As filed with the Securities and Exchange Commission on February 16, 2021.
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Hayward Holdings, Inc.
(Exact name of registrant as specified in its charter)
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Delaware
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5091
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82-2060643
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(State or other jurisdiction of
incorporation or organization)
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(Primary Standard Industrial
Classification Code Number)
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(I.R.S. Employer
Identification Number)
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400 Connell Drive
Suite 6100
Berkeley Heights, NJ 07922
(908) 351-5400
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Eifion Jones
Senior Vice President and Chief Financial Officer
400 Connell Drive
Suite 6100
Berkeley Heights, NJ 07922
(908) 351-5400
(Name, address, including zip code, and telephone number, including area code, of agent for service)
With copies to:
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Craig Marcus, Esq.
Rachel Phillips, Esq.
Ropes & Gray LLP
1211 Avenue of the Americas
New York, NY 10036
(617) 951-7000
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Michael Kaplan, Esq.
Roshni Banker Cariello, Esq.
Jeffrey S. Ramsay, Esq.
Davis Polk & Wardwell LLP
450 Lexington Avenue
New York, NY 10017
(212) 450-4000
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Approximate date of commencement of proposed sale to the public:
As soon as practicable after this Registration Statement is declared effective.
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box: ☐
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer ☐
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Accelerated filer ☐
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Non-accelerated filer ☒
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Smaller reporting company ☐
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Emerging growth company ☒
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐
CALCULATION OF REGISTRATION FEE
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Title of Each Class of Securities to be Registered
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Proposed Maximum
Aggregate Offering
Price(1)(2)
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Amount of
Registration
Fee(3)
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Common stock, par value $0.001 per share
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$
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100,000,000
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$
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10,910.00
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(1)
Estimated solely for the purpose of calculating the registration fee under Rule 457(o) of the Securities Act of 1933, as amended.
(2)
Includes the offering price of additional shares that the underwriters have the option to purchase, if any.
(3)
To be paid in connection with the initial filing of the registration statement.
The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
The information in this prospectus is not complete and may be changed. Neither we nor the selling stockholders may sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
Subject to Completion, dated February 16, 2021.
Shares
Hayward Holdings, Inc.
Common Stock
This is an initial public offering of shares of our common stock. We are offering shares of our common stock. The selling stockholders identified in this prospectus are offering shares of our common stock. We will not receive any proceeds from the sale of the shares being sold by the selling stockholders.
Prior to this offering, there has been no public market for our common stock. We estimate that the initial public offering price per share will be between $ and $ . See “Underwriting” for a discussion of the factors to be considered in determining the initial offering price. We intend to apply to list our common stock on the New York Stock Exchange under the symbol “HAYW.”
After the completion of this offering, certain affiliates of CCMP, MSD Partners and AIMCo (each as defined herein) will be parties to a stockholders agreement and will beneficially own approximately % of the combined voting power of our common stock (or % if the underwriters exercise in full their option to purchase additional shares of common stock). As a result, we will be a “controlled company” within the meaning of the New York Stock Exchange’s corporate governance standards. See “Management — Controlled Company Exemption” and “Principal and Selling Stockholders.”
We are an “emerging growth company” as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), and will be subject to reduced public company reporting requirements for this prospectus and future filings. See “Prospectus Summary — Implications of Being an Emerging Growth Company.”
Investing in shares of our common stock involves significant risks. See “Risk Factors” beginning on page 25.
Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
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Per Share
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Total
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Initial public offering price
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$
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$
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Underwriting discounts and commissions(1)
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$
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$
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Proceeds before expenses, to us
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$
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$
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Proceeds before expenses, to the selling stockholders
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$
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$
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(1)
We have agreed to reimburse the underwriters for certain expenses. See “Underwriting.”
We have granted the underwriters the option to purchase up to an additional shares of common stock from us at the initial public offering price, less the underwriting discounts and commissions.
The underwriters expect to deliver the shares of common stock to purchasers on or about , 2021.
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BofA Securities
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Goldman Sachs & Co. LLC
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Nomura
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Credit Suisse
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Morgan Stanley
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Baird
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Guggenheim Securities
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Jefferies
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BMO Capital Markets
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KeyBanc Capital Markets
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William Blair
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Houlihan Lokey
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Moelis & Company
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The date of this prospectus is , 2021.
TABLE OF CONTENTS
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Page
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ii
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ii
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ii
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ii
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iii
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iv
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1
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25
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54
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56
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57
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58
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61
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64
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65
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66
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88
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111
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119
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135
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138
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140
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146
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151
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153
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157
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165
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165
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165
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F-1
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Through and including , 2021 (the 25th day after the date of this prospectus), all dealers effecting transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to a dealer’s obligation to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or subscription.
ABOUT THIS PROSPECTUS
We, the selling stockholders and the underwriters (and any of our or their affiliates) have not authorized anyone to provide any information or to make any representations other than those contained in this prospectus or in any free writing prospectuses filed with the Securities and Exchange Commission (the “SEC”). We, the selling stockholders and the underwriters (and any of our or their affiliates) take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. This prospectus is an offer to sell only the shares offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of its date.
We, the selling stockholders and the underwriters (and any of our or their affiliates) have not done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who obtain this prospectus must inform themselves about, and observe any restrictions relating to, this offering and the distribution of this prospectus outside of the United States.
MARKET AND INDUSTRY DATA
This prospectus includes market and industry data and forecasts that we have derived from independent consultants, publicly available information, various industry publications, other published industry sources and our internal data and estimates. Independent consultant reports, industry publications and other published industry sources generally indicate that the information contained therein was obtained from sources believed to be reliable.
Our internal data and estimates are based upon information obtained from trade and business organizations and other contacts in the markets in which we operate and our management’s understanding of industry conditions. Although we believe that such information is reliable, we have not had this information verified by any independent sources. Similarly, our internal research is based upon our understanding of industry conditions, and such information has not been verified by any independent sources. Any estimates underlying such market-derived information and other factors could cause actual results to differ materially from those expressed in the independent parties’ estimates and in our estimates.
Certain monetary amounts, percentages and other figures included in this prospectus have been subject to rounding adjustments. Accordingly, figures shown as totals in certain tables and charts may not be the arithmetic aggregation of the figures that precede them, and figures expressed as percentages in the text may not total 100% or, as applicable, when aggregated may not be the arithmetic aggregation of the percentages that precede them.
TRADEMARKS, TRADENAMES AND SERVICE MARKS
We own or have rights to trademarks or trade names that we use in conjunction with the operation of our business and that appear in this prospectus. This prospectus also contains trademarks, service marks, trade names and copyrights of other companies which, to our knowledge, are the property of their respective owners. Solely for convenience, trademarks and trade names referred to in this prospectus may appear without the ® or ™ symbols, but the absence of such symbols does not indicate the registration status of the trademarks and is not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the right of the applicable licensor to such trademarks and trade names.
NON-GAAP FINANCIAL MEASURES
This prospectus contains “non-GAAP financial measures,” including EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted segment income and adjusted segment income margin. These are
financial measures that are not calculated and presented in accordance with generally accepted accounting principles in the United States (“GAAP”). For more information about how we use these non- GAAP financial measures in our business, the limitations of these measures, and a reconciliation of these measures to the most directly comparable GAAP measures, please see the sections titled “Prospectus Summary—Summary Consolidated Financial and Other Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Reconciliation.”
THE RECLASSIFICATION
Prior to the completion of this offering, we will reclassify our Class B common stock into common stock and then effect a -for-1 split of our common stock. In addition, following the reclassification of our Class B common stock and the stock split of our common stock and prior to the completion of this offering, (i) we will convert each outstanding share of our Class A stock into shares of our common stock plus an additional number of shares determined by dividing (a) the Class A preference amount of such share of Class A stock as adjusted to give effect to the stock split of our common stock, or $ per share (the “Class A Preference Amount”), by (b) the initial public offering price of a share of our common stock in this offering, net of the per share underwriting discount, rounded to the nearest whole share, and (ii) we will redeem each outstanding share of our Class C stock for an aggregate price of $1.00. In connection with the conversion of the Class A stock, holders of our Class A stock will receive a cash payment from us in lieu of fractional shares based on the initial public offering price per share of our common stock in this offering, but will not receive any other cash payments in connection with the conversion.
References to the “Reclassification” throughout this prospectus refer to (i) the reclassification of our Class B common stock into our common stock, (ii) the -for-1 stock split of our common stock, (iii) the conversion of our Class A stock into common stock, (iv) the redemption of our Class C stock and (v) the filing and effectiveness of our second restated certificate of incorporation and the adoption of our amended and restated bylaws. Unless otherwise indicated, all share data gives effect to the Reclassification. See “The Reclassification.”
A MESSAGE FROM HAYWARD PRESIDENT AND CEO KEVIN HOLLERAN
With roots that go back nearly a century, Hayward has grown from a small, family-run company to a leading manufacturer of pool equipment and provider of enjoyable outdoor experiences. For all the growth and progress, the people of Hayward have retained the founder’s family values, working as a closely-knit team to develop and deliver superior products, provide exceptional service and build lasting relationships with distributors, builders, buying groups, retailers, servicers and pool owners. As a result, Hayward has one of the largest global installed bases and is the industry’s most recognized and trusted brand in the United States with a loyal customer base. We place a high priority on sustainability, community involvement and a fair living wage and are committed to improving the quality of life of our employees, our neighbors, our trade customers and pool owners.
I joined Hayward in mid-2019 after nearly 30 years of working with great recreational and industrial brands at Textron, Ingersoll-Rand and Terex. I was excited to join such a strong company with a great presence and growth potential in the outdoor living space. I was also delighted to find a deeply rooted and mutually supportive company culture that reaches beyond Hayward employees to a vast network of trade partners, retailers, and dealers, many of whom have had long-lasting relationships with Hayward. That cooperative spirit was never more needed or more evident than when the COVID-19 pandemic struck. I am proud of how the Hayward team rose to the challenges of servicing our trade customers, given our essential business status, while always keeping safety paramount. We worked remotely where we could and implemented appropriate safety measures where we could not. Our factories and distribution centers remained open, enabling our channel partners to satisfy soaring demand as pool owners realized the advantages of recreation in their own backyards. This experience has only reinforced appreciation for outdoor living and home wellness. The recent increase in new pool construction will play to the core strength of our business model for years to come, a model which focuses on the resilient aftermarket demand for repair, replacement and remodeling of existing pool equipment.
At the heart of Hayward’s strength is our position as a full-line supplier of industry-leading products to suit pools of all types—in-ground, above ground and commercial. Our high-quality components are engineered to work together to keep every pool at its best. The energy efficient products we develop and the natural processes we harness for pool sanitization reduce dependency on harsh chemicals. Our innovative spirit has brought breakthrough salt chlorine generators to the mainstream pool market with AquaRite. We continue our leadership today with Omni integrated “smart” home automation to cater to pool owners who increasingly expect to control all pool functions from the palm of their hand. Our reputation for reliability, quality and innovation draws trade customers and pool owners to the Hayward brand.
We engage a large addressable market with a revenue mix diversified by region, channel and product. Hayward’s strong revenue growth and margins have contributed to our financial strength. In 2020, we achieved net sales growth of 19.4%, improved our operating income margin, net income margin and adjusted EBITDA margin from 13.5% to 14.2%, 1.2% to 4.9% and 23.5% to 26.5%, respectively. Our market share has continued to grow as we introduce more energy efficient and more environmentally sustainable relevant products. We expect future growth to come from continued leadership in new and innovative products and further expansion in the United States and Canada as well as international markets where we are under-represented. We expect to achieve growth organically, and through targeted strategic acquisitions, where a disciplined process of integration has helped us in the past to expand markets, add new products and improve our technology.
We invite you to learn more about Hayward, the industry we serve, the strengths of our offerings and our future plans for growth and expansion.
Sincerely,
Kevin Holleran
President and Chief Executive Officer
PROSPECTUS SUMMARY
This summary highlights selected information contained elsewhere in this prospectus, but it does not contain all of the information that you should consider before deciding to invest in our common stock. You should carefully read the entire prospectus, including the information presented under the sections entitled “Risk Factors” and “Special Note Regarding Forward-Looking Statements” and the financial statements and the notes thereto, included elsewhere in this prospectus, before making an investment decision. This summary contains forward-looking statements that involve risks and uncertainties. Unless otherwise indicated or the context otherwise requires, references in this prospectus to (i) “Hayward Holdings” refers to Hayward Holdings, Inc., (ii) “Hayward Industries” refers to Hayward Industries, Inc., our primary operating subsidiary, and (iii) “we,” “us,” “our,” “Hayward” or the “Company” refer to Hayward Holdings, Inc. and its consolidated subsidiaries, including Hayward Industries.
We define the year ended December 31, 2020 as Fiscal Year 2020 and the year ended December 31, 2019 as Fiscal Year 2019. Our fiscal quarters usually include 13 weeks except the fourth quarter which ends on December 31 of each fiscal year.
Company Overview
We are an industry-leading global designer, manufacturer and marketer of a broad portfolio of pool equipment and associated automation systems. With the pool as the centerpiece of the growing outdoor living space, the pool industry has attractive market characteristics, including significant aftermarket requirements, innovation-led growth opportunities and a favorable industry structure. We are a leader in this market with a highly-recognized brand, one of the largest installed bases of pool equipment in the world, decades-long relationships with our key channel partners and trade customers and a history of technological innovation. Our engineered products, which include various energy efficient and more environmentally sustainable offerings, enhance the pool owner’s outdoor living lifestyle while also delivering high quality water, pleasant ambiance and ease of use for the ultimate backyard experience. Aftermarket replacements and upgrades to higher value Internet-of-Things-enabled (“IoT”) and energy efficient models are a primary growth driver for our business as we estimate that aftermarket sales represented approximately 75% of net sales in Fiscal Year 2020. We estimate aftermarket sales based upon feedback from certain representative customers and management’s interpretation of available industry and government data, and not upon our GAAP net sales results.
We have an attractive financial profile driven by our market position, product offerings and focus on operational excellence. From 2012 to 2020, our net sales grew at a 6.7% CAGR, our operating income grew at a 4.6% CAGR, our net income declined at a 3.4% CAGR and our adjusted EBITDA grew at a 9.6% CAGR. Our long history of lean manufacturing and supply chain initiatives produced operating income margins of 14.2% and 13.5%, net income margins of 4.9% and 1.2% and adjusted EBITDA margins of 26.5% and 23.5% in Fiscal Years 2020 and 2019, respectively. As a result of our strong financial profile, we believe we have significant flexibility with respect to capital allocation, giving us the ability to drive long-term shareholder value through our operating and financial strategies. Additional information regarding our financial performance and non-GAAP measures, including adjusted EBITDA and adjusted EBITDA margin, together with a reconciliation of non-GAAP measures to their most directly comparable GAAP measures, is included in “— Summary Consolidated Financial and Other Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Reconciliation.”
![[MISSING IMAGE: TM2037032D9-PC_NETSALE4C.JPG]](https://content.edgar-online.com/edgar_conv_img/2021/02/17/0001104659-21-024595_TM2037032D9-PC_NETSALE4C.JPG)
The demand for outdoor living products has increased over the past decade as retiring baby boomers are investing in their homes and millennials are showing increased interest in outdoor spaces. Consumer spending has been redirected towards outdoor home improvements as consumers continue migrating to the suburbs and increase time spent at home and in the backyard. Outdoor living repair, replacement and remodeling has grown faster than traditional home repair, replacement and remodeling projects as homeowners choose to make larger outdoor investments. The trend toward healthy outdoor living has helped underpin continued pool industry growth. Homeowners’ response to COVID-19 also helped to reinforce this trend of new pool builds as a safe environment for enjoyment at home, further increasing the installed base of pools globally, which we estimate is over 25 million as of 2020. Our business is primarily driven by reliable aftermarket spending associated with a number of key drivers: a growing installed base, an increasing range of new pool products, a shift to more highly valued energy efficient and more environmentally sustainable products and the development of “smart home” technology to increase connectivity and automation.
We have a leading brand with a reputation for quality, energy efficiency and innovation among both global pool professionals (e.g., retailers, builders, servicers and e-commerce resellers) and pool owners. We are a leading global manufacturer, supported by a large installed base and an estimated North American residential pool market share of approximately 30% that we believe is well-positioned for future growth. We estimate our North American market share based on our extensive knowledge of the markets in which we operate and observations of our direct competitors, which we use to inform analyses of a survey of North American pool construction and aftermarket spending trends prepared by P.K. Data as well as unit share data prepared by a third party market research company. On average, we have 20+ year relationships with our top 20 trade customers. Many of our products are critical to the ongoing operation of pools given requirements for water quality and sanitization. As a result, we believe that many pool owners consider our products essential.
![[MISSING IMAGE: TM2037032D1-PH_ENERGY4CLR.JPG]](https://content.edgar-online.com/edgar_conv_img/2021/02/17/0001104659-21-024595_TM2037032D1-PH_ENERGY4CLR.JPG)
Our products include a broad line of advanced IoT-enabled controls, alternate natural sanitizers to lower chemical usage, energy efficient pumps, LED lights, heaters, automatic cleaners and filters. We remain focused on being at the forefront of product innovation, as we continually expand our product offerings and have proactively brought new products to the market with 59 new products launched in the last three years. As of December 31, 2020, we had approximately 350 issued patents and 135 patent applications pending, including many for current and for future products under development. Consistent with our commitment to providing more environmentally sustainable solutions, over the past three years our products have helped to generate approximately 1.1 billion kWh of energy savings, reduce chlorine usage by approximately 81 million pounds and save approximately 2 billion gallons of chemically treated, heated water. Approximately 85% of our products are designed to be energy efficient, conserve water and/or avoid harsh chemical usage.
As the shift towards connected outdoor living continues, we remain focused on building an industry-leading integrated digital platform for our pool products. Given the strong aftermarket mix of our business, existing product upgrades (e.g., enhanced functions and IoT compatibility) drive our growth. Our proprietary Hayward Omni mobile app and automation platform provides numerous ways to manage essential pool functions from the scheduling of sanitization, filtration and automatic cleaners to enabling landscape light shows with water features to create the ultimate backyard experience. Our branded technology enables pool owners to manage their pools without the need to use broader technology integrators. In addition, the app helps to connect pool owners to the Hayward brand and increase awareness. We believe our focus on developing innovative connected products further enhances pool owner loyalty and enables us to increase our market share.
Our Competitive Strengths
We believe that the following competitive strengths have been key drivers of our success to date, and strategically position us for continued success.
Market Pioneer and Leader in Connected Pool Products Catering to Healthy Outdoor Living
We develop highly engineered outdoor living products. Our market leading brand has helped establish industry standards for generations, pioneering the shift to plastic flow control products and energy efficient heaters. Today we continue that innovation through healthy, more energy efficient and connected pool products. Swimming is one of the most popular recreational activities in the world and water-based exercise is known to improve physical and mental health. Our water care products are composed of salt chlorine
generators that eliminate the need to handle and store corrosive chlorine chemicals. This natural process generates all the chlorine needed for sanitization while maintaining soft water for healthy, irritation free swimming. Our line of UV/Ozone and Advanced Oxidization Process (“AOP”) alternate sanitizers are among the most effective technologies in destroying waterborne bacteria and viruses while reducing the amount of chlorine required by at least 50%. Our pump products now consume only a third of the energy relative to a decade ago. The U.S. Environmental Protection Agency (“USEPA”) and U.S. Department of Energy (“DOE”) awarded us Energy Star Partner of the Year for the last two years as a result of our energy efficient products.
![[MISSING IMAGE: TM2037032D3-FC_GROUND4C.JPG]](https://content.edgar-online.com/edgar_conv_img/2021/02/17/0001104659-21-024595_TM2037032D3-FC_GROUND4C.JPG)
As the world becomes more digitally focused, pool owners are increasingly demanding “smart” outdoor living solutions. Our proprietary Hayward Omni mobile app and automation platform provides numerous ways to manage every essential pool function. The mobile app manages everything from the scheduling of sanitization, filtration and running of automatic cleaners, to pool light shows with water features that create the ultimate backyard experience. Omni® gives the pool owner the power to access and adjust pool settings from anywhere. Omni easily connects to Amazon Alexa or Google Home for voice command of pool functions or integrates as part of a home automation system (e.g., Crestron and Savant). The emergence of IoT and smart home systems is a growing trend that is led by the U.S. smart home market, which is expected to grow approximately 15% per year, according to a recent report by Statista. Apps or voice controls are the most widely used systems for operating these home systems which complements Omni’s capability to operate pool and spa functions along with other backyard functions such as irrigation and landscape lighting. Omni is the highest rated pool app in both the Apple and Google online stores, with a 93% attach rate, which refers to the percentage of installed Omni-compatible products connected to the app. Our growing app user traffic allows us to better understand how pool owners are using our products and provides invaluable feedback on a real-time basis. Pool owners can also share their app data with their pool servicers and notify them of potential equipment issues to enable proactive service and maintenance. In the future, we expect to execute “in-app” marketing to push relevant offers and promotions to app users.
Large Installed Base with Growing Content and Replacement Needs Creates Recurring Sales Model
Our products are generally non-discretionary and recurring (after initial pool construction and remodels) due to the need to repair and replace equipment for the ongoing operation of pools. Given our estimate of an installed base of approximately 25 million above ground and in-ground pools globally as of 2020 and our leadership position in the market, we estimate that approximately 75% of our net sales in Fiscal Year 2020 was driven by aftermarket repair, replacement, remodel and pool owner-desired upgrades. We estimate aftermarket sales based upon feedback from certain representative customers and management’s interpretation of available industry and government data, and not upon our GAAP net sales results. Our product replacement cycle is approximately 9 to 12 years, driving multiple replacement opportunities over the typical life of a pool. Pool equipment features are of significant importance to the pool owner, and therefore we believe pool owners tend to be less price sensitive to our equipment relative to the pool’s total cost. At the time of replacement, pool owners typically prefer a like-for-like Hayward product or an upgrade to a newer product from our catalog. The replacement cycle drives an ongoing relationship that continues as homeowners upgrade their pools for many years after installation.
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Demand for pool products is also supported by an increasing sales value per pool equipment order. The average wholesale price for equipment per pool typically ranges from $1,500 for entry level pools to well above $10,000 for premium pools, but equipment is only a fraction of the total pool cost. The average amount spent on equipment per pool has more than doubled in the last 10 years as owners increasingly
spend more to incorporate the latest technology. A recent study shows that pool professionals are increasingly recommending and installing upgraded products. In 2020, pool professionals reported they installed premium or upgraded versions of pool products 47% of the time, rather than making a like for like replacement of the broken product. In a similar survey conducted in 2016, pool professionals reported installing upgrades 37% of the time. Examples of recent themes in more advanced products include increased use of controls, apps, home automation systems, variable speed pumps, alternate sanitizers that reduce chemical usage, energy efficient water heaters, automatic cleaners and exciting new technology to increase ambiance and comfort. U.S. and Canadian government regulations, along with the European Ecodesign Directive, also support the transition to the use of energy efficient pumps. These innovative pool products enhance the pool ownership experience and in return drive greater pool satisfaction and pool demand.
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Premium Brand with Highly Engineered Products across Pool Types
We are an industry-leading brand among both global pool professionals (e.g., retailers, builders and servicers) and pool owners. We offer a comprehensive product assortment, consisting of more than 4,000 product SKUs. Our ability to offer a full bundle of products is a critical competitive advantage. We have invested heavily in our brand. Through new product development, rebranding of integrated acquisitions, customer service and operations, we have positioned Hayward as the go-to brand of choice, synonymous with pool product excellence. In the United States, we are the industry’s most recognized and trusted brand among pool owners. We believe that pool professionals consider us the highest quality, most dependable brand and they believe that Hayward is worth paying a premium for.
Our broad suite of connected products caters to entry, mid-range and premium in-ground residential pools, above ground pools and commercial pools. As pool owners upgrade their pools over time, we believe we can remain a provider of choice at every step along their outdoor living progression. We leverage pool owners’ brand loyalty and our breadth of product offerings to grow across all pool categories.
Highly Flexible, Global Manufacturing and Distribution Platform with Differentiated Capabilities
We have six primary global manufacturing facilities and five primary distribution centers with a network of small locations for final assembly serving over 25 countries. Our production facilities are located in the United States, Spain and China, and leverage cost-efficient automation processes. Products manufactured in the United States have typically accounted for approximately 70% of our net sales. We have a strong commitment to safety, quality and environmental protection. In 2018, we implemented a behavioral safety initiative that has helped reduce recorded incidents by approximately 62% over the last three years. We use approximately 3 million pounds of recycled resin per year — up to 10% of all resin used in our pump and filter manufacturing consists of recycled material. In addition, we operate over 130 molding machines, of which approximately 70% are fully electric or hybrids and can save 20–40% in energy consumption compared to traditional hydraulic machines.
Our lean, vertically-integrated manufacturing and distribution processes allow for low-cost production that results in attractive margins and a high degree of quality control. We have consistently invested in these facilities to ensure that we have a strong and reliable supply chain designed to handle surges in demand and unforeseen logistical disruptions. We have ample manufacturing and distribution capacity, which provides versatility for growth and operating leverage within our existing footprint. We are able to produce customized, customer-differentiated products through our “Centers of Excellence” which are vertically-integrated facilities with flexible manufacturing capabilities. In addition, we have an agile production footprint with variable capacity available to support our anticipated growth over the next decade. The high level of automation in our facilities allows us to extend our work week and increase production velocity with limited additional capacity investments.
Multi-Channel Strategy Provides Multiple Points to Influence Pool Owners
Our go-to-market strategy leverages the professional trade, retail and e-commerce channels. Our trade customers are primarily distributors, major pool builders, buying groups, servicers and specialty on-line resellers, all of which subsequently sell our products to the pool owner. Sales to distributors make up the majority of our net sales, comprising 76% of net sales in Fiscal Year 2020, with remaining revenue from direct major builders, retailers and buying groups. Given our market position, trade customers are very familiar with our products and help to advocate their merits to pool owners. On average, we have 20+ year relationships with our top 20 trade customers and actively invest in these relationships through targeted sales efforts, loyalty programs and other initiatives.
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We deploy a “push-pull” strategy through the Hayward Sales Model. Our sales organization “pushes” distributors to stock and market our products, while simultaneously creating a “pull” from end-user demand by marketing these products to builders, retailers, servicers and pool owners. This combination of forces helps to increase the barrier for competitors to enter the channel.
We manage this coordinated effort with a highly trained sales organization supported by our Salesforce.com customer relationship management (“CRM”) platform. The sales organization is divided into specialized teams: new accounts acquisition, builder, servicer and distribution channel management, commercial pool, e-commerce management and inside sales. These sales teams ensure that we reach our trade customers effectively and deliver our value proposition to the trade channel. Our sales organization compensation strategy is aligned to growing our business as compensation incentives are tied to year-on-year sales growth and are based on a combination of sales into the channel (i.e., sales to distributors) and sales out of the channel (i.e., distributor sales to trade partners). We generate “push” through programs such as volume rebates with key distributors and offer higher growth rebates to partners who achieve agreed upon growth milestones. Given the role of builders, retailers and servicers in the distribution channel, our sales team helps with training, marketing, advertising, promotional events and other tasks.
We create “pull” demand not only through our products’ quality and innovative features but also through loyalty programs. As product satisfaction is usually high, pool owners typically prefer the Hayward brand when looking for a replacement or upgrade of their current Hayward equipment. Pool owners may also choose a like-for-like Hayward product when replacing other manufacturers’ products, at the suggestion of retailers or servicers. This consumer dynamic helps to provide confidence for our trade customers to maintain ample inventory of our products. To further support demand, we motivate and incentivize our builders, retailers and servicers. These programs reward trade customers based on both volume and range of products ordered. Those who support the “Hayward bundle” as part of a one-stop-shop commitment save more on their purchases from the company over time.
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Our ongoing trade partner care intiatives further support our “push-pull” strategy and drive trade customer retention and growth. We have approximately 1,700 Hayward Authorized Service Centers in the United States to assist our trade customers and pool owners. In addition, we provide field-based technical service coordinated by three regional managers and 28 district technical managers covering all regions of the United States. We also operate two centralized call centers. The first provides product technical support to trade partners in the field. The second assists trade partners with order management and other commercial matters or issues.
In recent years, we have taken a market leading e-commerce position. We have implemented a range of policies and special SKUs for the online channel designed to maximize the opportunity for online sales without compromising our growth strategy with our “brick and mortar” customers. Approximately 15% of our products sold in the United States are ultimately purchased online. Our products reach the online sales channel through a combination of direct sales to online resellers and sales to our distributors who in turn sell to online resellers.
Resilient, Strong Financial Performance
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Regardless of the economic conditions, it has been our experience that pool owners will maintain their pools and continue to pursue their pool wellness and recreation activities. Pool owners also are conscious that maintaining a pool typically costs less than repairing pool products that are damaged due to the lack of maintenance. We have delivered net sales growth, expanded margins and executed a disciplined capital expenditure program. From 2012 to 2020, our net sales grew at a 6.7% CAGR, our operating income grew at a 4.6% CAGR, our net income declined at a 3.4% CAGR and our adjusted EBITDA grew at a 9.6% CAGR. Our revenue and profitability metrics all grew over this time period with the exception of net income, which witnessed negative growth as a result of the transition in 2017 from a family-owned business to a sponsor-backed business, which resulted in higher interest expense following the Acquisition (as defined below). In addition, our net sales and adjusted EBITDA grew in every year since 2012 except for Fiscal Year 2019, which was negatively affected by elevated inventory levels in some of our key distribution channels entering the pool season (largely due to significant tariff-driven price increases impacting the industry in 2018), as well as sales volume declines due to cold, wet weather during the first half of 2019 in key markets. Our strong margin profile is supported by our aftermarket mix, continuous improvement initiatives and price inflation of 2–3% per year. In Fiscal Year 2020, we improved our operating income margin, net income margin and adjusted EBITDA margin from 13.5% to 14.2%, 1.2% to 4.9% and 23.5% to 26.5%, respectively. We have steadily reinvested in our business over time, mitigating the need for large capital expenditures on our installed manufacturing base. As a result of our attractive financial profile, we have significant flexibility with respect to capital allocation, giving us the ability to drive long-term shareholder value through various operating and financial strategies. Additional information regarding our financial performance and non-GAAP measures, including adjusted EBITDA and adjusted EBITDA margin, together with a reconciliation of non-GAAP measures to their most directly comparable GAAP measures, is included in “— Summary Consolidated Financial and Other Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Reconciliation.”
Proven Management Team Focused on Growth
Our strategic vision and culture are directed by our executive management team under the leadership of our President and Chief Executive Officer, Kevin Holleran and Senior Vice President and Chief Financial Officer, Eifion Jones. Mr. Holleran joined us in 2019 and has nearly 30 years of experience in commercial and leadership positions across a number of industrial focused end markets. Most recently, Mr. Holleran served as President and Chief Executive Officer of the $4 billion Industrial Segment within Textron (NYSE: TXT). Mr. Jones joined us in 2020 with over 30 years of experience as a world-class business leader with a strong track record of building and leading global financial organizations. Mr. Holleran and Mr. Jones joined an experienced management team with a track record of innovation and operational excellence at Hayward. Our management team is uniquely capable of executing upon our strategic vision and successfully continuing to create long-term shareholder value.
Our Growth Strategy
We believe our multi-faceted growth strategy positions us to drive profitable, above-market growth in the markets we serve.
Continue to Introduce Thoughtful Innovation That Expands Our Markets
We have a proven track record of developing new products, offering advanced technology, energy-saving efficiency and a high-quality pool owner experience that have expanded our markets. Our strong manufacturing capabilities, detailed consumer research and extensive engineering expertise allow us to rapidly introduce differentiated products. In Fiscal Year 2020, new products launched in the last three years contributed approximately 11% of net sales. Recent product innovation includes: MaxFlo and TriStar VS—advanced energy efficient variable speed pumps for standalone operation or Omni control; HydraPure—an advanced oxidation process combining UV and ozone for water sanitization; OmniPL™ Smart Pool and Control—mobile app-based smart control for all connected pool and spa systems as well as other connected backyard components; AquaRite® 940 Omni—North America’s #1 salt chlorine generator bundled with Omni for smart control; AquaVac® 6 Series—a line of robotic pool cleaners with the technologically advanced, patented SpinTech™ debris separation technology for constant suction power; TriVac® 700—the only pressure cleaner capable of skimming debris from the surface of the water in addition to vacuuming the pool floor, walls and coves; and CAT 6000—a commercial, IoT-enabled water chemistry controller that allows precise sanitization control.
Our smart device apps have been available for our control products since 2010. In 2019, we significantly redesigned our premium Omni control app which first launched in 2015. This highly rated new app is compatible with all past and present Omni-compatible products, affording all users the same enhanced functionality and user experience. Data gathered from the app will help us further tailor our product development, distribution and sales strategies. This year, we plan to launch another exciting round of new products focused on the key categories of sanitization, heating, lighting and IoT-enabled controls. We also expect to introduce a new line of products timed to capitalize on the DOE's 2021 regulatory changes that require replacing many single speed pumps with variable speed pumps in new installations and replacements going forward. We expect these regulatory changes to accelerate the sales growth of variable speed pumps in 2021 and beyond. We believe this regulatory change will be a win-win for both the Company and the pool owner. Due to added product features, variable speed pumps have prices that are up to 2.4 times higher than single speed pumps and present significant revenue and gross margin upside to the Company. Similarly, the efficiency gains afforded by the products provide pool owners a rapid product purchase payback — as quickly as one to two years due to energy savings. We estimate that approximately 70% of North American pools have either no controls or just a simple on/off timeclock, providing us with an opportunity to upgrade these pools with Omni control and automation systems as part of the pump upgrade.
Focus on Key Strategic Sales Initiatives to Strengthen Trade Customer Relationships
We recently embarked on a sales initiative aimed at “Getting Closer to the Customer” in an effort to drive greater market share. We are evolving our sales organization from a generalist unit to a number of focused, channel-specific teams. We are creating national positions for managing e-commerce, large accounts and the commercial segment. Salesforce.com forms the backbone of this new strategy to ensure cross communication between teams in the field along with marketing and customer service. To further enhance our customer capabilities, we utilize a combination of in-person and virtual training programs. We have mobile training vehicles that provide hands-on product training and education in the field. Hayward University, an online portal of training videos and a library of product information available for our trade customers, further supports our training initiative and enables us to operate virtually. We also offer our Totally Hayward loyalty program, an incentive-based program that allows us to better connect with our trade partners.
Grow Additional Share in the International and Commercial Markets
We are a leading global manufacturer with a large installed base and an estimated North American residential pool market share of approximately 30% in Fiscal Year 2020. Based on management’s estimates, we believe that we also have a strong international presence with an estimated #3 share in Europe and #4 in Australia. We continue to focus on expansion as we implement Totally Hayward and leverage our complete product bundle across our international markets. The international market, particularly in Europe, is fragmented and we see significant room to grow our presence via our existing footprint and the introduction of new products that meet local market demands.
We are currently a niche player in the commercial market where we see an opportunity for growth following the expansion of our commercial pool sales team. We believe our significant new product pipeline portfolio, which is a mix of in-house new product development complemented by strategic partnerships with third parties under the Hayward brand, will allow us to continue to drive deeper penetration in these markets. Moreover, we expect the broader adoption of ancillary products, such as sanitization systems, in the commercial market. This trend is expected to provide further growth opportunities in this end market.
Expand Margins and Returns Through Continuous Improvement Initiatives
Our global manufacturing and distribution footprint has enabled us to maintain strong margins and returns. We believe that we can continue to improve our margins through implementing cost improvement programs, including clear cost takeout programs currently in place. We believe our well-invested and predominantly owned manufacturing footprint supports our continuous improvement initiatives. Lean methodologies and Kaizen principles are central to everything we do. Our one-piece flow process, which enables us to assemble, test and package a product in a single work cell, maximizes our efficiency and lowers our manufacturing costs. Our strategic initiatives help us manage the costs of our materials through negotiations and various hedging programs. We believe these and other recent initiatives will enable us to strengthen our penetration in our key markets, expand market share and improve margins.
Execute Strategic Acquisitions That Broaden Our Platform
We generate a significant amount of cash flow and continue to re-invest in the business through organic and inorganic means. Acquisitions add new product technology and national market positions throughout our portfolio. We have completed and integrated more than 10 bolt-on acquisitions in the last 20 years. For example, the 2018 acquisition of Paramount opened a new category of in-floor cleaning, strengthened our position in alternate sanitizers and energy efficient goods. Our 2016 acquisition of Sugar Valley in Spain has both fueled market share growth in the European market and provided new technological product capabilities in sanitization and automatic controls.
We intend to utilize our disciplined process to identify, evaluate, acquire and integrate businesses across the healthy and connected outdoor living space. We actively monitor a pipeline of attractive acquisition opportunities across multiple product categories and geographies. We target opportunities that enhance our technological capabilities, strengthen our global market positions and increase our geographical diversity in our end markets. We also look to identify adjacencies in the outdoor living category that can be integrated into our Omni platform and can benefit from our scale.
Our Industry
Outdoor Living Market
The demand for outdoor living products has increased over the past decade as homeowners seek to create attractive areas in their backyards as an extension of their home space. A recent survey that gauged popularity of certain repair and remodeling categories showed that the top three responses were all related to outdoor living. In addition, outdoor living repair and remodeling spending has outpaced traditional repair and remodeling spending in recent years.
Key contributors to this growth are retiring baby boomers and discerning millennials. Baby boomers are investing in improvements to their residences as they decide to retire in place. Millennials have shown a greater appreciation for the outdoors than prior generations and want attractive and functional outdoor spaces. Studies show that 70% of U.S. households have outdoor living spaces and those spaces are used at least once per week. Homeowners’ response to the COVID-19 pandemic have also helped reinforce this trend.
The outdoor living market covers several product areas:
The pool typically serves as the centerpiece of the outdoor living space for homeowners and is one of the most expensive investments in the backyard. Buyer satisfaction with pool ownership is very high and the pool often brings people together outside. New pool products have also greatly increased the ease of maintaining a pool as well as the entertainment and enjoyment of this key backyard centerpiece.
U.S. Pool Market
History & Product Development
Americans have been enamored with swimming pools for many decades. In the 1930s, high-end hotels and local municipalities began using pools as marketing tools. The U.S. residential pool industry started to flourish after World War II as Americans were aided by the GI Bill, which fueled strong growth in new housing and a significant population relocation to Sun Belt and Western states. The pool industry continued to grow over the ensuing decades, including the introduction of new pool types such as the above ground pool. These industry developments helped to expand pool ownership and created a large installed base of pools. The quality and enjoyment of the pool experience has increased significantly over the past two decades as the result of innovative pool product companies such as ourselves.
Today’s pool owners typically demand healthy experiences, ‘green’ products, energy efficiency and a digital experience. Swimming is one of the best forms of exercise available according to the Centers for Disease Control and Prevention, while also being considered essential to wellness. As a result, we have introduced innovative products to satisfy this demand.
We believe the pool equipment market is large, growing and predictable. The industry is characterized by attractive long-term growth dynamics that have driven market growth of approximately 6-8% over the
last five years. This market growth is supported by a growing aftermarket installed base, new construction of pools, product upgrades and industry pricing increases.
U.S. Residential Aftermarket
The installed base of residential pools is large with approximately nine million pools in the United States as of 2020. As a result, pool equipment market expenditures are driven primarily by aftermarket spend versus new pool construction. Aftermarket equipment sales are driven primarily by the ongoing repair, replacement, remodeling and upgrading of equipment for existing pools. The non-discretionary nature of ongoing pool water treatment to maintain safe, sanitized water has been a key attribute of the industry. The Centers for Disease Control and Prevention (the “CDC”) recommends that swimming pool water chemistry be tested at least twice per day, or more often when the pool is in heavy use, and that water be treated as necessary to protect from germs that cause recreational water illnesses. A pool quickly becomes unusable if not regularly maintained and routine maintenance is less expensive than the cost of failing to maintain a pool, which can range from around $2,000 for chemical treatments to over $10,000 for entire pool decommissioning, according to management estimates. A pool provides a stream of revenue for manufacturers as pool owners require equipment, parts, components and services through the repair, replacement and remodeling cycle of their pools.
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The U.S. installed base of in-ground pools has grown every year since 1970. While the installed based is increasing, so is the average age of these pools, which has risen from an average age of 19 years in
2012 to 22 years in 2019. Management estimates that pumps and filters are replaced in over half of all pool remodel projects and residential in-ground pools are remodeled approximately every 9-12 years, roughly the service life of most pool components. The rising age of pools brings about an increased need for repair, replacement and remodeling work. This continual replacement spend creates a resilient market with a very steady flow of demand for aftermarket sales of our products and services. The average spend per remodel on U.S. in-ground pools has increased by 44% between 2012 and 2019, which we believe was largely driven by this product upgrade dynamic. Aftermarket replacements often utilize newer product technology such as salt chlorine generators, IoT controls and variable speed pumps, which are more expensive than prior generation products but can help reduce chemical and energy spend for pool owners. We believe that these ongoing chemical and energy cost reductions can create a payback for pool owners of less than two years in many cases, providing an incentive for them to install the latest technology.
New U.S. Residential Pool Construction
Beginning in 2012, the U.S. pool market saw steady growth in new residential in-ground pool construction based on annual pool installments. Since 2012, U.S. new pool construction has grown at over a 7% CAGR through 2020E while the total value of new residential in-ground pool construction has increased twofold, a growth rate that is significantly faster than the volume of new pool construction due to the increasing value of pool equipment. Also during this time, outdoor living expenditures have increased as American homeowners continue to invest in healthy outdoor living experiences. Pool construction weakened slightly in 2019 due to abnormally high rainfall as 2019 was the second wettest year on record for the United States.
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We believe the pool industry is poised for continued growth as industry tailwinds remain in place. The estimated 94,000 pools constructed in 2020 remains well below the long term annual pool construction median of 113,000 pools. While the post-Great Recession recovery of the new pool build market is still ongoing, current demand exceeds the pool construction industry’s ability to supply new pools, leading to a robust backlog and positive outlook for 2021 and beyond. Continued growth in new pool construction is expected to be aided by a strong new housing market, rising home equity levels, migration trends to the Sun Belt and continued growth in outdoor living investment.
International Pool Market
We believe the international pool market outside North America was composed of approximately 15 million pools in 2020. Europe represents the largest portion of this market with approximately 7 million pools in the region and is projected to grow at a CAGR of over 9% between 2020 and 2026 based on expected continued growth in new pool construction and upgrades to new pool equipment technology. The European market remains highly fragmented, partially because various regional product certifications make it easier for market participants to operate locally. The European market is slightly more weighted to the direct channel than the United States as approximately 70% of sales are through distribution and approximately 30% are direct to trade customers. The majority of the European market is concentrated in warmer climates. France and Spain, combined, represent most of the market. Germany, Austria and Switzerland are also sizeable markets. Growth drivers for international pool markets include continued growth in residential and commercial pool construction and upgrades of equipment on existing pools to automated, energy efficient technology.
Recent Developments
On October 28, 2020, we entered into a second incremental amendment to the First Lien Term Facility (as defined herein), which provided for additional first lien term loans in an aggregate principal amount of $150.0 million (the “First Lien Incremental Term Facility”) to bring the aggregate outstanding loan amount under the First Lien Term Facility to approximately $1,108.0 million. The proceeds from the First Lien Incremental Term Facility were used to fund a portion of a special dividend of approximately $275.0 million on the outstanding shares of our Class A stock. For additional information, see “Description of Certain Indebtedness.”
The Reclassification
Prior to the completion of this offering, we will reclassify our Class B common stock into common stock and then effect a -for-1 split of our common stock. In addition, following the reclassification of our Class B common stock and the stock split of our common stock and prior to the completion of this offering, (i) we will convert each outstanding share of our Class A stock into shares of our common stock plus an additional shares (assuming an offering price equal to the midpoint of the estimated offering price range shown on the cover page of this prospectus), which amount will be determined by dividing (a) the Class A preference amount of such share of Class A stock as adjusted to give effect to the stock split of our common stock, or $ per share (the “Class A Preference Amount”), by (b) the initial public offering price of a share of our common stock in this offering, net of the per share underwriting discount, rounded to the nearest whole share, and (ii) we will redeem each outstanding share of our Class C stock for an aggregate price of $1.00. In connection with the conversion of the Class A stock, holders of our Class A stock will receive a cash payment from us in lieu of fractional shares based on the initial public offering price per share of our common stock in this offering, but will not receive any other cash payments in connection with the conversion. See “The Reclassification.”
Our Corporate Structure
The following chart illustrates our ownership structure as of , 2021 after giving effect to this offering and the application of the net proceeds therefrom:
Summary of Material Risks Related to Our Business, Our Industry and This Offering
Investing in our common stock involves substantial risk, and our ability to successfully operate our business is subject to numerous risks. Some of the more significant challenges and risks related to our business include the following:
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Our business depends on the performance of distributors, builders, buying groups, retailers and servicers;
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The demand for our swimming pool equipment products may be adversely affected by unfavorable economic and business conditions;
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We compete in markets with high levels of competition, which may result in pressure on our profit margins and limit our ability to maintain or increase the market share of our products;
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Our future success depends on developing, manufacturing and attaining market adoption of new products, and even if we are able to attain significant market acceptance of our planned or future products, the commercial success of these products is not guaranteed;
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A loss of, or material cancellation, reduction, or delay in purchases by, one or more of our largest customers could harm our business;
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If we do not manage product inventory in an effective and efficient manner, it could adversely affect profitability;
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We depend on suppliers, including single-source suppliers and, in a few cases, sole-source suppliers, to consistently supply us with components for our products, and any failure to procure such components could have a material adverse effect on our business, product inventories, sales and profit margins;
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Product manufacturing disruptions, including as a result of catastrophic and other events beyond our control, could cause us to be unable to meet customer demands or increase our costs;
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If we are unable to adequately obtain and maintain our intellectual property rights or if we, our vendors and/or our customers are accused of infringing on, misappropriating or otherwise
violating the intellectual property of others, our competitive position could be harmed or we could be required to incur significant expenses to enforce or defend our rights;
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If our trademarks and trade names are not adequately protected, we may not be able to build name recognition in our markets of interest and third parties could assert trademark infringement claims against us;
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Our substantial indebtedness could adversely affect our financial condition;
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Servicing our debt requires a significant amount of cash and our ability to generate sufficient cash depends on numerous factors beyond our control, and we may be unable to generate sufficient cash flow to service our debt obligations;
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The terms of our indebtedness restrict our current and future operations, particularly our ability to respond to change or to take certain actions;
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Our Sponsors will continue to have significant influence over us after this offering; and
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Upon the listing of our common stock on the New York Stock Exchange, we will be a “controlled company” within the meaning of the corporate governance standards of the New York Stock Exchange.
Any of the factors set forth under “Risk Factors” may limit our ability to successfully execute our business strategy. You should carefully consider all of the information set forth in this prospectus and, in particular, should evaluate the specific factors set forth under “Risk Factors” in deciding whether to invest in our common stock.
Implications of Being an Emerging Growth Company
As a company with less than $1.07 billion in total annual gross revenues during our most recently completed fiscal year, we qualify as an “emerging growth company” as defined in Section 2(a)(19) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As an emerging growth company, we may take advantage of specified reduced disclosure and other requirements that are otherwise applicable, in general, to public companies that are not emerging growth companies. These provisions include:
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reduced disclosure about our executive compensation arrangements;
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no non-binding shareholder advisory votes on executive compensation;
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exemption from the auditor attestation requirement in the assessment of our internal control over financial reporting; and
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reduced disclosure of financial information in this prospectus, including only two years of audited financial information and two years of selected financial information.
We may take advantage of these exemptions for up to five years or such earlier time that we are no longer an emerging growth company. We would cease to be an emerging growth company if we have more than $1.07 billion in total annual gross revenues as of the end of any fiscal year, if we are deemed to be a large accelerated filer under the rules of the SEC or if we issue more than $1 billion of non-convertible debt during a three-year period.
The JOBS Act permits an emerging growth company to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies. We are choosing not to “opt out” of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we will adopt the new or revised standard at the time private companies adopt the new or revised standard and will do so until such time that we either (i) irrevocably elect to “opt out” of such extended transition period or (ii) no longer qualify as an emerging growth company. Therefore, the reported results of operations contained in our financial statements may not be directly comparable to those of other public companies.
Our Principal Stockholders
We were acquired by entities affiliated with CCMP Capital Advisors, LP (“CCMP”), MSD Partners, L.P. (“MSD Partners”) and Alberta Investment Management Corporation (“AIMCo” and, together with CCMP and MSD Partners, the “Sponsors”) and members of management and our board of directors (the “Board of Directors”) in June 2017 (the “Acquisition”). As of December 31, 2020, and prior to giving effect to this offering and the Reclassification, entities affiliated with CCMP, MSD Partners, AIMCo, and current and former members of management and our Board of Directors and other investors owned equity securities representing approximately 35.4%, 35.4%, 18.2% and 11.1% respectively, of our voting power. Our Sponsors will continue to have significant influence over us and decisions made by our stockholders upon completion of this offering and may have interests that differ from yours. See “Risk Factors—Risks Related to this Offering and to our Common Stock.”
CCMP is a leading global private equity firm specializing in buyouts and growth equity investments in companies ranging from $250 million to more than $2 billion in size. CCMP has invested over $18 billion since 1984, which includes its founders’ activities at J.P. Morgan Partners, LLC (a private equity division of JPMorgan Chase & Co.) and its predecessor firms. CCMP was formed in August 2006 when the buyout and growth equity investment professionals of J.P. Morgan Partners, LLC separated from JPMorgan Chase & Co. to commence operations as an independent firm. The foundation of CCMP’s investment approach is to leverage the combined strengths of its deep industry expertise and proprietary operating resources to create value by investing in three targeted industries—Consumer, Industrial and Healthcare.
MSD Partners, an SEC-registered investment adviser located in New York, was formed in 2009 by the principals of MSD Capital, L.P. to enable a select group of investors to invest in strategies that were developed by MSD Capital. MSD Capital was established in 1998 to exclusively manage the capital of Michael Dell and his family. MSD Partners utilizes a multi-disciplinary investment strategy focused on maximizing long-term capital appreciation by making investments across the globe in the equities of public and private companies, credit, real estate and other asset classes and securities.
AIMCo is one of Canada’s largest and most diversified institutional investment managers with more than $115 billion of assets under management. AIMCo was established on January 1, 2008 with a mandate to provide superior long-term investment results for its clients. AIMCo operates at arms-length from the Government of Alberta and invests globally on behalf of public pension, public endowment and government funds in the Province of Alberta.
Corporate History and Information
Hayward Holdings, Inc. was incorporated in Delaware in June 2017. Our principal executive offices are located at 400 Connell Drive, Suite 6100, Berkeley Heights, NJ 07922 and our telephone number is (908) 351-5400. Our website is www.hayward-pool.com. Information contained on our website or that can be accessed through our website is not a part of, and is not incorporated by reference in, this prospectus.
The Offering
Common stock offered by us
shares.
Common stock offered by the selling stockholders
shares.
Underwriters’ option to purchase additional shares of common stock
We and the selling stockholders have granted the underwriters an option for a period of 30 days from the date of this prospectus to purchase up to an aggregate of additional shares of common stock, less underwriting discounts and commissions.
Common stock outstanding after this offering
shares (or shares if the underwriters exercise in full their option to purchase additional shares of common stock). For additional information regarding the impact of a change in the initial public offering price on the number of shares outstanding after completion of this offering related to the conversion of our Class A stock, see “The Reclassification.”
We estimate that the net proceeds to us from this offering, after deducting estimated underwriting discounts, commissions and estimated offering expenses payable by us, will be approximately $ (or approximately $ if the underwriters exercise in full their option to purchase additional shares of common stock), assuming an initial public offering price of $ per share (which is the midpoint of the estimated offering price range shown on the cover page of this prospectus). We will not receive any proceeds from the sale of shares of common stock by the selling stockholders named in this prospectus. See “Use of Proceeds.”
We intend to use the net proceeds from the sale of our common stock in this offering to repay approximately $ million in aggregate principal amount of outstanding borrowings under our Credit Facilities (as defined herein). We intend to use the remaining net proceeds from this offering for general corporate purposes. See “Use of Proceeds” for additional information.
Our Board of Directors does not currently plan to pay dividends on our common stock. The declaration, amount, and payment of any future dividends will be at the sole discretion of our Board of Directors. Our Board of Directors may take into account general economic and business conditions, our financial condition and operating results, our available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax, and regulatory restrictions, and implications on the payment of dividends by us to our stockholders or by our subsidiaries to us, including restrictions under our Credit Facilities and other indebtedness we may incur, and such other factors as our Board of Directors may deem relevant. See “Dividend Policy.”
At our request, the underwriters have reserved for sale, at the initial public offering price, up to % of the shares offered by this prospectus for sale to some of our directors, officers, employees and related persons through a directed share program. If these persons purchase reserved shares, this will reduce the number of shares available for sale to the general public. Any reserved shares that are not so purchased will be offered by the underwriters to the general public on the same terms as the other shares offered by this prospectus.
See “Risk Factors” for a discussion of risks you should carefully consider before deciding to invest in our common stock.
After the completion of this offering, we will be a “controlled company” within the meaning of the New York Stock Exchange’s corporate governance standards.
Proposed New York Stock Exchange ticker symbol
“HAYW.”
Except as otherwise indicated, the number of shares of common stock outstanding after this offering is based on shares outstanding as of December 31, 2020 after giving effect to the Reclassification, assuming an initial public offering price of $ per share (which is the midpoint of the estimated offering price range shown on the cover page of this prospectus). Because the number of shares of our common stock into which a share of our Class A stock is convertible will be determined by reference to the initial public offering price in this offering, a change in the initial public offering price would have a corresponding impact on the number of outstanding shares of our common stock presented in this prospectus after giving effect to this offering. See “The Reclassification.” Except as otherwise indicated, the number of shares of our common stock to be outstanding after this offering excludes:
•
shares of common stock issuable upon the exercise by the underwriters in this offering of their option to purchase additional shares of common stock from us;
•
shares of common stock issuable upon the exercise of stock options outstanding as of , 2021 under our 2017 Plan (as defined herein) at a weighted average exercise price of;
•
shares of common stock available for future issuance as of , 2021 under our 2017 Plan;
•
shares of common stock that will become available for issuance under our 2021 Plan, which includes shares of our common stock issuable upon the exercise of options with an exercise price per share equal to the initial public offering price in this offering and restricted common stock units, in each case to be granted in connection with this offering under our 2021 Plan; and
•
shares of common stock that will become available for issuance under our ESPP.
Except as otherwise noted or the context otherwise requires, all information in this prospectus assumes or gives effect to:
•
the Reclassification (assuming an initial public offering price equal to the midpoint of the estimated offering price range shown on the cover page of this prospectus);
•
no exercise of the outstanding stock options described above after , 2020;
•
no exercise by the underwriters of their option to purchase additional shares;
•
no purchase of shares of common stock in this offering by directors, officers or existing stockholders.
Summary Consolidated Financial and Other Data
You should read the following summary consolidated financial and other data together with the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of this prospectus and our audited consolidated financial statements and the related notes thereto and our unaudited consolidated financial statements and the related notes thereto, each included elsewhere in this prospectus. The summary consolidated statement of operations data, cash flows data and other data for the years ended December 31, 2019 and December 31, 2020 and the summary consolidated balance sheet data as of December 31, 2019 and December 31, 2020 have been derived from our audited consolidated financial statements included elsewhere in this prospectus. Our historical results for any prior period are not necessarily indicative of results to be expected in any future period.
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Years Ended December 31,
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(dollars in millions, except per share data)
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2020
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2019
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Statement of Operations Data
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|
|
|
|
|
|
|
|
|
|
|
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Net sales
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$
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875.4
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|
|
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$
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733.4
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Cost of sales
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478.4
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|
|
|
|
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409.9
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Gross profit
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397.0
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|
|
|
|
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323.5
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Selling, general, and administrative expenses
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195.2
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|
|
|
|
|
179.4
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Research, development, and engineering
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20.0
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|
|
|
|
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19.9
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Acquisition and restructuring related expense (income)
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19.3
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(16.3)
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Amortization of intangible assets
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37.9
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|
|
|
|
|
41.8
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Operating income
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|
|
|
|
124.6
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|
|
|
|
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98.7
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Interest expense, net
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73.6
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84.5
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Other (income) expense, net
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(6.8)
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2.1
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Total other expense
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66.8
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86.6
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Income from operations before income taxes
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57.8
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12.1
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Provision for income taxes
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|
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|
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14.5
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|
|
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3.6
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|
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Net income
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$
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43.3
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|
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$
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8.5
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Net income margin
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4.9%
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1.2%
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Cash Flow Data
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Net cash provided by operating activities
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$
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213.8
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$
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94.0
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Net cash (used in) provided by investing activities
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(13.0)
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4.0
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Net cash used in financing activities
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(135.1)
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(65.1)
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Balance Sheet Data (as of period end)
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Cash and cash equivalents
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$
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114.9
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|
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$
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47.2
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Property, plant, and equipment, net
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142.3
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|
|
|
|
|
139.9
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|
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Goodwill and intangibles
|
|
|
|
|
2,034.5
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|
|
|
|
|
2,068.7
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Total assets
|
|
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2,607.1
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|
|
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2,603.1
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Long term debt
|
|
|
|
|
1,300.3
|
|
|
|
|
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1,147.8
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Total liabilities
|
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1,803.4
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|
|
|
|
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1,569.6
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Redeemable stock
|
|
|
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594.5
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|
|
|
|
|
869.5
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|
|
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Stockholders’ equity
|
|
|
|
|
209.2
|
|
|
|
|
|
164.0
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|
|
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Total liabilities, redeemable stock and stockholders’ equity
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$
|
2,607.1
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|
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|
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$
|
2,603.1
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Non-GAAP Data(1)
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Adjusted EBITDA(2)
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|
|
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231.6
|
|
|
|
|
|
172.4
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|
|
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Adjusted EBITDA margin(2)
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|
|
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26.5%
|
|
|
|
|
|
23.5%
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|
|
|
|
|
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Years Ended December 31,
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(dollars in millions, except per share data)
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2020
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2019
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|
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Pro forma:
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Pro forma Earnings per Class B common share(3)
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Basic
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$
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|
|
|
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Diluted
|
|
|
|
$
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|
|
|
|
|
Pro forma weighted average Class B common share(3)
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|
|
|
|
|
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|
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Basic
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|
|
|
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Diluted
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(1)
We use adjusted EBITDA and adjusted EBITDA margin to supplement GAAP measures of performance to evaluate the effectiveness of our business strategies. These metrics are also frequently used by analysts, investors and other interested parties to evaluate companies in our industry, when considered alongside other GAAP measures. Adjusted EBITDA and adjusted EBITDA margin are not recognized measures of financial performance under GAAP. We believe these non-GAAP measures provide analysts, investors and other interested parties with additional insight into the underlying trends of our business and assist these parties in analyzing our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance, which allows for a better comparison against historical results and expectations for future performance. Management uses these non-GAAP measures to understand and compare operating results across reporting periods for various purposes including internal budgeting and forecasting, short-and long-term operating planning, employee incentive compensation, and debt compliance. These non-GAAP measures are not intended to replace the presentation of our financial results in accordance with GAAP. Use of the terms EBITDA, adjusted EBITDA and adjusted EBITDA margin may differ from similar measures reported by other companies. Adjusted EBITDA and adjusted EBITDA margin are not calculated in the same manner by all companies, and accordingly, are not necessarily comparable to similarly entitled measures of other companies and may not be an appropriate measure for performance relative to other companies. Adjusted EBITDA should not be construed as an indicator of a company’s operating performance in isolation from, or as a substitute for, net income (loss), which is prepared in accordance with GAAP. We have presented adjusted EBITDA and adjusted EBITDA margin solely as supplemental disclosure because we believe it allows for a more complete analysis of results of operations. In the future we may incur expenses such as those added back to calculate adjusted EBITDA. Our presentation of adjusted EBITDA and adjusted EBITDA margin should not be construed as an inference that our future results will be unaffected by these items.
(2)
Adjusted EBITDA is defined as earnings before interest (including amortization of debt costs), income taxes, depreciation, and amortization further adjusted for the impact of restructuring related income, stock-based compensation, currency exchange items, Sponsor management fees and certain non-cash, nonrecurring or other items that are included in net income that we do not consider indicative of our ongoing operating performance. Adjusted EBITDA margin is defined as adjusted EBITDA divided by net sales.
Following is a reconciliation from net income to adjusted EBITDA for Fiscal Years 2020 and 2019.
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Fiscal Years
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(dollars in millions)
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2020
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2019
|
|
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Net income
|
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$
|
43.3
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|
|
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$
|
8.5
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|
|
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Depreciation
|
|
|
|
|
18.8
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|
|
|
|
|
17.2
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|
|
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Amortization
|
|
|
|
|
44.0
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|
|
|
|
|
46.8
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|
|
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Interest expense
|
|
|
|
|
73.6
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|
|
|
|
|
84.5
|
|
|
|
Income taxes
|
|
|
|
|
14.5
|
|
|
|
|
|
3.6
|
|
|
|
EBITDA
|
|
|
|
|
194.2
|
|
|
|
|
|
160.6
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|
|
|
|
|
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Fiscal Years
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|
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(dollars in millions)
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|
|
2020
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|
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2019
|
|
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Stock-based compensation(a)
|
|
|
|
|
1.9
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|
|
|
|
|
1.6
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|
|
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Sponsor management fees(b)
|
|
|
|
|
0.8
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|
|
|
|
|
0.8
|
|
|
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Currency exchange items(c)
|
|
|
|
|
(4.7)
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|
|
|
|
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4.2
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|
|
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Acquisition and restructuring related expenses, net(d)
|
|
|
|
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32.1
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|
|
|
|
|
1.4
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|
|
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Other(e)
|
|
|
|
|
7.3
|
|
|
|
|
|
3.8
|
|
|
|
Total Adjustments
|
|
|
|
$
|
37.4
|
|
|
|
|
$
|
11.8
|
|
|
|
Adjusted EBITDA
|
|
|
|
$
|
231.6
|
|
|
|
|
$
|
172.4
|
|
|
|
Adjusted EBITDA margin
|
|
|
|
|
26.5%
|
|
|
|
|
|
23.5%
|
|
|
(a)
Represents non-cash stock-based compensation expense related to equity awards issued.
(b)
Represents discretionary fees paid to our Sponsors for management services rendered pursuant to a management agreement with the Company. These payments will cease as of the effective date of our initial public offering.
(c)
Represents non-cash mark to market gains (losses) on foreign currency contracts.
(d)
Adjustments in 2019 include net one-time costs associated with reorganizations of $20.4 million, net of a gain on the sale of real estate of $16.9 million, and remeasurement of a contingent consideration of $6.0 million, as well as operating losses of $5.3 million related to an early stage product business acquired in 2018 that is being phased out in 2021. Adjustments in 2020 primarily include $19.3 million of business restructuring related costs, $4.2 million of severance and retention costs, and $5.1 million of operating losses related to an early stage product business acquired in 2018 that is being phased out in 2021.
(e)
Includes professional fees, financial fees, $2.0 million for expenses incurred in preparation for our initial public offering, additional health and safety expenses related to COVID-19, and other miscellaneous costs that we believe are not representative of our ongoing business operations.
(3)
Pro forma earnings per share gives effect to (1) the reclassification of Class B common stock into common stock and the -for-1 stock split of our common stock prior to this offering and (2) the conversion of Class A stock into common stock based on a price of $ , the midpoint of the range set forth on the cover of this prospectus.
RISK FACTORS
An investment in our common stock involves risks. You should carefully consider the following information about these risks, together with the other information contained in this prospectus, before investing in shares of our common stock. The risks described below are those that we believe are the material risks that we face. If any of the following risks actually occurs, our business, prospects, operating results and financial condition could suffer materially, the trading price of our common stock could decline and you could lose all or part of your investment. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties not currently known to us or those we currently view to be immaterial also may materially and adversely affect our business, prospects, operating results or financial condition. See “Special Note Regarding Forward-Looking Statements” elsewhere in this prospectus.
Risks Related to Our Business
Our business depends on the performance of distributors, builders, buying groups, retailers and servicers.
We distribute our products through our customers who are distributors, builders, buying groups, retailers and servicers, many of whom sell products of competing manufacturers. We rely on our customers to stock, market and recommend our products to pool owners and our business depends on retaining good relationships with our customers. However, the financial condition of these resellers could weaken, they could stop distributing our products or reduce sales of our products and prefer others, or uncertainty regarding demand for some or all of our products could cause them to reduce their ordering and marketing of our products, and as a result our business, financial condition, results of operations and cash flows could be materially impacted.
We have invested and intend to continue to invest in programs designed to enhance sales to distributors, builders, buying groups, retailers and servicers, including through volume rebates with key distributors. However, these programs may not be successful in retaining or increasing product purchases by these customers.
The demand for our swimming pool equipment products may be adversely affected by unfavorable economic and business conditions.
We compete in various geographic regions and product markets around the world. Among these, the most significant are residential markets in the United States, Canada, Europe and Australia as well as commercial markets in the United States and Europe. We have experienced, and expect to continue to experience, fluctuations in sales and results of operations due to economic and business cycles. While our products (other than for initial pool construction and remodels) are generally non-discretionary and purchased on a recurring basis due to the need for ongoing operation of pools, consumer spending affects sales of our products for initial pool installation and, more broadly, to our customers, such as distributors, builders, buying groups, retailers and servicers, who sell our products to pool owners and who must account for anticipated changes in consumer demand when they purchase our products from us. Consumer spending is impacted by factors outside of our control, including general economic conditions, the residential housing market, unemployment rates and wage levels, interest rate fluctuations, inflation, disposable income levels, consumer confidence, and access to credit. In economic downturns, the demand for swimming pool equipment products and the growth rate of pool-eligible households and swimming pool construction may decline. A weak economy may also cause pool owners to defer replacement and refurbishment activity or upgrades to new pool equipment, including newer technologies, or to purchase less expensive brands, and historically our aftermarket product sales have comprised a majority of our net sales. Even in generally favorable economic conditions, severe and/or prolonged downturns in the housing market could have a material adverse impact on our financial performance. In addition, we believe that homeowners’ access to consumer credit is a critical factor enabling the purchase of new pools and related products. Unfavorable economic conditions or a downturn in the housing market can result in significant tightening of credit markets, which limits the ability of pool owners to access financing for new swimming pools and related supplies, and consequently, replacement, repair and operation of equipment, which could negatively impact our product sales.
Any of the above factors, individually or in the aggregate, or a significant or sustained downturn in a specific end market or geographic region could reduce demand for our products, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.
We compete in markets with high levels of competition, which may result in pressure on our profit margins and limit our ability to maintain or increase the market share of our products.
The markets for our products are geographically diverse and highly competitive. We compete against large and well-established national and global companies, as well as regional and local niche OEM’s and lower cost manufacturers. Competition may also result from new entrants into the markets we serve, offering products that compete with us. Our competitors offer pool equipment of varied quality and across a wide range of retail price points. We compete based on brand recognition with pool owners, strong relationships with our distributors and resellers, and the loyalty of our builders and servicers with whom we have built a large installed base. In addition, we compete based on our technical innovation, intellectual property, reputation for providing quality and reliable products, competitive pricing and contractual terms. Some of our competitors, in particular smaller companies, compete based primarily on price and local relationships, especially with respect to products that do not require significant engineering or technical expertise. In addition, during economic downturns average selling prices tend to decrease as market participants compete more aggressively on price. Moreover, demand for our products, which impacts profit margins, is affected by changes in customer order and consumer purchasing patterns, such as changes in the levels of inventory maintained by customers and the timing of customer and consumer purchases, and changes in customers’ and consumers’ preferences for our products, including the success of products offered by our competitors. Consumer purchasing behavior may also shift by product mix in the market or result in a shift to new distribution channels, including e-commerce, which is a rapidly developing area. If we are unable to continue to differentiate our products or adapt to changes in consumer purchasing behavior or shifts in distribution channels, or if we are forced to cut prices or to incur additional costs to remain competitive, it could have a material adverse effect on our business, financial condition, results of operations and cash flows.
Our future success depends on developing, manufacturing and attaining market adoption of new products. Even if we are able to attain significant market acceptance of our planned or future products, the commercial success of these products is not guaranteed.
Our future financial success will depend substantially on our ability to develop, manufacture and effectively and profitably market and sell our planned and future new products. Pool owners are increasingly demanding “smart home” technology, automation and other features to enhance their pools and staying at the forefront of product innovation and consumer demand is important to our future success. We must continue to develop and bring to market innovative products, which requires hiring and retaining technical staff, maintaining and upgrading manufacturing facilities and equipment and expanding our intellectual property rights. We must also identify emerging technological and other trends in our target end markets as well as understand and react to potential regulatory changes. The failure to effectively launch competitive products, services, solutions, organization, workforce and sales strategies could have a material adverse effect on our business, financial condition, results of operations and cash flows. Even if we are able to achieve or maintain significant market acceptance, the commercial success of our planned or future products or services is dependent on a number of additional factors. Successful growth of our sales and marketing efforts will depend on the strength of our marketing infrastructure and the effectiveness of our sales and marketing strategies as well as the continued quality, reliability and innovation of our products. Our ability to satisfy product demand driven by our sales and marketing efforts will be largely dependent on the ability to maintain a commercially viable manufacturing process that is compliant with regulatory standards. Failure to manufacture, market and sell our planned or future products could have a material adverse effect on our business, financial condition, and results of operations.
In several geographic markets, such as Europe, many potential consumers prefer local suppliers, in some cases because of existing relationships and in other cases because of local legal restrictions or incentives that favor local businesses. Our success in these markets depends on obtaining and maintaining relationships with channel partners who can effectively sell our products to pool owners in the applicable market. Accordingly, our future success depends upon a number of factors, including our ability to develop or acquire innovative, competitive products and bring them to market quickly and cost effectively as well as develop customer service, solutions, organization, workforce and sales strategies to fit localities throughout the world particularly in high growth emerging markets.
Past growth may not be indicative of future growth.
Historically, we have experienced substantial sales growth through organic market share gains, geographic expansion, technological innovation, new product offerings, increased demand for outdoor living products and acquisitions that have increased our size, scope, and geographic footprint. Our various business strategies and initiatives, including our growth initiatives, are subject to business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In the future, we may not be able to:
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acquire new customers, retain existing customers or grow or maintain our share of the market;
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penetrate new markets;
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identify and develop new products that meet the demand of rapidly evolving pool owner expectations;
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generate sufficient cash flows to support expansion plans and general operating activities;
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obtain financing for our growth initiatives, including acquisitions;
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identify suitable acquisition candidates and successfully integrate acquired businesses;
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maintain favorable supplier and customer arrangements and relationships;
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maintain consumer satisfaction and retention; and
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identify and divest assets that do not meet our objectives.
If we are not able to continue to compete in our markets and grow our business, our business, financial condition, results of operations and cash flows could be adversely affected.
Our results of operations and cash flows may fluctuate from quarter to quarter for many reasons, including seasonality and weather conditions.
We experience seasonal demand with customers and pool owners and as a result we experience fluctuations in quarterly results. During the second quarter of a fiscal year, sales are higher in anticipation of the start of the summer pool season. In the fourth quarter, we incentivize trade customers to buy and stock up in preparation for next year’s pool season under an “early buy” program which offers a price discount and extended payment terms. Under the early buy program we ship products from October through March and receive payments for these shipments from April through July. As a result, our accounts receivable balance increases from October to June before the early buy payment is received. In addition, cash flow is higher in the second quarter as the seasonality of our business peaks and payments are received.
As a result, management believes that period to period comparisons of results of operations are not necessarily meaningful and should not be relied upon as any indication of future performance or results expected for the fiscal year. In addition, seasonal effects in our business may vary from year to year and be impacted by weather patterns, particularly by temperature, heavy flooding and droughts. Additionally, while the majority of our sales are driven by aftermarket repair, replacement and remodeling products, adverse weather conditions, such as cold or wet weather, may negatively impact demand for, and sales of, pool equipment as a result of diminished use and reduced construction speed.
A loss of, or material cancellation, reduction, or delay in purchases by, one or more of our largest customers could harm our business.
A majority of our net sales is generated from sales to distributors, including our largest customer, Pool Corporation, who represented approximately 30% of our net sales in Fiscal Year 2020 and 35% of our accounts receivable on December 31, 2020. While we do not have any other customers that accounted for 10% or more of our net sales in Fiscal Year 2020, we have other customers that are key to the success of our business. Our top five customers accounted for approximately 43% of our net sales in Fiscal Year 2020. Our concentration of sales to a relatively small number of larger customers makes our relationship with each of these customers important to our business. Our success is dependent on retaining these customers, which requires us to successfully manage relationships and anticipate the needs of our customers in the
channels in which we sell our products. We cannot provide assurance that we will be able to retain our largest customers. In addition, some of our customers may shift their purchases to our competitors in the future. The loss of one or more of our largest customers, any material cancellation, reduction, or delay in purchases by these customers, or our inability to successfully develop relationships with additional customers could have a material adverse effect on our business, financial condition, results of operations and cash flows.
We are exposed to credit risk on our accounts receivable and this risk is heightened during periods when economic conditions worsen.
We distribute our products through distributors, large pool builders, buying groups, services and specialty online resellers. A substantial majority of our outstanding accounts receivables are not covered by collateral, third-party bank support or financing arrangements, or credit insurance, and a significant portion of our accounts receivables are typically concentrated within a relatively small number of distributors, builders, buying groups, retailers and servicers. As of December 31, 2020, our largest customer represented approximately 35% of our accounts receivable and our top five customers represented approximately 54% of our accounts receivable. Furthermore, our exposure to credit and collectability risk on our accounts receivable is higher in certain international markets and our ability to mitigate such risks may be limited. While we have procedures to monitor and limit exposure to credit risk on our accounts receivable there can be no assurance such procedures will effectively limit our credit risk and avoid losses.
We are exposed to political, regulatory, economic, trade, and other risks that arise from our international business operations.
Sales outside of the United States for Fiscal Year 2020 accounted for approximately 29% of our net sales. Furthermore, we obtain some components and raw materials from non-U.S. suppliers and have manufacturing facilities in Europe and China. Accordingly, our business is subject to the political, regulatory, economic, trade, and other risks that are inherent in operating in numerous countries. These risks include:
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changes in general economic and political conditions in countries where we operate, particularly in emerging markets;
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relatively more severe economic conditions in some international markets than in the United States;
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the imposition of tariffs, duties, exchange controls or other trade restrictions, including recently enacted tariffs on manufactured goods imported from China;
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changes in tax treaties, laws or rulings that could have a material adverse impact on our effective tax rate;
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the difficulty of enforcing agreements and collecting receivables through non-U.S. legal systems;
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the difficulty of communicating and monitoring evolving standards and directives across our product lines, services, and global facilities;
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trade protection measures and import or export licensing requirements and restrictions;
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the possibility of terrorist action affecting us or our operations;
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the threat of nationalization and expropriation;
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difficulty in staffing and managing widespread operations in non-U.S. labor markets;
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limitations on repatriation of earnings or other regionally-imposed capital requirements;
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the difficulty of protecting intellectual property and other proprietary rights in non-U.S. countries; and
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changes in and required compliance with a variety of non-U.S. laws and regulations.
Our success depends in part on our ability to anticipate and effectively manage these and other risks. We cannot assure that these and other factors will not have a material adverse effect on our international operations or on our business as a whole.
Changes in U.S. or foreign government administrative policy, including changes to existing trade agreements, could have a material adverse effect on us.
As a result of changes to U.S. or foreign government administrative policy, there may be changes to existing trade agreements, such as the U.S.-Mexico-Canada Agreement (“USMCA”), which recently replaced the North American Free Trade Agreement. The full impact of the USMCA on manufacturing operations in North America, as well as on economic conditions and markets generally, is currently unknown. Further, during the negotiations leading up to the USMCA, the political and trade relationship between the United States and Mexico was strained, and such relationship may deteriorate. If our ability, the ability of our partners or our contract manufacturer’s ability, to manufacture our products is interrupted as a result, or if our ability to import products or raw materials into the United States is impacted, our business, financial condition, results of operations or cash flows could be adversely affected.
In addition, recently enacted tariffs and potential future increases in tariffs on manufactured goods imported from China could adversely affect our business. Since July 2018, the United States has imposed a series of tariffs, ranging from 5% to 25%, on a variety of imports from China and subsequently implemented tariffs on additional goods imported from China. As trade negotiations between the United States and China continue, it is unclear as to whether or not the U.S. government will take further tariff action or perhaps grant relief to actions already put in place. Inability to reduce acquisition costs or pass through price increases could have an adverse effect on our results of operations and cash flows. Similarly, increases in pricing may have an adverse impact on the competitiveness of the Company’s products relative to other manufacturers with less exposure to the tariff and could also lead to adverse impacts on our results of operations and cash flows.
It remains unclear what the U.S. government or other foreign governments will or will not do with respect to tariffs, USMCA or other international trade agreements and policies. Other governmental action related to tariffs or international trade agreements, including USMCA, changes in U.S. social, political, regulatory and economic conditions or in laws and policies governing foreign trade, manufacturing, development and investment in the territories and countries where we currently manufacture and sell products, and any resulting negative sentiments towards the United States as a result of such changes, could also have a material adverse effect on our business, financial condition, results of operations and cash flows.
We may not be able to identify, finance and complete suitable acquisitions, and any completed acquisitions may be unsuccessful or consume significant resources.
Our business strategy includes acquiring businesses that complement our existing businesses. To date, we have experienced significant growth through acquisitions, completing multiple acquisitions over the past two decades, but we may not be able to successfully integrate an acquired business or technology or to effectively manage the company following an acquisition. Acquisitions could also result in dilutive issuances of equity securities, the use of our available cash, or the incurrence of debt, which could harm our operating results. In addition, if an acquired business fails to meet our expectations, our business, financial condition, results of operations or cash flows may be negatively affected. We continue to analyze and evaluate the acquisition of strategic businesses or product lines with the potential to strengthen our industry position or enhance our existing set of product offerings. We may not be able to identify suitable acquisition candidates, obtain financing or have sufficient cash necessary for acquisitions or successfully complete acquisitions in the future. Any acquisitions that we complete may not be successful. Acquisitions may involve significant cash expenditures, debt incurrences, equity issuances, operating losses and expenses. Acquisitions involve numerous other risks, including:
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diversion of management time and attention from daily operations;
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difficulties integrating acquired businesses, technologies and personnel into our business;
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difficulties in obtaining and verifying the financial statements and other business information of acquired businesses;
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inability to obtain required regulatory approvals;
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potential loss of key employees, key contractual relationships or key customers of acquired companies or of ours;
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assumption of the liabilities and exposure to unforeseen liabilities of acquired companies, including risks relating to anti-corruption laws such as the U.S. Foreign Corrupt Practices Act (the “FCPA”) and privacy laws, including the General Data Protection Regulation (“GDPR”); and
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dilution of interests of holders of our shares through the issuance of equity securities or equity-linked securities.
It may be difficult for us to integrate acquired businesses, products or technology efficiently into our business operations. Any acquisitions or investments may not be successful and may ultimately result in impairment charges and have a material adverse effect on our business, financial condition, results of operations and cash flows.
The COVID-19 pandemic and associated responses could adversely impact our business, operations, financial condition, results of operations or cash flows.
While we believe that the COVID-19 pandemic has only reinforced existing pool industry growth trends and has not had a significant impact to our cost structure, our business, operations, financial condition, results of operations or cash flows could be negatively impacted by the COVID-19 pandemic and associated responses.
Early in the pandemic, certain of our suppliers faced challenges and were not able to timely deliver the quantities of raw materials or components we required. This negatively affected our production capabilities in the second quarter. During the third quarter we secured secondary sources of supply and were able to return production to full capabilities. Continued restrictions and disruption of transportation, including reduced availability of air transport, port closures and increased border controls or closures, have resulted in higher costs and delays, both for obtaining raw materials and components and shipping finished goods to customers, which has had a limited impact on our profitability. However, if the COVID-19 pandemic is prolonged or worsens, we could experience further supply chain disruptions or delays that could have a material impact on our business.
Our North American operations are and have been continuously open since the start of the COVID-19 pandemic as water sanitization has been designated as an essential business in almost all of our markets. As such we have implemented the necessary steps to protect our manufacturing and distribution facilities to ensure we have continuity of production and supply to our customers. While we did experience in the early months of the pandemic partial or full facility closure for cleaning and sanitization, all of our manufacturing and distribution facilities are currently operational. However, a future shutdown or reduction of our manufacturing or distribution facilities as a result of the pandemic could have a negative impact on our operations, inventory, results of operations or cash flows.
The COVID-19 pandemic has caused a global economic slowdown that may last for a potentially extended duration, and it is possible that it could cause a global recession. Deteriorating economic and political conditions caused by the COVID-19 pandemic, such as increased unemployment, decreased capital spending, declines in consumer confidence, or economic slowdowns or recessions, could cause a decrease in demand for our products. In addition, a prolonged or worsened COVID-19 pandemic could lead to the shutdown or material reduction of pool construction and repair, replacement and remodeling activity, which could have a material adverse effect on our business, financial condition, results of operations and cash flows. While we have experienced higher demand in our pool business as pool owners sheltered-in-place and have spent more time at home as a result of the COVID-19 pandemic, such growth may not be sustainable and may not be repeated in future periods. Furthermore, even if growth in demand continues, we may not be able to meet that demand due to production and capacity challenges.
The severity, magnitude and duration of the current COVID-19 pandemic is uncertain, rapidly changing and hard to predict. We may not be able respond to the impacts of the COVID-19 pandemic on a timely basis to prevent near- or long-term adverse impacts to our results of operations. Any negative impact on our business, financial condition, results of operations and cash flows cannot be reasonably estimated at this time, but the COVID-19 pandemic could lead to extended disruption of economic activity and the impact on our business, financial condition, results of operations and cash flows could be material.
Sales of counterfeit versions of our products, as well as unauthorized sales of our products, may adversely affect our reputation, business, financial condition, results of operations and cash flows.
Our products have and may continue to become subject to competition from counterfeit products, which are products sold under the same or very similar brand names and/or having a similar appearance to genuine products, but which are sold without proper licenses or approvals. Such products divert sales from genuine products, often are of lower cost and quality, and have the potential to damage the reputation for quality and effectiveness of the genuine product. Illegal sales of counterfeit products could have an adverse impact on our business, financial condition, results of operations and cash flows. In addition, if illegal sales of counterfeits result in adverse product liability or negative customer experience, we may be associated with any negative publicity resulting from such incidents. Although we seek to monitor the existence of counterfeit products and initiate actions to remove them from sale, we may not be able to prevent third parties from manufacturing, selling or purporting to sell counterfeit products competing with our products. Such sales may also be occurring without our knowledge. The existence and any increase in production or sales of counterfeit products or unauthorized sales could negatively impact our sales, brand reputation, business, financial condition, results of operations and cash flows.
We may be negatively impacted by litigation and other claims, including intellectual property, product liability or warranty claims, and health and safety concerns, including product recalls, could negatively impact our sales and expose us to litigation.
We have been, and in the future may be, made a party to litigation arising in the ordinary course of our business, including those relating to commercial or contractual disputes with suppliers, customers or parties to acquisitions and divestitures, intellectual property matters, product liability, the use or installation of our products, consumer matters, employment and labor matters, and environmental, health and safety matters, including claims based on alleged exposure to asbestos-containing product components. For example, we are a defendant in a set of consolidated patent infringement actions brought by Pentair Water Pool and Spa, Inc. and Danfoss Drives A/S (the “Pentair Litigation”). The plaintiffs in the Pentair Litigation have claimed certain of our variable speed pump and controller products infringe seven U.S. patents, and may in the future claim that other Hayward products infringe and/or that we, our vendors and/or our customers infringe other Pentair patents. We have challenged six of the asserted patents at the U.S. Patent and Trademark Office (“USPTO”) in inter partes proceedings and have raised non-infringement and invalidity defenses to each of the seven patents currently asserted against us in the infringement actions, which are currently stayed. See “Business—Legal Proceedings.” The outcome of such legal proceedings cannot be predicted with certainty and some may be disposed of unfavorably to us. Regardless of outcome, legal proceedings can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. In addition, we have agreed to provide indemnification in connection with prior acquisitions or dispositions for certain of these matters, and we cannot assure you that material indemnification claims will not be brought against us in the future.
Product quality issues could negatively impact consumer confidence in our brands and our business. If our products do not meet applicable safety standards or pool owners’ expectations regarding safety or quality, we could experience lost sales and increased costs and be exposed to legal, financial, and reputational risks, as well as governmental enforcement actions. Actual, potential or perceived product safety concerns could expose us to litigation, as well as government enforcement actions, and result in costly product recalls and other liabilities.
We have in the past and may in the future implement a voluntarily recall or market withdrawal or may be required to do so by a regulatory authority. A recall or market withdrawal of one of our products would be costly and would divert management resources. A recall or withdrawal of one of our products, or
a similar product processed by another entity, also could impair sales of our products because of confusion concerning the scope of the recall or withdrawal, or because of the damage to our reputation for quality and safety.
In addition, if our products are, or are alleged to be, defectively designed, manufactured or labeled, contain, or are alleged to contain, defective components or components containing hazardous materials, such as asbestos, or are misused, we may become subject to costly litigation initiated by pool owners. Product liability claims could harm our reputation, divert management’s attention from our core business, be expensive to defend, and may result in sizable damage awards against us. Although we maintain product liability insurance, we may not have sufficient insurance coverage for future product liability claims. We may not be able to obtain insurance in amounts or scope sufficient to provide us with adequate coverage against all potential liabilities. Product liability claims brought against us, with or without merit, could increase our product liability insurance rates or prevent us from securing continuing coverage, harm our reputation, significantly increase our expenses, and reduce product sales. Product liability claims could cause us to incur significant legal fees and deductibles and claims in excess of our insurance coverage would be paid out of cash reserves, harming our financial condition and operating results. In addition, successful product liability claims made against one of our competitors could cause claims to be made against us or expose us to a perception that we are vulnerable to similar claims. Claims against us, regardless of their merit or potential outcome, may also hurt our ability to obtain acceptance of our products or to expand our business.
We have significant goodwill and intangible assets and future impairment of our goodwill and intangible assets could have a material adverse effect on our results of operations.
We test goodwill and other indefinite-lived intangible assets for impairment on at least an annual basis, and more frequently if circumstances warrant. As of December 31, 2020, our goodwill and intangible assets were $2,034.5 million and represented approximately 78% of our total assets. Declines in value could result in future goodwill and intangible asset impairment charges.
Exchange rate fluctuations could adversely affect our financial condition, results of operations and cash flows.
We incur currency transaction risk whenever we enter into either a purchase or sale transaction using a currency other than the local currency of the transacting entity. We conduct business in various locations throughout the world and are subject to market risk due to changes in value of foreign currencies in relation to our reporting currency, the U.S. dollar. Periodically, we use derivative financial instruments to manage these risks. The functional currencies of our foreign operating locations are generally the local currency in the country. We manage these operating activities at the local level and net sales, costs, assets and liabilities are generally denominated in local currencies, thereby mitigating the risk associated with changes in foreign exchange. However, our results of operations and assets and liabilities are reported in U.S. dollars and thus will fluctuate with changes in exchange rates between such local currencies and the U.S. dollar.
The Company’s financial instruments that can be affected by foreign currency fluctuations and exchange risks consist primarily of cash and cash equivalents, trade receivables, trade payables, and net sales denominated in currencies other than the U.S. dollar. For the Fiscal Year 2020, approximately 25% of our net sales were denominated in a currency other than our functional U.S. dollar currency. These sales were primarily transacted in Euros as well as Canadian dollars. Consequently, we are exposed to the impact of exchange rate volatility between the U.S. dollar and these currencies. To hedge against this risk, we enter into foreign currency forward exchange contracts to protect our trade receivable positions and forward options to protect highly probable net Euro sales receipts expected from our outstanding contractual price and sales volume commitments.
We expect that the amount of our sales denominated in non-dollar currencies may increase in future periods. Given the volatility of exchange rates, there can be no assurance that we will be able to effectively manage our currency transaction risks or that any volatility in currency exchange rates will not have a material adverse effect on our financial condition or results of operations. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Quantitative and Qualitative Disclosures about Market Risk.”
Additionally, because our consolidated financial results are reported in U.S dollars, the translation of sales or earnings generated in other currencies into U.S. dollars can result in a significant increase or decrease in the amount of those sales or earnings in our financial statements, which also affects the comparability of our results of operations and cash flows between financial periods. Further, currency fluctuations may negatively impact our debt service requirements, which are primarily in U.S. dollars.
Changes in our effective tax rate or exposure to additional income tax liabilities could adversely affect our financial results.
Taxation and tax policy changes, tax rate changes, new tax laws, revised tax law interpretations, and changes in accounting standards and guidance related to tax matters may cause fluctuations in our effective tax rate. Our effective tax rate may also be impacted by changes in the geographic mix of our earnings.
We may experience cost and other inflation.
In the past, we have experienced material cost and other inflation in a number of our businesses. We strive for productivity improvements and seek to implement increases in selling prices to help mitigate cost increases in raw materials (especially metals and resins), energy and other costs including wages, pension, health care and insurance. We continue to implement operational initiatives designed to mitigate the impacts of this inflation and reduce our costs. However, these actions may not be successful in managing our costs or increasing our productivity. Continued cost inflation or failure of our initiatives to generate cost savings or improve productivity could have a material adverse effect on our business, financial condition, results of operations and cash flows.
We depend on our ability to attract, develop, and retain highly qualified personnel, including key members of management.
Our future success depends on the continued efforts of the members of our executive management team. If one or more of our executives or other key personnel are unable or unwilling to continue in their present positions, or if we are unable to attract and retain high-quality executives or key personnel in the future, our business may be adversely affected.
In addition, we consider our employees to be the foundation for our growth and success. As such, our future success depends in large part on our ability to attract, train, retain, and motivate qualified personnel. For example, during periods of unexpected demand for our products, we may need to hire additional personnel to maintain sufficient inventory levels. If we are unable to attract, hire and retain qualified personnel, our operating results could be adversely affected.
We may encounter difficulties in operating or implementing a new enterprise resource planning (“ERP”) system, which may adversely affect our operations and financial reporting.
Over the next 2-3 years, we intend to select and implement a new ERP system for a majority of our business as part of our ongoing efforts to improve and strengthen our operational and financial processes and our reporting systems. The ERP system may not provide the benefits anticipated, could add costs and complications to ongoing operations, and may impact our ability to process transactions efficiently, all of which may have a material adverse effect on our business and results of operations.
Disruptions in the financial markets could adversely affect us, our customers and our suppliers by increasing funding costs or reducing availability of credit.
In the normal course of our business, we may access credit markets for general corporate purposes, which may include refinancing or repayment of indebtedness, acquisitions, additions to working capital, repurchase of shares, capital expenditures and investments in our subsidiaries. Our access to and the cost of capital could be negatively impacted by disruptions in the credit markets, which have occurred in the past and made financing terms for borrowers unattractive or unavailable. These factors may make it more difficult or expensive for us to access credit markets if the need arises. In addition, these factors may make it more difficult for our suppliers to meet demand for their products or for prospective customers to commence new projects, as customers and suppliers may experience increased costs of debt financing or difficulties in
obtaining debt financing. Disruptions in the financial markets have had adverse effects on other areas of the economy and have led to a slowdown in general economic activity that may continue to adversely affect our businesses. One or more of these factors could adversely affect our business, financial condition, results of operations or cash flows.
Our operating results will be harmed if we are unable to effectively manage and sustain growth or scale our operations.
We may not be able to manage our future growth, if any, efficiently or profitably. Our sales and operating margins, or sales and margin growth, may be less than expected. If we are unable to scale our operations efficiently or maintain pricing without significant discounting, we may fail to achieve expected operating margins, which would have a material and adverse effect on our operating results. Growth may also stress our ability to adequately manage our operations, quality of products, safety, and regulatory compliance. If growth significantly decreases, it will negatively impact our cash flows, and it may be necessary to refinance our existing indebtedness or obtain additional financing, which may increase indebtedness or result in dilution to shareholders. Further, we may not be able to obtain additional financing on acceptable terms, if at all.
We rely on information technology systems to support our business operations. A significant disturbance or breach of our technological infrastructure, or those of our vendors or others with which we do business, could adversely affect our financial condition and results of operations. Additionally, failure to maintain the security of confidential information could damage our reputation and expose us to litigation.
Information technology supports several aspects of our business, including, among others, supply sourcing, pricing, customer service, transaction processing, financial reporting, collections and cost management. In addition, we expect our reliance on information technology systems to increase as we continue to develop IoT-enabled products, such as our Omni mobile app. As a result, our ability to operate effectively on a day-to-day basis and accurately report our results depends on a solid technological infrastructure, which is inherently susceptible to internal and external threats. We are vulnerable to interruption and breakdown by fire, natural disaster, power loss, telecommunication failures, internet failures, security breaches, and other catastrophic events. Exposure to various types of cyberattacks such as malware, computer viruses, worms, or other malicious acts, as well as human error or malfeasance, could also potentially disrupt our operations or result in a significant interruption in the delivery of our products. Such information technology security threats are increasing in frequency and sophistication and pose a risk to the security of our systems and networks and the confidentiality, availability and integrity of the data we process and maintain.
Advances in computer and software capabilities, encryption technology, and other discoveries increase the complexity of our technological environment, including how each interact with our various software platforms. Such advances could delay or hinder our ability to process transactions or could compromise the integrity of our data, resulting in a material adverse impact on our financial condition and results of operations. The risk of system disruption is increased when significant system changes are undertaken. If we fail to timely integrate and update our information systems and processes, we may fail to realize the cost savings or operational benefits anticipated to be derived from these initiatives. We also may experience occasional system interruptions and delays that make our information systems unavailable or slow to respond, including the interaction of our information systems with those of third parties. A lack of sophistication or reliability of our information systems could adversely impact our operations and consumer service and could require major repairs, replacements or remodelings, resulting in significant costs and foregone sales.
Cybersecurity threats, which include computer viruses, spyware, ransomware and malware, attempts to access information, denial of service attacks, and other electronic security breaches, are persistent and evolve quickly, and we have in the past and may in the future experience such cybersecurity threats. Such threats have increased in frequency, scope, and potential impact in recent years. Since the techniques used to obtain unauthorized access or to sabotage systems change frequently and are often not recognized until after they are launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures. The accidental or willful security breaches or other
unauthorized access by third parties to our information technology systems or facilities, or those of our vendors and/or others with which we do business, or the existence of computer viruses in our or their data or software, and/or any other failure of our or their information technology systems could expose us to a risk of information loss, the misappropriation of proprietary and confidential information, work stoppages, disruptions, and/or the defective manufacture or defective design of our products, which could expose us to liability. Any theft, misuse, unauthorized or inadvertent disclosure, manipulation or destruction of this information could result in, among other things, unfavorable publicity, damage to our reputation, difficulty in marketing our products, allegations by our customers that we have not performed our contractual obligations, regulatory fines or penalties, litigation by affected parties and possible financial obligations for liabilities and damages related to the theft or misuse of this information, any of which could have an adverse effect on our business, financial condition, results of operations, reputation, and relationships with our customers and suppliers. Further, we could be forced to expend significant financial and operational resources in response to a security breach, including repairing system damage, increasing security protection costs by deploying additional personnel and modifying or enhancing our protection technologies, investigating and remediating any information security vulnerabilities and defending against and resolving legal and regulatory claims, all of which could divert resources and the attention of our management and key personnel away from our business operations and adversely affect our business, financial condition and results of operations.
Risks Related to the Manufacturing, Supply and Distribution of Our Products
We depend on suppliers, including single-source suppliers and, in a few cases, sole-source suppliers, to consistently supply us with components for our products, and any failure to procure such components could have a material adverse effect on our business, product inventories, sales and profit margins.
Our suppliers (and those they depend upon for materials and services) are subject to risks, including labor disputes or constraints, union organizing activities, financial liquidity, inclement weather, natural disasters, significant public health and safety events, supply constraints, and general economic and political conditions that could limit their ability to provide us with materials. While we have manufacturing and supply agreements with the most strategic and critical of our suppliers, for most of our suppliers we place purchase orders on an as-needed basis. Our suppliers could discontinue the manufacturing or supply of these components at any time. We carry safety stocks within our inventory, but do not carry a significant inventory of these components that could cover every potential supply constraint. Our suppliers may not be able to meet our demand for their products, either because of acts of nature, the nature of our agreements with those manufacturers or our relative importance to them as a customer, and our manufacturers may decide in the future to discontinue or reduce the level of business they conduct with us. We might not be able to identify and obtain additional or replacement suppliers for any of these components quickly or at all or without incurring significant additional costs. We cannot guarantee that we will be able to establish alternative relationships on similar terms, without delay or at all. In addition, we rely on single-source suppliers for certain types of parts in our products, and, in a few cases, on sole-source suppliers. A single-source supplier is a supplier from which we make all purchases of a particular component used in our products even though other suppliers of the component exist. A sole-source supplier is a supplier from which we make all purchases of a particular component used in our product, and the supplier is the only source of that particular component in the market. Establishing additional or replacement suppliers for any of these materials or components, if required, or any supply interruption from our suppliers, could limit our ability to manufacture our products, result in production delays and increased costs and adversely affect our ability to deliver products to our customers on a timely basis or at all. If we are not able to identify alternate sources of supply for the components, we might need to modify our product to use substitute components, which could cause delays in shipments, increase design and manufacturing costs and increase prices for our products. Any such modified product might not be as effective as the predecessor product or might not gain market acceptance. This could lead to customer or consumer dissatisfaction and damage to our reputation and could materially and adversely affect our business, product inventories, sales and profit margins.
Product manufacturing disruptions, including as a result of catastrophic and other events beyond our control, could cause us to be unable to meet customer demands or increase our costs.
If operations at any of our manufacturing facilities were to be disrupted as a result of significant equipment failures, natural or man-made disasters, earthquakes, power outages, fires, explosions, terrorism,
adverse weather conditions, labor disputes, public health epidemics or other catastrophic events or events outside of our control, we may be unable to fill customer orders and otherwise meet customer demand for our products. In addition, these types of events may negatively impact residential, commercial and industrial spending in impacted regions or, depending on the severity, globally. As a result, any of such events could have a material adverse effect on our business, financial condition, results of operations and cash flows.
Interruptions in production, in particular at our manufacturing facilities, could increase our costs and reduce our sales. Any interruption in production capability could require us to make substantial capital expenditures to fill customer orders. While we maintain property damage insurance, as well as business interruption insurance to mitigate losses resulting from any production interruption or shutdown caused by an insured loss, any recovery under our insurance policies may not offset the lost sales or increased costs that may be experienced during the disruption of operations, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.
The cost of raw materials could increase our cost of goods sold and cause our results of operations and financial condition to suffer.
Our principal raw materials are resins (ABS, PP, HDPE, PVC), metals (copper, steel, aluminum, titanium, ruthenium) and liner board (packaging), which are commodity materials. The prices of these commodity materials are a function of, among other things, manufacturing capacity and demand. While we have generally passed through raw material price increases to our consumers, we may not always be able to do so. We purchase most of our key parts and components primarily from large suppliers in the United States, Mexico and China. We believe that reliable alternate sources of supply are available for all of our raw materials and finished goods. We may not continue to have access to reliable sources of supply. Additionally, significant price fluctuations or shortages in raw materials needed for our products may increase our cost of goods sold and cause our results of operations and financial condition to suffer.
If we do not manage product inventory in an effective and efficient manner, it could adversely affect profitability.
Many factors affect the efficient use and planning of product inventory, such as effectiveness of predicting demand, preparing manufacturing to meet demand, meeting product mix and product demand requirements, and managing product expiration. We build-up product inventory during the third quarter in anticipation of shipments of products purchased through our early buy program in the fourth quarter. However, we may not accurately anticipate the level of customer participation in the early buy program or the amount of products that they may purchase. We may be unable to manage our inventory efficiently, keep inventory within expected budget goals, keep our work-in-process inventory on hand or manage it efficiently, control expired product, or keep sufficient product on hand to meet demand. We may not be able to keep inventory costs within our target levels. Failure to do so may harm our long-term growth prospects.
Risks Related to Government Regulation
The nature of our business subjects us to compliance with, and liabilities under, employment, environmental, health, transportation, safety, and other governmental regulations.
We are subject to foreign, federal, state, and local laws and regulations relating to matters such as product labeling, weights and measures, zoning, land use, environmental protection, local fire codes, and health and safety, including workplace safety, including regulation by the USEPA, the Federal Communications Commission, the Consumer Product Safety Commission, the Occupational Safety and Health Administration (“OSHA”), the National Fire Protection Agency, and the Federal Trade Commission,. Most of these requirements govern the packaging, labeling, handling, transportation, storage, sale and use of our products. We and certain of our affiliates store certain types of hazardous materials and chemicals at various locations and the storage of these items is strictly regulated by local fire codes. In addition, we sell UV, Ozone, and Salt Chlorinator and related products that are regulated under the Federal Insecticide, Fungicide and Rodenticide Act (“FIFRA”), which primarily relate to testing, use, reporting, sale, distribution, licensing and market verification of these products. We are also subject to regulation passed by the DOE relating to the labeling, testing, reporting and certification of new and replacement pumps sold for swimming pools.
Failure to comply with these laws and regulations, or others that we may be subject to in the future, may result in investigations, the assessment of administrative, civil and criminal fines, damages, seizures, disgorgements, penalties, cessation of operations, or the imposition of injunctive relief. Moreover, compliance with such laws and regulations in the future could prove to be costly and affect various aspects of the business. Although we presently do not expect to incur any capital or other expenditures relating to regulatory matters in amounts that may be material to us, we may be required to make such expenditures in the future. These laws and regulations have changed substantially and rapidly in recent years, and we anticipate that there will be continuing changes.
The clear trend in environmental, health, transportation, and safety regulations is to place more restrictions and limitations on activities that impact the environment, such as the use and handling of hazardous materials and chemicals. Under certain environmental laws and regulations, we could be held strictly, jointly and severally liable for costs related to contamination at our currently or formerly owned, leased or operated properties or at third-party sites where we have sent wastes. We could also be liable to third parties for related damages, including property damage or personal injuries. Certain of our properties have had a history of industrial and other uses that have resulted in contamination. In addition, from time to time, we have been involved in investigation and remediation activities, and there can be no assurance that any future costs or liabilities relating to such activities will not be material.
Increasingly, strict restrictions and limitations have resulted in higher costs for us and it is possible that the costs of compliance with such laws and regulations will continue to increase. Our attempts to anticipate future regulatory requirements that might be imposed and our plans to remain in compliance with changing regulations and to minimize the costs of such compliance may not be as effective as we anticipate. We cannot assure you that we will not incur material costs to comply with such laws and regulations in the future.
Increased information technology security threats and computer crime pose a risk to our systems, networks and products, and we are exposed to potential regulatory, financial and reputational risks relating to the protection of our data.
We rely upon information technology systems and networks in connection with a variety of business activities, some of which are managed by third parties. The secure operation of our information technology systems and networks is critical to our business operations and strategy. Information technology security threats—from user error to attacks designed to gain unauthorized access to our systems, networks and data—are increasing in frequency and sophistication, posing a risk to the security of our systems and networks and the confidentiality, availability and integrity of the data we process and maintain. As our business increasingly interfaces with employees, customers, trade customers and suppliers using information technology systems and networks, we are subject to an increased risk to the secure operation of these systems and networks. We may in the future and have in the past experienced cybersecurity attacks and other unauthorized or inadvertent disclosure of certain confidential information, including personal information. We periodically evaluate and test the adequacy of our systems, measures, controls and procedures and perform third-party risk assessments. In addition, our evolution into offering smart products that can connect to the IoT subjects us to increased cyber and technology risks, including reputational harm if any of our connected products experience data or cybersecurity breaches. Establishing and maintaining systems and processes to address these threats may increase our costs. Additionally, certain laws and regulations may require us to implement security measures to protect our systems and IoT connected devices. For example, the California Internet of Things Security Law, effective January 1, 2020, requires us to implement reasonable security measures for IoT devices, and failure to do so could expose us to investigation by the California Attorney General. The failure of such security measures or of our security systems and processes could expose us, our employees, customers, trade customers and suppliers to the theft of assets, misuse of information or systems, compromise of confidential information, manipulation and destruction of data, defective products, production downtimes and operations disruptions. The occurrence of any of these events could have a material adverse effect on our reputation, business, financial condition, results of operations and cash flows. In addition, such breaches in security could result in litigation, regulatory action and potential liability and the costs and operational consequences of implementing further data protection measures.
Our collection, use, storage, disclosure, transfer and other processing of personal information could give rise to significant costs and liabilities, including as a result of governmental regulation, uncertain or inconsistent interpretation and enforcement of legal requirements or differing views of personal privacy rights, which may have a material adverse effect on our reputation, business, financial condition and results of operations.
We collect, use, store, transmit and otherwise process data that is sensitive to the Company and its employees, customers, dealers and suppliers. A variety of state, federal, and foreign laws, regulations and industry standards apply to the collection, use, retention, protection, disclosure, transfer and other processing of certain types of data, including the California Consumer Privacy Act (the “CCPA”), the European Union General Data Protection Regulation (“GDPR”), Canada’s Personal Information Protection and Electronic Documents Act, and Australia’s Privacy Act. Some jurisdictions also are considering or have passed legislation requiring local storage and processing of data, or similar requirements, which could increase the cost and complexity of delivering our products and services. As we seek to expand our business, we are, and may increasingly become subject to various laws, regulations and standards, as well as contractual obligations, relating to data privacy and security in the jurisdictions in which we operate. In many cases, these laws and regulations may apply not only to third-party transactions, but also to transfers of information between or among us, our affiliates and other parties with whom we conduct business. These laws, regulations and standards are continuously evolving and may be interpreted and applied differently over time and from jurisdiction to jurisdiction, and it is possible that they will be interpreted and applied in ways that may have a material adverse effect on our reputation, business, financial condition and results of operations.
Many foreign data privacy regulations, including the GDPR, which became effective in the European Union in 2018 and has extraterritorial scope, are more stringent than laws and regulations in the United States. The GDPR has resulted and will continue to result in significantly greater compliance burdens and costs for companies with customers, users, or operations in the European Union. The GDPR’s requirements for using and sharing personal information may be operationally costly, and fines of up to 20 million Euros or up to 4% of the annual global revenues of the infringer, whichever is greater, can be imposed for violations. The GDPR imposes several stringent requirements for controllers and processors of personal information and could make it more difficult or more costly for us to use and share personal information. In addition to the GDPR, the European Union also is considering another draft data protection regulation. The proposed regulation, known as the Regulation on Privacy and Electronic Communications, or ePrivacy Regulation, would replace the current ePrivacy Directive and addresses topics such as unsolicited marketing and cookies. Originally planned to be adopted and implemented at the same time as the GDPR, the ePrivacy Regulation has been delayed. Recent discussions were cancelled due to the COVID-19 pandemic, further delaying enactment of this regulation, the details of which remain in flux. Additional time and effort may need to be spent addressing the new requirements in the potential ePrivacy Regulation as compared to the GDPR. Further, the Court of Justice of the European Union’s July decision in the Schrems II matter may impact our or our service providers ability to transfer personal data from Europe to the United States or other jurisdictions.
Within the United States, many states are considering adopting, or have already adopted, privacy regulations, including the CCPA, which became operational in January 2020 and became enforceable by the California Attorney General in July 2020. The CCPA increases privacy rights for California residents and imposes obligations on companies that process their personal information, came into effect on January 1, 2020. Among other things, the CCPA requires covered companies to provide new disclosures to California consumers and provide such consumers new data protection and privacy rights, including the ability to opt-out of certain sales of personal information. The CCPA provides for civil penalties for violations enforceable by the California Attorney General, as well as a private right of action for certain data breaches that result in the loss of personal information. This private right of action may increase the likelihood of, and risks associated with, data breach litigation. Additionally, in November 2020, California passed the California Privacy Rights Act (the “CPRA”), which expands the CCPA significantly, including by expanding consumers’ rights with respect to certain personal information and creating a new state agency to oversee implementation and enforcement efforts, potentially resulting in further uncertainty and requiring us to incur additional costs and expenses in an effort to comply. Many of the CPRA’s provisions will become effective on January 1, 2023. The costs of compliance with, and the other burdens imposed by, these and other laws or regulatory actions may increase our operational costs, and/or result in interruptions or delays in the availability of systems.
Our communications with our customers and email and social media marketing are subject to certain laws and regulations, including the Controlling the Assault of Non-Solicited Pornography and Marketing (“CAN-SPAM”) Act of 2003, the Telephone Consumer Protection Act of 1991 (the “TCPA”), and the Telemarketing Sales Rule and analogous state laws, that could expose us to significant damages awards, fines and other penalties that could materially impact our business. For example, the TCPA imposes various consumer consent requirements and other restrictions in connection with telemarketing activity and other communication with consumers by phone, fax or text message. The CAN-SPAM Act and the Telemarketing Sales Rule and analogous state laws also impose various restrictions on marketing conducted use of email, telephone, fax or text message. As laws and regulations, including FTC enforcement, rapidly evolve to govern the use of these communications and marketing platforms, the failure by us, our employees or third parties acting at our direction to abide by applicable laws and regulations could adversely impact our business, financial condition and results of operations or subject us to fines or other penalties.
In addition, some of these laws may require us to notify governmental authorities and/or affected individuals of data breaches involving certain personal information or other unauthorized or inadvertent access to or disclosure of such information. We have in the past and may in the future notify governmental authorities and affected individuals with respect to such incidents. For example, laws in all 50 U.S. states may require businesses to provide notice to consumers whose personal information has been disclosed as a result of a data breach. These laws are not consistent, and compliance in the event of a widespread data breach may be difficult and costly. We also may be contractually required to notify consumers or other counterparties of a security breach. Regardless of our contractual protections, any actual or perceived security breach or breach of our contractual obligations could harm our reputation and brand, expose us to potential liability or require us to expend significant resources on data security and in responding to any such actual or perceived breach.
In addition to government regulation, privacy advocates and industry groups have and may in the future propose self-regulatory standards from time to time. These and other industry standards may legally or contractually apply to us, or we may elect to comply with such standards. We expect that there will continue to be new proposed laws and regulations concerning data privacy and security, and we cannot yet determine the impact such future laws, regulations and standards may have on our business.
We make public statements about our use and disclosure of personal information through our privacy policies, information provided on our website and press statements. The publication of our privacy policies and other statements that provide promises and assurances about data privacy and security can subject us to potential government or legal action if they are found to be deceptive, unfair or misrepresentative of our actual practices.
Our employees, commercial partners, and vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements.
We are exposed to the risk that our employees, commercial partners, and vendors may engage in fraudulent or illegal activity. Misconduct by these parties could include intentional, reckless, and/or negligent conduct or disclosure of unauthorized activities to us that violate: (i) the rules of the applicable regulatory bodies; (ii) manufacturing standards; (iii) data privacy laws or other similar non-United States laws; or (iv) laws that require the true, complete and accurate reporting of financial information or data. These laws may impact, among other things, future sales, marketing, and education programs.
It is not always possible to identify and deter misconduct by our employees and other third parties, and the precautions we take to detect and prevent these activities may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations. In addition, we are subject to the risk that a person or government could allege such fraud or other misconduct, even if none occurred. If any such actions are instituted against us and we are not successful in defending ourselves or asserting our rights, those actions could result in the imposition of significant fines or other sanctions, including the imposition of civil, criminal, and administrative penalties, additional integrity reporting and oversight obligations. Whether or not we are successful in defending against any such actions or investigations, we could incur substantial costs, including legal fees, and divert the attention of management in defending
ourselves against any of these claims or investigations, which could have a material adverse effect on our business, financial condition, and results of operations.
Violations of the U.S. Foreign Corrupt Practices Act, U.K. Bribery Act, and other anti-corruption laws outside the United States could have a material adverse effect on us.
The FCPA, U.K. Bribery Act, and other anti-corruption laws in other jurisdictions generally prohibit companies and their intermediaries from making improper payments to government officials or other persons for the purpose of obtaining or retaining business. Recent years have seen a substantial increase in anti-bribery law enforcement activity, with more frequent and aggressive investigations and enforcement proceedings by both the U.S. Department of Justice and the SEC, increased enforcement activity by non-U.S. regulators and increases in criminal and civil proceedings brought against companies and individuals. Our policies mandate compliance with these anti-bribery laws. We operate in many parts of the world that are recognized as having governmental and commercial corruption and in certain circumstances, strict compliance with anti-bribery laws may conflict with local customs and practices. Because many of our customers and consumers are involved in infrastructure construction and energy production, they are often subject to increased scrutiny by regulators. We cannot assure you that our internal control policies and procedures will always protect us from reckless or criminal acts committed by our employees or third-party intermediaries. In the event that we believe or have reason to believe that our employees or agents have or may have violated applicable anti-corruption laws, including the FCPA, we may be required to investigate or have outside counsel investigate the relevant facts and circumstances, which can be expensive and require significant time and attention from senior management. Violations of these laws may require self-disclosure to government agencies and result in criminal or civil sanctions, which could disrupt our business and result in a material adverse effect on our reputation, business, financial condition, results of operations and cash flows.
Our failure to satisfy international trade compliance regulations, and changes in U.S. government sanctions, could have a material adverse effect on us.
Our global operations require importing and exporting goods and technology across international borders on a regular basis. Certain of the products we manufacture are “dual use” products, which are products that may have both civil and military applications, or may otherwise be involved in weapons proliferation, and may be subject to more stringent export controls. From time to time, we obtain or receive information alleging improper activity in connection with imports or exports. Our policy mandates strict compliance with U.S. and non-U.S. trade laws applicable to our products. However, even when we are in strict compliance with law and our policies, we may suffer reputational damage if certain of our products are sold through various intermediaries to entities operating in sanctioned countries. When we receive information alleging improper activity, our policy is to investigate that information and respond appropriately, including, if warranted, reporting our findings to relevant governmental authorities. Nonetheless, our policies and procedures may not always protect us from actions that would violate U.S. and/or non-U.S. laws. Any improper actions could subject us to civil or criminal penalties, including material monetary fines, or other adverse actions including denial of import or export privileges, and could damage our reputation and business prospects.
Risks Related to Intellectual Property Matters
If we are unable to adequately obtain and maintain our intellectual property and proprietary rights or if we are accused of infringing on, misappropriating or otherwise violating the intellectual property of others, our competitive position could be harmed or we could be required to incur significant expenses to enforce or defend our rights.
Patents, trademarks and other intellectual property rights are important to our business, and our success depends in part on our ability to obtain and maintain patent and trademark protection in the United States and other countries. As of December 31, 2020, we held approximately 177 issued U.S. patents and 173 issued foreign patents relating to our technologies, such as pumps, filters, heaters, drains and white goods, robotic cleaners, in-floor cleaning systems, lights, automation and controls, sanitization, valves and flow control, and IoT and other technologies, as well as approximately 119 U.S. trademark registrations
and 656 foreign trademark registrations covering our marks, brands and products. As of December 31, 2020, we also held approximately 45 pending U.S. patent applications, 90 pending foreign patent applications, 19 pending U.S. trademark applications and 33 pending foreign trademark applications. See “Business—Intellectual Property.” In addition, we have in-licensed patents and patent applications to certain technologies incorporated in our products.
Pending and future patent applications may not result in patents being issued which protect our products or which effectively prevent others from commercializing competitive technologies and products. Moreover, the coverage claimed in a patent application can be significantly reduced before the patent is issued. Even once issued, the issuance, scope, validity, enforceability, and commercial value of patent rights are uncertain. Any patents that we hold or in-license may be challenged, narrowed, circumvented, or invalidated by third parties, and this could allow such third parties to commercialize our technology or products and compete directly with us, without payment to us, or result in our inability to manufacture or commercialize products without infringing third-party rights. We cannot predict whether the patent or trademark applications we own or in-license will issue at all or in any particular jurisdiction. Even if we obtain intellectual property protection for our products and technology, it may not preclude competitors from developing products similar to ours or from challenging our names, brands or products or provide us a significant competitive advantage.
In addition, if we do not adequately maintain our intellectual property, we may lose our rights. For example, we are required to pay various periodic and renewal fees on registered intellectual property, and our failure to do so could result in the affected intellectual property being partially or completely invalidated. If this were to occur, our competitors may be able to use our technologies, names, brands or the goodwill we have acquired in the marketplace and erode or negate any competitive advantage we may have, which could harm our business and ability to achieve profitability.
Competitors may infringe our intellectual property, or we may be required to defend against claims of infringement or inventorship or priority disputes. To counter or defend against such claims can be expensive and time-consuming, and an adverse result in any proceeding could put our intellectual property rights at risk of being invalidated or narrowed. In addition, our ability to enforce our intellectual property rights depends on our ability to detect infringement. It may be difficult to detect infringers who do not advertise the components that are used in their products. Moreover, it may be difficult or impossible to obtain evidence of infringement in a competitor’s or potential competitor’s product. We may not prevail in any disputes that we initiate and the damages or other remedies awarded if we were to prevail may not be commercially meaningful. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of dispute.
Participants in our markets may use challenges to intellectual property as a means to compete. Patent and trademark challenges increase our costs to develop, engineer and market our products. We may need to spend significant resources monitoring, enforcing and defending our intellectual property rights, and we may or may not be able to detect infringement by third parties. If we fail to successfully enforce our intellectual property rights or register new patents, our competitive position could suffer, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.
If our trademarks and trade names are not adequately protected, we may not be able to build name recognition in our markets of interest, and third parties could assert trademark infringement claims against us.
If our trademarks and trade names are not adequately protected, we may not be able to build name recognition in our target markets and our business may be adversely affected. If we are unable to successfully register our trademarks and trade names and establish name recognition based on our trademarks and trade names, then we may not be able to compete effectively and our business may be adversely affected. In addition, competitors or other third parties have in the past, and may in the future, adopt trade names or trademarks similar to ours, thereby impeding our ability to build brand identity, possibly leading to market confusion and potentially requiring us to pursue legal action. In addition, there could be potential trade name or trademark infringement claims brought by owners of other registered trademarks or trademarks that incorporate variations of our unregistered trademarks or trade names. Our efforts to enforce or protect our proprietary rights related to trademarks, domain names or other similar intellectual property
may be ineffective and could result in substantial costs, diversion of resources and potentially the payment by us of money damages or injunctive relief preventing us from using certain of such intellectual property, each of which could adversely impact our financial condition or results of operations.
We rely on access to intellectual property owned by third parties, so our rights to develop and commercialize certain products are subject to the terms and conditions of licenses granted to us by others.
Some of our products incorporate intellectual property owned by third parties and as a result, we are reliant on licenses from such third parties. For example, we license patents to certain technologies used in our pool cleaner and lighting products. These licenses may not provide us rights (whether exclusive or non-exclusive) to use such intellectual property for all purposes or in all territories that we may wish to commercialize our products, now and in the future. As a result, others may also include such intellectual property in their products, and which may weaken any competitive advantage that our licensed intellectual property may provide us. In addition, if our licensors fail to prosecute, maintain, enforce, and defend such intellectual property or otherwise lose their rights therein, the rights we have licensed may be reduced or eliminated, and our right to develop and commercialize any of our products that are subject of such licensed rights could be adversely affected. Furthermore, we could have disagreements with our licensors, including regarding the scope of our licensed rights or the amount of royalty payments owed to them. For example, we are currently undergoing a routine audit pursuant to our license agreement with one of our licensors, and we cannot rule out the possibility that we may owe more royalties than we anticipate. If our licensors conclude that we have materially breached our license agreements, they might therefore terminate the license agreements, thereby removing our ability to develop and commercialize products covered by these license agreements. In addition, we may need to obtain additional licenses from our licensors and, in connection with obtaining such licenses, we may agree to amend our existing licenses in a manner that may be more favorable to the licensors, including by agreeing to terms that could enable third parties (potentially including our competitors) to receive licenses to a portion of the intellectual property that is subject to our existing licenses.
From time to time, we have been notified that we may be infringing certain patents or other intellectual property rights of third parties. There is no assurance that the necessary licenses can be obtained on commercially reasonable terms or at all. Failure to obtain the right to use third-party intellectual property, or to use such intellectual property on commercially reasonable terms, could force us to develop alternative approaches that do not infringe, misappropriate or otherwise violate such intellectual property rights, preclude us, our vendors, and/or our customers from making, using, selling, offering for sale and/or importing certain products or offering certain features or functionality in those products, or otherwise have a material adverse impact on our financial condition and operating results.
We may be subject to claims that our employees, consultants, or advisors have wrongfully used or disclosed alleged trade secrets of their current or former employers or claims asserting ownership of what we regard as our own intellectual property.
Third parties may in the future make claims challenging the inventorship or ownership of our intellectual property. For example, although we try to ensure that our employees, consultants and advisors do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that we or these individuals have used or disclosed intellectual property, including trade secrets or other proprietary information, of any such individual’s current or former employer. In addition, we may face claims by third parties that our agreements with employees obligating them to assign intellectual property to us are ineffective or in conflict with prior or competing contractual obligations of assignment, which could result in ownership disputes regarding intellectual property we have developed or will develop and interfere with our ability to capture the commercial value of such intellectual property. Litigation may be necessary to resolve an ownership dispute, and if we are not successful, we may be precluded from using certain intellectual property or may lose our exclusive rights in such intellectual property. Either outcome could harm our business and competitive position.
Third parties may initiate legal proceedings alleging that we are infringing, misappropriating, or otherwise violating their intellectual property rights, the outcome of which would be uncertain and could have a material adverse effect on the success of our business.
Our success in part depends on our ability to develop, manufacture, market and sell products using our proprietary technologies without infringing, misappropriating or otherwise violating the intellectual
property rights of others. Although we believe we do not infringe, misappropriate, or otherwise violate any valid third-party intellectual property, third parties have and may sue or otherwise take action against us for infringing, misappropriating or otherwise violating their patents or other intellectual property rights, and we cannot be certain that third-party intellectual property does not exist or will not be issued that would prevent us from commercializing our products. Because of technological changes in our industry, current extensive patent coverage and the rapid rate of issuance of new patents, our current or future products may unknowingly infringe existing or future patents or intellectual property rights of others.
For example, the plaintiffs in the Pentair Litigation have claimed certain of our variable speed pump and controller products infringe seven U.S. patents, and may in the future claim that other Hayward products infringe and/or that we, our vendors and/or our customers infringe other Pentair patents. We have challenged six of these patents at the USPTO in inter partes proceedings and have raised non-infringement and invalidity defenses to each of the seven patents currently asserted against us in the infringement actions, which are currently stayed. See “Business—Legal Proceedings.” If we do not prevail in any dispute regarding intellectual property, in addition to any damages we might have to pay, we could be required to cease the infringing activity or obtain a license requiring us to make royalty payments. It is possible that a required license may not be available to us on commercially acceptable terms, if at all. In addition, a required license may be non-exclusive, and therefore our competitors may have access to the same technology licensed to us. If we fail to obtain a required license or are unable to design around any third party’s intellectual property, we may be unable to make use of some of the affected products, which would reduce our sales and revenues.
In addition, intellectual property litigation is costly and time-consuming. The defense costs and settlements for patent infringement lawsuits are not covered by insurance. Patent infringement lawsuits can take years to settle. If we are not successful in our defenses or are not successful in obtaining dismissals of any such lawsuit, legal fees or settlement costs could have a material adverse effect on our results of operations and financial position. Even if resolved in our favor, litigation or other legal proceedings relating to intellectual property claims may cause us to incur significant expenses and could distract our personnel from their normal responsibilities.
We may not be able to effectively enforce our intellectual property rights throughout the world.
The laws of some foreign countries do not afford intellectual property protection to the same extent as the laws of the United States, and many companies have encountered significant problems in protecting and defending intellectual property rights in certain foreign jurisdictions. For example, the requirements for patentability may differ in certain countries, particularly in developing countries. Moreover, our ability to protect and enforce our intellectual property rights may be adversely affected by unforeseen changes in foreign intellectual property laws. The legal systems of some countries, particularly developing countries, do not favor the enforcement of patents and other intellectual property rights. This could make it difficult for us to stop the infringement of our patents or the misappropriation or other violation of our other intellectual property rights. For example, many foreign countries have compulsory licensing laws under which a patent owner must grant licenses to third parties. Consequently, we may not be able to prevent third parties from practicing our inventions in all countries outside the United States. In addition, competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and, further, may export otherwise infringing products to territories where we have patent protection, if our ability to enforce our patents to stop infringing activities is inadequate. These products may compete with our products, and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing.
Proceedings to enforce our patent rights in foreign jurisdictions, whether or not successful, could result in substantial costs and divert our efforts and resources from other aspects of our business. Furthermore, while we intend to protect our intellectual property rights in the major markets for our products, we cannot ensure that we will be able to initiate or maintain similar efforts in all jurisdictions in which we may wish to market our products. Accordingly, our efforts to protect our intellectual property rights in such countries may be inadequate.
Recent changes in U.S. patent laws may limit our ability to obtain, defend, and/or enforce our patents.
The United States has recently enacted and implemented wide ranging patent reform legislation. The U.S. Supreme Court has ruled on several patent cases in recent years, either narrowing the scope of
patent protection available in certain circumstances or weakening the rights of patent owners in certain situations. In addition to increasing uncertainty with regard to our ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents, once obtained. Depending on actions by the U.S. Congress, the U.S. federal courts, and the USPTO, the laws and regulations governing patents could change in unpredictable ways that could weaken our ability to obtain new patents or to enforce patents that we have licensed or that we might obtain in the future. Similarly, changes in patent law and regulations in other countries or jurisdictions, changes in the governmental bodies that enforce them or changes in how the relevant governmental authority enforces patent laws or regulations may weaken our ability to obtain new patents or to enforce patents that we have licensed or that we may obtain in the future.
Risks Related to Our Indebtedness
Our substantial indebtedness could adversely affect our financial condition.
We have a substantial amount of indebtedness, which, as of December 31, 2020, totaled approximately $1,322.7 million, including $958.0 million outstanding under our First Lien Term Loan Facility, $150.0 million outstanding under our First Lien Incremental Term Facility, $205.0 million outstanding under our Second Lien Term Loan Facility and $9.7 million of capital lease obligations. In October 2020, we entered into the First Lien Incremental Term Facility which provided for additional first lien term loans in an aggregate principal amount of $150.0 million, the proceeds of which were used to fund a portion of a special distribution of approximately $275.0 million on the outstanding shares of our Class A stock. We intend to use the net proceeds from this offering primarily to repay a portion of our indebtedness. See “Use of Proceeds.”
Our substantial indebtedness, combined with our other financial obligations and contractual commitments, could have important consequences, including:
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requiring us to dedicate a substantial portion of our cash flows from operations to payments on our indebtedness, thereby reducing funds available for working capital, capital expenditures, acquisitions, selling and marketing efforts, product development and other purposes;
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increasing our vulnerability to adverse economic and industry conditions, which could place us at a competitive disadvantage compared to our competitors that have relatively less indebtedness;
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limiting our flexibility in planning for, or reacting to, changes in our business and the industries in which we operate;
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increasing our exposure to rising interest rates because certain of our borrowings are at variable interest rates;
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restricting us from making strategic acquisitions or causing us to make non-strategic divestitures; and
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limiting our ability to borrow additional funds, or to dispose of assets to raise funds, if needed, for working capital, capital expenditures, acquisitions, product development and other corporate purposes.
Although the terms of the agreements governing our indebtedness contain restrictions on the incurrence of additional indebtedness, such restrictions are subject to a number of important exceptions and indebtedness incurred in compliance with such restrictions could be substantial. If we and our restricted subsidiaries incur significant additional indebtedness, the related risks that we face could increase.
Servicing our debt requires a significant amount of cash. Our ability to generate sufficient cash depends on numerous factors beyond our control, and we may be unable to generate sufficient cash flow to service our debt obligations.
Our business may not generate sufficient cash flow from operating activities to service our debt obligations. Our ability to make payments on and to refinance our debt and to fund planned capital
expenditures depends on our ability to generate cash in the future. To some extent, this is subject to general economic, financial, competitive, legislative, regulatory, and other factors that are beyond our control.
If we are unable to generate sufficient cash flow from operations to service our debt and meet our other commitments, we may need to refinance all or a portion of our debt, sell material assets or operations, delay capital expenditures, or raise additional debt or equity capital. We may not be able to effect any of these actions on a timely basis, on commercially reasonable terms or at all, and these actions may not be sufficient to meet our capital requirements. In addition, the terms of our existing or future debt agreements may restrict us from pursuing any of these alternatives.
The terms of our indebtedness restrict our current and future operations, particularly our ability to respond to change or to take certain actions.
The agreements governing our outstanding indebtedness contain a number of restrictive covenants that impose significant operating and financial restrictions on us and may limit our ability to engage in acts that may be in our long-term best interest, including, among other things, restrictions on our ability to:
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incur additional indebtedness;
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create liens on assets;
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declare or pay certain dividends and other distributions;
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make certain investments, loans, guarantees or advances;
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consolidate, amalgamate, merge, sell or otherwise dispose of all or substantially all of our assets; and
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enter into certain transactions with our affiliates;
In addition, the ABL Facility contains a financial covenant requiring us to maintain specified fixed charge coverage ratio during the specified periods described therein. These restrictions could impede our ability to operate our business by, among other things, limiting our ability to take advantage of financing, merger and acquisition and other corporate opportunities. See “Description of Certain Indebtedness—Certain Covenants and Events of Default.”
Various risks, uncertainties and events beyond our control could affect our ability to comply with these covenants and maintain these financial tests and ratios. A breach of such covenants could result in an event of default unless we obtain a waiver to avoid such default. If we are unable to obtain a waiver, such a default may allow our creditors to accelerate the related debt and may result in the acceleration of, or default under, any other debt to which a cross-acceleration or cross-default provision applies. In the event our lenders accelerate the repayment of our borrowings, we and our subsidiaries may not have sufficient assets to repay that indebtedness.
Because our operations are conducted through our subsidiaries, we are dependent on the receipt of distributions and dividends or other payments from our subsidiaries for cash to fund our operations and expenses, including to make future dividend payments, if any.
Our operations are conducted through our subsidiaries. As a result, our ability to make future dividend payments, if any, is dependent on the earnings of our subsidiaries and the payment of those earnings to us in the form of dividends, loans or advances and through repayment of loans or advances from us. Payments to us by our subsidiaries will be contingent upon our subsidiaries’ earnings and other business considerations and may be subject to statutory or contractual restrictions. We do not currently expect to declare or pay dividends on our common stock for the foreseeable future. However, to the extent that we determine in the future to pay dividends on our common stock, the ability of Hayward Holdings, Inc.’s operating subsidiaries to pay dividends is restricted by the credit agreements governing Hayward Industries, Inc.’s credit facilities. Under the credit agreements, dividends may only be paid to Hayward Holdings, Inc. for corporate overhead expenses and otherwise pursuant to customary dollar baskets, a “builder” basket in the term loan credit agreements based on 50% of cumulative adjusted “Consolidated Net Income” (as defined in the credit agreements) from July 1, 2017 to the applicable date of determination (taken as one accounting period, which was $160.3 million as of December 31, 2020) and equity proceeds among other things, an
unlimited amount under the asset-based revolving credit agreement subject to satisfying minimum availability requirements for borrowings under the credit agreement and the absence of certain defaults, and an unlimited amount under the term loan credit agreements subject to Hayward Industries, Inc.’s total leverage not exceeding certain thresholds on a pro forma basis.
Despite our substantial debt, we may still be able to incur significantly more debt, which would increase the risks described herein. We may also require additional capital, which may not be available on acceptable terms, if at all.
Despite our current indebtedness levels, we may increase our levels of debt in the future to finance our operations or in connection with acquisitions. The agreements relating to our indebtedness limit but do not prohibit our ability to incur additional debt. If we increase our total indebtedness, our debt service obligations will increase. We will become more exposed to the risks arising from our substantial level of indebtedness as described above as we become more leveraged. As of December 31, 2020, we had approximately $87.0 million of undrawn lines of credit available under our ABL Facility, subject to certain conditions, including compliance with certain financial covenants. We regularly consider market conditions and our ability to incur indebtedness to either refinance existing indebtedness or for working capital. If additional debt is added to our current debt levels, the related risks we face could increase.
If our cash flow from operations is less than we anticipate, if our cash requirements are more than we expect, or if we intend to finance acquisitions, we may require more financing. However, debt or equity financing may not be available to us on acceptable terms, if at all. If we incur additional debt or raise equity through the issuance of additional capital shares, the terms of the debt or capital shares issued may give the holders rights, preferences and privileges senior to those of holders of our ordinary shares, particularly in the event of liquidation. The terms of the debt may also impose additional and more stringent restrictions on our operations than we currently have. If we raise funds through the issuance of additional equity, the percentage ownership of existing shareholders in our company would decline. If we are unable to raise additional capital when needed, our financial condition could be adversely affected. Unfavorable changes in the ratings that rating agencies assign to our debt may ultimately negatively impact our access to the debt capital markets and increase the costs we incur to borrow funds. If ratings for our debt fall below investment grade, our access to the debt capital markets may become restricted. Additionally, our credit agreements generally include an increase in interest rates if the ratings for our debt are downgraded.
Uncertainty relating to the London interbank offered rate (“LIBOR”) and the potential discontinuation of LIBOR in the future may adversely affect our interest expense.
Borrowings under our Credit Facilities bear interest at a rate equal to an adjusted base rate or LIBOR, plus, in each case, an applicable margin. On July 27, 2017, the United Kingdom’s Financial Conduct Authority, which regulates LIBOR, announced that it intends to phase out LIBOR by the end of 2021. While the ICE Benchmark Administration recently announced its intention to extend the publication of certain LIBOR settings to the end of 2023, there can be no assurance such extension will occur. As a result, it is unclear if LIBOR will cease to exist after 2021 or if new methods of calculating LIBOR will be established such that it continues to exist after that time. The United States Federal Reserve, in conjunction with the Alternative Reference Rates Committee, a steering committee composed of large U.S. financial institutions, is considering replacing LIBOR with a new index calculated by short-term repurchase agreements, backed by U.S. Treasury securities. The future of LIBOR at this time is uncertain and any changes in the methods by which LIBOR is determined or regulatory activity related to LIBOR’s phaseout could cause LIBOR to perform differently than in the past or cease to exist. If LIBOR ceases to exist, we may need to renegotiate our credit agreements and related agreements, which may result in interest rates and/or payments that do not correlate over time with the interest rates and/or payments that would have been made on our obligations if LIBOR was available in its current form. Changes in the method of calculating LIBOR, or the replacement of LIBOR with an alternative rate or benchmark, may adversely affect interest rates and result in higher borrowing costs. This could materially and adversely affect our results of operations, cash flow and liquidity.
Risks Related to this Offering and Ownership of Our Common Stock
Our Sponsors will continue to have significant influence over us after this offering.
Following completion of this offering, entities affiliated with (i) CCMP will beneficially own approximately % of our outstanding common stock (approximately % if the underwriters exercise
their option to purchase additional shares in full) (ii) MSD Partners will beneficially own approximately % of our outstanding common stock (approximately % if the underwriters exercise their option to purchase additional shares in full) and (iii) AIMCo will beneficially own approximately % of our outstanding common stock (approximately % if the underwriters exercise their option to purchase additional shares in full). For as long as affiliates of our Sponsors continue to beneficially own a substantial percentage of the voting power of our outstanding common stock, they will continue to have significant influence over us. For example, they will be able to strongly influence or effectively control the election of all of the members of our Board of Directors and our business and affairs, including any determinations with respect to mergers or other business combinations, the acquisition or disposition of assets, the incurrence of additional indebtedness, the issuance of any additional shares of common stock or other equity securities, the repurchase or redemption of shares of our common stock and the payment of dividends. This concentration of ownership may have the effect of deterring, delaying, or preventing a change of control of the Company, could deprive our stockholders of an opportunity to receive a premium for their common stock as part of a sale of the Company and might ultimately affect the market price of our common stock.
Each of our Sponsors may also have interests that differ from yours. For example, our Sponsors, and the members of our Board of Directors who are affiliated with each respective Sponsor, by the terms of our certificate of incorporation, will not be required to offer us any corporate opportunity of which they become aware and can take any such corporate opportunity for themselves or offer it to other companies in which they have an investment. We, by the terms of our certificate of incorporation, will expressly renounce any interest or expectancy in any such corporate opportunity to the extent permitted under applicable law, even if the opportunity is one that we or our subsidiaries might reasonably have pursued or had the ability or desire to pursue if granted the opportunity to do so. Our Sponsors are in the business of making investments in companies and may from time to time acquire and hold interests in businesses that compete directly or indirectly with us.
If you purchase shares in this offering, you will suffer immediate and substantial dilution.
If you purchase shares of our common stock in this offering, you will incur immediate and substantial dilution in the pro forma net tangible book value of your stock of $ per share as of December 31, 2020 based on an assumed initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover of this prospectus, because the price that you pay will be substantially greater than the net tangible book value deficiency per share of the shares you acquire. You will experience additional dilution upon the exercise of options to purchase shares of our common stock, including those options currently outstanding and those granted in the future, and the issuance of restricted stock or other equity awards under our stock incentive plans, including the vesting of shares of restricted stock upon the consummation of this offering, and the vesting of options to purchase up to shares in the event our stock trades above a certain threshold following the consummation of this offering. To the extent we raise additional capital by issuing equity securities, our stockholders will experience substantial additional dilution. See “Dilution.”
Further, we may need to raise additional funds in the future to finance our operations and/or acquire complementary businesses. If we obtain capital in future offerings on a per-share basis that is less than the initial public offering price per share, the value of the price per share of your common stock will likely be reduced. In addition, if we issue additional equity securities in a future offering and you do not participate in such offering, there will effectively be dilution in your percentage ownership interest in the Company.
We will in the future grant stock options and other awards to our certain current or future officers, directors, employees, and consultants under additional plans or individual agreements. The grant, exercise, vesting, and/or settlement of these awards, as applicable, will have the effect of diluting your ownership interests in the Company. We may also issue additional equity securities in connection with other types of transactions, including shares issued as part of the purchase price for acquisitions of assets or other companies from time to time or in connection with strategic partnerships or joint ventures, or as incentives to management or other providers of resources to us. Such additional issuances are likely to have the same dilutive effect.
Our stock price could be extremely volatile and, as a result, you may not be able to resell your shares at or above the price you paid for them.
Since our inception, there has not been a public market for our common stock, and an active public market for our common stock may not develop or be sustained following completion of this offering. In addition, the stock market in general has been highly volatile. As a result, the market price of our common stock is likely to be similarly volatile, and investors in our common stock may experience a decrease, which could be substantial, in the value of their stock, including decreases unrelated to our operating performance or prospects, and could lose part or all of their investment. The price of our common stock could be subject to wide fluctuations in response to a number of factors, including those described elsewhere in this prospectus and others such as:
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variations in our operating performance and the performance of our competitors;
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actual or anticipated fluctuations in our quarterly or annual operating results;
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publication of research reports by securities analysts about us, our competitors or our industry;
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our failure or the failure of our competitors to meet analysts’ projections or guidance that we or our competitors may give to the market;
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additions or departures of key personnel;
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strategic decisions by us or our competitors, such as acquisitions, divestitures, spin-offs, joint ventures, strategic investments or changes in business strategy;
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the passage of legislation or other regulatory developments affecting us or our industry;
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changes in legislation, regulation and government policy as a result of the U.S. presidential and congressional elections;
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speculation in the press or investment community;
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changes in accounting principles;
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terrorist acts, acts of war or periods of widespread civil unrest;
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natural disasters and other calamities;
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changes in general market and economic conditions; and
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the other factors described in this “Risk Factors” section and the section titled “Special Note Regarding Forward-Looking Statements.”
In addition, broad market and industry factors may negatively affect the market price of our common stock, regardless of our actual operating performance, and factors beyond our control may cause our stock price to decline rapidly and unexpectedly. We are exposed to the impact of any global or domestic economic disruption. Additionally, in the past, securities class action litigation has often been initiated against companies following periods of volatility in their stock price. This type of litigation could result in substantial costs and divert our management’s attention and resources, and could also require us to make substantial payments to satisfy judgments or to settle litigation.
We have identified material weaknesses in our internal control over financial reporting. If our remediation of these material weaknesses is not effective, or if we identify additional material weaknesses in the future or otherwise fail to maintain an effective system of internal controls, we may not be able to accurately or timely report our financial condition or results of operations, which may adversely affect investor confidence in us and, as a result, the value of our common stock.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company’s annual or interim financial statements will not be prevented or detected on a timely basis. As of December 31, 2020 and December 31, 2019, our management has identified the following material weaknesses:
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We did not document the design or operation of an effective control environment commensurate with the financial reporting requirements of an SEC registrant. Specifically, we did not design and maintain adequate formal documentation of certain policies and procedures, controls over the segregation of duties within our financial reporting function and the preparation and review of journal entries.
In addition, this material weakness contributed to the following additional material weaknesses:
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We did not design and maintain control activities to adequately address identified risks or evidence of performance, or to operate at a sufficient level of precision that would identify material misstatements to our financial statements.
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We did not design and maintain effective controls over certain information technology (“IT”) general controls for information systems that are relevant to the preparation of our financial statements. Specifically, we did not design and maintain:
(i) program change management controls to ensure that information technology program and data changes affecting financial IT applications and underlying accounting records are identified, tested, authorized and implemented appropriately.
(ii) user access controls to ensure appropriate segregation of duties and that adequately restrict user and privileged access to financial applications, programs, and data to appropriate Company personnel.
(iii) computer operations controls to ensure that critical batch jobs are monitored and data backups are authorized and monitored.
(iv) testing and approval controls for program development to ensure that new software development is aligned with business and IT requirements.
These IT deficiencies did not result in a material misstatement to the financial statements, however, when aggregated, could impact maintaining effective segregation of duties, as well as the effectiveness of IT-dependent controls (such as automated controls that address the risk of material misstatement to one or more assertions, along with the IT controls and underlying data that support the effectiveness of system-generated data and reports) that could result in misstatements potentially impacting all financial statement accounts and disclosures that would not be prevented or detected. Accordingly, management has determined these deficiencies in the aggregate constitute a material weakness.
None of the above material weaknesses resulted in material misstatements. If we are unable to timely address the weaknesses in our control environment, however, they could result in misstatements of our account balances or disclosures that would result in material misstatements of our annual or interim financial statements that would not be prevented or detected.
Upon identifying the material weaknesses, we began taking steps intended to address the underlying causes of the control deficiencies in order to remediate the material weaknesses. Our efforts to date have focused on: (i) development of a remediation plan to fully address the control deficiencies; (ii) establishment of an internal audit group; (iii) implementation of processes and controls to better identify and manage segregation of duties and (iv) engagement of a third party provider to support in evaluating and documenting the design of our internal controls, assist with the remediation of the deficiencies, and test the operating effectiveness of our internal controls.
While we believe these efforts will improve our internal controls and address the underlying causes of the material weaknesses, such material weaknesses will not be remediated until our remediation plan has been fully implemented and we have concluded that our controls are operating effectively for a sufficient period of time. We cannot be certain that the steps we are taking will be sufficient to remediate the control deficiencies that led to our material weaknesses in our internal control over financial reporting or prevent future material weaknesses or control deficiencies from occurring. While we are working to remediate the material weaknesses as timely and efficiently as possible, at this time we cannot provide an estimate of costs expected to be incurred in connection with the implementation of this remediation plan, nor can we
provide an estimate of the time it will take to complete this remediation plan. We do, however, intend to remediate the identified material weaknesses prior to becoming subject to the reporting requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as amended (the “Sarbanes-Oxley Act”) at the end of 2022. In addition, we cannot be certain that we have identified all material weaknesses in our internal control over financial reporting, or that in the future we will not have additional material weaknesses in our internal control over financial reporting.
Neither our management nor an independent registered public accounting firm has performed an evaluation of our internal control over financial reporting in accordance with the provisions of the Sarbanes-Oxley Act because no such evaluation has been required. Had we or our independent registered public accounting firm performed an evaluation of our internal control over financial reporting in accordance with the provisions of the Sarbanes-Oxley Act, additional material weaknesses may have been identified. If we fail to effectively remediate the material weaknesses in our internal control over financial reporting, or if we identify additional material weaknesses in the future or otherwise fail to maintain an effective system of internal controls when required to do so in the future, we may be unable to accurately or timely report our financial condition or results of operations. In addition, if we are unable to assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting, when required, investors may lose confidence in the accuracy and completeness of our financial reports, we may face restricted access to the capital markets, and our stock price could be adversely affected.
Upon becoming a public company, we will be required to comply with the SEC’s rules implementing Sections 302 and 404 of the Sarbanes-Oxley Act, which will require management to certify financial and other information in our quarterly and annual reports and provide an annual management report on the effectiveness of internal control over financial reporting. Although we will be required to disclose changes that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting on a quarterly basis, we will not be required to make our first annual assessment of our internal control over financial reporting pursuant to Section 404 until at least our second annual report required to be filed with the SEC.
To comply with the requirements of being a public company, we may need to undertake various actions, to develop, implement and test additional processes and other controls. Testing and maintaining internal controls can divert our management’s attention from other matters related to the operation of our business.
There may be sales of a substantial amount of our common stock after this offering by our current stockholders, and these sales could cause the price of our common stock to fall.
Following completion of this offering, there will be shares of our common stock outstanding. Of our issued and outstanding shares, all of the common stock sold in this offering will be freely transferable, except for any shares held by our “affiliates,” as that term is defined in Rule 144 under the Securities Act. Following completion of this offering, approximately %, % and % of our outstanding common stock (or approximately %, % and % if the underwriters exercise their option to purchase additional shares in full) will be held by affiliates of our Sponsors, respectively.
Each of our executive officers and directors, the selling stockholders and substantially all holders of our common stock have entered into a lock-up agreement with BofA Securities, Inc. and Goldman Sachs & Co. LLC, as representatives of the underwriters, which regulates their sales of our common stock for a period of 180 days after the date of this prospectus, subject to certain exceptions. BofA Securities and Goldman Sachs & Co. LLC may, in their sole discretion, release all or some portion of the shares subject to lock-up agreements at any time and for any reason. See “Shares Eligible for Future Sale—Lock-Up Agreements.”
Sales of substantial amounts of our common stock in the public market after this offering, the perception that such sales will occur, or early release of these lock-up agreements could adversely affect the market price of our common stock and make it difficult for us to raise funds through securities offerings in the future. Of the shares of our common stock to be outstanding following completion of this offering, the shares offered by this prospectus will be eligible for immediate sale in the public market without restriction
by persons other than our affiliates. Our remaining outstanding shares will become available for resale in the public market as shown in the chart below, subject to the provisions of Rule 144 and Rule 701.
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Number of Shares
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Date Available for Resale
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On the date of this offering ( , 2021)
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180 days after this offering ( , 2021) subject to certain exceptions
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Beginning 180 days after this offering, subject to certain exceptions, our Sponsors may require us to register shares of our common stock held by them for resale under the federal securities laws, subject to reduction upon the request of the underwriter of the offering, if any. See “Certain Relationships and Related Party Transactions—Amended and Restated Stockholders Agreement.” Registration of those shares would allow the Sponsors to immediately resell their shares in the public market. Any such sales or anticipation thereof could cause the market price of our common stock to decline.
In addition, following completion of this offering, we intend to register (i) shares of common stock issuable upon the exercise of stock options outstanding under our 2017 Plan, (ii) shares of our common stock that we expect to issue pursuant to our 2021 Plan and (iii) shares of our common stock that will become available for issuance under our ESPP. For more information, see “Shares Eligible for Future Sale—Registration Statements on Form S-8.”
Provisions in our charter documents after this offering and Delaware law may deter takeover efforts that you feel would be beneficial to stockholder value.
In addition to our Sponsors’ beneficial ownership of a substantial percentage of our common stock, provisions in our certificate of incorporation and bylaws after this offering and Delaware law could make it harder for a third party to acquire us, even if doing so might be beneficial to our stockholders, and could also make it difficult for stockholders to elect directors that are not nominated by the current members of our Board of Directors or take other corporate actions, including effecting changes in our management. These provisions include a classified board of directors and the ability of our Board of Directors to issue preferred stock without stockholder approval that could be used to dilute a potential hostile acquiror. Our certificate of incorporation will also impose some restrictions on mergers and other business combinations between us and any holder of 15% or more of our outstanding common stock other than our Sponsors. As a result, you may lose your ability to sell your stock for a price in excess of the prevailing market price due to these protective measures, and efforts by stockholders to change the direction or management of the company may be unsuccessful. See “Description of Capital Stock—Anti-Takeover Effects of Our Certificate of Incorporation and Bylaws and Certain Provisions of Delaware Law.”
Our second restated certificate of incorporation will designate specific courts as the sole and exclusive forum for certain claims or causes of action that may be brought by our stockholders, which could discourage lawsuits against us and our directors and officers.
Our second restated certificate of incorporation will provide that, subject to limited exceptions, the Court of Chancery of the State of Delaware (or, if, and only if, the Court of Chancery of the State of Delaware dismisses a Covered Claim (as defined below) for lack of subject matter jurisdiction, any other state or federal court in the State of Delaware that does have subject matter jurisdiction) will, to the fullest extent permitted by applicable law, be the sole and exclusive forum for the following types of claims: (i) any derivative claim brought in the right of the Company, (ii) any claim asserting a breach of a fiduciary duty to the Company or the Company’s stockholders owed by any current or former director, officer or other employee or stockholder of the Company, (iii) any claim against the Company arising pursuant to any provision of the DGCL, our second restated certificate of incorporation or amended and restated bylaws, (iv) any claim to interpret, apply, enforce or determine the validity of our second restated certificate of incorporation or our amended and restated bylaws, (v) any claim against the Company governed by the internal affairs doctrine, and (vi) any other claim, not subject to exclusive federal jurisdiction and not asserting a cause of action arising under the Securities Act, as amended, brought in any action asserting one or more of the claims specified in clauses (a)(i) through (v) herein above (each a “Covered Claim”). This provision would not apply to claims brought to enforce a duty or liability created by the Exchange Act.
Our second restated certificate of incorporation will further provide that the federal district courts of the United States of America will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act. In addition, our second restated certificate of incorporation will provide that any person or entity purchasing or otherwise acquiring any interest in the shares of capital stock of the Company will be deemed to have notice of and consented to these choice-of-forum provisions and waived any argument relating to the inconvenience of the forums in connection with any Covered Claim.
The choice of forum provisions to be contained in our second restated certificate of incorporation may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or any of our directors, officers, other employees or stockholders, which may discourage lawsuits with respect to such claims, although our stockholders will not be deemed to have waived our compliance with federal securities laws and the rules and regulations thereunder. While the Delaware courts have determined that such choice of forum provisions are facially valid, it is possible that a court of law in another jurisdiction could rule that the choice of forum provisions to be contained in our second restated certificate of incorporation are inapplicable or unenforceable if they are challenged in a proceeding or otherwise, which could cause us to incur additional costs associated with resolving such action in other jurisdictions.
Upon the listing of our common stock on the New York Stock Exchange, we will be a “controlled company” within the meaning of the corporate governance standards of the New York Stock Exchange. As a result, we will qualify for, and intend to rely on, exemptions from certain corporate governance standards. You will not have the same protections afforded to stockholders of companies that are subject to such requirements.
After the completion of this offering, the Sponsors will collectively control a majority of the voting power of shares eligible to vote in the election of our directors. Because more than 50% of the voting power in the election of our directors will be held by an individual, group, or another company, we will be a “controlled company” within the meaning of the corporate governance standards of the New York Stock Exchange. As a controlled company, we may elect not to comply with certain corporate governance requirements, including the requirements that, within one year of the date of the listing of our common stock:
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a majority of our Board of Directors consists of “independent directors,” as defined under the rules of such exchange;
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our Board of Directors has a compensation committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and
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our Board of Directors has a nominating and corporate governance committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities.
Following this offering, we intend to utilize these exemptions. As a result, immediately following this offering we do not expect that the majority of our directors will be independent or that any committees of our Board of Directors, other than our audit committee, will be composed of independent directors. Accordingly, you will not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of the New York Stock Exchange.
We are an emerging growth company and cannot be certain if the reduced disclosure requirements applicable to us will make our common stock less attractive to investors.
We are an “emerging growth company,” as defined in the JOBS Act, and we expect to take advantage of certain exemptions and relief from various reporting requirements that are applicable to other public companies that are not emerging growth companies. In particular, while we are an emerging growth company, we will not be required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act; we will be exempt from any rules that could be adopted by the Public Company Accounting Oversight Board requiring mandatory audit firm rotations or a supplement to the auditor’s report on financial statements; we will be subject to reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements; and we will not be required to hold nonbinding advisory votes on executive compensation or stockholder approval of any golden parachute payments not previously approved.
In addition, while we are an emerging growth company, we can take advantage of an extended transition period for complying with new or revised accounting standards. This allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of this extended transition period and, as a result, our operating results and financial statements may not be comparable to the operating results and financial statements of companies that have adopted the new or revised accounting standards.
We may remain an emerging growth company until the last day of the fiscal year following the fifth anniversary of the completion of this offering, though we may cease to be an emerging growth company earlier under certain circumstances, including if (i) we have $1.07 billion or more in annual gross revenue in any fiscal year, (ii) we become a “large accelerated filer,” as defined in Rule 12b-2 under the Exchange Act; or (iii) we issue more than $1.0 billion of non-convertible debt over a three-year period.
We cannot predict whether investors will find our common stock less attractive if we choose to rely on these exemptions. If some investors find our common stock less attractive as a result of any choices to reduce future disclosure, there may be a less active trading market for our common stock and our stock price may be more volatile.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus, including the sections entitled “Prospectus Summary,” “Risk Factors,” Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business,” contains certain forward-looking statements and information relating to us that are based on the beliefs of our management as well as assumptions made by, and information currently available to, us. These statements include, but are not limited to, statements about our strategies, plans, objectives, expectations, intentions, expenditures and assumptions and other statements contained in or incorporated by reference in this prospectus that are not historical facts. When used in this document, words such as “may,” “will,” “should,” “could,” “intend,” “potential,” “continue,” “anticipate,” “believe,” “estimate,” “expect,” “plan,” “target,” “predict,” “project,” “seek” and similar expressions as they relate to us are intended to identify forward-looking statements. These statements reflect our current views with respect to future events, are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. Further, certain forward-looking statements are based upon assumptions as to future events that may not prove to be accurate.
Examples of forward-looking statements include, among others, statements we make regarding: our financial position; business plans and objectives; general economic and industry trends; business prospects; future product development and acquisition strategies; growth and expansion opportunities; operating results; and working capital and liquidity. We may not achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place significant reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make.
The forward-looking statements in this prospectus are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements, including such statements taken from third-party industry and market reports. See “Market and Industry Data.” In addition to those discussed herein under the caption “Risk Factors,” important factors that could affect our future results and could cause those results or other outcomes to differ materially from those indicated in our forward-looking statements include the following:
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our ability to execute on our growth strategies and expansion opportunities;
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our ability to maintain favorable relationships with suppliers;
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our relationships with and the performance of distributors, builders, buying groups, retailers and servicers who sell our products to pool owners;
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competition from national and global companies, as well as lower cost manufacturers;
•
impacts on our business from the sensitivity of our business to seasonality and unfavorable economic and business conditions;
•
our ability to identify emerging technological and other trends in our target end markets;
•
our ability to develop, manufacture and effectively and profitably market and sell our new planned and future products;
•
failure of markets to accept new product introductions and enhancements;
•
the ability to successfully identify, finance, complete and integrate acquisitions;
•
our ability to attract and retain senior management and other qualified personnel;
•
regulatory changes and developments affecting our current and future products;
•
volatility in currency exchange rates;
•
our ability to service our existing indebtedness and obtain additional capital to finance operations and our growth opportunities;
•
impacts on our business from political, regulatory, economic, trade, and other risks associated with operating foreign businesses;
•
our ability to establish and maintain intellectual property protection for our products, as well as our ability to operate our business without infringing, misappropriating or otherwise violating the intellectual property rights of others;
•
the impact of material cost and other inflation;
•
the impact of changes in laws, regulations and administrative policy, including those that limit U.S. tax benefits or impact trade agreements and tariffs;
•
the outcome of litigation and governmental proceedings;
•
impacts on our business from the COVID-19 pandemic; and
•
other risks and uncertainties, including those listed in the section titled “Risk Factors.”
These forward-looking statements involve known and unknown risks, inherent uncertainties and other factors, which may cause our actual results, performance, time frames or achievements to be materially different from any future results, performance, time frames or achievements expressed or implied by the forward-looking statements. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. Actual results and the timing of certain events may differ materially from those contained in these forward-looking statements.
Many of these factors are macroeconomic in nature and are, therefore, beyond our control. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, our actual results, performance or achievements may vary materially from those described in this prospectus as anticipated, believed, estimated, expected, intended, planned or projected. We discuss many of these risks in greater detail under the heading “Risk Factors.” The forward-looking statements included in this prospectus are made only as of the date hereof. Unless required by United States federal securities laws, we neither intend nor assume any obligation to update these forward-looking statements for any reason after the date of this prospectus to conform these statements to actual results or to changes in our expectations.
USE OF PROCEEDS
We estimate that the net proceeds to us from this offering, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, will be approximately $ (or approximately $ if the underwriters exercise in full their option to purchase additional shares of common stock), assuming an initial public offering price of $ per share (which is the midpoint of the estimated offering price range shown on the cover page of this prospectus).
We will not receive any of the proceeds from the selling stockholders named in this prospectus. The selling stockholders will receive approximately $ of proceeds from this offering.
We intend to use the net proceeds from the sale of our common stock in this offering to repay approximately $ million in aggregate principal amount of outstanding borrowings under our Credit Facilities, out of which approximately (i) $ million will be used to repay borrowings under the First Lien Term Facility, (ii) $ million will be used to repay borrowings under the First Lien Incremental Term Facility and (iii) $ million will be used to repay borrowings under the Second Lien Term Facility. We intend to use the remaining net proceeds from this offering for general corporate purposes.
As of December 31, 2020, there was approximately $1,313.0 million in aggregate principal amount of debt outstanding under our Credit Facilities, consisting of approximately (i) $958.0 million outstanding under the First Lien Term Facility, bearing interest at a rate of 3.65% and maturing on August 4, 2024, (ii) $150.0 million outstanding under the First Lien Incremental Term Facility, bearing interest at a rate of 4.50% and maturing on August 4, 2026, and (iii) $205.0 million outstanding under the Second Lien Term Facility, bearing interest at a rate of 8.40%, and maturing on August 4, 2025. On October 28, 2020, Hayward Industries entered into the First Lien Incremental Term Facility, which provided for additional first lien term loans in an aggregate principal amount of $150.0 million, the proceeds of which were used to fund a portion of a special distribution of approximately $275.0 million on the outstanding shares of our Class A stock. For additional information regarding the Credit Facilities, see “Description of Certain Indebtedness.”
A $1.00 increase (decrease) in the assumed initial public offering price of $ per share, based on the midpoint of the estimated offering price range shown on the cover page of this prospectus, would increase (decrease) the net proceeds to us from this offering by approximately $ , assuming the number of shares offered by us, shown on the cover page of this prospectus, remains the same and after deducting estimated underwriting discounts, commissions and estimated offering expenses payable by us for this offering. An increase (decrease) of 1,000,000 shares from the expected number of shares to be sold by us in this offering, assuming no change in the assumed initial public offering price of $ per share, the midpoint of the estimated offering price range shown on the cover page of this prospectus, would increase (decrease) our net proceeds from this offering by $ .
DIVIDEND POLICY
On October 28, 2020, we paid a cash distribution of approximately $275.0 million on the outstanding shares of our Class A stock. Our Board of Directors does not currently plan to pay dividends on our common stock following this offering and currently expects to retain all future earnings for use in the operation and expansion of our business. Following this offering, we may reevaluate our dividend policy. The declaration, amount and payment of any future dividends on our common stock will be at the sole discretion of our Board of Directors, which may take into account general and economic conditions, our financial condition and results of operations, our available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax and regulatory restrictions and implications on the payment of dividends by us to our stockholders or by our subsidiaries to us, including restrictions under our Credit Facilities and other indebtedness we may incur, and such other factors as our Board of Directors may deem relevant. If we elect to pay such dividends in the future, we may reduce or discontinue entirely the payment of such dividends at any time.
CAPITALIZATION
The following table sets forth our cash and cash equivalents and capitalization as of December 31, 2020:
•
on an actual basis;
•
on a pro forma basis to reflect to the Reclassification that will be completed immediately prior to this offering, as described under “The Reclassification,” as if it had occurred on December 31, 2020 and based on an assumed public offering price of $ per share (which is the midpoint of the estimated offering price range shown on the cover page of this prospectus); and
•
on a pro forma as adjusted basis to reflect (i) the issuance and the sale by us of shares of common stock in this offering at an assumed public offering price of $ per share (which is the midpoint of the estimated offering price range shown on the cover page of this prospectus), after deducting underwriting discounts, commissions and estimated offering expenses, and (ii) the application of the net proceeds therefrom as described in “Use of Proceeds.”
You should read the information in this table in conjunction with our financial statements and the related notes thereto appearing elsewhere in this prospectus, as well as the information under the headings “The Reclassification,” “Use of Proceeds,” “Selected Consolidated Financial Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
|
(dollars in millions, except per share data)
|
|
|
Actual
|
|
|
As of December 31,
2020 pro forma
|
|
|
Pro forma
as adjusted
|
|
|
Cash and cash equivalents
|
|
|
|
$
|
114.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Lien Term Facility, due August 4, 2024
|
|
|
|
|
958.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Lien Incremental Term Facility, due August 4, 2026
|
|
|
|
|
150.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second Lien Term Facility, due August 4, 2025
|
|
|
|
|
205.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ABL Facility
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital lease obligations
|
|
|
|
|
9.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total debt(1)(2)
|
|
|
|
|
1,322.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Redeemable stock:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A stock, $0.001 par value per share, 1,500,000 shares
authorized, 872,598 shares issued and 869,823 shares
outstanding on an actual basis; no shares authorized,
issued or outstanding on a pro forma and pro forma as
adjusted basis
|
|
|
|
|
594.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class C stock, $0.001 par value per share; 100 shares
authorized, 100 shares issued and outstanding on an
actual basis; no shares authorized, issued or outstanding
on a pro forma and pro forma as adjusted basis
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock, $0.001 par value per share; 150,000 shares
authorized, 19,728 shares issued and 14,220 shares
outstanding on an actual basis; shares authorized and
shares issued and outstanding on a pro forma
basis; shares authorized and shares issued and
outstanding on a pro forma as adjusted basis(3)
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock, $0.001 par value per share, no shares authorized, issued or outstanding on an actual basis; shares authorized, no shares issued or outstanding on a pro forma and pro forma as adjusted basis
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional paid-in capital(1)
|
|
|
|
|
10.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Treasury stock
|
|
|
|
|
(3.7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retained earnings
|
|
|
|
|
203.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated other comprehensive loss
|
|
|
|
|
(0.4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total stockholders’ equity(1)
|
|
|
|
|
209.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total capitalization(1)
|
|
|
|
$
|
1,531.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Each $1.00 increase (decrease) in the assumed initial public offering price of $ per share, based on the midpoint of the estimated offering price range shown on the cover page of this prospectus, would decrease (increase) total debt by $ , increase (decrease) common stock, including paid-in capital, and total stockholders’ equity by $ and increase (decrease) total capitalization by $ , assuming the number of shares offered by us, shown on the cover page of this prospectus remains the same and after deducting estimated underwriting discounts, commissions and estimated offering expenses payable by us. We may also increase or decrease the number of shares we are offering in this offering. An increase (decrease) of 1,000,000 shares offered by us from the expected number of shares to be sold by us in this offering, assuming no change in the assumed initial public offering price of $ per share, the midpoint of the estimated offering price range shown on the cover page of this prospectus, would increase (decrease) common stock, including paid-in capital, and total stockholders’ equity by $ and increase (decrease) total
capitalization by $ , after deducting estimated underwriting discounts, commissions and estimated offering expenses payable by us for this offering.
(2)
Reflects principal amount before reduction for unamortized debt issuance costs.
(3)
Because the number of shares of common stock into which a share of our Class A stock is convertible will be determined by reference to the initial public offering price in this offering, a change in the initial public offering price would have a corresponding impact on the number of outstanding shares of our common stock presented in this prospectus after giving effect to this offering. See “The Reclassification.”
DILUTION
If you invest in our common stock in this offering, your ownership interest in us will be diluted to the extent of the difference between the initial public offering price per share of our common stock and the as adjusted net tangible book value (deficit) per share of our common stock after this offering. Dilution results from the fact that the per share offering price of the common stock is substantially in excess of the book value (deficit) per share attributable to the shares of common stock held by our pre-IPO owners.
Our pro forma net tangible book value (deficit) as of December 31, 2020 would have been $ million, or $ per share of our common stock after giving effect to the Reclassification, assuming the Reclassification had taken place on December 31, 2020 and assuming an initial public offering price of $ per share (which is the midpoint of the estimated offering price range shown on the cover page of this prospectus). Pro forma net tangible book value (deficit) represents the amount of our total tangible assets less our total liabilities, after giving effect to the pro forma adjustments described above. Pro forma net tangible book value (deficit) per share represents pro forma net tangible book value (deficit) divided by the number of shares outstanding as of December 31, 2020, after giving effect to the pro forma adjustments described above.
After giving further effect to (i) the sale by us and the selling stockholders of shares of common stock in this offering at an initial public offering price of $ per share (which is the midpoint of the estimated offering price range shown on the cover page of this prospectus), after deducting underwriting discounts, commissions and estimated offering expenses payable by us, and (ii) the application of the net proceeds as set forth under “Use of Proceeds,” our as pro forma adjusted net tangible book value (deficit) as of December 31, 2020 would have been $ , or $ per share of our common stock. This represents an immediate increase in net tangible book value (or a decrease in net tangible book value) of $ per share to existing stockholders and an immediate and substantial dilution in net tangible book value (deficit) of $ per share to investors purchasing shares in this offering at the initial public offering price.
The following table illustrates this dilution on a per share basis:
|
|
Assumed initial public offering price per share
|
|
|
|
$
|
|
|
|
|
|
Pro forma net tangible book value (deficit) per share as of December 31, 2020
|
|
|
|
|
|
|
|
|
|
Increase in pro forma as adjusted net tangible book value (deficit) per share attributable to new investors purchasing common stock in this offering
|
|
|
|
|
|
|
|
|
|
Pro forma as adjusted net tangible book value (deficit) per share after this offering
|
|
|
|
$
|
|
|
|
|
|
Dilution per share to new investors purchasing common stock in this offering
|
|
|
|
$
|
|
|
|
Dilution is determined by subtracting as adjusted net tangible book value (deficit) per share of common stock after this offering from the initial public offering price per share of common stock.
If the underwriters exercise in full their option to purchase additional shares in this offering, the as adjusted net tangible book value (deficit) per share after giving effect to this offering and the use of proceeds therefrom would be $ per share. This represents an increase in as adjusted net tangible book value (or a decrease in as adjusted net tangible book value) of $ per share to existing stockholders and results in dilution in as adjusted net tangible book value (deficit) of $ per share to investors purchasing shares in this offering at the initial public offering price.
Each $1.00 increase (decrease) in the assumed initial public offering price of $ per share, based on the midpoint of the estimated offering price range shown on the cover page of this prospectus, would decrease (increase) our pro forma as adjusted net tangible book value (deficit) by approximately $ million or by approximately $ per share, assuming the number of shares offered by us, shown on the cover page of this prospectus remains the same and after deducting estimated underwriting discounts, commissions and estimated offering expenses payable by us. Because the number of shares of our common stock into which a share of our Class A stock is convertible will be determined by reference to the initial public offering price in this offering, a change in the initial public offering price would also have a corresponding impact on our pro forma net tangible book value deficiency per share of our common stock.
Our pro forma as adjusted net tangible book value (deficit) per share of our common stock would have been the following at December 31, 2020, assuming the initial public offering prices for our common stock shown below:
|
|
Initial public offering price
|
|
|
|
$
|
|
|
|
|
|
$
|
|
|
|
|
|
$
|
|
|
|
|
|
$
|
|
|
|
|
|
$
|
|
|
|
|
|
$
|
|
|
|
|
|
$
|
|
|
|
|
|
Pro Forma as adjusted net tangible book value per share
|
|
|
|
$
|
|
|
|
|
|
$
|
|
|
|
|
|
$
|
|
|
|
|
|
$
|
|
|
|
|
|
$
|
|
|
|
|
|
$
|
|
|
|
|
|
$
|
|
|
|
The following table summarizes, as of December 31, 2020, the differences between the number of shares of common stock purchased from us, the total consideration paid to us, and the average price per share paid by existing stockholders and by new investors. As the table shows, new investors purchasing shares in this offering will pay an average price per share substantially higher than our existing stockholders paid. The table below is based on an initial public offering price of $ per share for shares of common stock purchased in this offering and excludes underwriting discounts, commissions and estimated offering expenses payable by us:
|
|
|
|
Shares Purchased
|
|
|
Total Consideration
|
|
|
Avg/Share
|
|
|
(dollars in thousands, except per share amounts)
|
|
|
Number
|
|
|
%
|
|
|
Amount
|
|
|
$
|
|
|
|
|
|
|
|
|
Existing stockholders
|
|
|
|
|
|
|
|
%
|
|
|
|
|
$
|
|
|
|
|
|
|
%
|
|
|
|
|
$
|
|
|
|
|
New investors
|
|
|
|
|
|
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
%
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
|
%
|
|
|
|
|
$
|
|
|
|
|
|
|
%
|
|
|
|
|
$
|
|
|
|
(1)
The number of shares purchased by existing stockholders is determined as follows:
|
|
Class B common shares issued as of December 31, 2020
|
|
|
|
|
|
|
Less: Class B treasury shares as of December 31, 2020
|
|
|
|
|
|
|
Net Class B common shares outstanding as of December 31, 2020
|
|
|
|
|
|
|
Converted net Class A shares as of December 31, 2020(a)
|
|
|
|
|
|
|
Common shares issued as of December 31, 2020
|
|
|
|
|
|
|
Less: Common treasury shares as of December 31, 2020
|
|
|
|
|
|
|
Total common shares purchased by existing stockholders
|
|
|
|
|
(a)
See “The Reclassification” for a computation of the Number of Class B common shares issuable upon conversion of the Class A shares issued and outstanding as of December 31, 2020.
Sales by the selling stockholders in this offering will cause the number of shares held by existing stockholders to be reduced to shares, or % of the total number of shares of our common stock outstanding following the completion of this offering, and will increase the number of shares held by new investors to shares, or % of the total number of shares outstanding following the completion of this offering.
Because the number of shares of our common stock into which a share of our Class A stock is convertible will be determined by reference to the initial public offering price in this offering, a change in the initial public offering price would have a corresponding impact on the number of shares purchased by existing stockholders. The number of shares purchased by existing stockholders would have been the following as of December 31, 2020, assuming the initial public offering prices for our common stock shown below:
|
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
Shares purchased by existing stockholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percent of total shares purchased by existing stockholders
|
|
|
|
|
%
|
|
|
|
|
|
%
|
|
|
|
|
|
%
|
|
|
|
|
|
%
|
|
|
|
|
|
%
|
|
|
|
|
|
%
|
|
|
|
|
|
%
|
|
|
If the underwriters were to fully exercise their option to purchase additional shares of our common stock in this offering, the percentage of shares of our common stock held by existing
stockholders as of December 31, 2020 would be % and the percentage of shares of our common stock held by new investors would be %, based on an assumed initial public offering price of $ per share (which is the midpoint of the estimated offering price range shown on the cover page of this prospectus).
To the extent that outstanding options are exercised or outstanding restricted stock awards settle or we grant options, restricted stock, restricted stock units or other equity-based awards to our employees, executive officers and directors in the future, or other issuances of common stock are made, there will be further dilution to new investors.
The dilution information above is for illustrative purposes only. Our net tangible book value following the completion of this offering is subject to adjustment based on the actual initial public offering price of our shares of common stock and other terms of this offering determined at pricing.
THE RECLASSIFICATION
Prior to this offering, we had three classes of common stock outstanding, Class A stock, Class B common stock and Class C stock. The Class A stock was identical to the Class B common stock, except that the Class A stock was convertible into shares of our Class B common stock as described below, and each share of Class A stock was entitled to a preferential payment upon any liquidating distribution by us to holders of our capital stock, whether by dividend, distribution or otherwise, equal to the Class A Preference Amount for such share. Class C stock had no voting rights or conversion rights, but each share of Class C stock was entitled to receive a special dividend equal to $1.0 million multiplied by the quotient of the (i) number of Class A stock held by such holder divided by (ii) the number of shares of Class A stock owned collectively by the Sponsors, on the terms and conditions set forth in the Special Dividend Side Letter (as defined herein).
Prior to the completion of this offering, we will reclassify our Class B common stock into common stock and then effect a -for-1 split of our common stock. In addition, following the reclassification of our Class B common stock and the stock split of our common stock and prior to the completion of this offering, (i) we will convert each outstanding share of our Class A stock into shares of our common stock plus an additional shares (assuming an offering price equal to the midpoint of the estimated offering price range shown on the cover page of this prospectus), which amount will be determined by dividing (a) the Class A preference amount of such share of Class A stock as adjusted to give effect to the stock split of our common stock, or $ per share (the “Class A Preference Amount”), by (b) the initial public offering price of a share of our common stock in this offering, net of the per share underwriting discount, rounded to the nearest whole share and (ii) we will redeem each outstanding share of our Class C stock for an aggregate price of $1.00. In connection with the conversion of the Class A stock, holders of our Class A stock will receive a cash payment from us in lieu of fractional shares based on the initial public offering price per share of our common stock in this offering, but will not receive any other cash payments in connection with the conversion.
References to the “Reclassification” throughout this prospectus refer to (i) the reclassification of our Class B common stock into our common stock, (ii) the -for-1 stock split of our common stock, (iii) the conversion of our Class A stock into common stock, (iv) the redemption of our Class C stock and (v) the filing and effectiveness of our second restated certificate of incorporation and the adoption of our amended and restated bylaws.
Assuming an initial public offering price of $ per share, which is the midpoint of the estimated offering price range shown on the cover page of this prospectus, shares of common stock will be outstanding immediately after the Reclassification but before this offering. The actual number of shares of our common stock that will be issued as a result of the Reclassification is subject to change based on the actual initial public offering price.
Because the number of shares of common stock into which a share of our Class A stock is convertible will be determined by reference to the initial public offering price in this offering, a change in the initial public offering price would have a corresponding impact on the number of outstanding shares of our common stock presented in this prospectus after giving effect to this offering. The following presents the number of shares of our common stock into which each share of Class A stock will be converted and the number of shares of our common stock that would be outstanding immediately after the Reclassification but before this offering, assuming the initial public offering prices for our common stock shown below.
|
|
|
|
Assumed Initial Public Offering Price
|
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
Shares of common stock per share of Class A stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SELECTED CONSOLIDATED FINANCIAL DATA
You should read the following selected consolidated financial data together with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of this prospectus and our audited consolidated financial statements and the related notes thereto included elsewhere in this prospectus. The selected consolidated statement of operations data for the years ended December 31, 2019 and December 31, 2020 and the selected consolidated balance sheet data as of December 31, 2019 and December 31, 2020 have been derived from our audited consolidated financial statements included elsewhere in this prospectus. Our historical results for any prior period are not necessarily indicative of results to be expected in any future period.
|
|
|
|
Years Ended December 31,
|
|
|
(dollars in millions, except per share data)
|
|
|
2020
|
|
|
2019
|
|
|
Statement of Operations Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
|
$
|
875.4
|
|
|
|
|
$
|
733.4
|
|
|
|
Cost of sales
|
|
|
|
|
478.4
|
|
|
|
|
|
409.9
|
|
|
|
Gross profit
|
|
|
|
|
397.0
|
|
|
|
|
|
323.5
|
|
|
|
Selling, general, and administrative expenses
|
|
|
|
|
195.2
|
|
|
|
|
|
179.4
|
|
|
|
Research, development, and engineering
|
|
|
|
|
20.0
|
|
|
|
|
|
19.9
|
|
|
|
Acquisition and restructuring related expense (income)
|
|
|
|
|
19.3
|
|
|
|
|
|
(16.3)
|
|
|
|
Amortization of intangible assets
|
|
|
|
|
37.9
|
|
|
|
|
|
41.8
|
|
|
|
Operating income
|
|
|
|
|
124.6
|
|
|
|
|
|
98.7
|
|
|
|
Interest expense, net
|
|
|
|
|
73.6
|
|
|
|
|
|
84.5
|
|
|
|
Other (income) expense, net
|
|
|
|
|
(6.8)
|
|
|
|
|
|
2.1
|
|
|
|
Total other expense
|
|
|
|
|
66.8
|
|
|
|
|
|
86.6
|
|
|
|
Income from operations before income taxes
|
|
|
|
|
57.8
|
|
|
|
|
|
12.1
|
|
|
|
Provision for income taxes
|
|
|
|
|
14.5
|
|
|
|
|
|
3.6
|
|
|
|
Net income
|
|
|
|
$
|
43.3
|
|
|
|
|
$
|
8.5
|
|
|
|
Cash Flow Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
|
|
$
|
213.8
|
|
|
|
|
$
|
94.0
|
|
|
|
Net cash (used in) provided by investing activities
|
|
|
|
|
(13.0)
|
|
|
|
|
|
4.0
|
|
|
|
Net cash used in financing activities
|
|
|
|
|
(135.1)
|
|
|
|
|
|
(65.1)
|
|
|
|
Balance Sheet Data (as of period end)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
$
|
114.9
|
|
|
|
|
$
|
47.2
|
|
|
|
Property, plant, and equipment, net
|
|
|
|
|
142.3
|
|
|
|
|
|
139.9
|
|
|
|
Goodwill and intangibles
|
|
|
|
|
2,034.5
|
|
|
|
|
|
2,068.7
|
|
|
|
Total assets
|
|
|
|
|
2,607.1
|
|
|
|
|
|
2,603.1
|
|
|
|
Long term debt
|
|
|
|
|
1,300.3
|
|
|
|
|
|
1,147.8
|
|
|
|
Total liabilities
|
|
|
|
|
1,803.4
|
|
|
|
|
|
1,569.6
|
|
|
|
Redeemable stock
|
|
|
|
|
594.5
|
|
|
|
|
|
869.5
|
|
|
|
Stockholders’ equity
|
|
|
|
|
209.2
|
|
|
|
|
|
164.0
|
|
|
|
Total liabilities, redeemable stock and stockholders’ equity
|
|
|
|
$
|
2,607.1
|
|
|
|
|
$
|
2,603.1
|
|
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
You should read the following discussion of our results of operations and financial condition together with “Prospectus Summary—Summary Consolidated and Other Financial Data,” “Risk Factors,” “Special Note Regarding Forward-Looking Statements,” “Selected Consolidated Financial Data” and our audited consolidated financial statements and notes thereto, each included elsewhere in this prospectus. In addition to historical financial information, this discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results may differ materially from those contained in or implied by any forward-looking statements.
We define the year ended December 31, 2020 as Fiscal Year 2020 and the year ended December 31, 2019 as Fiscal Year 2019. Our fiscal quarters are 13 weeks except the fourth quarter which ends on December 31 of each fiscal year.
Our Company
We are an industry-leading global designer, manufacturer, and marketer of a broad portfolio of pool equipment and associated automation systems. With the pool as the centerpiece of the growing outdoor living space, the pool industry has attractive market characteristics, including significant aftermarket requirements, innovation-led growth opportunities, and a favorable industry structure. We are a leader in this market with a highly-recognized brand, one of the largest installed bases of pool equipment in the world, decades-long relationships with our key channel partners and trade customers and a history of technological innovation. Our engineered products, which include various energy efficient and more environmentally sustainable offerings, enhance the pool owner’s outdoor living lifestyle while also delivering high quality water, pleasant ambiance and ease of use for the ultimate backyard experience. Aftermarket replacements and upgrades to higher value IoT and energy efficient models are a primary growth driver for our business.
We have an estimated North American residential pool market share of approximately 30%. We believe that we are well-positioned for future growth. On average, we have 20+ year relationships with our top 20 customers. Based upon feedback from certain representative customers and our interpretation of available industry and government data in the United States, we estimate that aftermarket sales represented approximately 75% of net sales. Aftermarket sales are not based upon our GAAP net sales results. We believe aftermarket sales are generally recurring in nature since these products are critical to the ongoing operation of pools given requirements for water quality and sanitization. Our product replacement cycle of approximately 9 to 12 years drives multiple replacement opportunities over the typical life of a pool, creating opportunities to generate aftermarket product sales as pool owners repair and replace equipment and remodel and upgrade their pools.
We manufacture our products at six primary facilities worldwide, which are located in North Carolina, Tennessee, Rhode Island, Spain (two) and China.
Segments
Our business is organized into two reportable segments: North America (“NAM”) and Europe & Rest of World (“E&RW”). The Company determined its operating segments based on how the Chief Operating Decision Maker (“CODM”) reviews the Company’s operating results in assessing performance and allocating resources. NAM and E&RW accounted for approximately 81% and 19% and 79% and 21% of total net sales for Fiscal Year 2020 and Fiscal Year 2019, respectively.
The NAM segment manufactures and sells a complete line of residential and commercial swimming pool equipment and supplies in the United States and Canada and manufactures and sells flow control products globally.
The E&RW segment manufactures and sells residential and commercial swimming pool equipment and supplies in Europe, Central and South America, the Middle East, Australia and other Asia Pacific countries.
Key Trends and Uncertainties Regarding Our Existing Business
The following trends and uncertainties may affect our financial performance in the future:
•
Demand related to the aging base of pools and the COVID-19 pandemic. Irrespective of broader macroeconomic trends, the primary driver for the industry continues to be aftermarket spending on the base of installed pools. In the United States, our primary market, the record construction of pools from 1999 to 2005 is manifesting itself in the aftermarket repair, replace, and remodel cycle given that the average age of this pool cohort is over 20 years. Residential pool equipment sales have increased during the COVID-19 pandemic. This increase in demand has broadly been across all of our product lines as “stay at home” mandates have refocused attention on improving the quality of the homeowner’s outdoor living experience especially for products such as heaters to extend the pool season. Urban flight along with desire for second homes is also driving residential pool construction as homeowners remodel or upgrade their existing outdoor living spaces. Despite the increase in new pool construction during 2020, it still remains below the pre-2008 construction levels, leading us to expect an increase in the installed base in coming seasons. Demand for commercial pool and industrial flow control products was negatively impacted due to customer project delays, lower commercial activities and reduced use of public pools as a result of “shelter in place” orders and commercial closures during the second and third quarters of 2020.
•
Seasonality. Our business is seasonal with sales typically higher in the second and fourth quarters. During the second quarter, sales are higher in anticipation of the start of the summer pool season and in the fourth quarter, we incent trade customers to buy and stock in readiness for next year’s pool season under an “early buy” program which offers a price discount and extended payment terms. Under the early buy program, we ship products during October through March and receive payments for these shipments during May through July. Revenue is recognized upon shipment of products, which cannot be returned unless damaged. For more information, see “—Key Factors and Measures We Use to Evaluate Our Business—Net Sales.’’ We aim to keep our manufacturing plants running at a constant level throughout the year and consequently we build inventory in the first and third quarters and inventory is sold-down in the second and fourth quarters. Our accounts receivable balance increases from October to May as a result of the early buy extended terms and higher sales in the second quarter. However, during the Fiscal Year 2020, we saw a change in historical seasonality as sales in the first and second quarters were lower than the third and fourth quarter, due to the “shelter in place” impact at the onset of the pandemic. Shipments accelerated in the second half of the year as we caught up with pent up demand. See “—Selected Quarterly Results of Operations” below to see how seasonality has affected our quarterly results of operations.
•
Targeted expansion efforts. We continue to pursue attractive product and global geographic market opportunities to grow our presence in new markets or markets in which we have less penetration. We believe that our business can effectively address these opportunities through new product development and scalable sales, marketing, and administration. We also have and may in the future pursue acquisitions to opportunistically add product offerings or increase our geographic footprint. If we do not execute this strategic objective, our core net sales growth will likely be limited or may decline.
•
New product offerings. Our business is primarily driven by aftermarket spending. Pool owners are increasingly demanding new technologies, such as IoT-enabled and more energy efficient products, as they replace or upgrade their existing pool equipment. In Fiscal Year 2020, new products launched in the last three years contributed approximately 11% of net sales. These new products, for example, a new generation of variable speed pumps, enhanced Omni controls, and advanced robotic cleaners, offer higher energy efficiency, automation capabilities and enhanced water care solutions, and will become primary drivers of our sales growth. Staying at the forefront of technological innovation and introducing new product offerings with new features will continue to be critical in growing our market share and revenue.
•
Materials and other cost increases. We have experienced increases in the cost of raw materials and commodities. We strive for productivity improvements, and implement price increases to help mitigate this impact. We expect to see continuing price volatility (metals, resins, and electronic sub-assemblies) and import duty charges (motors, electronics, valves and cleaner products) for some of our raw materials. We are uncertain as to the timing and impact of these market changes, but have mitigation activities in place to minimize the impact on costs.
•
Impact of our initial public offering. Following our initial public offering, we will incur incremental selling, general, and administrative expenses (“SG&A”) that we did not incur as a private company. Those costs include additional director and officer liability insurance, as well as third-party and internal resources related to accounting, auditing, Sarbanes-Oxley Act compliance, legal, directors fees, and investor and public relations expenses. We expect such expenses to further increase after we are no longer an emerging growth company. These costs will generally be expensed as SG&A in the consolidated statement of operations.
Factors Affecting the Comparability of our Results of Operations
Our past two years results have been affected by the following, among other events, which must be understood to assess the comparability of our period-to-period financial performance and condition.
Impact of COVID-19
The COVID-19 pandemic has resulted in governments around the world implementing increasingly stringent measures to help control the spread of the virus, including quarantines, “shelter in place” and “stay at home” mandates, travel restrictions, certain business curtailments, limits on gatherings, and other measures. In addition, governments and central banks in several parts of the world have enacted fiscal and monetary stimulus measures to counteract pandemic economic impacts. We believe that the pandemic has only reinforced existing pool industry growth trends and has not had a significant impact to our cost structure through the date of this filing. Hayward is classified as an essential business and as such we have implemented the necessary steps to protect our manufacturing and distribution facilities to ensure we have continuity of production and supply to our customers. While in the early months of the pandemic we did experience partial or full facility closure for cleaning and sanitization, all of our manufacturing and distribution facilities are currently operational.
We have taken proactive actions to protect the health and safety of our employees, customers, and suppliers. We have enacted rigorous safety measures, including social distancing protocols, work from home arrangements, suspending business travel, disinfecting workspaces, temperature monitoring at our facilities, and facial coverings where required. We will continue to take all precautions recommended by governmental health departments to protect the health and safety of our employees, customers, and suppliers.
Early in the pandemic, certain suppliers faced challenges and were not able to timely deliver the quantities of raw materials or components we required. This negatively affected our production capabilities in the second quarter. During the third quarter we secured secondary sources of supply and were able to return production to full capabilities.
At the onset of the pandemic the Company immediately reduced discretionary and capital spending and implemented a number of austerity measures in anticipation of a prolonged sales slowdown. Though we continue to monitor the situation, we have reversed most of the austerity measures and capital spending has returned to normal levels. We also benefited from the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), obtaining deferral of our employer U.S. Social Security contributions and a permanent reduction of certain cash tax payments in federal, state and international jurisdictions.
Continued restrictions and disruption of transportation, including reduced availability of air transport, port closures and increased border controls or closures, have resulted in higher costs and delays in both obtaining raw materials and components and in shipping finished goods.
Key Factors and Measures We Use to Evaluate Our Business
We consider a variety of financial and operating measures in assessing the performance of our business. The key GAAP measures we use are net sales, gross profit and gross profit margin, SG&A expenses, research, development and engineering (“RD&E”), operating income and operating income margin. The key non-GAAP measures we use are adjusted EBITDA, adjusted EBITDA margin, adjusted segment income and adjusted segment income margin.
Net sales
We offer a broad range of pool equipment including pumps, filters, heaters, automatic cleaners, sanitizers, controls, LED lights, as well as industrial thermoplastic valves and process liquid control products. Sales are impacted by product and geographic segment mix, as well as promotional and competitive activities. Growth of our sales is primarily driven by market demand, expansion of our trade customers and product offering.
Revenue is recognized upon shipment and recorded inclusive of outbound shipping and handling charges billed to customers and net of related discounts, allowances, returns, and sales tax. Customers are offered volume discounts and other promotional benefits. We estimate these volume discounts, promotional allowance benefits, and returns based upon the terms of the customer contracts and historical experience and record such amounts as a reduction of gross sales with an offsetting adjustment to account receivable. We regularly monitor the adequacy of these allowances.
Gross profit and Gross profit margin
Gross profit is equal to net sales less cost of sales. Cost of sales includes the direct cost of manufacturing, including direct materials, labor and related overhead, as well as inbound and outbound freight and import duties.
Gross profit margin is gross profit as a percentage of net sales. Gross profit margin is impacted by costs of raw material, product mix, salary and wage inflation, production costs, shipping and handling costs, and import duties, all of which can vary.
Selling, general and administrative expenses
Our SG&A includes expenses arising from activities in selling, marketing, technical and customer services, warranty, warehousing, and administrative expenses. Other than warranty and variable compensation, SG&A is generally not directly proportional to net sales, but is expected to increase over time to support the needs of a public company.
Research, development and engineering expenses
The Company conducts RD&E activities in its own facilities. These expenses consist primarily of salaries, supplies and overhead costs related to the active development of new products, enhanced product applications and improved manufacturing and value engineering of existing products.
Generally, RD&E costs are expensed as incurred. Certain RD&E costs applicable to the development of software are capitalized and amortized over the expected life of the product.
Amortization of intangible assets
Customer relationships, patents and other intangible assets arising from business combinations are amortized over their expected useful lives of 10-20 years.
Acquisition and restructuring related costs (or income)
The Company records costs or expenses incurred related to business combinations, organizational restructuring, or gains or losses attributable to any sales or dispositions of assets to acquisition and related income, net.
Operating income
Operating income is gross profit less SG&A, RD&E, acquisition and restructuring related expense or income and amortization intangible assets. Operating income excludes interest expense, income tax expense, and other expenses, net. We use operating income as well as other indicators as a measure of our profitability of our business.
Interest expense
The Company incurs interest expense on its Credit Facilities, as defined herein. The amortization of debt issuance costs and impact of our interest rate hedging instruments are also included in interest expense.
Net income
Net income is operating income less interest expense, other non-operating items, and provision for income taxes.
Adjusted EBITDA, Adjusted EBITDA margin, Adjusted segment income, Adjusted segment income margin
Adjusted EBITDA, adjusted EBITDA margin, adjusted segment income and adjusted segment income margin are key metrics used by management and our Board of Directors to assess our financial performance. For information about our use of Non-GAAP measures and a reconciliation of these metrics to the nearest GAAP metric see “—Non-GAAP Reconciliation.”
Results of Operations
The following tables summarize key components of our results of operations for the periods indicated, both in dollars and as a percentage of our net sales. We derived the consolidated statements of operations for the Fiscal Years 2020 and 2019 from our audited consolidated financial statements. Our historical results are not necessarily indicative of the results that may be expected in the future. The following table summarizes our results of operations and a comparison of the change between the periods (in millions):
|
|
|
|
Fiscal Years
|
|
|
|
|
|
|
|
2020
|
|
|
% of Net
Sales
|
|
|
2019
|
|
|
% of Net
Sales
|
|
|
Increase
(Decrease)
|
|
|
Percentage
Change
|
|
|
Net sales
|
|
|
|
$
|
875.4
|
|
|
|
|
|
|
|
|
|
|
$
|
733.4
|
|
|
|
|
|
|
|
|
|
|
$
|
142.0
|
|
|
|
|
|
19.4%
|
|
|
|
Cost of sales
|
|
|
|
|
478.4
|
|
|
|
|
|
54.6%
|
|
|
|
|
|
409.9
|
|
|
|
|
|
55.9%
|
|
|
|
|
|
68.5
|
|
|
|
|
|
16.7%
|
|
|
|
Gross profit
|
|
|
|
|
397.0
|
|
|
|
|
|
45.4%
|
|
|
|
|
|
323.5
|
|
|
|
|
|
44.1%
|
|
|
|
|
|
73.5
|
|
|
|
|
|
22.7%
|
|
|
|
Selling, general, and administrative
expenses
|
|
|
|
|
195.2
|
|
|
|
|
|
22.3%
|
|
|
|
|
|
179.4
|
|
|
|
|
|
24.5%
|
|
|
|
|
|
15.8
|
|
|
|
|
|
8.8%
|
|
|
|
Research, development, and engineering
|
|
|
|
|
20.0
|
|
|
|
|
|
2.3%
|
|
|
|
|
|
19.9
|
|
|
|
|
|
2.7%
|
|
|
|
|
|
0.1
|
|
|
|
|
|
0.5%
|
|
|
|
Acquisition and restructuring related expense
(income)
|
|
|
|
|
19.3
|
|
|
|
|
|
2.2%
|
|
|
|
|
|
(16.3)
|
|
|
|
|
|
(2.2)%
|
|
|
|
|
|
35.6
|
|
|
|
|
|
(218.4)%
|
|
|
|
Amortization of intangible assets
|
|
|
|
|
37.9
|
|
|
|
|
|
4.3%
|
|
|
|
|
|
41.8
|
|
|
|
|
|
5.7%
|
|
|
|
|
|
(3.9)
|
|
|
|
|
|
(9.3)%
|
|
|
|
Operating income
|
|
|
|
|
124.6
|
|
|
|
|
|
14.2%
|
|
|
|
|
|
98.7
|
|
|
|
|
|
13.5%
|
|
|
|
|
|
25.9
|
|
|
|
|
|
26.2%
|
|
|
|
Interest expense, net
|
|
|
|
|
73.6
|
|
|
|
|
|
8.4%
|
|
|
|
|
|
84.5
|
|
|
|
|
|
11.5%
|
|
|
|
|
|
(10.9)
|
|
|
|
|
|
(12.9)%
|
|
|
|
Other (income) expense, net
|
|
|
|
|
(6.8)
|
|
|
|
|
|
(0.8)%
|
|
|
|
|
|
2.1
|
|
|
|
|
|
0.3%
|
|
|
|
|
|
(8.9)
|
|
|
|
|
|
(423.8)%
|
|
|
|
Total other expense
|
|
|
|
|
66.8
|
|
|
|
|
|
7.6%
|
|
|
|
|
|
86.6
|
|
|
|
|
|
11.8%
|
|
|
|
|
|
(19.8)
|
|
|
|
|
|
(22.9)%
|
|
|
|
Income from operations before income taxes
|
|
|
|
|
57.8
|
|
|
|
|
|
6.6%
|
|
|
|
|
|
12.1
|
|
|
|
|
|
1.6%
|
|
|
|
|
|
45.7
|
|
|
|
|
|
377.7%
|
|
|
|
Provision for income taxes
|
|
|
|
|
14.5
|
|
|
|
|
|
1.7%
|
|
|
|
|
|
3.6
|
|
|
|
|
|
0.5%
|
|
|
|
|
|
10.9
|
|
|
|
|
|
302.8%
|
|
|
|
Net income
|
|
|
|
$
|
43.3
|
|
|
|
|
|
4.9%
|
|
|
|
|
$
|
8.5
|
|
|
|
|
|
1.2%
|
|
|
|
|
$
|
34.8
|
|
|
|
|
|
409.4%
|
|
|
|
Adjusted EBITDA(a)
|
|
|
|
$
|
231.6
|
|
|
|
|
|
26.5%
|
|
|
|
|
$
|
172.4
|
|
|
|
|
|
23.5%
|
|
|
|
|
$
|
59.2
|
|
|
|
|
|
34.3%
|
|
|
(a)
See “— Non-GAAP Reconciliation.”
Fiscal Year 2020 Compared to Fiscal Year 2019
Net sales
Increased to $875.4 million in Fiscal Year 2020 from $733.4 million in Fiscal Year 2019, an increase of $142.0 million or 19.4%. See segment discussion below for further information.
Year-over-year net sales increases were driven by the following:
|
|
|
|
2020
|
|
|
Volume
|
|
|
|
|
18.5%
|
|
|
|
Price, net of discounts and allowances
|
|
|
|
|
0.7%
|
|
|
|
Currency and other
|
|
|
|
|
0.2%
|
|
|
|
Total
|
|
|
|
|
19.4%
|
|
|
The Fiscal Year 2020 increase in net sales was primarily the result of higher volumes, mainly in residential pool equipment sales, a return to normal weather conditions, improved channel inventory buying patterns, an acceleration of outdoor living trends as homeowners “shelter in place”, and a 2% gross price increase which was reduced by higher volume related discounts and allowances resulting in a net 0.7% price impact. While the duration of the COVID-19 pandemic is uncertain, we believe that the pandemic has only reinforced existing pool industry growth trends.
Gross profit and Gross profit margin
Gross profit increased to $397.0 million in Fiscal Year 2020 from $323.5 million in Fiscal Year 2019, an increase of $73.5 million or 22.7%.
Gross profit margin increased to 45.4% in Fiscal Year 2020 compared to 44.1% in Fiscal Year 2019, an increase of 124 basis points primarily resulting from the net price increase discussed above, manufacturing leverage, net cost savings, a favorable mix of higher margin NAM sales partially offset by $6.8 million of additional reserves for obsolete and nonsalable inventory.
Selling, general, and administrative expenses
Increased to $195.2 million in Fiscal Year 2020 from $179.4 million in Fiscal Year 2019, an increase of $15.8 million or 8.8% primarily driven by increased compensation expense of $21.1 million, $2.0 million for expenses incurred in preparation for our initial public offering, and volume related warranty expense of $2.3 million, partially offset by a $2.5 million decrease in advertising expenses and $5.1 million of cost savings related to decreased travel, marketing and other expenses as a result of the pandemic. As a percentage of net sales, SG&A decreased to 22.3% in Fiscal Year 2020 as compared to 24.5% in Fiscal Year 2019, a decrease of 216 basis points.
Research, development, and engineering
Increased to $20.0 million in Fiscal Year 2020 from $19.9 million in Fiscal Year 2019, effectively flat. As a percentage of net sales, RD&E dropped to 2.3% in Fiscal Year 2020 compared to 2.7% in Fiscal Year 2019, a decrease of 43 basis points.
Acquisition and restructuring related expense (income)
In Fiscal Year 2020 we incurred an expense of $19.3 million as compared to income of $16.3 million in Fiscal Year 2019. This is an increased expense of $35.6 million.
The $19.3 million expense in Fiscal Year 2020 was primarily driven by additional costs consequential to the below mentioned cessation of certain manufacturing and distribution operations and the start-up of a new distribution center in the Southwest United States.
In Fiscal Year 2019, we announced the cessation of certain manufacturing and distribution operations and sold the associated real estate with a one year leaseback arrangement to allow for the orderly restructuring of these operations. Net consideration received was $28.4 million, resulting in a gain of $16.9 million. We also incurred certain business restructuring costs of $5.0 million and executive retention accruals of $1.2 million consequential to a 2018 business combination. Additionally, in Fiscal Year 2019 we recognized income of $6.0 million on the reversal of a contingent consideration liability arising from a 2018 acquisition.
See Note 18. Acquisition and Restructuring Related Expense (Income)
Amortization of intangible assets
Decreased to $37.9 million in Fiscal Year 2020 from $41.8 million in Fiscal Year 2019, a decrease of $3.9 million or 9.3%, due to the amortization pattern of certain intangibles based on the declining balance method.
Operating income
Increased to $124.6 million in Fiscal Year 2020 from $98.7 million in Fiscal Year 2019, an increase of $25.9 million or 26.2% due to the accumulated effect of the items described above.
Interest expense, net
Decreased to $73.6 million in Fiscal Year 2020 from $84.5 million in Fiscal Year 2019, a decrease of $10.9 million or 12.9% primarily due to reduced interest rates on our floating rate debt and a reduction in the use of our ABL Facility.
Interest expense for the year ended December 31, 2020 consisted of $68.5 million of interest on the outstanding debt, $5.4 million of amortization of deferred financing fees net of $0.3 million of interest income. The effective interest rate on our borrowings, net of the impact of our interest rate hedge was 5.95% for Fiscal Year 2020.
Interest expense for the year ended December 31, 2019 consisted of $79.3 million on the outstanding debt, $5.3 million of amortization of deferred financing fees net of $0.1 million of interest income. The effective interest rate on our borrowings, net of the impact of the interest rate hedge, was 6.75% for Fiscal Year 2019.
Provision for income taxes
We incurred income tax expense of $14.5 million for Fiscal Year 2020 and $3.6 million for Fiscal Year 2019, an increase of $10.9 million or 302.8%. This was primarily due to increased income from operations.
Our effective income tax rate declined to 25.1% for Fiscal Year 2020 from 29.7% for Fiscal Year 2019 primarily due to a valuation allowance recorded in Fiscal Year 2019 against certain international net operating losses, the absence of a reversal of a distinct contingent consideration that was incurred in Fiscal Year 2019, and an increase in income from operations combined with increased deductible interest expense due to the passage of the CARES Act.
Net income
As a result of the foregoing, net income increased to $43.3 million in Fiscal Year 2020 compared to net income of $8.5 million in Fiscal Year 2019, an increase of $34.8 million or 409.4%.
Adjusted EBITDA and Adjusted EBITDA margin
Adjusted EBITDA increased to $231.6 million in Fiscal Year 2020 from $172.4 million in Fiscal Year 2019, an increase of $59.2 million or 34.3% driven primarily by higher net sales and operating leverage resulting in an increase in gross profit of $73.5 million, partially offset by an increase in SG&A expenses of $15.8 million.
Adjusted EBITDA margin increased to 26.5% in Fiscal Year 2020 compared to 23.5% in Fiscal Year 2019, an increase of 295 basis points.
See Non-GAAP reconciliation section for detailed explanations.
Segment Results of Operations
The Company manages its business primarily on a geographic basis. The Company’s reportable segments consist of NAM and E&RW.
We evaluate performance based on net sales, gross profit, segment income and adjusted segment income, and use gross profit margin, segment income margin and adjusted segment income margin as comparable performance measures for our reporting segments.
Segment income represents net sales less cost of sales, less segment SG&A and RD&E. A reconciliation of segment income to our operating income is detailed below (in millions). Adjusted segment income represents segment income adjusted for the impact of depreciation, amortization of certain intangible assets, stock-based compensation and certain non-cash, nonrecurring or other items that are included in segment income that we do not consider indicative of the ongoing segment operating performance. See “— Non-GAAP Reconciliation” for a reconciliation of these metrics to the most directly comparable GAAP metric (in millions):
|
|
|
|
Fiscal Year 2020
|
|
|
Fiscal Year 2019
|
|
|
|
|
|
Total
Hayward
|
|
|
NAM
|
|
|
E&RW
|
|
|
Total
Hayward
|
|
|
NAM
|
|
|
E&RW
|
|
|
Net sales
|
|
|
|
$
|
875.4
|
|
|
|
|
$
|
706.5
|
|
|
|
|
$
|
168.9
|
|
|
|
|
$
|
733.4
|
|
|
|
|
$
|
575.9
|
|
|
|
|
$
|
157.5
|
|
|
|
Gross profit
|
|
|
|
$
|
397.0
|
|
|
|
|
$
|
334.6
|
|
|
|
|
$
|
62.4
|
|
|
|
|
$
|
323.5
|
|
|
|
|
$
|
267.0
|
|
|
|
|
$
|
56.5
|
|
|
|
Gross profit margin %
|
|
|
|
|
45.4%
|
|
|
|
|
|
47.4%
|
|
|
|
|
|
36.9%
|
|
|
|
|
|
44.1%
|
|
|
|
|
|
46.4%
|
|
|
|
|
|
35.9%
|
|
|
|
Segment income
|
|
|
|
$
|
202.6
|
|
|
|
|
$
|
171.8
|
|
|
|
|
$
|
30.8
|
|
|
|
|
$
|
132.3
|
|
|
|
|
$
|
105.9
|
|
|
|
|
$
|
26.4
|
|
|
|
Segment income margin %
|
|
|
|
|
23.1%
|
|
|
|
|
|
24.3%
|
|
|
|
|
|
18.2%
|
|
|
|
|
|
18.0%
|
|
|
|
|
|
18.4%
|
|
|
|
|
|
16.8%
|
|
|
|
Adjusted segment income(a)
|
|
|
|
$
|
241.1
|
|
|
|
|
$
|
206.9
|
|
|
|
|
$
|
34.2
|
|
|
|
|
$
|
176.9
|
|
|
|
|
$
|
146.8
|
|
|
|
|
$
|
30.1
|
|
|
|
Adjusted segment income margin %(a)
|
|
|
|
|
27.5%
|
|
|
|
|
|
29.3%
|
|
|
|
|
|
20.2%
|
|
|
|
|
|
24.1%
|
|
|
|
|
|
25.5%
|
|
|
|
|
|
19.1%
|
|
|
|
Expenses not allocated to segments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate expense, net
|
|
|
|
$
|
20.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
8.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition and restructuring related expense (income)
|
|
|
|
$
|
19.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(16.3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets
|
|
|
|
$
|
37.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
41.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
|
$
|
124.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
98.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
See “—Non-GAAP Reconciliation.”
North America (“NAM’’)
|
|
|
|
Fiscal Years
|
|
|
Increase
(Decrease)
|
|
|
Percentage /
bps Change
|
|
|
|
|
|
2020
|
|
|
2019
|
|
|
Net sales
|
|
|
|
$
|
706.5
|
|
|
|
|
$
|
575.9
|
|
|
|
|
$
|
130.6
|
|
|
|
|
|
22.7%
|
|
|
|
Gross profit
|
|
|
|
$
|
334.6
|
|
|
|
|
$
|
267.0
|
|
|
|
|
$
|
67.6
|
|
|
|
|
|
25.3%
|
|
|
|
Gross profit margin %
|
|
|
|
|
47.4%
|
|
|
|
|
|
46.4%
|
|
|
|
|
|
1.0%
|
|
|
|
|
|
100
|
|
|
|
Segment income
|
|
|
|
$
|
171.8
|
|
|
|
|
$
|
105.9
|
|
|
|
|
$
|
65.9
|
|
|
|
|
|
62.2%
|
|
|
|
Segment income margin %
|
|
|
|
|
24.3%
|
|
|
|
|
|
18.4%
|
|
|
|
|
|
5.9%
|
|
|
|
|
|
593
|
|
|
|
Adjusted segment income(a)
|
|
|
|
$
|
206.9
|
|
|
|
|
$
|
146.8
|
|
|
|
|
$
|
60.1
|
|
|
|
|
|
40.9%
|
|
|
|
Adjusted segment income margin %(a)
|
|
|
|
|
29.3%
|
|
|
|
|
|
25.5%
|
|
|
|
|
|
3.8%
|
|
|
|
|
|
379
|
|
|
(a)
See “—Non-GAAP Reconciliation.”
Year-over-year net sales increases were driven by the following:
|
|
|
|
2020
|
|
|
Volume
|
|
|
|
|
22.3%
|
|
|
|
Price, net of allowances and discounts
|
|
|
|
|
0.6%
|
|
|
|
Currency and other
|
|
|
|
|
(0.2)%
|
|
|
|
Total
|
|
|
|
|
22.7%
|
|
|
Net sales
Increased to $706.5 million in Fiscal Year 2020 from $575.9 million in Fiscal Year 2019, an increase of $130.6 million or 22.7%.
This was primarily the result of a 22.3% increase in volume mostly due to higher sales of residential pool equipment, a return to normal weather conditions, improved channel inventory buying patterns, an acceleration of outdoor living trends as homeowners “shelter in place”, and a 2.3% gross price increase which was reduced by higher volume related discounts and allowances resulting in a net 0.6% positive price impact.
Gross profit and Gross profit margin
Gross profit increased to $334.6 million in Fiscal Year 2020 from $267.0 million in Fiscal Year 2019, an increase of $67.6 million or 25.3%.
Gross profit margin rose to 47.4% in Fiscal Year 2020 from 46.4% in Fiscal Year 2019, an increase of 100 basis points, primarily driven by the net price increase discussed above, manufacturing leverage, and cost savings, partially offset by a $5.7 million increase in reserves for obsolete and nonsalable inventory.
Segment income and Segment income margin
Segment income increased to $171.8 million in Fiscal Year 2020 from $105.9 million in Fiscal Year 2019, an increase of $65.9 million or 62.2%. This was primarily driven by an increase in gross profit as discussed above offset in part by higher SG&A and RD&E expenses of $1.7 million or 1%, despite sales growth of 22.7%, mainly from increased variable compensation expense and volume-related warranty costs. In Fiscal Year 2020 a 460 basis point operating leverage was achieved in RD&E and SG&A costs.
Segment income margin increased to 24.3% in Fiscal Year 2020 from 18.4% in Fiscal Year 2019, an increase of 593 basis points achieved via increased gross profit margin and operating expense leverage as discussed above.
Adjusted segment income and Adjusted segment income margin
Adjusted segment income increased to $206.9 million in Fiscal Year 2020 from $146.8 million in Fiscal Year 2019, an increase of $60.1 million or 40.9%. This was driven by the higher segment income as discussed above offset in part by reduced non-cash or non-recurring charges.
Adjusted segment income margin increased to 29.3% in Fiscal Year 2020 from 25.5% in Fiscal Year 2019, an increase of 379 basis points.
Europe & Rest of World (“E&RW”)
|
|
|
|
Fiscal Years
|
|
|
Increase
(Decrease)
|
|
|
Percentage /
bps Change
|
|
|
|
|
|
2020
|
|
|
2019
|
|
|
Net sales
|
|
|
|
$
|
168.9
|
|
|
|
|
$
|
157.5
|
|
|
|
|
$
|
11.4
|
|
|
|
|
|
7.2%
|
|
|
|
Gross profit
|
|
|
|
$
|
62.4
|
|
|
|
|
$
|
56.5
|
|
|
|
|
$
|
5.9
|
|
|
|
|
|
10.4%
|
|
|
|
Gross profit margin %
|
|
|
|
|
36.9%
|
|
|
|
|
|
35.9%
|
|
|
|
|
|
1.1%
|
|
|
|
|
|
107
|
|
|
|
Segment income
|
|
|
|
$
|
30.8
|
|
|
|
|
$
|
26.4
|
|
|
|
|
$
|
4.4
|
|
|
|
|
|
16.7%
|
|
|
|
Segment income margin %
|
|
|
|
|
18.2%
|
|
|
|
|
|
16.8%
|
|
|
|
|
|
1.5%
|
|
|
|
|
|
147
|
|
|
|
Adjusted segment income(a)
|
|
|
|
$
|
34.2
|
|
|
|
|
$
|
30.1
|
|
|
|
|
$
|
4.1
|
|
|
|
|
|
13.6%
|
|
|
|
Adjusted segment income margin %(a)
|
|
|
|
|
20.2%
|
|
|
|
|
|
19.1%
|
|
|
|
|
|
1.1%
|
|
|
|
|
|
114
|
|
|
(a)
See “—Non-GAAP Reconciliation.”
Year-over-year net sales increases were driven by the following:
|
|
|
|
2020
|
|
|
Volume
|
|
|
|
|
4.8%
|
|
|
|
Price, net of allowances and discounts
|
|
|
|
|
1.0%
|
|
|
|
Currency and other
|
|
|
|
|
1.4%
|
|
|
|
Total
|
|
|
|
|
7.2%
|
|
|
Net sales
Increased to $168.9 million in Fiscal Year 2020 from $157.5 million in Fiscal Year 2019, an increase of $11.4 million or 7.2%.
This was primarily due to 4.8% volume growth driven by a recovery in demand in the second half of Fiscal Year 2020 after an extended business “lock-down” mandated by the local governments.
Gross profit and Gross profit margin
Gross profit increased to $62.4 million in Fiscal Year 2020 from $56.5 million in Fiscal Year 2019, an increase of $5.9 million or 10.4%.
Gross profit margin increased to 36.9% in Fiscal Year 2020 from 35.9% in Fiscal Year 2019, an increase of 107 basis points, primarily driven by price increases and cost savings from quality improvements partially offset by $0.8 million of additional reserves for obsolete and nonsalable inventory.
Segment income and Segment income margin
Segment income increased to $30.8 million in Fiscal Year 2020 from $26.4 million in Fiscal Year 2019, an increase of $4.4 million or 16.7%. This was driven by an increase in gross profit as discussed above partially offset by higher SG&A expenses.
Segment income margin increased to 18.2% in Fiscal Year 2020 from 16.8% in Fiscal Year 2019, an increase of 147 basis points. The improvement was from higher gross profit margin and a 40 basis points improvement in operating expense leverage.
Adjusted segment income and Adjusted segment income margin
Adjusted segment income increased to $34.2 million in Fiscal Year 2020 from $30.1 million in Fiscal Year 2019, an increase of $4.1 million or 13.6%. This was primarily driven by the increase in segment income.
Adjusted segment income margin increased to 20.2% in Fiscal Year 2020 from 19.1% in Fiscal Year 2019, an increase of 114 basis points.
Selected Quarterly Results of Operations
The following table sets forth certain financial and operating information for each of our last eight fiscal quarters. The quarterly information has been prepared based on the consolidated financial statements and includes all adjustments (consisting of normal recurring adjustments) that in the opinion of management are necessary for a fair presentation of the information. Due to the seasonal nature of our industry, the results of any one or more quarters are not necessarily a good indication of results for an entire fiscal year (in millions):
|
|
|
|
Q1 2020
|
|
|
Q2 2020
|
|
|
Q3 2020
|
|
|
Q4 2020
|
|
|
Net sales
|
|
|
|
$
|
170.2
|
|
|
|
|
$
|
220.0
|
|
|
|
|
$
|
224.5
|
|
|
|
|
$
|
260.7
|
|
|
|
Gross profit
|
|
|
|
$
|
75.6
|
|
|
|
|
$
|
97.9
|
|
|
|
|
$
|
106.2
|
|
|
|
|
$
|
117.3
|
|
|
|
Gross profit margin %
|
|
|
|
|
44.4%
|
|
|
|
|
|
44.5%
|
|
|
|
|
|
47.3%
|
|
|
|
|
|
45.0%
|
|
|
|
Segment income
|
|
|
|
$
|
28.2
|
|
|
|
|
$
|
53.8
|
|
|
|
|
$
|
56.1
|
|
|
|
|
$
|
64.5
|
|
|
|
|
|
|
Q1 2020
|
|
|
Q2 2020
|
|
|
Q3 2020
|
|
|
Q4 2020
|
|
|
Segment income margin %
|
|
|
|
|
16.6%
|
|
|
|
|
|
24.5%
|
|
|
|
|
|
25.0%
|
|
|
|
|
|
24.7%
|
|
|
|
Adjusted segment income(a)
|
|
|
|
$
|
36.3
|
|
|
|
|
$
|
61.1
|
|
|
|
|
$
|
64.4
|
|
|
|
|
$
|
79.3
|
|
|
|
Adjusted segment income margin %(a)
|
|
|
|
|
21.3%
|
|
|
|
|
|
27.8%
|
|
|
|
|
|
28.7%
|
|
|
|
|
|
30.4%
|
|
|
|
|
|
|
Q1 2019
|
|
|
Q2 2019
|
|
|
Q3 2019
|
|
|
Q4 2019
|
|
|
Net sales
|
|
|
|
$
|
146.7
|
|
|
|
|
$
|
192.1
|
|
|
|
|
$
|
162.3
|
|
|
|
|
$
|
232.3
|
|
|
|
Gross profit
|
|
|
|
$
|
64.8
|
|
|
|
|
$
|
87.0
|
|
|
|
|
$
|
68.8
|
|
|
|
|
$
|
102.9
|
|
|
|
Gross profit margin %
|
|
|
|
|
44.2%
|
|
|
|
|
|
45.3%
|
|
|
|
|
|
42.4%
|
|
|
|
|
|
44.3%
|
|
|
|
Segment income
|
|
|
|
$
|
17.8
|
|
|
|
|
$
|
37.9
|
|
|
|
|
$
|
20.0
|
|
|
|
|
$
|
56.6
|
|
|
|
Segment income margin %
|
|
|
|
|
12.1%
|
|
|
|
|
|
19.7%
|
|
|
|
|
|
12.3%
|
|
|
|
|
|
24.4%
|
|
|
|
Adjusted segment income(a)
|
|
|
|
$
|
25.9
|
|
|
|
|
$
|
47.0
|
|
|
|
|
$
|
32.9
|
|
|
|
|
$
|
71.1
|
|
|
|
Adjusted segment income margin %(a)
|
|
|
|
|
17.7%
|
|
|
|
|
|
24.5%
|
|
|
|
|
|
20.3%
|
|
|
|
|
|
30.6%
|
|
|
(a)
See “—Non-GAAP Reconciliation.”
Non-GAAP Reconciliation
The Company uses adjusted EBITDA, adjusted EBITDA margin, adjusted segment income and adjusted segment income margin to supplement GAAP measures of performance to evaluate the effectiveness of our business strategies. These metrics are also frequently used by analysts, investors and other interested parties to evaluate companies in our industry, when considered alongside other GAAP measures.
Adjusted EBITDA is defined as earnings before interest (including amortization of debt costs), income taxes, depreciation, and amortization further adjusted for the impact of restructuring related income or expenses, stock-based compensation, currency exchange items, sponsor management fees and certain non-cash, nonrecurring, or other items that are included in net income that we do not consider indicative of our ongoing operating performance. Adjusted EBITDA margin is defined as adjusted EBITDA divided by net sales. Adjusted segment income is defined as segment income adjusted for the impact of depreciation and amortization, stock-based compensation, sponsor management fees, currency exchange items, and certain non-cash, nonrecurring, or other items that are included in segment income that we do not consider indicative of the ongoing segment operating performance. Adjusted segment income margin is defined as adjusted segment income divided by segment net sales.
Adjusted EBITDA, adjusted EBITDA margin, adjusted segment income and adjusted segment income margin are not recognized measures of financial performance under GAAP. We believe these non-GAAP measures provide analysts, investors and other interested parties with additional insight into the underlying trends of our business and assist these parties in analyzing our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance, which allows for a better comparison against historical results and expectations for future performance. Management uses these non-GAAP measures to understand and compare operating results across reporting periods for various purposes including internal budgeting and forecasting, short and long-term operating planning, employee incentive compensation, and debt compliance. These non-GAAP measures are not intended to replace the presentation of our financial results in accordance with GAAP. Use of the terms adjusted EBITDA, adjusted EBITDA margin, adjusted segment income and adjusted segment income margin may differ from similar measures reported by other companies. Adjusted EBITDA, adjusted EBITDA margin, adjusted segment income and adjusted segment income margin are not calculated in the same manner by all companies, and accordingly, are not necessarily comparable to similarly entitled measures of other companies and may not be an appropriate measure for performance relative to other companies. Adjusted EBITDA and adjusted segment income should not be construed as indicators of a company’s operating performance in isolation from, or as a substitute for, net income (loss) and segment income, which are prepared in accordance with GAAP. We have presented adjusted EBITDA, adjusted EBITDA margin, adjusted segment income and adjusted segment income margin solely as supplemental disclosure because we believe it allows for a more complete analysis of results of operations. In the future
we may incur expenses such as those added back to calculate adjusted EBITDA. Our presentation of adjusted EBITDA should not be construed as an inference that our future results will be unaffected by these items.
Following is a reconciliation from net income to adjusted EBITDA (in millions):
|
|
|
|
Fiscal Years
|
|
|
Increase
(Decrease)
|
|
|
Percentage
Change
|
|
|
|
|
|
2020
|
|
|
2019
|
|
|
Net income
|
|
|
|
$
|
43.3
|
|
|
|
|
$
|
8.5
|
|
|
|
|
$
|
34.8
|
|
|
|
|
|
409.4%
|
|
|
|
Depreciation
|
|
|
|
|
18.8
|
|
|
|
|
|
17.2
|
|
|
|
|
|
1.6
|
|
|
|
|
|
9.3%
|
|
|
|
Amortization
|
|
|
|
|
44.0
|
|
|
|
|
|
46.8
|
|
|
|
|
|
(2.8)
|
|
|
|
|
|
(6.0)%
|
|
|
|
Interest expense
|
|
|
|
|
73.6
|
|
|
|
|
|
84.5
|
|
|
|
|
|
(10.9)
|
|
|
|
|
|
(12.9)%
|
|
|
|
Income taxes
|
|
|
|
|
14.5
|
|
|
|
|
|
3.6
|
|
|
|
|
|
10.9
|
|
|
|
|
|
302.8%
|
|
|
|
EBITDA
|
|
|
|
|
194.2
|
|
|
|
|
|
160.6
|
|
|
|
|
|
33.6
|
|
|
|
|
|
20.9%
|
|
|
|
Stock-based compensation(a)
|
|
|
|
|
1.9
|
|
|
|
|
|
1.6
|
|
|
|
|
|
0.3
|
|
|
|
|
|
18.8%
|
|
|
|
Sponsor management fees(b)
|
|
|
|
|
0.8
|
|
|
|
|
|
0.8
|
|
|
|
|
|
—
|
|
|
|
|
|
—%
|
|
|
|
Currency exchange items(c)
|
|
|
|
|
(4.7)
|
|
|
|
|
|
4.2
|
|
|
|
|
|
(8.9)
|
|
|
|
|
|
(211.9)%
|
|
|
|
Acquisition and restructuring related expense, net(d)
|
|
|
|
|
32.1
|
|
|
|
|
|
1.4
|
|
|
|
|
|
30.7
|
|
|
|
|
|
n/m
|
|
|
|
Other(e)
|
|
|
|
|
7.3
|
|
|
|
|
|
3.8
|
|
|
|
|
|
3.5
|
|
|
|
|
|
92.1%
|
|
|
|
Total Adjustments
|
|
|
|
$
|
37.4
|
|
|
|
|
$
|
11.8
|
|
|
|
|
$
|
25.6
|
|
|
|
|
|
216.9%
|
|
|
|
Adjusted EBITDA
|
|
|
|
$
|
231.6
|
|
|
|
|
$
|
172.4
|
|
|
|
|
$
|
59.2
|
|
|
|
|
|
34.3%
|
|
|
|
Adjusted EBITDA margin
|
|
|
|
|
26.5%
|
|
|
|
|
|
23.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
Represents non-cash stock-based compensation expense related to equity awards issued.
(b)
Represents discretionary fees paid to our Sponsors for management services rendered pursuant to a management agreement with the Company. These payments will cease as of the effective date of our initial public offering.
(c)
Represents non-cash mark to market gains (losses) on foreign currency contracts.
(d)
Adjustments in 2019 include net one-time costs associated with reorganizations of $20.4 million, net of a gain on the sale of real estate of $16.9 million, and remeasurement of a contingent consideration of $6.0 million, as well as operating losses of $5.3 million related to an early stage product business acquired in 2018 that is being phased out in 2021. Adjustments in 2020 primarily include $19.3 million of business restructuring related costs, $4.2 million of severance and retention costs, and $5.1 million of operating losses related to an early stage product business acquired in 2018 that is being phased out in 2021.
(e)
Includes professional fees, financing fees, $2.0 million for expenses incurred in preparation for our initial public offering, additional health and safety expenses related to COVID-19, and other miscellaneous costs that we believe are not representative of our ongoing business operations.
Following is a quarterly reconciliation from segment income to adjusted segment income (in millions):
|
|
|
|
Q1 2020
|
|
|
Q2 2020
|
|
|
Q3 2020
|
|
|
Q4 2020
|
|
|
Segment income
|
|
|
|
$
|
28.2
|
|
|
|
|
$
|
53.8
|
|
|
|
|
$
|
56.1
|
|
|
|
|
$
|
64.5
|
|
|
|
Depreciation
|
|
|
|
|
4.4
|
|
|
|
|
|
4.5
|
|
|
|
|
|
4.9
|
|
|
|
|
|
4.3
|
|
|
|
Amortization
|
|
|
|
|
1.3
|
|
|
|
|
|
1.3
|
|
|
|
|
|
1.7
|
|
|
|
|
|
1.9
|
|
|
|
Stock-based compensation(a)
|
|
|
|
|
0.5
|
|
|
|
|
|
0.5
|
|
|
|
|
|
0.5
|
|
|
|
|
|
—
|
|
|
|
Currency exchange items(b)
|
|
|
|
|
0.4
|
|
|
|
|
|
0.2
|
|
|
|
|
|
0.1
|
|
|
|
|
|
0.6
|
|
|
|
Acquisition and restructuring related expense, net(c)
|
|
|
|
|
1.9
|
|
|
|
|
|
1.5
|
|
|
|
|
|
1.3
|
|
|
|
|
|
2.8
|
|
|
|
Other(d)
|
|
|
|
|
(0.4)
|
|
|
|
|
|
(0.7)
|
|
|
|
|
|
(0.2)
|
|
|
|
|
|
5.2
|
|
|
|
Total Adjustments
|
|
|
|
|
8.1
|
|
|
|
|
|
7.3
|
|
|
|
|
|
8.3
|
|
|
|
|
|
14.8
|
|
|
|
Adjusted segment income
|
|
|
|
$
|
36.3
|
|
|
|
|
$
|
61.1
|
|
|
|
|
$
|
64.4
|
|
|
|
|
$
|
79.3
|
|
|
|
Adjusted segment income margin
|
|
|
|
|
21.3%
|
|
|
|
|
|
27.8%
|
|
|
|
|
|
28.7%
|
|
|
|
|
|
30.4%
|
|
|
|
|
|
|
Q1 2019
|
|
|
Q2 2019
|
|
|
Q3 2019
|
|
|
Q4 2019
|
|
|
Segment income
|
|
|
|
|
17.8
|
|
|
|
|
|
37.9
|
|
|
|
|
|
20.0
|
|
|
|
|
|
56.6
|
|
|
|
Depreciation
|
|
|
|
|
4.2
|
|
|
|
|
|
4.2
|
|
|
|
|
|
4.1
|
|
|
|
|
|
4.7
|
|
|
|
Amortization
|
|
|
|
|
1.2
|
|
|
|
|
|
1.2
|
|
|
|
|
|
1.2
|
|
|
|
|
|
1.3
|
|
|
|
Stock-based compensation(a)
|
|
|
|
|
0.7
|
|
|
|
|
|
0.3
|
|
|
|
|
|
0.5
|
|
|
|
|
|
(0.2)
|
|
|
|
Currency exchange items(b)
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
1.4
|
|
|
|
|
|
0.8
|
|
|
|
Acquisition and restructuring related expense, net(c)
|
|
|
|
|
1.6
|
|
|
|
|
|
2.7
|
|
|
|
|
|
3.7
|
|
|
|
|
|
4.2
|
|
|
|
Other(d)
|
|
|
|
|
0.4
|
|
|
|
|
|
0.7
|
|
|
|
|
|
2.0
|
|
|
|
|
|
3.7
|
|
|
|
Total Adjustments
|
|
|
|
|
8.1
|
|
|
|
|
|
9.1
|
|
|
|
|
|
12.9
|
|
|
|
|
|
14.5
|
|
|
|
Adjusted segment income
|
|
|
|
|
25.9
|
|
|
|
|
|
47.0
|
|
|
|
|
|
32.9
|
|
|
|
|
|
71.1
|
|
|
|
Adjusted segment income margin
|
|
|
|
|
17.7%
|
|
|
|
|
|
24.5%
|
|
|
|
|
|
20.3%
|
|
|
|
|
|
30.6%
|
|
|
(a)
Represents non-cash stock-based compensation expense related to equity awards issued.
(b)
Represents currency exchange impact.
(c)
Includes non-recurring severance expenses, retention bonuses, legal fees, and the operating losses of approximately $5.1 million and $5.3 million generated in Fiscal Year 2020 and Fiscal Year 2019, respectively, related to an early stage product business acquired in 2018 that is being phased out in 2021.
(d)
Includes professional fees, additional health and safety expenses related to COVID-19, additional reserves for obsolete and nonsalable inventories and other miscellaneous costs we believe are not representative of our ongoing business operations.
Following is a reconciliation from segment income to adjusted segment income for NAM (in millions):
|
|
|
|
Fiscal Years
|
|
|
|
|
|
2020
|
|
|
2019
|
|
|
Segment income
|
|
|
|
$
|
171.8
|
|
|
|
|
$
|
105.9
|
|
|
|
Depreciation
|
|
|
|
|
16.6
|
|
|
|
|
|
16.0
|
|
|
|
Amortization
|
|
|
|
|
6.2
|
|
|
|
|
|
4.9
|
|
|
|
Stock-based compensation(a)
|
|
|
|
|
1.2
|
|
|
|
|
|
1.0
|
|
|
|
Acquisition and restructuring related expense, net(b)
|
|
|
|
|
7.5
|
|
|
|
|
|
12.2
|
|
|
|
Other(c)
|
|
|
|
|
3.6
|
|
|
|
|
|
6.8
|
|
|
|
Total Adjustments
|
|
|
|
|
35.1
|
|
|
|
|
|
40.9
|
|
|
|
Adjusted segment income
|
|
|
|
$
|
206.9
|
|
|
|
|
$
|
146.8
|
|
|
|
Adjusted segment income margin
|
|
|
|
|
29.3%
|
|
|
|
|
|
25.5%
|
|
|
(a)
Represents non-cash stock-based compensation expense related to equity awards issued .
(b)
Includes non cash non-recurring severance expenses, retention bonuses, legal fees, and the operating losses of approximately $5.1 million and $5.3 million generated in Fiscal Year 2020 and Fiscal Year 2019, respectively, related to an early stage product business acquired in 2018 that is being phased out in 2021.
(c)
Includes professional fees, additional health and safety expenses related to COVID-19, additional reserves for obsolete and nonsalable inventories and other miscellaneous costs we believe are not representative of our ongoing business operations.
Following is a reconciliation from segment income to adjusted segment income for E&RW (in millions):
|
|
|
|
Fiscal Years
|
|
|
|
|
|
2020
|
|
|
2019
|
|
|
Segment income
|
|
|
|
$
|
30.8
|
|
|
|
|
|
26.4
|
|
|
|
Depreciation
|
|
|
|
|
1.5
|
|
|
|
|
|
1.2
|
|
|
|
Stock-based compensation(a)
|
|
|
|
|
0.3
|
|
|
|
|
|
0.3
|
|
|
|
Currency exchange items(b)
|
|
|
|
|
1.3
|
|
|
|
|
|
2.2
|
|
|
|
Other(c)
|
|
|
|
|
0.3
|
|
|
|
|
|
2.2
|
|
|
|
Total Adjustments
|
|
|
|
|
3.4
|
|
|
|
|
|
3.7
|
|
|
|
Adjusted segment income
|
|
|
|
$
|
34.2
|
|
|
|
|
|
30.1
|
|
|
|
Adjusted segment income margin
|
|
|
|
|
20.2%
|
|
|
|
|
|
19.1%
|
|
|
(a)
Represents non-cash stock-based compensation expense related to equity awards issued.
(b)
Represents currency exchange impact.
(c)
Includes additional reserves for obsolete and nonsalable inventories, and COVID-19 related health and safety expenses.
Liquidity and Capital Resources
Primary sources of liquidity are net cash provided by operating activities and availability under the ABL Facility.
Cash and cash equivalents consist primarily of cash on deposit with banks which totaled $114.9 million and $47.2 million for the years ended December 31, 2020 and 2019, respectively.
Primary working capital requirements are for capital expenditures, raw materials, component and certain finished goods inventories and supplies, payroll, manufacturing, freight and distribution, facility, and other operating expenses. Cash flow and working capital requirements fluctuate during the year, driven primarily by the seasonal demand for our products, an early buy program, the timing of inventory purchases and receipt of customer payments and as such, the utilization of the ABL Revolving Credit Facility (“ABL Facility”) fluctuates during the year.
We focus on increasing cash flow, solidifying the liquidity position through working capital initiatives, and repaying debt, while continuing to fund business growth initiatives. We believe that net cash provided by operating activities and availability under the ABL Facility will be adequate to finance our working capital requirements, inclusive of capital expenditures, and debt service over the next 12 months. In the future, we may also allocate capital toward additional strategic acquisitions. If cash provided by operating activities and borrowings under the ABL Facility are not sufficient or available to meet the capital requirements, we will be required to obtain additional equity or debt financing in the future. There can be no assurance equity or debt financing will be available to us if we need it or, if available, the terms will be satisfactory to us.
Credit Facilities
The First Lien Term Facility, Second Lien Term Facility (“Term Loan Facilities”) and ABL Facility (collectively “Credit Facilities”) contain various restrictions, covenants and collateral requirements. For further information on the terms of these Credit Facilities, please see Note 9. Long-Term Debt to the Consolidated Financial Statements. As of December 31, 2020, we were in compliance with all material covenants under the Credit Facilities. Long-term debt consisted of the following (in millions):
|
|
|
|
2020
|
|
|
2019
|
|
|
First Lien Term Facility, due August 4, 2024
|
|
|
|
$
|
958.0
|
|
|
|
|
$
|
961.5
|
|
|
|
Incremental First Lien Term Facility, due August 4, 2026
|
|
|
|
|
150.0
|
|
|
|
|
|
—
|
|
|
|
Second Lien Term Facility, due August 4, 2025
|
|
|
|
|
205.0
|
|
|
|
|
|
205.0
|
|
|
|
ABL Revolving Credit Facility
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
Capital lease obligations
|
|
|
|
|
9.7
|
|
|
|
|
|
2.2
|
|
|
|
Total
|
|
|
|
$
|
1,322.7
|
|
|
|
|
$
|
1,168.7
|
|
|
ABL Facility
The ABL Credit Agreement provides for an ABL Facility in an aggregate amount of borrowings of up to $250.0 million, including letters of credit, subject to a borrowing base calculation, as defined therein.
For Fiscal Year 2020, the average borrowing base under the ABL Credit Agreement was $149.5 million, the average loan balance outstanding was $51.7 million, the loan balance was zero with a borrowing availability of $87.0 million as of December 31, 2020. During Fiscal Year 2020, the interest rate in effect was 4.82%.
For Fiscal Year 2019, the average borrowing base under the ABL Credit Agreement was $164.9 million, the average balance outstanding was $60.9 million, the loan balance was zero with a borrowing availability of $100.9 million on December 31, 2019. During Fiscal Year 2019, the interest rate in effect was 6.32%.
First Lien Term Facility
On October 28, 2020, the Company entered into a second amendment of the First Lien Credit Agreement which increased borrowings by an aggregate principal amount equal to $150.0 million with a maturity date of August 4, 2026. The Company may voluntarily prepay any borrowings outstanding under the First Lien Term Facility without a premium and penalty. In addition, the First Lien Credit Agreement requires mandatory principal payments to be made based on certain events, including annual excess cash flow, as defined therein.
As of December 31, 2020, the balance outstanding under the First Lien Term Facility was $958.0 million and the interest rate in effect, net of the interest rate hedge, was 5.16%. The balance outstanding under the Incremental First Lien Term Facility was $150.0 million and the interest rate in effect was 4.93%.
As of December 31, 2019, the balance outstanding under the First Lien Term Facility was $961.5 million and the interest rate in effect, net of the interest rate hedge, was 5.94%.
Second Lien Term Facility
The Second Lien Credit Agreement matures on August 4, 2025, and requires mandatory prepayments substantially similar to the First Lien Credit Agreement, however mandatory prepayments under the Second Lien Credit Agreement are not permitted until all amounts under the First Lien Credit Agreement have been paid in full. For Fiscal Year 2020, the balance outstanding under the Second Lien Term Facility was $205.0 million and the interest rate in effect, net of the interest rate hedge, was 9.98%. For Fiscal Year 2019, the balance outstanding under the Second Lien Term Facility was $205.0 million and the interest rate in effect, net of the interest rate hedge, was 10.76%.
Summary of Cash Flows
Following is a summary of our cash flows from operating, investing, and financing activities (in millions):
|
|
|
|
Fiscal Years
|
|
|
Increase
(Decrease)
|
|
|
Percentage
Change
|
|
|
|
|
|
2020
|
|
|
2019
|
|
|
Net cash provided by operating activities
|
|
|
|
$
|
213.8
|
|
|
|
|
$
|
94.0
|
|
|
|
|
$
|
119.8
|
|
|
|
|
|
127.4%
|
|
|
|
Net cash (used in) provided by investing activities
|
|
|
|
|
(13.0)
|
|
|
|
|
|
4.0
|
|
|
|
|
|
(17.0)
|
|
|
|
|
|
(425.0)%
|
|
|
|
Net cash used in financing activities
|
|
|
|
|
(135.1)
|
|
|
|
|
|
(65.1)
|
|
|
|
|
|
(70.0)
|
|
|
|
|
|
107.5%
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
|
|
2.4
|
|
|
|
|
|
—
|
|
|
|
|
|
2.4
|
|
|
|
|
|
—%
|
|
|
|
Change in cash and cash equivalents
|
|
|
|
$
|
68.1
|
|
|
|
|
$
|
32.9
|
|
|
|
|
$
|
35.2
|
|
|
|
|
|
107.0%
|
|
|
Net cash provided by operating activities
Net cash provided by operating activities increased to $213.8 million for Fiscal Year 2020 from $94.0 million for Fiscal Year 2019, an increase of $119.8 million or 127.4% which primarily reflects higher net income of $34.8 million, a cash source of $51.3 million from a reduction in net working capital partially attributable to improvements in working capital management, and an increase of non-cash adjustments of $33.7 million.
Net cash (used in) provided by investing activities
Net cash (used in) provided by investing activities decreased to a use of cash of $13.0 million for Fiscal Year 2020 compared to a $4.0 million cash source for Fiscal Year 2019, a decrease of $17.0 million, primarily driven by a $28.0 million decrease in the proceeds from the sale of a manufacturing and distribution facility of $28.5 million in Fiscal Year 2019. This was partially offset by a decrease of $10.8 million in capital expenditures, however the company acquired an additional $8.1 million of capital assets through capital leases in Fiscal Year 2020.
Net cash used in financing activities
Net cash used in financing activities increased to $135.1 million for Fiscal Year 2020 from $65.1 million for Fiscal Year 2019, an increase of $70.0 million. This increase is primarily due to a distribution to the Class A stockholders of $275.0 million partially funded by $150.0 million of proceeds from an incremental First Lien Term Facility during Fiscal Year 2020, compared to a net debt repayment of $64.7 million in Fiscal Year 2019.
Contractual Obligations and Other Commitments
The following table summarizes our contractual cash obligations as of Fiscal Year 2020 (in millions):
|
|
|
|
2021
|
|
|
2022
|
|
|
2023
|
|
|
2024
|
|
|
2025
|
|
|
Thereafter
|
|
|
Total
|
|
|
Long-term debt(a)
|
|
|
|
$
|
0.8
|
|
|
|
|
$
|
11.3
|
|
|
|
|
$
|
11.5
|
|
|
|
|
$
|
939.0
|
|
|
|
|
$
|
206.5
|
|
|
|
|
$
|
143.9
|
|
|
|
|
$
|
1,313.0
|
|
|
|
Letters of Credit
|
|
|
|
|
4.4
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
4.4
|
|
|
|
Operating Lease Commitments(b)
|
|
|
|
|
3.7
|
|
|
|
|
|
4.4
|
|
|
|
|
|
4.0
|
|
|
|
|
|
3.2
|
|
|
|
|
|
3.3
|
|
|
|
|
|
23.9
|
|
|
|
|
|
42.5
|
|
|
|
Capital Lease Commitments
|
|
|
|
|
2.0
|
|
|
|
|
|
2.0
|
|
|
|
|
|
2.1
|
|
|
|
|
|
2.0
|
|
|
|
|
|
1.5
|
|
|
|
|
|
0.1
|
|
|
|
|
|
9.7
|
|
|
|
Total
|
|
|
|
$
|
10.9
|
|
|
|
|
$
|
17.7
|
|
|
|
|
$
|
17.6
|
|
|
|
|
$
|
944.2
|
|
|
|
|
$
|
211.3
|
|
|
|
|
$
|
167.9
|
|
|
|
|
$
|
1,369.6
|
|
|
(a)
For further information on the terms of the Credit Facilities please see Note 9. to the Consolidated Financial Statements and the comments under Liquidity and Capital Resources above. The Long-term debt and the ABL Facility are subject to variable interest rates. The weighted average interest rate on this debt in Fiscal Year 2020 was 5.95%. We are required to pay a commitment fee of 0.375% to 0.25% respectively based on whether the unused portion of the ABL Facility is less than or greater than 50% of the borrowing base.
(b)
Operating lease commitments relate to our office, distribution, and manufacturing facilities. All of these obligations require cash payments to be made by us over varying periods of time. Certain leases are renewable at our option for periods of one to ten years and certain of these arrangements are cancellable on short notice while others require payment upon early termination.
Off-Balance Sheet Arrangements
We did not have any off-balance sheet arrangements during Fiscal Years 2020 or 2019.
Critical Accounting Policies and Estimates
Our consolidated financial statements have been prepared in accordance with GAAP. The preparation of our consolidated financial statements and notes to consolidated financial statements requires us to make estimates that affect the reported amounts of assets, liabilities, sales and expenses, and related disclosures of contingent assets and liabilities. We base these estimates on historical results and various other assumptions believed to be reasonable, all of which form the basis for making estimates concerning the carrying value of assets and liabilities that are not readily available from other sources. Actual results may differ from these estimates.
Our significant accounting policies are described in the notes to our consolidated financial statements included elsewhere in this prospectus. We believe that the following critical accounting policies affect the most significant estimates and management judgments used in preparing the consolidated financial statements.
Customer Rebates
Many of our major customer agreements provide for rebates upon achievement of various performance targets. We account for customer rebates as a reduction of gross sales with a corresponding offset to accounts receivable. We estimate the rebates based on our latest projection of customer performance. We update the estimates regularly to reflect any changes to the projection of customer performance for the applicable period.
Goodwill and Indefinite Lived Intangibles
We review goodwill and indefinite lived intangible assets for impairment annually or on an interim basis whenever events or changes in circumstances indicate the fair value of such assets may be below their carrying amount.
For goodwill, we may first make a qualitative assessment of whether it is more likely than not that a reporting unit’s fair value is less than its carrying value. The qualitative impairment assessment includes considering various factors including macroeconomic conditions, industry and market conditions, cost factors, and any reporting unit specific events. If it is determined through the qualitative assessment that the reporting unit’s fair value is more likely than not greater than its carrying value, the quantitative impairment assessment is not required. If the qualitative assessment indicates it is more likely than not that the reporting unit’s fair value is no greater than its carrying value, we must perform a quantitative impairment assessment. If it is determined a quantitative assessment is necessary, we would compare the fair value of the reporting unit to the respective carrying value, which includes goodwill. If the fair value of the reporting unit exceeds its carrying value, goodwill is not considered impaired. If the carrying value is higher than the fair value, the difference would be recognized as an impairment loss. Fair value of the reportable unit is estimated using a discounted six-year projected cash flow analyses and a terminal value calculation at the end of the six-year period.
Similar to the test for impairment of goodwill, we may first make a qualitative assessment of whether it is more likely than not that an indefinite lived intangible assets’ fair value is less than its carrying value to determine whether it is necessary to perform a quantitative impairment assessment. If it is determined a quantitative assessment is necessary, we would compare their estimated fair values to their carrying values. Fair value is generally estimated using discounted cash flows or relief from royalty approaches. We would recognize an impairment charge when the estimated fair value of the indefinite lived intangible asset is less than its carrying value. We annually evaluate whether the trade names continue to have an indefinite life.
Income Taxes
We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts and tax bases of existing assets and liabilities. Deferred tax assets, including the benefit of net operating loss and tax credit carryforwards, are evaluated based on the guidelines for realization and are reduced by a valuation allowance if it is deemed more likely than not that such assets will not be realized. We consider several factors in evaluating the realizability of our deferred tax assets, including the nature, frequency and severity of recent losses, the remaining years available for carryforwards, changes in tax laws, the future profitability of the operations in the jurisdiction, and tax planning strategies.
The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which the associated temporary differences become deductible. On a quarterly basis, we evaluate whether it is more likely than not that our deferred tax assets will be realized in the future and conclude whether a valuation allowance must be established.
Stock-Based Compensation
We recognize stock-based compensation expense for awards of equity instruments based on the grant-date fair value of those awards. The grant-date fair value of the award is recognized as compensation expense ratably over the requisite service period, which generally equals the vesting period of the award. We also grant performance-based stock options. The grant-date fair value of the performance-based stock options is recognized as compensation expense once it is probable that the performance condition will be achieved. We record actual forfeitures in the period in which the forfeiture occurs. We use the Black-Scholes option pricing model to estimate the fair value of option awards.
Determination of Fair Value of Common Stock
As there has been no public market for our common stock to date, the estimated fair value of our common stock has been determined by our Board of Directors as of the date of each equity grant, with input from management, considering our most recently available third-party equity valuations. These factors include, but are not limited to: our results of operations, financial position and capital resources; current business conditions and projections; the lack of marketability of our common stock; the hiring of key personnel and the experience of management; the risk inherent in the development, manufacturing and distribution of our products; the fact that the option grants involve illiquid securities in a private company; and the likelihood of achieving a liquidity event, such as an initial public offering or sale, in light of prevailing market conditions.
We have periodically determined the estimated fair value of our common stock at various dates using contemporaneous, independent valuations performed in accordance with the guidance outlined in the American Institute of Certified Public Accountants’ Accounting and Valuation Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensation, or the Practice Aid. The Practice Aid identifies various available methods for allocating enterprise value across classes and series of capital stock to determine the estimated fair value of common stock at each valuation date. In accordance with the Practice Aid, our Board of Directors considered the following methods:
•
Current Value Method. Under the Current Value Method (“CVM”), our value is determined based on our balance sheet. This value is then first allocated based on the liquidation preference associated with preferred stock issued as of the valuation date, and then any residual value is assigned to the common stock.
•
Option-Pricing Method. Under the option-pricing method (“OPM”), shares are valued by creating a series of call options with exercise prices based on the liquidation preferences and conversion terms of each equity class. The estimated fair values of the preferred and common stock are inferred by analyzing these options.
•
Probability-Weighted Expected Return Method. The probability-weighted expected return method (“PWERM”), is a scenario-based analysis that estimates value per share based on the probability-weighted present value of expected future investment returns, considering each of the possible outcomes available to us, as well as the economic and control rights of each share class.
Based on the aforementioned relevant factors, we determined that the Option Pricing Method was the most appropriate method for allocating the enterprise value to determine the estimated fair value of our common stock. We then applied a discount for lack of marketability to reflect the increased risk arising from the inability to readily sell the underlying shares. Our common stock and option valuations are completed once each calendar year by an independent valuation firm.
Our Board of Directors and management develop best estimates based on the application of these approaches and the assumptions underlying these valuations, giving careful consideration to the advice from the third-party valuation expert. Such estimates involve inherent uncertainties and the application of significant judgment. As a result, if factors or expected outcomes change and we use significantly different assumptions or estimates, equity-based compensation could be materially different.
Following the closing of this offering, our Board of Directors will determine the fair market value of our common stock based on its closing price as reported on the date of grant on the primary stock exchange on which our common stock is traded.
Warranties
We provide base warranties on the products we sell for specific periods of time, which vary depending upon the type of product and the geographic location of its sale. Pursuant to these warranties, we will repair, replace or remodel all parts that are defective in factory-supplied materials or workmanship. We accrue the estimated cost of warranty coverages at the time of sale using historical information regarding the nature, frequency, and average cost of claims for each product. We then compare the resulting accruals with present spending rates to assess whether the balances are adequate to meet expected future obligations.
Based on this data, we update the estimates as necessary.
Due to the uncertainty and potential volatility of the factors used in establishing estimates, changes in assumptions could materially affect our financial condition and results of operations.
Inventory Valuation
Inventories consist of merchandise held for sale and are stated at the lower of cost or net realizable value. When evidence exists that the net realizable value of inventory is lower than its cost, the difference is recorded in cost of sales in our consolidated statement of operations as a loss in the period in which it occurs. We provide provisions for losses related to inventories based on historical purchase cost, selling price, margin, and current business trends. The estimates have calculations that require us to make assumptions based on the current rate of sales, age, salability of inventory, and profitability of inventory, all of which may be affected by changes in merchandising mix and consumer preferences. We do not believe there is a reasonable likelihood that there will be a material change in the assumptions we use to calculate inventory provisions. However, if actual results are not consistent with our estimates and assumptions, we may be exposed to losses that could be material. We review and update these reserves on a quarterly basis.
Recently Issued and Adopted Accounting Standards
We are an emerging growth company, as defined in the JOBS Act. Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. We elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, our consolidated financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates.
See Note 2. Significant Accounting Policies to our Consolidated Financial Statements included elsewhere in this prospectus for additional information.
Quantitative and Qualitative Disclosures About Market Risks
Market risk is the potential economic loss that may result from adverse changes in the fair value of financial instruments. We are exposed to various market risks, including changes in interest rates and foreign currency rates. Periodically, we use derivative financial instruments to manage or reduce the impact of changes in interest rates and foreign currency rates. Counterparties to all derivative contracts are major financial institutions. All instruments are entered into for other than trading purposes.
Internal Control Over Financial Reporting
We evaluated and documented the design of our internal controls over financial reporting and identified material weaknesses as described in “Risk Factors—We have identified material weaknesses in our internal control over financial reporting. If our remediation of these material weaknesses is not effective, or if we identify additional material weaknesses in the future or otherwise fail to maintain an effective system of internal controls, we may not be able to accurately or timely report our financial condition or results of operations, which may adversely affect investor confidence in us and, as a result, the value of our common stock.” We do not know the specific time frame needed to fully remediate the material weaknesses identified.
Currency Fluctuation Risk
We conduct business in various locations throughout the world and are subject to market risk due to changes in value of foreign currencies in relation to our reporting currency, the U.S. dollar. Periodically, we use derivative financial instruments to manage these risks. The functional currencies of our international operating locations are generally the in-country local currency. We manage these operating activities at the
local level and net sales, costs, assets, and liabilities are generally denominated in local currencies, thereby mitigating the risk associated with changes in foreign exchange. However, our results of operations and assets and liabilities are reported in U.S. dollars and thus will fluctuate with changes in exchange rates.
The Company’s financial instruments that can be affected by foreign currency fluctuations and exchange risks consist primarily of cash and cash equivalents, trade receivables, trade payables, and net sales denominated in currencies other than the U.S. dollar. For the Fiscal Year 2020, approximately 25% of our net sales were denominated in a currency other than our functional U.S. dollar currency. These sales were primarily transacted in Euros and Canadian dollars. Consequently, we are exposed to the impact of exchange rate volatility between the U.S. dollar and these currencies. To hedge against this risk, we enter into foreign currency forward exchange contracts to protect our trade receivable positions and forward options to protect highly probable net Canadian dollar, Euro, and Australian dollar inter-company sales receipts expected from outstanding contractual prices and sales volume commitments.
Based on the Fiscal Year 2020, an increase or decrease of 1.0% in the currency exchange rate would cause an increase or decrease in net sales of approximately $2.1 million over the next 12 months. In the future we may enter into additional foreign exchange forward and option contracts as a result of our international growth strategy.
Interest Rate Risk
Our results are subject to risk from interest rate fluctuations on borrowings under the Credit Facilities. Our borrowings bear interest at a variable rate, therefore, we are exposed to market risks relating to changes in interest rates. As of December 31, 2020, we had $958.0 million, $150.0 million and $205.0 million of outstanding variable rate loans under the First Lien Term Facility, First Lien Incremental Term Facility and the Second Lien Term Facility, respectively. Based on our December 31, 2020 variable rate loan balances, an increase or decrease of 1% in the effective interest rate would cause an increase or decrease in interest cost of approximately $13.1 million over the next 12 months.
On August 4, 2017, the Company entered into interest rate swap agreements to manage interest rate risk related to its variable rate debt obligations. Such agreements cap the borrowing rate on variable rate debt to provide a hedge against the risk of rising rates. At December 31, 2020, we had interest rate cap agreements per year with total initial notional amount of $550 million (the “Cap Agreements”) to mitigate the impact of fluctuations in the one-month LIBOR and effectively cap the LIBOR applicable to our variable rate debt at an average rate of 1.79% and 1.63% respectively for the twelve months ending August 31, 2020 and August 31, 2021. The four-year Cap Agreements reset and settle monthly through August 31, 2021. Fluctuations in the market value of the Cap Agreements are recorded in “Other income and expenses” on our consolidated statements of operations.
Impact of Inflation
Our results of operations and financial condition are presented based on historical cost. We actively manage the impact of inflation, including import duties, through strong relationships with our diverse supplier base, vendor terms negotiations, and price and promotion management. Historically, we have been able to realize price increases to partially or fully offset cost inflation. We were granted certain import duty exemptions in 2019 for products sourced from China and received refunds in 2019 and 2020. Such exemptions expired in 2020. We strategically invest through inventory purchases to obtain favorable pricing ahead of vendor price increases. As a result, we believe we have the ability to mitigate negative impacts of inflation.
BUSINESS
Company Overview
We are an industry-leading global designer, manufacturer and marketer of a broad portfolio of pool equipment and associated automation systems. With the pool as the centerpiece of the growing outdoor living space, the pool industry has attractive market characteristics, including significant aftermarket requirements, innovation-led growth opportunities and a favorable industry structure. We are a leader in this market with a highly-recognized brand, one of the largest installed bases of pool equipment in the world, decades-long relationships with our key channel partners and trade customers and a history of technological innovation. Our engineered products, which include various energy efficient and more environmentally sustainable offerings, enhance the pool owner’s outdoor living lifestyle while also delivering high quality water, pleasant ambiance and ease of use for the ultimate backyard experience. Aftermarket replacements and upgrades to higher value IoT and energy efficient models are a primary growth driver for our business as we estimate that aftermarket sales represented approximately 75% of net sales in Fiscal Year 2020. We estimate aftermarket sales based upon feedback from certain representative customers and management’s interpretation of available industry and government data, and not upon our GAAP net sales results.
We have an attractive financial profile driven by our market position, product offerings and focus on operational excellence. From 2012 to 2020, our net sales grew at a 6.7% CAGR, our operating income grew at a 4.6% CAGR, our net income declined at a 3.4% CAGR and our adjusted EBITDA grew at a 9.6% CAGR. Our long history of lean manufacturing and supply chain initiatives produced operating income margins of 14.2% and 13.5%, net income margins of 4.9% and 1.2% and adjusted EBITDA margins of 26.5% and 23.5% in Fiscal Years 2020 and 2019, respectively. As a result of our strong financial profile, we believe we have significant flexibility with respect to capital allocation, giving us the ability to drive long-term shareholder value through our operating and financial strategies. Additional information regarding our financial performance and non-GAAP measures, including adjusted EBITDA and adjusted EBITDA margin, together with a reconciliation of non-GAAP measures to their most directly comparable GAAP measures, is included in “Prospectus Summary—Summary Consolidated Financial and Other Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Reconciliation.”
The demand for outdoor living products has increased over the past decade as retiring baby boomers are investing in their homes and millennials are showing increased interest in outdoor spaces. Consumer spending has been redirected towards outdoor home improvements as consumers continue migrating to the suburbs and increase time spent at home and in the backyard. Outdoor living repair, replacement and remodeling has grown faster than traditional home repair, replacement and remodeling projects as homeowners choose to make larger outdoor investments. The trend toward healthy outdoor living has helped underpin continued pool industry growth. Homeowners’ response to COVID-19 also helped to reinforce this trend of new pool builds as a safe environment for enjoyment at home, further increasing the
installed base of pools globally, which we estimate is over 25 million as of 2020. Our business is primarily driven by reliable aftermarket spending associated with a number of key drivers: a growing installed base, an increasing range of new pool products, a shift to more highly valued energy efficient and more environmentally sustainable products and the development of “smart home” technology to increase connectivity and automation.
We have a leading brand with a reputation for quality, energy efficiency and innovation among both global pool professionals (e.g., retailers, builders, servicers and e-commerce resellers) and pool owners. We are a leading global manufacturer, supported by a large installed base and an estimated North American residential pool market share of approximately 30% that we believe is well-positioned for future growth. On average, we have 20+ year relationships with our top 20 trade customers. Many of our products are critical to the ongoing operation of pools given requirements for water quality and sanitization. As a result, we believe that many pool owners consider our products essential.
Our products include a broad line of advanced IoT-enabled controls, alternate natural sanitizers to lower chemical usage, energy efficient pumps, LED lights, heaters, automatic cleaners and filters. We remain focused on being at the forefront of product innovation, as we continually expand our product offerings and have proactively brought new products to the market with 59 new products launched in the last three years. As of December 31, 2020, we had approximately 350 issued patents and 135 patent applications pending, including many for current and for future products under development. Consistent with our commitment to providing more environmentally sustainable solutions, over the past three years our products have helped to generate approximately 1.1 billion kWh of energy savings, reduce chlorine usage by approximately 81 million pounds and save approximately 2 billion gallons of chemically treated, heated water. Approximately 85% of our products are designed to be energy efficient, conserve water and/or avoid harsh chemical usage.
As the shift towards connected outdoor living continues, we remain focused on building an industry-leading integrated digital platform for our pool products. Given the strong aftermarket mix of our business, existing product upgrades (e.g., enhanced functions and IoT compatibility) drive our growth. Our proprietary Hayward Omni mobile app and automation platform provides numerous ways to manage essential pool functions from the scheduling of sanitization, filtration and automatic cleaners to enabling landscape light shows with water features to create the ultimate backyard experience. Our branded technology enables pool owners to manage their pools without the need to use broader technology integrators. In
addition, the app helps to connect pool owners to the Hayward brand and increase awareness. We believe our focus on developing innovative connected products further enhances pool owner loyalty and enables us to increase our market share.
Competitive Strengths
We believe that the following competitive strengths have been key drivers of our success to date, and strategically position us for continued success.
Market Pioneer and Leader in Connected Pool Products Catering to Healthy Outdoor Living
We develop highly engineered outdoor living products. Our market leading brand has helped establish industry standards for generations, pioneering the shift to plastic flow control products and energy efficient heaters. Today we continue that innovation through healthy, more energy efficient and connected pool products. Swimming is one of the most popular recreational activities in the world and water-based exercise is known to improve physical and mental health. Our water care products are composed of salt chlorine generators that eliminate the need to handle and store corrosive chlorine chemicals. This natural process generates all the chlorine needed for sanitization while maintaining soft water for healthy, irritation free swimming. Our line of UV/Ozone and AOP alternate sanitizers are among the most effective technologies in destroying waterborne bacteria and viruses while reducing the amount of chlorine required by at least 50%. Our pump products now consume only a third of the energy relative to a decade ago. The USEPA and DOE awarded us Energy Star Partner of the Year for the last two years as a result of our energy efficient products.
As the world becomes more digitally focused, pool owners are increasingly demanding “smart” outdoor living solutions. Our proprietary Hayward Omni mobile app and automation platform provides numerous ways to manage every essential pool function. The mobile app manages everything from the scheduling of sanitization, filtration and running of automatic cleaners, to landscape light shows with water features that create the ultimate backyard experience. Omni gives the pool owner the power to access and adjust pool settings from anywhere. Omni easily connects to Amazon Alexa or Google Home for voice command of pool functions or integrates as part of a home automation system (e.g., Crestron and Savant). The emergence of IoT and smart home systems is a growing trend that is led by the U.S. smart home market, which is expected to grow approximately 15% per year, according to a recent report by Statista. Apps or voice controls are the most widely used systems for operating these home systems which complements Omni’s capability to operate pool and spa functions along with other backyard functions such as irrigation and landscape lighting. Omni is the highest rated pool app in both the Apple and Google online stores, with a 93% attach rate, which refers to the percentage of installed Omni-compatible products connected to the app. Our growing app user traffic allows us to better understand how pool owners are using our products and provides invaluable feedback on a real-time basis. Pool owners can also share their app data with their pool servicers and notify them of potential equipment issues to enable proactive service and maintenance. In the future, we expect to execute “in-app” marketing to push relevant offers and promotions to app users.
Large Installed Base with Growing Content and Replacement Needs Creates Recurring Sales Model
Our products are generally non-discretionary and recurring (after initial pool construction and remodels) due to the need to repair and replace equipment for the ongoing operation of pools. Given our estimate of an installed base of approximately 25 million above ground and in-ground pools globally as of 2020 and our leadership position in the market, we estimate that approximately 75% of our net sales in Fiscal Year 2020 was driven by aftermarket repair, replacement, remodel and pool owner-desired upgrades. We estimate aftermarket sales based upon feedback from certain representative customers and management’s interpretation of available industry and government data, and not upon our GAAP net sales results. Our product replacement cycle is approximately 9 to 12 years, driving multiple replacement opportunities over the typical life of a pool. Pool equipment features are of significant importance to the pool owner, and therefore we believe pool owners tend to be less price sensitive to our equipment relative to the pool’s total cost. At the time of replacement, pool owners typically prefer a like-for-like Hayward product or an upgrade to a newer product from our catalog. The replacement cycle drives an ongoing relationship that continues as homeowners upgrade their pools for many years after installation.
Demand for pool products is also supported by an increasing sales value per pool equipment order. The average wholesale price for equipment per pool typically ranges from $1,500 for entry level pools to well above $10,000 for premium pools, but equipment is only a fraction of the total pool cost. The average amount spent on equipment per pool has more than doubled in the last 10 years as owners increasingly spend more to incorporate the latest technology. A recent study shows that pool professionals are increasingly recommending and installing upgraded products. In 2020, pool professionals reported they installed
premium or upgraded versions of pool products 47% of the time, rather than making a like for like replacement of the broken product. In a similar survey conducted in 2016, pool professionals reported installing upgrades 37% of the time. Examples of recent themes in more advanced products include increased use of controls, apps, home automation systems, variable speed pumps, alternate sanitizers that reduce chemical usage, energy efficient water heaters, automatic cleaners and other exciting new technology to increase ambiance and comfort. U.S. and Canadian government regulations, along with the European Ecodesign Directive, also support the transition to the use of energy efficient pumps. These innovative pool products enhance the pool ownership experience and in return drive greater pool satisfaction and pool demand.
Premium Brand with Highly Engineered Products across Pool Types
We are an industry-leading brand among both global pool professionals (e.g., retailers, builders and servicers) and pool owners. We offer a comprehensive product assortment, consisting of more than 4,000 product SKUs. Our ability to offer a full bundle of products is a critical competitive advantage. We have invested heavily in our brand. Through new product development, rebranding of integrated acquisitions, customer service and operations, we have positioned Hayward as the go-to brand of choice, synonymous with pool product excellence. In the United States, we are the industry's most recognized and trusted brand among pool owners. We believe that pool professionals consider us the highest quality, most dependable brand and they believe that Hayward is worth paying a premium for.
Our broad suite of connected products caters to entry, mid-range and premium in-ground residential pools, above ground pools and commercial pools. As pool owners upgrade their pools over time, we believe we can remain a provider of choice at every step along their outdoor living progression. We leverage pool owners’ brand loyalty and our breadth of product offerings to grow across all pool categories.
Highly Flexible, Global Manufacturing and Distribution Platform with Differentiated Capabilities
We have six primary global manufacturing facilities and five primary distribution centers with a network of small locations for final assembly serving over 25 countries. Our production facilities are located in the United States, Spain and China, and leverage cost-efficient automation processes. Products manufactured in the United States have typically accounted for approximately 70% of our net sales. We have a strong commitment to safety, quality and environmental protection. In 2018, we implemented a behavioral safety initiative that has helped reduce recorded incidents by approximately 62% over the last three years. We use approximately 3 million pounds of recycled resin per year—up to 10% of all resin used in our pump and filter manufacturing consists of recycled material. In addition, we operate over 130 molding machines, of which approximately 70% are fully electric or hybrids and can save 20-40% in energy consumption compared to traditional hydraulic machines.
Our lean, vertically-integrated manufacturing and distribution processes allow for low-cost production that results in attractive margins and a high degree of quality control. We have ample manufacturing and distribution capacity, which provides versatility for growth and operating leverage within our existing footprint. We have consistently invested in these facilities to ensure that we have a strong and reliable supply chain designed to handle surges in demand and unforeseen logistical disruptions. We are able to produce customized, customer-differentiated products through our “Centers of Excellence” which are vertically-integrated facilities with flexible manufacturing capabilities. In addition, we have an agile production footprint with variable capacity available to support our anticipated growth over the next decade.The high level of automation in our facilities allows us to extend our work week and increase production velocity with limited additional capacity investments.
Multi-Channel Strategy Provides Multiple Points to Influence Pool Owners
Our go-to-market strategy leverages the professional trade, retail and e-commerce channels. Our trade customers are primarily distributors, major pool builders, buying groups, servicers and specialty on-line resellers. These trade customers subsequently sell our products to the pool owner. Sales to distributors make up the majority of our net sales, comprising 76% of net sales in Fiscal Year 2020, with remaining revenue from direct major builders, retailers and buying groups. Given our market position, trade customers are very familiar with our products and help to advocate their merits to pool owners. On average, we have 20+ year relationships with our top 20 trade customers and actively invest in these relationships through targeted sales efforts, loyalty programs and other initiatives.
We deploy a “push-pull” strategy through the Hayward Sales Model. Our sales organization “pushes” distributors to stock and market our products, while simultaneously creating a “pull” from end-user demand by marketing these products to builders, retailers, servicers and pool owners. This combination of forces helps to increase the barrier for competitors to enter the channel.
We manage this coordinated effort with a highly trained sales organization supported by our Salesforce.com CRM platform. The sales organization is divided into specialized teams: new accounts acquisition, builder, servicer and distribution channel management, commercial pool, e-commerce management and inside sales. These sales teams ensure that we reach our trade customers effectively and deliver our value proposition to the trade channel. Our sales organization compensation strategy is aligned to growing our business as compensation incentives are tied to year-on-year sales growth and are based on a combination of sales into the channel (i.e., sales to distributors) and sales out of the channel (i.e., distributor sales to trade partners). We generate “push” through programs such as volume rebates with key distributors and offer higher growth rebates to partners who achieve agreed upon growth milestones. Given the role of builders, retailers and servicers in the distribution channel, our sales team helps with training, marketing, advertising, promotional events and other tasks.
We create “pull” demand not only through our products’ quality and innovative features but also through loyalty programs. As product satisfaction is usually high, pool owners typically prefer the Hayward brand when looking for a replacement or upgrade of their current Hayward equipment. Pool owners may also choose a like-for-like Hayward brand when replacing other manufacturers’ products, at the suggestion of retailers or servicers. This consumer dynamic helps to provide confidence for our trade customers to maintain ample inventory of our products. To further support demand, we motivate and incentivize our builders, retailers and servicers. These programs reward trade customers based on both volume and range of products ordered. Those who support the “Hayward bundle” as part of a one-stop-shop commitment save more on their purchases from the company over time.
Our ongoing trade partner care intiatives further support our “push-pull” strategy and drive trade customer retention and growth. We have approximately 1,700 Hayward Authorized Service Centers in the United States to assist our trade customers and pool owners. In addition, we provide field-based technical service coordinated by three regional managers and 28 district technical managers covering all regions of the United States. We also operate two centralized call centers. The first provides product technical support to trade partners in the field. The second assists trade partners with order management and other commercial matters or issues.
In recent years, we have taken a market leading e-commerce position. We have implemented a range of policies and special SKUs for the online channel designed to maximize the opportunity for online sales without compromising our growth strategy with our “brick and mortar” customers. Approximately 15% of our products sold in the United States are ultimately purchased online. Our products reach the online sales channel through a combination of direct sales to online resellers and sales to our distributors who in turn sell to online resellers.
Resilient, Strong Financial Performance
Regardless of the economic conditions, it has been our experience that pool owners will maintain their pools and continue to pursue their pool wellness and recreation activities. Pool owners also are conscious that maintaining a pool typically costs less than repairing pool products that are damaged due to the lack of maintenance. We have delivered net sales growth, expanded margins and executed a disciplined capital expenditure program. From 2012 to 2020, our net sales grew at a 6.7% CAGR, our operating income grew at a 4.6% CAGR, our net income declined at a 3.4% CAGR and our adjusted EBITDA grew at a 9.6% CAGR. Our revenue and profitability metrics all grew over this time period with the exception of net income, which witnessed negative growth as a result of the transition in 2017 from a family-owned business to a sponsor-backed business, which resulted in higher interest expense following the Acquisition. In addition, our net sales and adjusted EBITDA grew in every year since 2012 except for Fiscal Year 2019, which was negatively affected by elevated inventory levels in some of our key distribution channels entering the pool season (largely due to significant tariff-driven price increases impacting the industry in 2018), as well as sales volume declines due to cold, wet weather during the first half of 2019 in key markets.
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We have steadily reinvested in our business over time, mitigating the need for large capital expenditures on our installed manufacturing base. As a result of our attractive financial profile, we have significant flexibility with respect to capital allocation, giving us the ability to drive long-term shareholder value through various operating and financial strategies. Additional information regarding our financial performance and non-GAAP measures, including adjusted EBITDA and adjusted EBITDA margin, together with a reconciliation of non-GAAP measures to their most directly comparable GAAP measures, is included in “Prospectus Summary—Summary Consolidated Financial and Other Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Reconciliation.”
Proven Management Team Focused on Growth
Our strategic vision and culture are directed by our executive management team under the leadership of our President and Chief Executive Officer, Kevin Holleran and Senior Vice President and Chief Financial Officer, Eifion Jones. Mr. Holleran joined us in 2019 and has nearly 30 years of experience in commercial and leadership positions across a number of industrial focused end markets. Most recently, Mr. Holleran served as President and Chief Executive Officer of the $4 billion Industrial Segment within Textron (NYSE: TXT). Mr. Jones joined us in 2020 with over 30 years of experience as a world-class business leader with a strong track record of building and leading global financial organizations. Mr. Holleran and Mr. Jones joined an experienced management team with a track record of innovation and operational excellence at Hayward. Our management team is uniquely capable of executing upon our strategic vision and successfully continuing to create long-term shareholder value.
Growth Strategy
We believe our multi-faceted growth strategy positions us to drive profitable, above-market growth in the markets we serve.
Continue to Introduce Thoughtful Innovation That Expands Our Markets
We have a proven track record of developing new products, offering advanced technology, energy-saving efficiency and a high-quality pool owner experience that have expanded our markets. Our strong manufacturing capabilities, detailed consumer research and extensive engineering expertise allow us to rapidly introduce differentiated products. We have launched 59 new products in the last three years, which contributed approximately 11% of net sales in Fiscal Year 2020. Recent product innovation includes: MaxFlo and TriStar VS—advanced energy efficient variable speed pumps for standalone operation or Omni control; HydraPure—an advanced oxidation process combining UV and ozone for water sanitization; OmniPL™ Smart Pool and Control—mobile app-based smart control for all connected pool and spa systems as well as other connected backyard components; AquaRite® 940 Omni—North America’s #1 salt chlorine generator bundled with Omni for smart control; AquaVac® 6 Series—a line of robotic pool cleaners with the technologically advanced, patented SpinTech™ debris separation technology for constant suction power; TriVac® 700—the only pressure cleaner capable of skimming debris from the surface of the water in addition to vacuuming the pool floor, walls and coves; and CAT 6000—a commercial, IoT-enabled water chemistry controller that allows precise sanitization control.
Our smart device apps have been available for our control products since 2010. In 2019, we significantly redesigned our premium Omni control app which first launched in 2015. This highly rated new app is compatible with all past and present Omni-compatible products, affording all users the same enhanced functionality and user experience. Data gathered from the app will help us further tailor our product development, distribution and sales strategies. This year, we plan to launch another exciting round of new products focused on the key categories of sanitization, heating, lighting and IoT-enabled controls. We also expect to introduce a new line of products timed to capitalize on the DOE's 2021 regulatory changes that require replacing many single speed pumps with variable speed pumps in new installations and replacements going forward. We expect these regulatory changes to accelerate the sales growth of variable speed pumps in 2021 and beyond. We believe this regulatory change will be a win-win for both the Company and the pool owner. Due to added product features, variable speed pumps have prices that are up to 2.4 times higher than single speed pumps and present significant revenue and gross margin upside to the Company. Similarly, the efficiency gains afforded by the products provide pool owners a rapid product purchase payback—as quickly as one to two years due to energy savings. We estimate that approximately 70% of North American pools have either no controls or just a simple on/off timeclock, providing us with an opportunity to upgrade these pools with Omni control and automation systems as part of the pump upgrade.
Focus on Key Strategic Sales Initiatives to Strengthen Trade Customer Relationships
We recently embarked on a sales initiative aimed at “Getting Closer to the Customer” in an effort to drive greater market share. We are evolving our sales organization from a generalist unit to a number of focused, channel-specific teams. We are creating national positions for managing e-commerce, large accounts and the commercial segment. Salesforce.com forms the backbone of this new strategy to ensure cross
communication between teams in the field along with marketing and customer service. To further enhance our customer capabilities, we utilize a combination of in-person and virtual training programs. We have mobile training vehicles that provide hands-on product training and education in the field. Hayward University, an online portal of training videos and a library of product information available for our trade customers, further supports our training initiative and enables us to operate virtually. We also offer our Totally Hayward loyalty program, an incentive-based program that allows us to better connect with our trade partners.
Grow Additional Share in the International and Commercial Markets
We are a leading global manufacturer with a large installed base and an estimated North American residential pool market share of approximately 30% in Fiscal Year 2020. Based on management’s estimates, we believe that we also have a strong international presence with an estimated #3 share in Europe and #4 in Australia. We continue to focus on expansion as we implement Totally Hayward and leverage our complete product bundle across our international markets. The international market, particularly in Europe, is fragmented and we see significant room to grow our presence via our existing footprint and the introduction of new products that meet local market demands.
We are currently a niche player in the commercial market where we see an opportunity for growth following the expansion of our commercial pool sales team. We believe our significant new product pipeline portfolio, which is a mix of in-house new product development complemented by strategic partnerships with third parties under the Hayward brand, will allow us to continue to drive deeper penetration in these markets. Moreover, we expect the broader adoption of ancillary products, such as sanitization systems, in the commercial market. This trend is expected to provide further growth opportunities in this end market.
Expand Margins and Returns Through Continuous Improvement Initiatives
Our global manufacturing and distribution footprint has enabled us to maintain strong margins and returns. We believe that we can continue to improve our margins through implementing cost improvement programs, including clear cost takeout programs currently in place. We believe our well-invested and predominantly owned manufacturing footprint supports our continuous improvement initiatives. Lean methodologies and Kaizen principles are central to everything we do. Our one-piece flow process, which enables us to assemble, test and package a product in a single work cell, maximizes our efficiency and lowers our manufacturing costs. Our strategic initiatives help us manage the costs of our materials through negotiations and various hedging programs. We believe these and other recent initiatives will enable us to strengthen our penetration in our key markets, expand market share and improve margins.
Execute Strategic Acquisitions That Broaden Our Platform
We generate a significant amount of cash flow and continue to re-invest in the business through organic and inorganic means. Acquisitions add new product technology and national market positions throughout our portfolio. We have completed and integrated more than 10 bolt-on acquisitions in the last 20 years. For example, the 2018 acquisition of Paramount opened a new category of in-floor cleaning, strengthened our position in alternative sanitizers and energy efficient goods. Our 2016 acquisition of Sugar Valley in Spain has both fueled market share growth in the European market and provided new technological product capabilities in sanitization and automatic controls.
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White Goods refer to key components of the pool recirculation system such as drains, skimmers, returns and fittings.
We intend to utilize our disciplined process to identify, evaluate, acquire and integrate businesses across the healthy and connected outdoor living space. We actively monitor a pipeline of attractive acquisition opportunities across multiple product categories and geographies. We target opportunities that enhance our technological capabilities, strengthen our global market positions and increase our geographical diversity in our end markets. We also look to identify adjacencies in the outdoor living category that can be integrated into our Omni platform and can benefit from our scale.
Industry
Outdoor Living Market
The demand for outdoor living products has increased over the past decade as homeowners seek to create attractive areas in their backyards as an extension of their home space. A recent survey that gauged popularity of certain repair and remodeling categories showed that the top three responses were all related to outdoor living. In addition, outdoor living repair and remodeling spending has outpaced traditional repair and remodeling spending in recent years.
Key contributors to this growth are retiring baby boomers and discerning millennials. Baby boomers are investing in improvements to their residences as they decide to retire in place. Millennials have shown a greater appreciation for the outdoors than prior generations and want attractive and functional outdoor spaces. Studies show that 70% of U.S. households have outdoor living spaces and those spaces are used at least once per week. Homeowners’ response to the COVID-19 pandemic have also helped reinforce this trend.
Today’s pool owners typically demand healthy experiences, ‘green’ products, energy efficiency and a digital experience. These discerning consumers are socially conscious and actively seek out products that
reduce the use of energy and chemicals. In line with this objective, these pool owners are more willing to invest in pool equipment with enhanced functions and capabilities that satisfy these criteria. In addition, swimming is one of the best forms of exercise available according to the Centers for Disease Control and Prevention, while also being considered essential to wellness. As a result, we have introduced innovative products to satisfy this demand.
The outdoor living market covers several product areas:
The pool typically serves as the centerpiece of the outdoor living space for homeowners and is one of the most expensive investments in the backyard. Buyer satisfaction with pool ownership is very high and the pool often brings people together outside. New pool products have also greatly increased the ease of maintaining a pool as well as the entertainment and enjoyment of this key backyard centerpiece.
U.S. Pool Market
History
Americans have been enamored with swimming pools for many decades. In the 1930s, high-end hotels and local municipalities began using pools as marketing tools. The U.S. residential pool industry started to flourish after World War II as Americans were aided by the GI Bill, which fueled strong growth in new housing and a significant population relocation to Sun Belt and Western states. The pool industry continued to grow over the ensuing decades, including the introduction of new pool types such as the above ground pool. These industry developments helped to expand pool ownership and created a large installed base of pools. The quality and enjoyment of the pool experience has increased significantly over the past two decades as the result of innovative pool product companies such as ourselves.
We believe the pool equipment market is large, growing and predictable. The industry is characterized by attractive long-term growth dynamics that have driven market growth of approximately 6 – 8% over the last five years. This market growth is supported by a growing aftermarket installed base, new construction of pools, product upgrades and industry pricing increases.
U.S. Residential Aftermarket
The installed base of residential pools is large with approximately 9 million pools in the United States as of 2020. As a result, pool equipment market expenditures are driven primarily by aftermarket spend versus new pool construction. Aftermarket equipment sales are driven primarily by the ongoing repair, replacement, remodeling and upgrading of equipment for existing pools. The non-discretionary nature of ongoing pool water treatment to maintain safe, sanitized water has been a key attribute of the industry. The CDC recommends that swimming pool water chemistry be tested at least twice per day, or more often when the pool is in heavy use, and that water be treated as necessary to protect from germs that cause recreational water illnesses. A pool quickly becomes unusable if not regularly maintained and routine maintenance is less expensive than the cost of failing to maintain a pool, which can range from around $2,000 for chemical treatments to over $10,000 for entire pool decommissioning, according to management estimates. A pool provides a stream of revenue for manufacturers as pool owners require equipment, parts, components and services through the repair, replacement and remodeling cycle of their pools.
The U.S. installed base of in-ground pools has grown every year since 1970. While the installed based is increasing, so is the average age of these pools, which has risen from an average age of 19 years in 2012 to 22 years in 2019. Management estimates that pumps and filters are replaced in over half of all pool remodel projects and residential in-ground pools are remodeled approximately every 9-12 years, roughly the service life of most pool components. The rising age of pools brings about an increased need for repair, replacement and remodeling work. This continual replacement spend creates a resilient market with a very steady flow of demand for aftermarket sales of our products and services. The average spend per remodel on U.S. in-ground pools has increased by 44% between 2012 and 2019, which we believe was largely driven by this product upgrade dynamic. Aftermarket replacements often utilize newer product technology such as salt chlorine generators, IoT controls and variable speed pumps, which are more expensive than prior generation products but can help reduce chemical and energy spend for pool owners. We believe that these ongoing chemical and energy cost reductions can create a payback for pool owners of less than two years in many cases, providing an incentive for them to install the latest technology.
New U.S. Residential Pool Construction
Beginning in 2012, the U.S. pool market saw steady growth in new residential in-ground pool construction based on annual pool installments. Since 2012, U.S. new pool construction has grown at over a 7% CAGR through 2020E while the total value of new residential in-ground pool construction has increased twofold, a growth rate that is significantly faster than the volume of new pool construction due to the increasing value of pool equipment. Also during this time, outdoor living expenditures have increased as American homeowners continue to invest in healthy outdoor living experiences. Pool construction weakened slightly in 2019 due to abnormally high rainfall as 2019 was the second wettest year on record for the United States.
We believe the pool industry is poised for continued growth as industry tailwinds remain in place. The estimated 94,000 pools constructed in 2020 remains well below long term the annual pool construction median of 113,000 pools. While the post-Great Recession recovery of the new pool build market is still ongoing, current demand exceeds the pool construction industry’s ability to supply new pools, leading to a robust backlog and positive outlook for 2021 and beyond. Continued growth in new pool construction is expected to be aided by a strong new housing market, rising home equity levels, migration trends to the Sun Belt and continued growth in outdoor living investment.
International Pool Market
We believe the international pool market outside North America was composed of approximately 15 million pools in 2020. Europe represents the largest portion of this market with approximately 7 million pools in the region and is projected to grow at a CAGR of over 9% between 2020 and 2026 based on expected continued growth in new pool construction and upgrades to new pool equipment technology. The European market remains highly fragmented, partially because various regional product certifications make it easier for market participants to operate locally. The European market is slightly more weighted to the direct channel than the United States as approximately 70% of sales are through distribution and approximately 30% are direct to trade customers. The majority of the European market is concentrated in warmer climates. France and Spain, combined, make up most of the market. Germany, Austria and Switzerland are also sizeable markets. Growth drivers for international pool markets include continued growth in residential and commercial pool construction and upgrades of equipment on existing pools to automated, energy efficient technology.
Commercial Market
We are currently a niche player in the commercial market where we have an opportunity to grow given our leadership in the residential pool market. We are uniquely positioned to further penetrate the market given our size, technological capabilities and distribution network.
The commercial market is composed of pools and recreational water features (e.g., wading pools, plunge pools, lazy rivers and various interactive water fixtures). We are focused on small to medium-sized pools (up to 150,000 gallons) which represent approximately 75% of the total commercial market. Target customers include hotels, motels, apartments and condominiums (“HMAC”) and health clubs.
Flow Control Market
Our flow control business, which accounted for less than 5% of our net sales in Fiscal Year 2020, addresses a market for industrial thermoplastic valves and process control products for various industrial end markets, including aquatics, oil and gas, data centers, municipal water and waste water management, power generation and chemical processing. Our key product offerings are typically lightweight and easy to install. Installation and maintenance costs are relatively low. In addition, our products have the ability to resist damage from temperature and corrosion while also avoiding contamination of transported fluids or gases. Our key customers include Ryan Herco, Indelco Plastics, Grainger and Harrington Plastics.
Business Segments
We operate in a global pool equipment market with an installed base that we estimate to be approximately 25 million pools globally. We estimate the global market size at $4.6 billion in 2020. North America and Europe are the two largest pool markets, accounting for an estimated 68% of the total global installed base and 84% of total equipment sales.
North America
Our North American business segment consists of the United States and Canada. We have residential and commercial field based teams selling directly to specialized pool distributors, large retailers,
major builders and specialized online resellers. U.S. trade customer shipments are fulfilled from either our East Coast or West Coast distribution centers depending on the customer’s location. Canadian trade customers are served through our distribution center in Oakville, Ontario.
Europe and Rest of World
Our Europe and Rest of World business segment consists of all countries outside of the United States and Canada. Europe and Australia make up a sizeable portion of this business segment. Europe and Australia have similar sales structures to the United States. Customer shipments in Europe are fulfilled through our France or Spain distribution centers and Australia has its own smaller regional distribution hubs. The other 20+ countries in this segment are predominantly served through U.S. based regional managers who in turn deal through established distribution in each of the markets. Products are consolidated into containers and shipped to global locations from the United States.
Products and Services
Since our founding in 1925, we have been delivering a growing portfolio of pool equipment that is differentiated by innovative features and high-quality. Our products are connected through built-in IoT capabilities and our mobile app, and perform various core and auxiliary functions to deliver the holistic pool experience for pool owners.
Full Spectrum of Pool Equipment
Our new product development capabilities have been a core component of our growth story. Recent product development has targeted key pool industry trends such as energy efficiency, advanced sanitization, reduced chemical usage, water conservation and enhanced IoT-driven pool experiences.
Recent product innovation includes:
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MaxFlo and TriStar VS: advanced energy efficient variable speed pumps for standalone operation or Omni control
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HydraPure: advanced oxidation process combining UV and ozone for water sanitization that kills 99.9% of chlorine resistant microorganisms and reduces chlorine demand by approximately 50%
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OmniPL™ Smart Pool and Control: mobile app-based smart control for all connected pool and spa systems as well as other connected backyard components
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AquaRite 940® Omni: North America’s #1 salt chlorine generator bundled with Omni for smart control
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AquaVac 6® Series: line of robotic pool cleaners with the technologically advanced, patented SpinTech™ debris separation technology for constant suction power
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TriVac® 700: the only pressure cleaner capable of skimming debris from the surface of the water in addition to vacuuming the pool floor, walls and coves
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CAT 6000: commercial, IoT-enabled water chemistry controller that allows precise sanitization control
Our more environmentally sustainable products provide increased value for pool owners through various advanced functions that help drive energy savings, minimize chemical usage and reduce water consumption. Given these advanced functions, we are able to charge a higher price on key products such as variable speed pumps, energy efficient heaters, efficient filters and LED lights—these products are priced approximately 1.3 to 2.4 times higher than basic product variants. The addition of IoT based controls and alternative sanitizers, including salt chlorination systems and UV/Ozone systems, also increases the potential equipment spend on a pool pad while providing greater ease of use for pool owners and potential energy savings and chemical reduction. Based on management’s estimates, the long term aftermarket upgrade opportunity from these currently available products is over $21 billion in total, with the current penetration rate of these upgraded technologies ranging from less than 5% to approximately 50% depending on the category. Pool owners are typically willing to pay higher prices upfront in order to enjoy functional product benefits and ultimate cost savings. Pool owners appreciate the more environmentally sustainable features and understand that they can expect a payback over several years. For example, the average payback period on a variable speed pump is approximately one to two years.
Leader in Game Changing New Product Development
Our products cater to all types of pools including both in-ground and above ground pools. Our wide range of offerings can be found in entry, mid-range and premium pools. The average wholesale price per pool typically ranges from $1,500 for entry level pools to well above $10,000 for premium pools, but equipment is only a fraction of the total pool cost. Approximately 50% of our net sales is derived from non-discretionary products that are essential to operating a residential or commercial pool. We believe pool owners tend to be less price sensitive to our products given the importance of pool equipment features to the pool owner experience and the relatively low cost of equipment compared with the total cost of a pool.
Catering to Different Pool Types
The growing product bundle and technology content of pools support both the company’s new pool construction and aftermarket businesses. Increased product content drives greater sales volume and higher cost technologies drive increased sale prices and margins. As an innovator in the industry, we play a leading role in driving growth and development of more advanced pool equipment and functionality to grow the market.
We take pride in the innovation, technology and quality of our products and we continue to build our brand with our trade customers and pool owners. We are aligned to our “We Build Better” branding strategy, which means:
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Better product performance: superior efficiency, power and speed
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Better product reliability: more durable and longer lasting
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Better design: easy installation and set-up
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Better living: brings comfort, safety and peace of mind
Customers
We sell our products through a variety of channels to a diverse global trade customer base. We have deep, long-standing relationships with large, blue chip customers. The majority of our sales are through specialty distributors, who in turn sell to thousands of pool builders and servicers. The remaining sales are directly to large retailers, pool builders and buying groups. Our largest customer, Pool Corporation, represented approximately 30% of our net sales in Fiscal Year 2020, but no other customer represented more than 10% of our net sales in Fiscal Year 2020.
On average, we have 20+ year relationships with our top 20 customers and we actively invest and develop these relationships through targeted sales efforts, loyalty programs and other initiatives. In addition to our strong distributor relationships, we estimate that we are currently the largest equipment supplier to each of the top four retailers in the United States.
Suppliers
We maintain longstanding relationships with approximately 900 suppliers. We mainly purchase assembled components such as motors, metal parts, cables and extrusions from our suppliers. We also purchase raw materials, such as resins (ABS, PP, HDPE, PVC), metals (copper, steel, aluminum, titanium, ruthenium) and liner board (packaging), which expose us to changes in commodity pricing. We seek to mitigate the effects of fluctuations in commodity prices through our agreements with our suppliers, that typically provide for fixed pricing over a three to 12 month period to manage raw material inflation. We complete full audits on all new suppliers, and periodically evaluate our existing supplier base to ensure maximum service and quality. Our supplier base is “sticky” as suppliers must invest to receive certain approvals, creating an economic incentive to maintaining a long and productive relationship.
We have dedicated supply chain employees who manage global sourcing, strategic consolidation and supplier relationships. We have reduced our supplier base by over 19% since 2015, helping improve purchasing power and reducing input costs. We expect continued strategic sourcing, as well as increased volumes from both organic growth and recent acquisitions, to drive further economies of scale. Our agreements with our suppliers typically provide for fixed pricing over a three to 12 month period to manage raw material inflation.
We have had an average relationship of over 15 years across our top 30 suppliers. We have had a 40+ year relationship with our top vendor and 10+ year relationships with 9 out of our top 10 suppliers, with an average of 19 years of supply continuity. These top 10 suppliers represent approximately 35% of our total material purchases.
Sales Channels
The pool equipment market is served through several sales channels. This complexity favors scaled manufacturers like us that have the ability to service multiple channels and act as a “one-stop shop” with a complete product offering.
Distributors: The majority of our net sales comes from an authorized network of regional and national distributors who service the pool trade (i.e., builders, retailers and servicers). We have long standing relationships with these trade customers and we have clear contractual agreements to support our continued net sales of our products through this channel. Distributors are responsible for ordering, stocking, training, delivering and taking on credit responsibility from their trade customers. Many distributors also sell our products to online retailers.
Builders, Retailers and Servicers (Direct Sales): We sell to several major buying groups composed of members who are independent businesses. Buying groups receive competitive pricing and special incentives. Members can place orders with the group’s corporate headquarters, purchase products through our distributors or receive shipments directly from us.
Buying Groups: We sell to several major buying groups which are composed of members who are independent businesses. Buying groups receive competitive pricing and special incentives. Members can place orders with the group’s corporate headquarters or order from us directly. We ship directly to member locations.
In the United States, approximately 78% of residential pool equipment is sold through specialty distributors such as Pool Corporation, Bel-Aqua, and Baystate. Another 12% is sold directly to retailers, and the remaining 10% is sold to builders. In Europe, the sales channel is more direct than in the United States as approximately 75% of sales are through distributors and 25% are through direct sales.
Across regions, the market is based on a “prescriber model.” The purchasing decisions of the end consumer (i.e., pool owners) are strongly influenced by pool builders and pool servicers.
Seasonality
Our business is seasonal with sales typically higher in the second and fourth quarters. During the second quarter of a fiscal year, sales are higher in anticipation of the start of the summer pool season. In the fourth quarter, we incentivize trade customers to buy and stock up in preparation for next year’s pool season under an “early buy” program which offers a price discount and extended payment terms. Under the early buy program we ship products from October through March and receive payments for these shipments from April through July.
Our aim is to keep our manufacturing plants running at a consistent level throughout the year. Consequently, we build inventory in the first and third quarters and inventory is sold-down in the second and fourth quarters. Our accounts receivable balance increases from October to June as a result of the early buy extended terms and higher sales in the second quarter. We typically utilize our ABL Facility in the first quarter to finance our operating expenses, and reduce our credit utilization in the second quarter as the seasonality of our business peaks and payments are received.
Weather can affect our sales, however we primarily serve the aftermarket, which is less affected than new pool construction equipment sales. Unseasonably cool weather or significant amounts of rainfall can suspend new pool construction and reduce the sale of pool equipment to the new pool builders.
For discussion regarding the effects seasonality had on our results of operations in Fiscal Year 2020, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Trends and Uncertainties Regarding Our Existing Business.”
Our Competition
The markets for our products are geographically diverse and highly competitive. We compete against large and well-established national and global companies, as well as regional and local niche OEMs and lower cost manufacturers. Competition may also result from new entrants into the markets we serve, offering products that compete with us. Our competitors offer pool equipment of varied quality and across a wide range of retail price points.
We compete based on brand recognition with distributors, retailers, pool builders and pool owners, strong relationships with our distributors and resellers, and the loyalty of our builders and servicers with
whom we have built a large installed base. In addition, we compete based on our technical innovation, intellectual property, reputation for providing quality and reliable products, competitive pricing and contractual terms. We believe our extensive inventory of products enables us to meet both residential and commercial needs, which creates a one-stop-shop for many of our trade partners. Some of our competitors, in particular smaller companies, compete based primarily on price and local relationships, especially with respect to products that do not require significant engineering or technical expertise.
Some geographic markets we serve, particularly the four largest and higher pool density U.S. markets of California, Texas, Florida and Arizona, have a greater concentration of competition than other U.S. markets. The European pool equipment market is generally more fragmented.
Intellectual Property
Patents and trademarks are important to our business. As of December 31, 2020, we held approximately 177 issued U.S. patents and 173 issued foreign patents relating to our technologies, such as pumps, filters, heaters, drains and white goods, robotic cleaners, in-floor cleaning systems, lights, automation and controls, sanitization, valves and flow control, and IoT and other technologies, as well as approximately 119 U.S. trademark registrations and 656 foreign trademark registrations covering our marks, brands and products. As of December 31, 2020, we also held approximately 45 pending U.S. patent applications, 90 pending foreign patent applications, 19 pending U.S. trademark applications and 33 pending foreign trademark applications. We also license patents to certain technologies used in our products, such as our pool cleaner and lighting products.
We also have a brand enforcement program under which we monitor and pursue action against unauthorized online resales and infringements of our intellectual property, such as our trademark rights. When needed, we send cease and desist letters, which frequently result in the desired compliance without the need for litigation. From time to time, we initiate litigation on these matters as a means to enforce our rights.
We do not regard our business as being materially dependent upon any single patent or proprietary technology. Patents, patent applications and license agreements will expire or terminate over time by operation of law, in accordance with their terms or otherwise.
Properties
Our corporate headquarters is located on leased premises in Berkeley Heights, New Jersey. We own four of our seven global manufacturing facilities and two of our eleven global distribution facilities. We lease all of our other properties including seven warehouse sites and the majority of our leases have two to eight year terms. As of December 31, 2020, leases with remaining terms longer than one year expire between 2021 and 2030.
Most of our leases contain renewal options, some of which involve rent increases. In addition to minimum rental payments, which are set at competitive rates, certain leases require reimbursement for taxes, maintenance and insurance. We do not believe that any single lease is material to our operations.
Our global manufacturing facilities range in size from approximately 17,857 square feet to 347,241 square feet and generally consist of warehouse, counter, display and office space. Our global distribution facilities range in size from approximately 5,371 square feet to 273,000 square feet.
The following is a summary of our principal properties as of December 31, 2020, including manufacturing, distribution, warehouse, and corporate offices:
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No. of Facilities
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Location
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Manufacturing
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Distribution
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Warehouse
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Corporate Headquarters
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North America
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Arizona
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—
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2
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—
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—
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California
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—
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—
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—
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—
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No. of Facilities
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Location
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Manufacturing
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Distribution
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Warehouse
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Corporate Headquarters
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New Jersey
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—
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—
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—
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1
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North Carolina
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1
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1
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4
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—
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Rhode Island
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1
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—
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1
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Tennessee
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1
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1
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2
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—
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Canada
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—
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1
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—
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Europe and Rest of World
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Australia
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—
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4
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—
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China
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1
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—
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—
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France
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—
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1
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—
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—
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Spain
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3
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1
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—
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We believe that our facilities as well as the related machinery and equipment, are well maintained and suitable for their purpose and are adequate to support our businesses.
Employees and Human Capital Resources
As of December 31, 2020, we had approximately 2,555 total full-time equivalent employees of whom approximately 18% are temporary or contract workers. Our total number of temporary and contract workers fluctuates due to business cycles during the year. We believe our ability to maintain a flexible, modular workforce enhances our manufacturing capabilities. Our employees are primarily located in the United States, with about 28% employed at our international locations in Canada, Spain, France, Australia and China. As of December 31, 2020, none of our employees were represented by a union. However, we do have relationships with works councils in Spain and France.
As part of our human capital resource objectives, we seek to attract, retain, develop and reward our employees through a variety of mechanisms. We build upon Hayward’s objectives by seeking to attract, retain, develop and reward behaviors to ensure our long term sustainability as a company. We continue to advance our efforts to develop a performance culture by strengthening performance management processes through management training and the development and implementation of consistent documentation and methodologies designed to ensure a robust process for all employees. We schedule performance discussions for all employees each year, and establish clearly defined goals and incentive programs to drive employee performance. In addition, we have implemented a coordinated approach in managing our overall compensation structure and regularly conduct full evaluations of our compensation and incentive programs to ensure we are competitive in these areas. We monitor our performance by measuring numerous elements relating to our human capital management efforts, including, but not limited to, employee turnover, time to fill open roles and general diversity statistics.
Information Systems
We believe that our website and information technology systems are equipped to support the operation of our business. In addition, we use commercially reasonable efforts to ensure that all such systems remain free and clear of all material bugs, errors, defects, malware or other corruptants.
Data Privacy and Security
We are subject to numerous U.S. state and federal and foreign laws and regulations that address privacy, data protection and the collection, storing, sharing, use, transfer, disclosure and protection of certain types of data. Such regulations include state data breach notification laws, the CCPA, the GDPR, Canada’s Personal Information Protection and Electronic Documents Act, and Australia’s Privacy Act, amongst others. Additionally, our evolution into offering smart products that can connect to the IoT may subject us to other IoT-specific laws and regulations, including the California Internet of Things Security Law. Because of our marketing activities, we may also be subject to applicable marketing privacy laws, including the CAN-SPAM Act of 2003 and the TCPA, amongst others.
These laws and regulations are increasing in number and complexity, and are subject to varying interpretations by regulators and the courts, resulting in higher risk of enforcement, fines, and other penalties. For example, California recently passed the CPRA, which expands the CCPA and will require us to incur costs to modify our data privacy and security practices. More details about these risks can be found in “Risk Factors—Risks Related to Government Regulation—Increased information technology security threats and computer crime pose a risk to our systems, networks and products, and we are exposed to potential regulatory, financial and reputational risks relating to the protection of our data” and “Risk Factors—Risks Related to Government Regulation—Our collection, use, storage, disclosure, transfer and other processing of personal information could give rise to significant costs and liabilities, including as a result of governmental regulation, uncertain or inconsistent interpretation and enforcement of legal requirements or differing views of personal privacy rights, which may have a material adverse effect on our reputation, business, financial condition and results of operations.”
We understand the importance of these laws and regulations and have taken steps to monitor and comply with changing requirements. For example, we maintain an updated website privacy policy that explains our online information collection and use practices and applicable rights of EU and California residents under the GDPR and CCPA, respectively. We also take reasonable efforts to implement and maintain security controls to align with industry standards.
Environmental, Health and Safety Matters
Our operations are subject to various laws and governmental regulations concerning environmental, health and safety matters, including employee health and safety, in the United States and other countries. U.S. federal environmental, health and safety regulations that apply to operations at one or more of our United States facilities include, without limitation, regulations promulgated under the Resource Conservation and Recovery Act, the Environmental Planning and Community Right-To-Know Act, the National Pollutant Discharge Elimination System Act, the Spill Prevention, Control and Countermeasures requirements and the Comprehensive Environmental Response, Compensation and Liability Act. We are also subject to regulation by OSHA concerning employee health and safety matters. In addition, we and certain of our affiliates store certain types of hazardous materials and chemicals at various locations and the storage of these items is strictly regulated by local fire codes. We also sell UV, Ozone, and Salt Chlorinator and related products that are regulated under FIFRA, which primarily relates to testing, use, reporting, sale, distribution, licensing and market verification of these products. Moreover, the USEPA, OSHA, and other federal and foreign, state and/or local agencies have the authority to promulgate laws and regulations in the future that may impact our operations going forward. In addition to the federal environmental laws identified above that apply to our operations, various states have been delegated certain authority under the aforementioned federal statutes (and others), and under state corollaries to the federal laws, to regulate environmental, health and safety matters at our U.S. facilities. Compliance with, or liabilities under, such laws and regulations in the future could prove to be costly and could affect various aspects of the business.
Regulatory Matters
We are also subject to foreign, federal, state, and local laws and regulations relating to matters such as product labeling, weights and measures, zoning, land use, and fire codes, including regulation by the Federal Communications Commission, the Consumer Product Safety Commission, the National Fire Protection Agency, and the Federal Trade Commission. Most of these requirements govern the packaging, labeling, handling, transportation, storage, sale and use of our products. In addition, we are subject to regulation passed by the DOE relating to the labeling, testing, reporting and certification of new and replacement pumps sold for swimming pools. Compliance with such laws and regulations in the future could prove to be costly and could affect various aspects of the business.
Legal Proceedings
We have been, and in the future may be, made a party to litigation arising in the ordinary course of our business, including those relating to commercial or contractual disputes with suppliers, customers or parties to acquisitions and divestitures, intellectual property matters, product liability, the use or installation of our products, consumer matters, employment and labor matters, and environmental, safety and health
matters, including claims based on alleged exposure to asbestos-containing product components. We believe that we are not currently party to any legal proceeding that would be expected, either individually or in the aggregate, to have a material adverse effect on our business or financial condition.
We periodically reexamine our estimates of probable liabilities and any associated expenses and receivables and make appropriate adjustments to such estimates based on experience and developments in litigation. As a result, the current estimates of the potential impact on our consolidated financial position, results of operations and cash flows for the proceedings and claims described in the notes to our consolidated financial statements could change in the future. Regardless of outcome, legal proceedings can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.
Pentair Litigation
Hayward is presently a defendant in a set of consolidated patent infringement actions brought by Pentair Water Pool and Spa, Inc. and Danfoss Drives A/S(Civil Nos. 5:11-cv-459-D and 5:12-cv-251-D), pending in the United States District Court for the Eastern District of North Carolina. Collectively, the plaintiffs in these actions have asserted that certain of our variable speed pump and controller products infringe claims in seven United States patents: U.S. Patent Nos. 7,854,597; 7,815,420; 7,857,600; 7,686,587; 7,704,051; 8,019,479; and 8,043,070. Hayward initiated related USPTO proceedings against certain of the asserted patents, including inter partes reexamination nos. 95/002005, 95/002006, 95/002007, and 95/002008 and inter partes review nos. IPR2013-00285 and IPR2013-00287. Hayward has also raised non-infringement and invalidity defenses against each of the patents asserted against us in the district court actions, which are currently stayed. Additionally, Hayward is aware of patents related to the asserted patents, including continuing, foreign and/or other related issued patents and pending patent applications, that could be asserted against us in the future. If defenses raised by Hayward are not upheld, or if Pentair and/or Danfoss were to prevail in these proceedings and/or otherwise, then we may owe money damages and/or be subject to an injunction for any unexpired patent that would require the cessation of any infringing activity, which could have a negative impact on our supply chain or other business, including the ability of us, our vendor(s), and/or our customer(s) to make, use, sell, offer for sale and/or import variable speed drives or pumps, and/or the automation controllers therefor, any of which including the component(s), feature(s) and/or functionalit(ies) accused of infringement.
Insurance
We maintain commercial insurance policies with third parties in the areas of executive risk, commercial property, and casualty (including product liability), cyber, business interruption, and ocean cargo. We also self-insure for workers’ compensation, vehicle, property, general liability, product liability, and employee medical benefit costs. We have stop-loss coverage to limit exposure arising from certain of these claims. There are various levels of deductibles depending on the coverage. Self-insurance claims filed and claims incurred but not recorded are accrued based upon our estimates of the ultimate costs to be incurred using historical experience. Our ultimate exposure may be mitigated by amounts we expect to recover from third parties associated with such claims.
MANAGEMENT
Directors and Executive Officers
Below is a list of the names, ages as of December 31, 2020, and positions, and a brief account of the business experience, of the individuals who serve as our executive officers and directors as of the date of this prospectus.
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Name
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Age
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Position
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Kevin Holleran
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President, Chief Executive Officer and Director
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Eifion Jones
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Senior Vice President and Chief Financial Officer
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Donald Smith
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Senior Vice President, Chief Supply Chain Officer
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Michael Colicchio
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Vice President and Corporate Controller
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Rick Roetken
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President, North America
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Fernando Blasco
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Vice President, General Manager, Europe & Rest of World
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Mark McFadden
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Director
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Timothy Walsh
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Director
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Greg Brenneman
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Director
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Kevin Brown
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Director
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Douglas Londal
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Director
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Jason Peters
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Director
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Larry Silber
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Director
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Arthur Soucy
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Director
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Ali Afraz
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Director
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Stephen Felice
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Director
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Christopher Bertrand
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Director
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Christopher Stevenson
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Director
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Kevin Holleran has served as President, Chief Executive Officer and Director of the Company since August 2019. Prior to joining the Company, Mr. Holleran served as President and Chief Executive Officer of the Industrial Segment within Textron beginning in 2017. Textron’s Industrial Segment is composed of Textron Specialized Vehicles, a leading global manufacturer of purpose-built vehicles and equipment for a variety of commercial and recreational applications across a number of brands; as well as, Kautex a tier one automotive supplier of fuel systems, selective catalytic reduction systems and cleaning solutions. Prior to 2017, Mr. Holleran was the President and Chief Executive Officer of Textron Specialized Vehicles for ten years, during which time he grew revenue and profitability substantially through both organic growth and acquisitions. Prior to his time at Textron, Mr. Holleran held a number of management positions at Ingersoll Rand and Terex Corporation across the sales, marketing, and product management functions. He holds an MBA from Wake Forest University and an undergraduate degree from Cornell University.
Eifion Jones has served as Senior Vice President and Chief Financial Officer of the Company since April 2020. Prior to joining the Company, Mr. Jones served as the Chief Financial Officer of Cornerstone Holdings Inc. (“Cornerstone”) since 2011, a portfolio company of private equity firms HIG Capital and, later, Littlejohn & Co. LLC. In this role he oversaw the governance, performance, and financial management of Cornerstone’s U.S. and European companies, including leading all acquisition evaluation, diligence and integration efforts. Prior to Cornerstone, Mr. Jones spent 21 years with Akzo Nobel, where he held financial and managerial leadership roles in the Americas and Europe, including SVP and General Manger for their Americas O&G protective coatings business and prior to that, SVP and CFO for their Americas industrial coatings business. He began his financial career with Courtaulds Plc in their European fibers businesses prior to its sale to Akzo Nobel.
Donald Smith has served as Senior Vice President, Chief Supply Chain Officer for the Company since January 2007. Mr. Smith has served as an officer of the Company, and as the executive lead for
numerous functions in his tenure, including Global Operations, Global Supply Chain, Engineering and Technology, Customer Care, and Acquisition integration. Mr. Smith is a member of twelve boards of directors for certain of the Company’s subsidiaries. Prior to joining the Company, Mr. Smith was an executive and company officer for Omega Polymer Technologies, Inc. from 2001 to 2006, prior to its strategic sale. During his five year, Mr. Smith served as Vice President and General Manager of Carsonite International (2001-2003) and Corporate Executive Vice President of Operations (2003-2005), before being named President in 2006. Mr. Smith held numerous leadership positions with Robert Bosch Corporation from 1996-2001, including an international assignment in Stuttgart, Germany (1997-1998). Mr. Smith began his career with General Motors’ Powertrain Division (1989-1996.) Assuming roles of increasing levels responsibility, Mr. Smith ultimately served as the lead manufacturing resource for new engine development and launches, as Manufacturing Engineering Administrator. Among Mr. Smith qualifications is a track record of operational excellence and performance. Mr. Smith brings expertise in general management, lean manufacturing, new product development, and strategic planning for operating performance. Mr. Smith has significant experience as a senior executive of global companies composed of multiples entities and complex value streams. He provides strategic direction toward improved operational and financial performance, organizational development, and product line optimization.
Michael Colicchio has served as Vice President and Corporate Controller of the Company since October 2017. Prior to joining the Company, Mr. Colicchio was an Operating Partner with Arsenal Capital Partners from July 2014 to September 2017. From June 2011 to June 2014, Mr. Colicchio served as special advisor to the Chief Financial Officer of Bunge Corporation, where he led the build of a Sao Paulo Shared Services Center for their South American business. Mr. Colicchio also served as a Finance Director for Celanese Corporation from May 2004 to May 2011, including a four year stint as Managing Director of Celanese Hungary, Kft., and Vice President — Finance for Degussa Corporation from September 1996 to April 2004. Mr. Colicchio, a Certified Public Accountant since 1986, was employed as a Senior Manager with KPMG LLP from May 1986 to January 1995. Mr. Colicchio brings significant expertise in accounting and taxation with a specialization in the design, build, and operation of global Shared Service Centers of Excellence, Controllership, Tax, and SEC reporting departments.
Rick Roetken has served as President, North America since August 2018. Prior to joining the Company, Mr. Roetken worked as an independent consultant from 2015 to 2018, with a focus on M&A, commercial strategies and operational efficiency for building products. Prior to that, Mr. Roetken served as President of multiple divisions of Masco Corporation (“Masco”), including Masco Cabinetry and Liberty Hardware, from 2010 to 2015. Mr. Roetken also served as Vice President of Marketing for Masco’s Delta Faucet business from 2007 and 2010. Prior to joining Masco, he was employed with United Technologies for 19 years serving in various operations and marketing roles. Mr. Roetken brings expertise in general management, business strategy, commercial markets, and manufacturing systems, as well as significant experience as a senior executive of major complex global companies.
Fernando Blasco has served as Vice President, General Manager, Europe & Rest of World since May 2019 and as General Manager for Hayward Australia since January 2020. From April 2012 to May 2019, Mr. Blasco was Chief Executive Officer of Adequa, Piping Systems Business of Uralita Group. Also within Uralita Group, Mr. Blasco held positions such as Managing Director of the Injection Business Unit from 2010 to 2012 and Corporate Sales Development Manager from 2008 to 2010. Prior to that, he was at GE Consumer & Industrial from 2004 to 2008, assuming the role of EMEA Prescription Manager. Mr. Blasco brings expertise in international market development, B2B go to market strategies, and manufacturing processes, as well as significant experience as a senior manager of major industrial companies.
Mark McFadden became a director in June 2017. Mr. McFadden is a Managing Director of CCMP and a member of the Firm’s Investment Committee. Mr. McFadden joined CCMP in 2002 and was named Managing Director in 2014 and a member of the Firm's Investment Committee in 2019. While at CCMP, Mr. McFadden has focused on investments in the industrial sector, including prior CCMP investments in Generac Power Systems, Milacron, and Eco Services. Prior to joining CCMP, Mr. McFadden worked in investment banking at CSFB and Bowles Hollowell Conner. Mr. McFadden serves on the board of directors of Hayward, PQ Corporation and BGIS. Mr. McFadden holds a B.B.A. and a B.A. from the College of William and Mary. Mr. McFadden brings expertise in corporate finance and strategic development, as well as significant experience as a board member of global industrial businesses.
Timothy Walsh became a director in June 2017. Mr. Walsh is President and CEO of CCMP and a member of the Firm’s Investment Committee. Mr. Walsh focuses on making investments in the industrial sector and has been responsible for CCMP’s investments in the chemicals, basic manufacturing, consumer products and packaging sectors. Mr. Walsh joined CCMP in 1992 and was named Partner and head of its industrial practice in 1999. Mr. Walsh became COO in 2015 and President and CEO in 2016. Prior to joining CCMP in 1992, Mr. Walsh worked on various industry-focused client teams within The Chase Manhattan Corporation. He serves on the board of directors of Hayward and PQ Corporation. Mr. Walsh holds a B.S. from Trinity College and an M.B.A. from the University of Chicago. Mr. Walsh brings expertise in corporate finance and strategic development, as well as significant experience as a board member of global industrial businesses.
Greg Brenneman became a director in June 2017. Mr. Brenneman is Executive Chairman of CCMP and a member of the Firm’s Investment Committee. Mr. Brenneman plays an active leadership role in executing the Firm’s overall strategy while remaining actively engaged in completing transactions, developing strategies and coaching the senior management of CCMP’s portfolio companies. Prior to joining CCMP in October 2008, Mr. Brenneman served as Chairman, CEO, President and/or COO of Quiznos Sub, Burger King, PwC Consulting and Continental Airlines. In 1994 Mr. Brenneman founded Turnworks, Inc. (“Turnworks”), his personal investment firm that focuses on corporate turnarounds. Prior to founding Turnworks, Mr. Brenneman was a Vice President for Bain & Company. Mr. Brenneman currently serves on the board of directors of Eating Recovery Center, Hayward, PQ Corporation, BGIS, Baker Hughes, Baylor College of Medicine and The Home Depot, Inc. Mr. Brenneman holds a B.B.A. in Accounting/Finance, summa cum laude, from Washburn University of Topeka, Kansas and an M.B.A. with distinction from Harvard Business School. He was awarded an honorary Doctor of Commerce degree from Washburn University. Mr. Brenneman brings expertise in leadership and strategic matters, as well as significant experience as a senior executive and board member of complex global businesses.
Kevin Brown became a director in June 2017. Mr. Brown is Co-Head of MSD Partners’ Private Capital Group. Mr. Brown joined MSD in 2016 and currently serves on the boards of directors for Endries International, Hayward Industries and Ring Container Technologies. Prior to joining MSD, Mr. Brown was a Partner with Court Square Capital where he worked primarily in the Industrials sector for ten years. Prior to Court Square, Mr. Brown was a Vice President with Apax Partners focusing on investments in the Media, Late-Stage Software, and Tech-Enabled Business Services sectors. He has served on numerous Boards of Directors, including ERICO Global, MacDermid, Pike Corporation and Wyle. Mr. Brown received his B.S. from the McIntire School of Commerce at The University of Virginia and his M.B.A. from the Wharton School of the University of Pennsylvania where he graduated as a Palmer Scholar. Mr. Brown brings expertise in finance and capital markets, strategic matters, as well as significant experience as a board member of complex global businesses.
Douglas Londal became a director in June 2017. Mr. Londal has been a Partner of MSD Capital, L.P. and MSD Partners since 2015 and served as the Head of Private Capital until 2020. Prior to joining MSD Partners, Mr. Londal was the President and COO of New Mountain Capital, LLC, an alternative asset management firm. Mr. Londal joined New Mountain in 2004 when the firm had one private equity fund and $770 million of AUM. He helped grow New Mountain to $15 billion of AUM by 2014 and into three separate businesses, including private equity, a long/short hedge fund and a publicly traded debt BDC (NYSE: NMFC). Prior to joining New Mountain, Mr. Londal spent 14 years at Goldman, Sachs & Co. He was a Managing Director in the Principal Investment Area and, among other positions, served as Co-Head of the U.S. Merchant Banking business and Co-Head of U.S. Mezzanine business. Mr. Londal has been directly involved in investing over $10 billion in private equity and mezzanine transactions valued at over $20 billion. He has served on over 20 “for-profit” boards of directors (public and private) in roles including chairman and lead director, as well as chair of several audit and compensation committees. Mr. Londal brings expertise in finance and capital markets, strategic matters, as well as significant experience as a senior executive of large and complex global businesses.
Jason Peters became a director in June 2017. Mr. Peters is Director, Private Equity, for AIMCo since January 2011. Currently, Mr. Peters is responsible for direct private equity efforts in the technology and consumer products sectors. Prior to his tenure at AIMCo, Mr. Peters has worked for 10 years at various firms either in an investment banking or private equity capacity, including Bank of America as a Vice
President in the Mergers and Acquisitions group, and with JPMorgan where he worked in the Middle Market and the Consumer Products Investment Banking groups. Mr. Peters also worked with EG Capital Group, a private equity firm based in New York where he focused on investments in the consumer products space. Mr. Peters currently serves on the board of directors of Vue International Bidco plc (since 2017). Mr. Peters brings expertise in private equity investing, asset management and strategic matters, corporate finance, mergers and acquisitions, and capital markets.
Larry Silber became a director in November 2019. Mr. Silber has served President and Chief Executive of Herc Rentals Inc. (“Herc Rentals”) since May 2015. Prior to joining Herc Rentals, Mr. Silber served as an executive advisor at Court Square Capital Partners, LLP, a private equity firm primarily investing in the business services, healthcare, general industrial and technology and telecommunications sectors, from April 2014 to May 2015. Mr. Silber also served as Chief Operating Officer for Hayward Industries from 2008 to 2012, during which time he oversaw a successful transition through the recession and return to solid profitability. From 1978 to 2008, Mr. Silber worked for Ingersoll-Rand plc (“Ingersoll”), a publicly traded manufacturer of industrial products and components, in a number of roles of increasing responsibility. Mr. Silber previously served on the board of directors of SMTC Corporation from 2012 to 2015. Mr. Silber brings expertise in executive management, strategy formation and leadership skills, gained as the Chief Operating Officer of Hayward Industries as well as in his current role as President and Chief Executive Officer of Herc Rentals. Mr. Silber also has extensive knowledge and experience in manufacturing, sales and marketing, and specific industry experience in our business, including our operations, business development matters and financial performance. Further, his experience as a director of another public company provides him with a broad understanding of the responsibilities of public company boards and issues applicable to public companies.
Arthur Soucy became a director in December 2017. Mr. Soucy is a retired executive with broad international experience running complex operations and large P&L’s in both the Oil & Gas and Aviation industries. Mr. Soucy has over 30 years of business leadership experience in multi-national environments holding executive positions with P&L responsibilities spanning some 80 countries. Mr. Soucy retired as President, Products & Technology for Baker Hughes, an Oil & Gas Services company, in July 2017. In that role he was responsible for the company’s multi-billion-dollar chemical business as well as enterprise New Product & Technology development. He also was responsible for the company’s global marketing and supply chain functions. Prior to that, Mr. Soucy was headquartered in London, UK for nearly four years where he served as President of Europe, Africa, Russia, Caspian, and had P&L responsibilities for the Region. Prior to joining Baer Hughes, Mr. Soucy spent 29 year at Pratt & Whitney, where held a variety of executive level P&L, technology and supply chain positions.
Ali Afraz became a director in February 2018. Mr. Afraz is a Director within the Private Equity team of Mubadala Capital, the financial investment arm of Mubadala Investment Company, a sovereign wealth fund wholly owned by the Abu Dhabi Government with an AUM in excess of $230.0 billion. Mr. Afraz joined Mubadala over 11 years ago in 2009. Prior to joining Mubadala, Mr. Afraz spent over 6 years within the investment banking division of Citigroup and Barclays Capital in their New York and Toronto offices. Mr. Afraz specialized in cross-border M&A and worked on a number of marquee transactions with a combined enterprise value in excess of $25.0 billion. Mr. Afraz has served as a director for Fermaca de Mexico since 2015, is an observer on the board of REEF Technology and was previously an IC member with Mubadala Infrastructure Partners from 2017 to 2019. Mr. Afraz brings expertise in private equity investing, asset management, corporate finance, mergers and acquisitions, and capital markets.
Stephen Felice became a director in May 2018. Mr. Felice has been Chairman and Chief Executive Officer of Felice Partners, LLC (advisory and private investment) since January 2017. Prior to that, Mr. Felice was President and Chief Executive Officer of Filtration Group Corporation (“FGC”), a global industrial manufacturer, from January 2014 through January 2017. Prior to joining FGC, Mr. Felice was President and Chief Commercial Officer of Dell, Inc (“Dell”) from December 2011 through December 2013 after previously serving in a variety of executive roles at Dell from February 1999 through November 2011. Prior to joining Dell, Mr. Felice was President and Chief Executive Officer of DecisionOne Corporation, a provider of computer technology services (“DOC”) from 1997 through 1999 after previously serving as President of DOC from 1995 through 1997. Prior to joining DOC, Mr. Felice worked at Bell Atlantic Corp in various roles from 1984 through 1995 and Shell Oil Corp from 1979 through 1984. Mr. Felice has served on
the board of directors of Southwire Corporation since 2015 (currently Chairman of Human Resources Committee) and the Mark Felice Foundation since 2003. Mr. Felice was also Vice Chairman at St. Michael’s Catholic Academy from 2010 to 2014, and served on the Board of Trustees for The Franklin Institute from 2013 to 2015 and the Singapore Economic Development Board 2010 to 2012. Mr. Felice brings significant expertise in managing large global enterprises, information technology and industrial manufacturing verticals, strategic planning, global sales, and manufacturing.
Christopher Bertrand became a director in October 2020. Mr. Bertrand is Managing Director in MSD Partners’ Private Capital Group. Mr. Bertrand joined MSD in 2019 and currently sits on the Board of Hayward Industries. Prior to joining MSD Partners, Mr. Bertrand was a Principal at Court Square Capital Partners. Previously, Mr. Bertrand was with Kohlberg, Kravis, & Roberts (KKR), where he focused on private equity investments, and Goldman, Sachs & Co. He received an M.B.A. with Distinction from Harvard Business School and a B.A. from Dartmouth College. He has served on numerous Boards of Directors. Mr. Bertrand brings expertise in finance and capital markets, strategic matters, as well as significant experience as a board member of several companies.
Chris Stevenson became a director in October 2020. Mr. Stevenson is a Principal in the New York office of CCMP Capital. Prior to joining CCMP in 2020, Mr. Stevenson was a Vice President at Fenway Partners from September 2011 to March 2020. Mr. Stevenson serves on the board of directors of Hayward. Mr. Stevenson holds a B.S. in Accounting and Business Administration from Washington and Lee University. Mr. Stevenson brings expertise in corporate finance and strategic development, as well as significant experience in the industrial sector.
Controlled Company Exemption
After the completion of this offering, we will be a “controlled company” within the meaning of the New York Stock Exchange’s corporate governance standards. Under these corporate governance standards, a company of which more than 50% of the voting power for the election of directors is held by an individual, group or other company is a “controlled company” and may elect not to comply with certain corporate governance standards, including the requirements (1) that a majority of our Board of Directors consist of independent directors, (2) that our Board of Directors have a compensation committee that consists entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities, and (3) that our director nominations be made, or recommended to our full Board of Directors, by our independent directors or by a nominations committee that consists entirely of independent directors and that we adopt a written charter or board resolution addressing the nominations process. Accordingly, you will not have the same protections afforded to stockholders of companies that are subject to these corporate governance requirements. In the event that we cease to be a “controlled company” and our shares continue to be listed on the New York Stock Exchange, we will be required to comply with these provisions within the applicable transition periods.
Board Structure and Committee Composition
Upon consummation of this offering, our second restated certificate of incorporation will provide that our Board of Directors shall consist of at least three but not more than fifteen directors and that the number of directors may be fixed from time to time by resolution of our Board of Directors. Our Board of Directors will initially consist of members. Our second restated certificate of incorporation will provide that our Board of Directors will be divided into three classes of directors, as nearly equal in number as possible. The initial division of the three classes is as follows:
•
Class I, which will initially consist of , and , whose terms will expire at our annual meeting of stockholders to be held in 2022;
•
Class II, which will initially consist of , and , whose terms will expire at our annual meeting of stockholders to be held in 2023; and
•
Class III, which will initially consist of , and , whose terms will expire at our annual meeting of stockholders to be held in 2024.
Upon the expiration of the initial term of office for each class of directors, each director in such class shall be elected for a term of three years and serve until a successor is duly elected and qualified and until his or her earlier death, resignation or removal.
In addition, upon consummation of this offering, we will have an audit committee, a compensation committee and a nominating and corporate governance committee with the composition and responsibilities described below. Each committee will operate under a charter that will be approved by our Board of Directors. The composition of each committee will be effective upon the consummation of this offering. The members of each committee are appointed by the Board of Directors and serve until their successor is elected and qualified, unless they are earlier removed or resign. In addition, from time to time, special committees may be established under the direction of the Board of Directors when necessary to address specific issues.
Our Board of Directors evaluates any relationship of each director with the company and makes an affirmative determination whether or not such director meets the qualification requirements for being an independent director under applicable laws and the corporate governance listing standards of the New York Stock Exchange. Our Board of Directors reviews any transaction or relationship between each non-employee director or any member of his or her immediate family and the company. The purpose of this review is to determine whether there were any such relationships or transactions and, if so, whether they were inconsistent with a determination that the director was independent. As a result of this review, our Board of Directors has affirmatively determined that , and are independent directors under the governance and listing standards of the New York Stock Exchange.
Because we will be a “controlled company” within the meaning of the corporate governance standards of the New York Stock Market, we will not have a majority of independent directors and our compensation committee and nominating and corporate governance committee will not be composed entirely of independent directors as defined under such standards. The controlled company exception does not modify the independence requirements for the audit committee and we intend to comply with the audit committee requirements of the Sarbanes-Oxley Act and the corporate governance standards of the New York Stock Market. Pursuant to such requirements, the audit committee must be composed of at least three members, one of whom must be independent at the time of this offering, a majority of whom must be independent within 90 days of the date of this prospectus, and all of whom must be independent within one year of the date of this prospectus.
Audit Committee
The purpose of the audit committee will be set forth in the audit committee charter. The audit committee’s primary duties and responsibilities will be to:
•
appoint or replace, compensate and oversee the outside auditors, who will report directly to the audit committee, for the purpose of preparing or issuing an audit report or related work or performing other audit, review or attest services for us;
•
pre-approve all auditing services and permitted non-audit services (including the fees and terms thereof) to be performed for us by our outside auditors, subject to de minimis exceptions that are approved by the audit committee prior to the completion of the audit;
•
review and discuss with management and the outside auditors the annual audited and quarterly unaudited financial statements, our disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the selection, application and disclosure of critical accounting policies and practices used in such financial statements; and
•
discuss with management and the outside auditors any significant financial reporting issues and judgments made in connection with the preparation of our financial statements, including any significant changes in our selection or application of accounting principles, any major issues as to the adequacy of our internal controls and any special steps adopted in light of material control deficiencies.
Upon completion of this offering, the audit committee will consist of , and , with serving as the chairperson of the committee. Our Board of Directors has determined that all members of our audit committee meet the requirements for financial literacy under the applicable rules and regulations of the SEC and the New York Stock Exchange. Our Board of Directors has determined that meets the independence requirements of Rule 10A-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the governance and listing standards of the New York Stock Exchange. We intend to comply with the audit committee requirements of the Sarbanes-Oxley Act and the governance and listing standards of the New York Stock Exchange. Pursuant to such requirements, the audit committee must be composed of at least three members, a majority of whom must be independent within 90 days of the date of this prospectus, and all of whom must be independent within one year of the date of this prospectus. Our Board of Directors has determined that is an “audit committee financial expert” within the meaning of the SEC regulations. Prior to the consummation of this offering, our Board of Directors will adopt a written charter under which the audit committee will operate. A copy of the charter, which will satisfy the applicable standards of the SEC and the New York Stock Exchange, will be available on our website.
Compensation Committee
The purpose of the compensation committee is to assist the Board of Directors in fulfilling its responsibilities relating to oversight of the compensation of our directors, executive officers and other employees and the administration of our benefits and equity-based compensation programs. The compensation committee reviews and recommends to our Board of Directors compensation plans, policies and programs and approves specific compensation levels for all executive officers. Upon completion of this offering, the compensation committee will consist of , and , with serving as the chairperson of the committee. Our Board of Directors has determined that , and meet the independence requirements under the governance and listing standards of the New York Stock Exchange. Pursuant to such requirements, the compensation committee must consist of a majority of independent members within 90 days of the date of this prospectus and all independent members within one year of the date of this prospectus. Prior to the consummation of this offering, our Board of Directors will adopt a written charter under which the compensation committee will operate. A copy of the charter, which will satisfy the applicable standards of the SEC and the New York Stock Exchange, will be available on our website.
Nominating and Corporate Governance Committee
The purpose of the nominating and corporate governance committee is to identify individuals qualified to become members of the Board of Directors, recommend to the Board of Directors director nominees for the next annual meeting of shareholders, develop and recommend to the Board of Directors a set of corporate governance principles applicable to the company, oversee the evaluation of the Board of Directors and its dealings with management as well as appropriate committees of the Board of Directors and review and approve all related party transactions. Upon completion of this offering, the nominating and corporate governance committee will consist of , and , with serving as the chairperson of the committee. Our Board of Directors has determined that , and meet the independence requirements under the governance and listing standards of the New York Stock Exchange. Prior to the consummation of this offering, our Board of Directors will adopt a written charter under which the nominating and corporate governance committee will operate. A copy of the charter, which will satisfy the applicable standards of the SEC and the New York Stock Exchange, will be available on our website.
Compensation Committee Interlocks and Insider Participation
None of our executive officers serves as a member of the Board of Directors or compensation committee, or other committee serving an equivalent function, of any other entity that has one or more of its executive officers serving as a member of our Board of Directors or compensation committee. Upon the completion of this offering, our compensation committee will consist of , and .
Code of Ethics
We have adopted a Code of Ethics that applies to our directors, officers and employees, including our principal executive officer, principal financial officer and principal accounting officer or controller, or persons performing similar functions. Following this offering, a current copy of the code will be available on our website.
EXECUTIVE COMPENSATION
The following discussion and analysis of compensation arrangements should be read with the compensation tables and related disclosures set forth below. This discussion contains forward looking statements that are based on our current plans and expectations regarding future compensation programs. The actual compensation programs that we adopt may differ materially from the programs summarized in this discussion.
Introduction
This section provides an overview of the compensation awarded to, earned by or paid to our principal executive officer and our next two most highly compensated executive officers for Fiscal Year 2020. We also include disclosure with respect to one of our former executive officers, as required by SEC rules. We refer to these individuals as our named executive officers. Our named executive officers are:
•
Kevin Holleran, President, Chief Executive Officer and Director;
•
Eifion Jones, Senior Vice President and Chief Financial Officer;
•
Rick Roetken, President, North America; and
•
Anthony Colucci, Former Senior Vice President and Chief Financial Officer.
Prior to this offering, our Board of Directors was responsible for determining the compensation of our executive officers and following this offering, the compensation committee of our Board of Directors will be responsible for making such determinations. Our Chief Executive Officer made recommendations to our Board of Directors about the compensation of his direct reports, including Messrs. Jones, Roetken, and Colucci, in respect of Fiscal Year 2020, and is expected to make such recommendations to the compensation committee following this offering.
Summary Compensation Table
The following table sets forth the compensation awarded to, earned by or paid to our named executive officers in respect of their service to us for Fiscal Year 2020:
|
Name and principal position
|
|
|
Year
|
|
|
Salary
($)(1)
|
|
|
Option
awards
($)(2)
|
|
|
Nonequity
incentive plan
compensation
($)(3)
|
|
|
All other
compensation
($)(4)
|
|
|
Total
($)
|
|
|
Kevin Holleran
|
|
|
|
|
2020
|
|
|
|
|
|
710,000
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
129,645
|
|
|
|
|
|
839,645
|
|
|
|
President, Chief Executive Officer and
Director
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Eifion Jones
|
|
|
|
|
2020
|
|
|
|
|
|
311,538
|
|
|
|
|
|
1,044,195
|
|
|
|
|
|
—
|
|
|
|
|
|
43,036
|
|
|
|
|
|
1,398,769
|
|
|
|
Senior Vice President and Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rick Roetken
|
|
|
|
|
2020
|
|
|
|
|
|
444,000
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
79,582
|
|
|
|
|
|
523,582
|
|
|
|
President, North America
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Anthony Colucci
|
|
|
|
|
2020
|
|
|
|
|
|
130,952
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
1,040,743
|
|
|
|
|
|
1,171,695
|
|
|
|
Former Senior Vice President and Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
The amounts shown for Messrs. Holleran, Jones, Roetken and Colucci include contributions made by them to the Hayward Industries, Inc. Retirement Plan, described below under "Employee and Retirement Benefits."
(2)
The amount reported in this column represents the grant date fair value of options to purchase our common stock granted to Mr. Jones in Fiscal Year 2020 computed in accordance with FASB ASC Topic 718, excluding the effect of estimated forfeitures. The assumptions used to value the options for this purpose are set forth in Note 16 to our consolidated financial statements included elsewhere in this prospectus. No amount is included in this column with respect to the portion of the
option granted to Mr. Jones in Fiscal Year 2020 that is subject to performance-based vesting conditions because the achievement of such conditions was not deemed probable at the time of grant. Assuming satisfaction of the underlying performance conditions associated with this portion of the option, the grant date fair value of such portion of the option is $812,100.
(3)
Annual bonus amounts for Fiscal Year 2020 have not yet been determined, and are expected to be determined in the first quarter of 2021. The Company will disclose the amount of the annual bonus, if any, once such amount is calculable. Our annual bonus program is described below under “Annual Bonuses.”
(4)
The amounts shown in the “All Other Compensation” column reflect the following items, as applicable to each named executive officer for the Fiscal Year 2020:
|
Name
|
|
|
Company
401(k)
matching
contributions
($)(a)
|
|
|
Company
cars
($)(b)
|
|
|
Supplemental
medical plan
($)(c)
|
|
|
Nonqualified
deferred
compensation
plan
($)(d)
|
|
|
Severance
($)(e)
|
|
|
Total
($)
|
|
|
Kevin Holleran
|
|
|
|
|
16,783
|
|
|
|
|
|
13,011
|
|
|
|
|
|
11,652
|
|
|
|
|
|
88,199
|
|
|
|
|
|
—
|
|
|
|
|
|
129,645
|
|
|
|
Eifion Jones
|
|
|
|
|
8,307
|
|
|
|
|
|
9,308
|
|
|
|
|
|
7,768
|
|
|
|
|
|
17,653
|
|
|
|
|
|
—
|
|
|
|
|
|
43,036
|
|
|
|
Rick Roetken
|
|
|
|
|
17,100
|
|
|
|
|
|
12,411
|
|
|
|
|
|
10,112
|
|
|
|
|
|
39,959
|
|
|
|
|
|
—
|
|
|
|
|
|
79,582
|
|
|
|
Anthony Colucci
|
|
|
|
|
7,479
|
|
|
|
|
|
3,102
|
|
|
|
|
|
3,884
|
|
|
|
|
|
12,240
|
|
|
|
|
|
1,014,038
|
|
|
|
|
|
1,040,743
|
|
|
(a)
The amounts shown for Messrs. Holleran, Jones, Roetken and Colucci reflect Company matching contributions to the Hayward Industries, Inc. Retirement Plan, described below under “Employee and Retirement Benefits.”
(b)
The amounts shown reflect car lease payments and car expense reimbursements we provide to each of the named executive officers.
(c)
The amounts shown reflect premiums for a supplemental executive medical plan that we make available to certain of our senior employees, including our named executive officers.
(d)
The amounts shown reflect Company matching contributions to the Hayward Industries, Inc. Supplementary Retirement Plan, described below under “Employee and Retirement Benefits.”
(e)
The amount shown reflects the severance amounts Mr. Colucci received pursuant to the release agreement we entered into with him in connection with his termination of employment. The release agreement is described below under “Severance upon Termination of Employment; Change of Control.”
Narrative Disclosure to Summary Compensation Table
Annual Base Salary
The employment agreement with each named executive officer, described below, establishes an annual base salary for the officer, which was determined at the time that the named executive officer commenced employment with us and is subject to periodic review. During 2020, Mr. Holleran’s annual base salary was increased to $710,000 and Mr. Roetken’s annual base salary was increased to $435,000 and then to $444,000. In 2021, Mr. Holleran’s annual base salary was increased to $775,000, Mr. Jones’s annual base salary was increased to $464,000 and Mr. Roetken’s annual base salary was increased to $456,000.
Annual Bonuses
With respect to Fiscal Year 2020, each of Messrs. Holleran, Jones, Roetken and Colucci was eligible to receive an annual bonus, with the target amount of such bonus for each named executive officer set forth in his employment agreement with us, described below. For Fiscal Year 2020, Mr. Colucci was eligible to receive a pro-rata annual bonus, pro-rated for the period he was employed by us in Fiscal Year 2020. For Fiscal Year 2020, the target bonus amounts, expressed as a percentage of annual base salary, for each of
Messrs. Holleran, Jones, Roetken and Colucci were as follows: 100%, 75%, 70% and 70%, respectively. Annual bonuses for Fiscal Year 2020 for our named executive officers will be determined based on the achievement of EBITDA-related goals and are expected to be determined in the first quarter of 2021.
Agreements with our Named Executive Officers
Messrs. Holleran, Jones and Roetken are each party to an employment agreement with us that sets forth the terms and conditions of his respective employment. The material terms of the agreements are described below. The terms “cause,” “good reason” and “change of control” referred to below are defined in the respective named executive officer’s agreement. In connection with this offering, we intend to enter into an amended and restated employment agreement with each of Messrs. Holleran, Jones and Roetken that will supersede the executive’s current agreement, the terms of which will be described in a subsequent filing when determined and will be generally consistent with the current agreements as described below.
Mr. Holleran. We entered into an employment agreement with Mr. Holleran on August 12, 2019 that provides for an annual base salary of $700,000 per year, and a target annual bonus equal to 100% of his annual base salary, as of the beginning of the applicable plan year, with the actual amount of the bonus payable based upon the achievement of performance criteria as determined by our Board of Directors. Mr. Holleran’s employment agreement also provides that, for so long as Mr. Holleran serves as our Chief Executive Officer, he will also serve as a member of our Board of Directors. Under Mr. Holleran’s employment agreement he is also entitled to certain personal benefits, including a car and reimbursement of related operating expenses, and payment or reimbursement for dues for a specified organization and travel costs incurred in attending one of the organization’s meetings per year. In addition, Mr. Holleran’s employment agreement provides for relocation benefits of reasonable temporary housing, reimbursement for travel to and from Mr. Holleran’s home to our principal executive offices, relocation costs up to $150,000, and a gross-up for taxes incurred in respect of the relocation benefits, until the earlier of July 15, 2020 and the date Mr. Holleran relocates his primary residence to New Jersey, which benefits have continued beyond July 15, 2020 due to the COVID-19 pandemic.
Under his employment agreement, Mr. Holleran has agreed not to compete with us during his employment and for one year following his termination of employment or solicit our officers, employees, customers or vendors during his employment and for two years following his termination of employment. In addition, Mr. Holleran has agreed to a perpetual confidentiality covenant, an assignment of intellectual property covenant and a perpetual mutual non-disparagement covenant.
Mr. Jones. We entered into an employment agreement with Mr. Jones effective on April 20, 2020 that provides for an annual base salary of $450,000 per year, and a target annual bonus equal to 75% of his annual base salary, with the actual amount of the bonus payable based upon the achievement of performance criteria as determined by our Board of Directors. In addition, Mr. Jones’s employment agreement provides for relocation benefits of temporary housing of $3,500 for up to five months, reimbursement for travel to and from Mr. Jones’s home to our principal executive offices, reimbursement for relocation costs up to $150,000, and a gross-up for taxes incurred in respect of the relocation benefits, until the earlier of April 20, 2021 and the date Mr. Jones relocates his primary residence to New Jersey. Under Mr. Jones’s employment agreement he is also entitled to certain personal benefits generally provided to other senior executives (other than the chief executive officer), including a car and reimbursement of related operating expenses.
Under his employment agreement, Mr. Jones has agreed not to compete with us during his employment and for one year following his termination of employment or solicit our officers, employees, customers or vendors during his employment and for two years following his termination of employment. Mr. Jones is also party to Non-Competition, Non-Solicitation, Confidentiality and Assignment Agreements he entered into in connection with the grant to him of options to purchase our Class B common stock under which he has agreed not to compete with us during his employment and for one year following his termination of employment or solicit our officers, employees, customers or vendors during his employment and for two years following his termination of employment. Mr. Jones has agreed to a perpetual confidentiality covenant, an assignment of intellectual property covenant and a non-disparagement covenant.
Mr. Roetken. We entered into an employment agreement with Mr. Roetken effective as of August 4, 2017, as revised on August 8, 2018 that provides for an annual base salary of $410,000 per year
and a target annual bonus equal to 70% of his annual base salary, with the actual amount of the bonus payable based upon the achievement of performance criteria as determined by our Board of Directors. Under Mr. Roetken’s employment agreement he is also entitled to certain personal benefits generally provided to other senior executives (other than the chief executive officer), including a car and reimbursement of related operating expenses.
Under his employment agreement, Mr. Roetken has agreed not to compete with us during his employment and for one year following his termination of employment or solicit our officers, employees, customers or vendors during his employment and for two years following his termination of employment. In addition, Mr. Roetken has agreed to a perpetual confidentiality covenant, an assignment of intellectual property covenant and a mutual non-disparagement covenant during his employment and for two years following his termination of employment. Mr. Roetken is also party to a Non-Competition, Non-Solicitation, Confidentiality and Assignment Agreement he entered into in connection with the grant to him of options to purchase our Class B common stock under which he has agreed not to compete with us during his employment and for one year following his termination of employment or solicit our officers, employees, customers or vendors during his employment and for two years following his termination of employment, and Mr. Roetken has agreed to a perpetual confidentiality covenant, an assignment of intellectual property covenant and a mutual non-disparagement covenant during his employment and for two years following his termination of employment.
Mr. Colucci. Prior to his termination of employment, we had been party to an employment agreement with Mr. Colucci. Under his employment agreement, Mr. Colucci has agreed not to compete with us during his employment and for one year following his termination of employment or solicit our officers, employees, customers or vendors during his employment and for two years following his termination of employment. In addition, Mr. Colucci has agreed to a perpetual confidentiality covenant, an assignment of intellectual property covenant and a mutual non-disparagement covenant during his employment and for two years following his termination of employment. Mr. Colucci is also party to a Non-Competition, Non-Solicitation, Confidentiality and Assignment Agreement he entered into in connection with the grant to him of options to purchase our Class B common stock under which he has agreed not to compete with us during his employment and for one year following his termination of employment or solicit our officers, employees, customers or vendors during his employment and for two years following his termination of employment, and Mr. Colucci has agreed to a perpetual confidentiality covenant, an assignment of intellectual property covenant and a mutual non-disparagement covenant during his employment and for two years following his termination of employment.
On April 16, 2020, Mr. Colucci’s employment was terminated, as described below.
Severance upon Termination of Employment; Change of Control.
Employment Agreements. Each of Mr. Holleran, Mr. Jones and Mr. Roetken is entitled to severance payments and benefits in connection with certain qualifying terminations of employment under their respective employment agreements. If Mr. Holleran, Mr. Jones or Mr. Roetken’s employment is terminated by us without cause or by him for good reason, he will be entitled to receive (i) any earned, but unpaid, base salary and any earned and payable, but unpaid, annual bonus, (ii) a pro-rata portion of his annual bonus for the year in which his termination occurs, to the extent earned, (iii) an amount equal to the sum of his annual base salary and target bonus paid in twelve monthly equal installments, (iv) either a payment equal to the cost of any personal benefits, welfare benefits and retirement plan contributions he would have been eligible to receive in the 12 months following the date of termination or the provision, for 12 months following the date of termination, of such benefits (the “Welfare Benefits”), (v) payment of a portion of his COBRA premiums for 12 months following his termination (or, if earlier, until the date on which the executive receives equivalent health care benefit coverage under a subsequent employer’s plans) at the rate we pay for active employees for the executive and his dependents, subject to his eligibility for, and timely election of, COBRA coverage and his continued payment of the portion of the cost required to be paid by him (the “COBRA Benefit”), and (vi) outplacement counseling services at a total cost not to exceed $12,000 ($13,000 in the case of Mr. Jones). If the executive’s employment is terminated as a result of his death, his estate or other legal representative will be entitled to receive (i) any earned, but unpaid, base salary and any earned and payable, but unpaid, annual bonus and (ii) a pro-rata portion of his annual bonus for the year
in which his termination occurs, to the extent earned. If the executive’s employment is terminated as a result of his disability, he will be entitled to receive (i) any earned, but unpaid, base salary and any earned and payable, but unpaid, annual bonus, (ii) a pro-rata portion of his annual bonus for the year in which his termination occurs, to the extent earned, (iii) the Welfare Benefits, and (iv) the COBRA Benefit. Our obligation to provide Mr. Holleran, Mr. Jones or Mr. Roetken with severance payments and other benefits under his respective employment agreement, other than any earned and payable, but unpaid, annual bonus or severance benefits as a result of his death, is conditioned on his signing a release of claims in favor of us.
Equity Awards. If Mr. Holleran’s employment is terminated as a result of his death or disability, in addition to the severance benefits described above, his then-unvested Class A restricted stock will vest in full. If Mr. Holleran’s employment is terminated by us without cause or by him for good reason, his then-unvested Class A restricted stock will remain outstanding and eligible to vest for six months, and if Mr. Holleran’s employment is terminated by us without cause or by him for good reason, in either case within 12 months following a transaction that is not an initial public offering or a change of control and certain investors cease to own certain investor shares following the transaction, in addition to the severance benefits described above, Mr. Holleran’s then-unvested Class A restricted stock will vest in full. In the event of an initial public offering or change of control, Mr. Holleran’s then-unvested Class A restricted stock will vest in full, subject to continued employment with us through the applicable event.
In the event of a change of control, Mr. Holleran’s then-unvested time-vesting options with respect to shares of our Class B common stock will vest in full as of the date of the change of control, subject to continued employment with us, and any then-unvested performance-vesting options that do not vest upon the change of control will be canceled. If Mr. Holleran’s employment is terminated as a result of his death or disability, in addition to the severance benefits described above, his then-unvested time-vesting options that would have vested within the following year will immediately vest and any then-unvested performance-vesting options will remain outstanding and eligible to vest for one year. If Mr. Holleran’s employment is terminated by us without cause or by him for good reason, his then-unvested performance-vesting options will remain outstanding and eligible to vest for six months, and if Mr. Holleran’s employment is terminated by us without cause or by him for good reason, in either case within 12 months following a transaction that is not an initial public offering or a change of control and certain investors cease to own certain investor shares following the transaction, in addition to the severance benefits described above, Mr. Holleran’s then-unvested time-vesting options will vest in full.
In the event of a change of control, Mr. Jones’s then-unvested time-vesting options with respect to shares of our Class B common stock will vest in full as of the date of the change of control, subject to continued employment with us, and any then-unvested performance-vesting options that do not vest upon the change of control will be canceled. If Mr. Jones’s employment is terminated as a result of his death or disability, in addition to the severance benefits described above, his then-unvested time-vesting options that would have vested within the following year will immediately vest and any then-unvested performance-vesting options will remain outstanding and eligible to vest for one year.
In the event of a change of control, Mr. Roetken’s then-unvested time-vesting options with respect to shares of our Class B common stock will vest in full of the date of the change of control, subject to continued employment with us, and any then-unvested performance-vesting options that do not vest upon the change of control will be canceled. If Mr. Roetken’s employment is terminated as a result of his death or disability, in addition to the severance benefits described above, his then-unvested time-vesting options that would have vested within the following year will immediately vest and any then-unvested performance-vesting options will remain outstanding and eligible to vest for one year.
Release Agreement with Mr. Colucci. In connection with the termination of Mr. Colucci’s employment, we entered into a release agreement with him under which he is entitled to receive (i) an amount equal to the sum of his annual base salary and target bonus, which will be paid in twelve monthly equal installments, (ii) a pro-rata portion of his annual bonus for the 2020 plan year, (iii) a payment equal to the cost of any personal benefits, welfare benefits and retirement plan contributions he would have been eligible to receive in the 12 months following the date of termination, (iv) a lump-sum payment of the employer portion of his COBRA premiums for 12 months at the rate we pay for active employees for Mr. Colucci and his dependents, and (v) outplacement counseling services for 12 months.
Equity Compensation
Mr. Jones received incentive equity grants in Fiscal Year 2020 under the Second Amended and Restated Hayward Holdings, Inc. 2017 Equity Incentive Plan.
On April 14, 2020, Mr. Jones was granted an option to purchase 1,500 shares of our Class B common stock, which were fully-vested as of the date of grant and expire 18 months from the date of grant.
On April 14, 2020, Mr. Jones was granted an option to purchase 8,000 shares of our Class B common stock, which vests 50% in five equal installments on each of April 20, 2021, April 20, 2022, April 20, 2023, April 20, 2024 and April 20, 2025 and vests 50% upon the receipt by certain of our investors of investment returns in excess of a specified target prior to an initial public offering, or following an initial public offering, if the average closing trading price of our common stock over a ten-day trading period equals or exceeds a specified price, in each case, generally subject to Mr. Jones’s continued employment with us through the applicable vesting date.
Employee and Retirement Benefits
We currently provide broad-based health and welfare benefits that are available to all of our employees, including our named executive officers, including health, life and AD&D, disability, vision, and dental insurance. We also make available a supplemental executive medical plan to certain of our senior employees, including our named executive officers. In addition, we maintain the Hayward Industries, Inc. Retirement Plan, a 401(k) retirement plan for our full-time employees. We make a non-discretionary safe harbor contribution to the 401(k) plan of 3% of an employee’s compensation and an additional employer contribution match to the 401(k) plan equal to 50% of the first 6% of compensation contributed to the plan. Our named executive officers are eligible to participate in these plans on the same basis as our other full-time employees.
In addition, we maintain the Hayward Industries, Inc. Supplementary Retirement Plan, a nonqualified deferred compensation plan in which participants, including our named executive officers, receive employer contributions equal to a 9% match of cash compensation deferred under the plan.
Outstanding Awards at Fiscal Year End Table
The following table sets forth information concerning outstanding equity awards held by each of our named executive officers as of December 31, 2020:
|
|
|
|
Option awards
|
|
|
Stock awards
|
|
|
Name
|
|
|
Number of
securities
underlying
unexercised
options
(#)
exercisable
|
|
|
Number of
securities
underlying
unexercised
options
(#)
unexercisable
|
|
|
Equity
incentive
plan
awards:
Number of
securities
underlying
unexercised
unearned
options
(#)
|
|
|
Option
exercise price
($/share)
|
|
|
Option
expiration
date
|
|
|
Equity
incentive
plan
awards:
Number of
unearned
shares, units
or other
rights that
have not
vested
(#)
|
|
|
Equity
incentive
plan
awards:
Market or
payout value
of unearned
shares, units
or other
rights that
have not
vested
($)
|
|
|
Kevin Holleran
|
|
|
|
|
2,000(1)
|
|
|
|
|
|
8,000(1)
|
|
|
|
|
|
10,000(1)
|
|
|
|
|
|
272.92
|
|
|
|
|
|
12/24/29
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
949.49(5)
|
|
|
|
|
|
1,534,537(6)
|
|
|
|
Eifion Jones
|
|
|
|
|
1,500(2)
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
272.92
|
|
|
|
|
|
10/14/21
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
4,000(3)
|
|
|
|
|
|
4,000(3)
|
|
|
|
|
|
272.92
|
|
|
|
|
|
04/14/30
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
Rick Roetken
|
|
|
|
|
1,200(4)
|
|
|
|
|
|
1,800(4)
|
|
|
|
|
|
3,000(4)
|
|
|
|
|
|
97.75
|
|
|
|
|
|
08/27/28
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
Anthony Colucci
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
(1)
Represents an option to purchase 20,000 shares of our Class B common stock granted on December 24, 2019, which vests as to 50% of the underlying shares in five equal installments on each of August 12, 2020, August 12, 2021, August 12, 2022, August 12, 2023 and August 12, 2024 and vests as to the remaining 50% of the underlying shares upon the receipt by certain of our investors of investment returns in excess of a specified target prior to an initial public offering, or following an initial public offering, if the average closing trading price of our common stock over a ten-day trading period equals or exceeds a specified price, in each case generally subject to Mr. Holleran’s continued employment with us through the applicable vesting date. Does not include shares that are expected to vest upon the consummation of this offering.
(2)
Represents an option to purchase 1,500 shares of our Class B common stock granted on April 14, 2020, which was fully-vested as of the date of grant.
(3)
Represents an option to purchase 8,000 shares of our Class B common stock granted on April 14, 2020, which vests as to 50% of the underlying shares in five equal installments on each of April 20, 2021, April 20, 2022, April 20, 2023, April 20, 2024 and April 20, 2025 and vests as to the remaining 50% of the underlying shares upon the receipt by certain of our investors of investment returns in excess of a specified target prior to an initial public offering, or following an initial public offering, if the average closing trading price of our common stock over a ten-day trading period equals or exceeds a specified price, in each case generally subject to Mr. Jones’s continued employment with us through the applicable vesting date.
(4)
Represents an option to purchase 6,000 shares of our Class B common stock granted on August 27, 2018, which vests as to 50% of the underlying shares in five equal installments on each of August 27, 2019, August 27, 2020, August 27, 2021, August 27, 2022 and August 27, 2023 and vests as to the remaining 50% of the underlying shares upon the receipt by certain of our investors of investment returns in excess of a specified target prior to an initial public offering, or following an initial public offering, if the average closing trading price of our common stock over a ten-day trading period equals or exceeds a specified price, in each case generally subject to Mr. Roetken’s continued employment with us through the applicable vesting date.
(5)
Represents a restricted stock award of 949.49 shares of our Class A stock granted on December 24, 2019, which vests upon a change of control or an initial public offering, in each case generally subject to Mr. Holleran’s continued employment with us through the applicable vesting date.
(6)
Amount determined based on the value of a share of our Class A stock on December 31, 2020, as determined by our Board of Directors.
Director Compensation
The following table sets forth the compensation awarded to, earned by or paid to our non-employee directors during Fiscal Year 2020. Mr. Holleran’s compensation for 2020 is included with that of our other named executive officers in the Summary Compensation Table above.
|
Name
|
|
|
Fees earned
or paid in cash
($)(2)
|
|
|
Option
awards
($)(3)
|
|
|
Total
($)
|
|
|
|
|
|
Ali Afraz(1)
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
Christopher Bertrand(1)
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
Greg Brenneman(1)
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
Kevin D. Brown(1)
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
Stephen Felice
|
|
|
|
|
60,000
|
|
|
|
|
|
—
|
|
|
|
|
|
60,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Douglas Londal(1)
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark McFadden(1)
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
Jason Peters(1)
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
Larry Silber
|
|
|
|
|
60,000
|
|
|
|
|
|
—
|
|
|
|
|
|
60,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
|
Fees earned
or paid in cash
($)(2)
|
|
|
Option
awards
($)(3)
|
|
|
Total
($)
|
|
|
|
|
|
Arthur Soucy
|
|
|
|
|
60,000
|
|
|
|
|
|
—
|
|
|
|
|
|
60,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Christopher Stevenson(1)
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
Timothy Walsh(1)
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Directors who are affiliated with our Sponsors do not receive compensation in respect of their service as members of our Board of Directors.
(2)
The amounts reported in this column represent cash fees earned in Fiscal Year 2020.
(3)
As of December 31, 2020, Messrs. Felice, Silber (through LHS Global Advisors, LLC) and Soucy held options to purchase 650, 800 and 650 shares of our Class B common stock, respectively.
Director Compensation
Mr. Felice. On July 25, 2018, we entered into a letter agreement with Mr. Felice under which he agreed to serve on our Board of Directors. Pursuant to his letter agreement, Mr. Felice is entitled to receive an annual fee equal to $60,000, payable in equal quarterly installments, and reimbursement for reasonable out-of-pocket expenses incurred in connection with serving as a director. In addition, Mr. Felice was entitled to receive a one-time grant of an option to purchase 650 shares of our Class B common stock, vesting 50% subject to time-based vesting criteria and 50% subject to performance-based vesting criteria.
Mr. Silber. On November 22, 2019, we entered into a letter agreement with Mr. Silber under which he agreed to serve on our Board of Directors. Pursuant to his letter agreement, Mr. Silber is entitled to receive an annual fee equal to $60,000, payable in equal quarterly installments, and reimbursement for reasonable out-of-pocket expenses incurred in connection with serving as a director. In addition, Mr. Silber was entitled to receive a one-time grant of an option to purchase 800 shares of our Class B common stock, vesting 100% subject to time-based vesting criteria.
Mr. Soucy. In July 2018, we entered into a letter agreement with Mr. Soucy under which he agreed to serve on our Board of Directors. Pursuant to his letter agreement, Mr. Soucy is entitled to receive an annual fee equal to $60,000, payable in equal quarterly installments, and reimbursement for reasonable out-of-pocket expenses incurred in connection with serving as a director. In addition, Mr. Soucy was entitled to receive a one-time grant of an option to purchase 650 shares of our Class B common stock, vesting 50% subject to time-based vesting criteria and 50% subject to performance-based vesting criteria.
Director Compensation Policy
In connection with this offering, our Board of Directors intends to adopt a non-employee director compensation policy, which will become effective upon the completion of this offering and will cover non-employee directors who are not affiliated with our Sponsors. The following summary describes what we anticipate to be the material terms of our non-employee director compensation policy:
Each covered non-employee director will receive an annual cash retainer for service to our Board of Directors and an additional annual cash retainer for service on any committee of our Board of Directors or for serving as the chairman of our Board of Directors or any of its committees, in each case, prorated for partial years of service, as follows:
|
|
|
|
Board or
Committee Member
|
|
|
Chairman of the Board or
Committee Chairman
|
|
|
Annual cash retainer
|
|
|
|
$
|
75,000
|
|
|
|
|
$
|
100,000
|
|
|
|
Additional annual cash retainer for compensation committee
|
|
|
|
$
|
5,000
|
|
|
|
|
$
|
10,000
|
|
|
|
Additional annual cash retainer for nominating and corporate governance committee
|
|
|
|
$
|
5,000
|
|
|
|
|
$
|
10,000
|
|
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Additional annual cash retainer for audit committee
|
|
|
|
$
|
5,000
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|
|
|
|
$
|
20,000
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|
|
Prior to January 1st of any year, a covered non-employee director may elect to receive his or her annual cash retainer in the form of restricted stock units or deferred stock units, as applicable.
Commencing in 2022, each covered non-employee director will be granted restricted stock units having a grant date fair value, determined in accordance with FASB ASC Topic 718 (or any successor provision), of $125,000 (or $200,000 in the case of the chairman of the our Board of Directors), such restricted stock units to vest , subject to the non-employee director’s continued service, through the applicable vesting date. Each covered non-employee director is expected to receive a grant of restricted stock units in connection with this offering as described below under “2021 Equity Plan”.
Each non-employee director is also entitled to reimbursement for reasonable travel and other expenses incurred in connection with attending meetings of our Board of Directors and any committee on which he or she serves.
Equity and Cash Plans
2017 Equity Incentive Plan
In November 2019, our Board of Directors adopted and our stockholders approved the Second Amended and Restated Hayward Holdings, Inc. 2017 Equity Incentive Plan, or our 2017 Plan. Our 2017 Plan permits the grant of non-qualified stock options, restricted stock awards, unrestricted stock awards, restricted stock units and any combination of the foregoing. Subject to adjustment, the maximum number of shares that may be granted under our 2017 Plan is 95,994.11 shares of our Class B common stock and 2,949.49 shares of our Class A stock. As of , 2021, options to purchase shares of our Class B common stock, shares of our Class A stock subject to restricted stock awards and shares of our Class B common stock subject to restricted stock awards were outstanding under our 2017 Plan and shares of our Class B common stock and shares of our Class A stock remained available for future issuance. It is anticipated that no further awards will be made under our 2017 Plan following the completion of this offering. In connection with this offering, we intend to adopt a new omnibus equity plan under which we will grant equity-based awards in connection with or following this offering. This summary is not a complete description of all provisions of our 2017 Plan and is qualified in its entirety by reference to our 2017 Plan, which is filed as an exhibit to the registration statement of which this prospectus is part.
Plan Administration
The compensation committee of our Board of Directors administers our 2017 Plan. As used in this summary, the term “Committee” refers to our Board of Directors and its authorized delegates, as applicable. The Committee has the power and authority to, among other things, select the individuals to whom awards may from time to time be granted; to determine the time or times of grant and the type of awards granted to any participants; to determine the class and the number of shares of our common stock to be covered by any award and the price, exercise price or other price relating thereto; to determine and modify from time to time the terms and conditions of any award, and to approve the form of written instruments evidencing the awards; to accelerate at any time the exercisability or vesting of all or any portion of any award; to adopt such rules, guidelines and practices for administration of our 2017 Plan as it shall deem necessary or advisable; to interpret the terms and provisions of our 2017 Plan and any award; and to make all determinations it deems advisable for the administration of our 2017 Plan.
Eligibility
Our or any of our subsidiaries’ full- or part-time officers and other employees, directors, consultants, and key persons are eligible to participate in our 2017 Plan. Eligibility for stock options is limited to individuals who are providing direct services to us or a subsidiary on the date of grant of the award.
Types of Awards
Our 2017 Plan provides for the grant of non-qualified stock options, restricted stock awards, unrestricted stock awards, restricted stock units and any combination of the foregoing (for a description of
the types of award, see below under “2021 Equity Incentive Plan”). No stock option will be exercisable more than ten years from the date of grant.
Vesting; Terms of Awards
The Committee determines the terms and conditions of all awards granted under our 2017 Plan, including the time or times an award vests or becomes exercisable, the terms on which an award remains exercisable, and the effect of termination of a participant’s employment or service on an award. The Committee may at any time accelerate the exercisability or vesting of all or any portion of an award.
Transferability of Awards
Except as the Committee may otherwise determine, awards may not be transferred other than by will or by the laws of descent and distribution.
Effect of Certain Transactions
In the event of certain covered transactions (including any transaction in which (i) one or more classes of securities issued by us are converted into, or exchanged for, securities in another form issued by us, any of our direct or indirect subsidiaries, a newly formed parent or affiliated persons or (ii) we merge or otherwise combine with one or more of our affiliates with the Company surviving any such merger or combination), outstanding awards will be subject to the agreement or arrangement governing the terms of the covered transaction, which may provide, without limitation, for:
•
The assumption or substitution of awards on substantially equivalent terms by an acquiring or surviving entity (which may include requiring participants to exchange or convert unvested awards for equity securities or other assets or rights that may include, but are not limited to, awards to acquire the same consideration paid to or received by the stockholders or the Company, as the case may be, pursuant to the covered transaction); or
•
A cash-out of awards, based on the value ascribed to the Company’s equity securities in the covered transaction.
Adjustment Provisions
In the event of certain corporate transactions, including a reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split or other similar change in our capital stock, or a merger or consolidation, or sale of all or substantially all of the assets of the Company, in which the outstanding shares of stock of the Company are converted into or exchanged for securities of the Company or any successor entity, the Committee will make appropriate adjustments in the maximum number of shares reserved for issuance under our 2017 Plan, the number and kind of shares or other securities subject to any then outstanding awards, the repurchase price, if any, per share subject to each outstanding restricted stock award, and the exercise price for each share subject to any then outstanding stock options, without changing the aggregate exercise price as to which such stock options remain exercisable.
Amendments and Termination
Our Board of Directors may at any time amend or discontinue our 2017 Plan and the Committee may at any time amend or cancel any outstanding award. However, no such action shall adversely affect rights under an outstanding award without the participant’s consent. To the extent determined by the Committee to be required by applicable law, any amendments to our 2017 Plan will be subject to shareholder approval.
2021 Equity Incentive Plan
In connection with this offering, our Board of Directors intends to adopt the Hayward Holdings, Inc. 2021 Equity Incentive Plan, or our 2021 Plan, and, in connection with and following this offering, all equity-based awards will be granted under our 2021 Plan. The following summary describes what we expect to be the material terms of our 2021 Plan. This summary is not a complete description of all provisions of
our 2021 Plan and is qualified in its entirety by reference to our 2021 Plan, which will be filed as an exhibit to the registration statement of which this prospectus is a part.
In connection with this offering, our Board of Directors expects to grant restricted stock units to each of . These restricted stock units will vest , subject to the director’s continued service on our Board of Directors through each applicable vesting date. In addition, our Board of Directors expects to grant an option to purchase shares of our common stock to Mr. Holleran, an option to purchase shares of our common stock to Mr. Jones, an option to purchase shares of our common stock to Mr. Roetken, options to purchase
approximately shares of our common stock in the aggregate to other employees and approximately restricted stock units in the aggregate to other employees. These options and restricted stock units will generally vest , generally subject to the individual’s continued employment with us through the applicable vesting date. The options granted in connection with this offering are expected to have a per share exercise price equal to the initial public offering price.
Administration
Our 2021 Plan will be administered by our compensation committee, except with respect to matters that are not delegated to our compensation committee by our Board of Directors. Our compensation committee (or our Board of Directors, as applicable) will have the discretionary authority to interpret our 2021 Plan and any awards granted under it, determine eligibility for and grant awards, determine the exercise price, base value from which appreciation is measured or purchase price, if any, applicable to any award, determine, modify, accelerate and waive the terms and conditions of any award, determine the form of settlement of awards, prescribe forms, rules and procedures relating to our 2021 Plan and awards and otherwise do all things necessary or desirable to carry out the purposes of our 2021 Plan or any award. Our compensation committee may delegate such of its duties, powers and responsibilities as it may determine to one or more of its members, members of our Board of Directors and, to the extent permitted by law, our officers, and may delegate to employees and other persons such ministerial tasks as it deems appropriate. As used in this summary, the term “Administrator” refers to our compensation committee and its authorized delegates, as applicable.
Eligibility
Our employees, directors and consultants are eligible to participate in our 2021 Plan. Eligibility for stock options intended to be incentive stock options, or ISOs, is limited to our employees or employees of certain affiliates. Eligibility for stock options, other than ISOs, and stock appreciation rights, or SARs, is limited to individuals who are providing direct services to us or certain affiliates on the date of grant of the award.
Authorized Shares
Subject to adjustment as described below, the maximum number of shares of our common stock that may be delivered in satisfaction of awards under our 2021 Plan is shares. Up to shares may be delivered in satisfaction of ISOs. The number of shares of our common stock delivered in satisfaction of awards under our 2021 Plan is determined (i) by excluding shares withheld by us in payment of the exercise price or purchase price of the award or in satisfaction of tax withholding requirements with respect to the award, (ii) by including only the number of shares delivered in settlement of a SAR any portion of which is settled in shares of our common stock and (iii) by excluding any shares underlying awards settled in cash or that expire, become unexercisable, terminate or are forfeited to or repurchased by us without the delivery of shares of our common stock. The number of shares available for delivery under our 2021 Plan will not be increased by any shares that have been delivered under our 2021 Plan and are subsequently repurchased using proceeds directly attributable to stock option exercises.
Shares that may be delivered under our 2021 Plan may be authorized but unissued shares, treasury shares or previously issued shares acquired by us.
Types of Awards
Our 2021 Plan provides for the grant of stock options, SARs, restricted and unrestricted stock and stock units, performance awards and other awards that are convertible into or otherwise based on our common stock. Dividend equivalents may also be provided in connection with awards under our 2021 Plan.
•
Stock options and SARs. The Administrator may grant stock options, including ISOs, and SARs. A stock option is a right entitling the holder to acquire shares of our common stock upon payment of the applicable exercise price. A SAR is a right entitling the holder upon exercise to receive an amount (payable in cash or shares of equivalent value) equal to the excess of the fair market value of the shares subject to the right over the base value from which appreciation is measured. The exercise price per share of each stock option, and the base value of each SAR, granted under our 2021 Plan shall be no less than 100% of the fair market value of a share on the date of grant (110% in the case of certain ISOs). Other than in connection with certain corporate transactions or changes to our capital structure, stock options and SARs granted under our 2021 Plan may not be repriced, amended or substituted for with new stock options or SARs having a lower exercise price or base value, nor may any consideration be paid upon the cancellation of any stock options or SARs that have a per share exercise or base price greater than the fair market value of a share on the date of such cancellation, in each case, without shareholder approval. Each stock option and SAR will have a maximum term of not more than ten years from the date of grant (or five years, in the case of certain ISOs).
•
Restricted and unrestricted stock and stock units. The Administrator may grant awards of stock, stock units, restricted stock and restricted stock units. A stock unit is an unfunded and unsecured promise, denominated in shares, to deliver shares or cash measured by the value of shares in the future, and a restricted stock unit is a stock unit that is subject to the satisfaction of specified performance or other vesting conditions. Restricted stock are shares subject to restrictions requiring that they be forfeited, redelivered or offered for sale to us if specified performance or other vesting conditions are not satisfied.
•
Performance awards. The Administrator may grant performance awards, which are awards subject to the achievement of performance criteria.
•
Other share-based awards. The Administrator may grant other awards that are convertible into or otherwise based on shares of our common stock, subject to such terms and conditions as it determines.
•
Substitute awards. The Administrator may grant substitute awards in connection with certain corporate transactions, which may have terms and conditions that are inconsistent with the terms and conditions of our 2021 Plan.
Vesting; Terms of Awards
The Administrator determines the terms and conditions of all awards granted under our 2021 Plan, including the time or times an award vests or becomes exercisable, the terms and conditions on which an award remains exercisable and the effect of termination of a participant’s employment or service on an award. The Administrator may at any time accelerate the vesting or exercisability of an award.
Transferability of Awards
Except as the Administrator may otherwise determine, awards may not be transferred other than by will or by the laws of descent and distribution.
Effect of Certain Transactions
In the event of certain covered transactions (including the consummation of a consolidation, merger or similar transaction, the sale of all or substantially all of our assets or shares of our common stock or our dissolution or liquidation), the Administrator may, with respect to outstanding awards, provide for (in each case, on such terms and subject to such conditions as it deems appropriate):
•
The assumption, substitution or continuation of some or all awards (or any portion thereof) by the acquiror or surviving entity;
•
The acceleration of exercisability or delivery of shares in respect of any award, in full or in part; and/or
•
A cash payment in respect of some or all awards (or any portion thereof) equal to the difference between the fair market value of the shares subject to the award and its exercise or base price, if any.
Except as the Administrator may otherwise determine, each award will automatically terminate or be forfeited immediately upon the consummation of the covered transaction, other than awards that are substituted for, assumed or that continue following the covered transaction.
Adjustment Provisions
In the event of certain corporate transactions, including a stock dividend, stock split or combination of shares (including a reverse stock split), recapitalization or other change in our capital structure, the Administrator shall make appropriate adjustments to the maximum number of shares that may be delivered under our 2021 Plan, the individual award limits and the number and kind of securities subject to, and, if applicable, the exercise or purchase prices (or base values) of, outstanding awards and any other provisions affected by such event.
Clawback
The Administrator may provide that any outstanding award, the proceeds of any award or shares acquired under any award and any other amounts received in respect of any award or shares acquired under any award will be subject to forfeiture and disgorgement to us, with interest and other related earnings, if the participant to whom the award was granted is not in compliance with any provision of our 2021 Plan or any award, any non-competition, non-solicitation, no-hire, non-disparagement, confidentiality, invention assignment or other restrictive covenant, or any company policy that relates to trading on non-public information and permitted transactions with respect to shares of our common stock or that provides for forfeiture, disgorgement or clawback, or as otherwise required by law or applicable stock exchange listing standards.
Amendments and Termination
The Administrator may at any time amend our 2021 Plan or any outstanding award and may at any time terminate our 2021 Plan as to future grants. However, except as expressly provided in our 2021 Plan, the Administrator may not alter the terms of an award so as to materially and adversely affect a participant’s rights without the participant’s consent (unless the Administrator expressly reserved the right to do so in our 2021 Plan or at the time the award was granted). Any amendments to our 2021 Plan will be conditioned on shareholder approval to the extent required by applicable law or stock exchange requirements.
2021 Employee Stock Purchase Plan
In connection with this offering, our Board of Directors intends to adopt the Hayward Holdings, Inc. 2021 Employee Stock Purchase Plan, or our ESPP. Our ESPP is intended to qualify as an “employee stock purchase plan” under Section 423 of the Code. The following summary describes what we expect to be the material terms of our ESPP. This summary is not a complete description of all provisions of our ESPP and is qualified in its entirety by reference to our ESPP, which will be filed as an exhibit to the registration statement of which this prospectus is a part.
Administration
Our ESPP will be administered by our compensation committee, which will have the discretionary authority to interpret our ESPP, determine eligibility under our ESPP, prescribe forms, rules and procedures relating to our ESPP and otherwise do all things necessary or desirable to carry out the purposes of our
ESPP. Our compensation committee may delegate such of its duties, powers and responsibilities as it may determine to one or more of its members, members of our Board of Directors and our officers and employees, in each case, to the extent permitted by law. As used in this summary, the term “Administrator” refers to our compensation committee and its authorized delegates, as applicable.
Shares Subject to our ESPP
Subject to adjustment as described below, the aggregate number of shares of our common stock available for purchase pursuant to the exercise of options under our ESPP is shares. Shares to be delivered upon exercise of options under our ESPP may be authorized but unissued shares, treasury shares or previously issued shares acquired by us. If any option granted under our ESPP expires or terminates for any reason without having been exercised in full or ceases for any reason to be exercisable in whole or in part, the unpurchased shares subject to such option will again be available for purchase under our ESPP.
Eligibility
Participation in our ESPP will generally be limited to our employees and employees of our subsidiaries (i) who have been continuously employed by us or one of our subsidiaries, as applicable, for a period of at least calendar days as of the first day of an applicable offering period, (ii) whose customary employment with us or one of our subsidiaries, as applicable, is for more than months per calendar year, (iii) who customarily work hours or more per week and (iv) who satisfy the requirements set forth in our ESPP. The Administrator may establish additional or other eligibility requirements, or change the requirements described in this paragraph, to the extent consistent with Section 423 of the Code. Any employee who owns (or is deemed under statutory attribution rules to own) shares possessing five percent or more of the total combined voting power or value of all classes of shares of us or our parent or subsidiaries, if any, will not be eligible to participate in our ESPP.
General Terms of Participation
Our ESPP allows eligible employees to purchase shares of our common stock during specified offering periods. Unless otherwise determined by the Administrator, offering periods under our ESPP will be in duration and commence on the first business day of and of each year. During each offering period, eligible employees will be granted an option to purchase shares of our common stock on the last business day of the offering period. A participant may purchase a maximum of shares with respect to any offering period (or such other number as the Administrator may prescribe). No participant will be granted an option under our ESPP that permits the participant’s right to purchase shares of our common stock under our ESPP and under all other employee stock purchase plans of us or our parent or subsidiaries, if any, to accrue at a rate that exceeds $25,000 in fair market value (or such other maximum as may be prescribed by the Code) for each calendar year during which any option granted to the participant is outstanding at any time, determined in accordance with Section 423 of the Code.
The purchase price of each share issued pursuant to the exercise of an option under our ESPP on an exercise date will be % (or such greater percentage as specified by the Administrator) of the lesser of: (a) the fair market value of a share of our common stock on the date the option is granted, which will be the first day of the offering period, and (b) the fair market value of a share of our common stock on the exercise date, which will be the last business day of the offering period.
The Administrator may change the commencement and exercise dates of offering periods, the purchase price, the maximum number of shares that may be purchased with respect to any offering period, the duration of any offering periods and other terms of our ESPP, in each case, without shareholder approval, except as required by law.
Participants in our ESPP will pay for shares purchased under our ESPP through payroll deductions. Participants may elect to authorize payroll deductions between and percent of the participant’s eligible compensation each payroll period.
Transfer Restrictions
For participants who have purchased shares under our ESPP, the Administrator may impose restrictions prohibiting the transfer, sale, pledge or alienation of such shares, other than by will or by the laws of descent and distribution, for such period as may be determined by the Administrator.
Adjustments
In the event of a stock dividend, stock split or combination of shares (including a reverse stock split), recapitalization or other change in our capital structure that constitutes an equity restructuring, the Administrator will make appropriate adjustments to the aggregate number and type of shares available for purchase under our ESPP, the number and type of shares granted under any outstanding options, the maximum number and type of shares purchasable under any outstanding option and/or the purchase price per share under any outstanding option.
Corporate Transactions
In the event of a (i) sale of all or substantially all of our then-outstanding common stock or a sale of all or substantially all of our assets, or (ii) merger or similar transaction in which we are not the surviving corporation or which results in the acquisition of us by another person, the Administrator may provide that each outstanding option will be assumed or substituted for or will be cancelled and the balances of participants’ accounts returned, or that the option period will end before the date of the proposed corporate transaction.
Amendments and Termination
The Administrator has discretion to amend our ESPP to any extent and in any manner it may deem advisable, provided that any amendment that would be treated as the adoption of a new plan for purposes of Section 423 of the Code will require shareholder approval. The Administrator may suspend or terminate our ESPP at any time.
2021 Cash Incentive Plan
In connection with this offering, our Board of Directors intends to adopt the Hayward Holdings, Inc. 2021 Cash Incentive Plan, or our Cash Incentive Plan. Following its adoption, our Cash Incentive Plan will provide for the grant of cash-based incentive awards to our executive officers and employees. The following summary describes the material terms of our Cash Incentive Plan. This summary is not a complete description of all provisions of our Cash Incentive Plan and is qualified in its entirety by reference to our Cash Incentive Plan, which is filed as an exhibit to the registration statement of which this prospectus is a part.
Administration
Our Cash Incentive Plan will be administered by our compensation committee and its delegates. As used in this summary, the term “Administrator” refers to our compensation committee and its authorized delegates, as applicable.
The Administrator will have the discretionary authority to interpret our Cash Incentive Plan and any awards, determine eligibility for and grant awards, adjust the performance criterion or criteria applicable to awards, determine, modify or waive the terms and conditions of any award, prescribe forms, rules and procedures relating to our Cash Incentive Plan and awards and otherwise do all things necessary or desirable to carry out the purposes of our Cash Incentive Plan.
Eligibility and Participation
Executive officers and key employees of us and our subsidiaries will be eligible to participate in our Cash Incentive Plan and will be selected from time to time by the Administrator to participate in our Cash Incentive Plan.
Awards; Performance Criteria
Awards under our Cash Incentive Plan will be made based on, and subject to achieving, specified criteria established by the Administrator. For each award granted under our Cash Incentive Plan, the
Administrator will establish the performance criteria applicable to the award, the amount or amounts payable if the performance criteria are achieved and such other terms and conditions as the Administrator deems appropriate.
Payments Under an Award
A participant will be entitled to payment under an award only if all conditions to payment have been satisfied in accordance with our Cash Incentive Plan and the terms of the award. Following the end of a performance period, the Administrator will determine whether and to what extent the applicable performance criteria have been satisfied and will determine the amount payable under each award. The Administrator has the discretionary authority to increase or decrease the amount actually paid under any award.
Recovery of Compensation
Payments in respect of an award will be subject to forfeiture and disgorgement to us if the participant violates a non-competition, non-solicitation, confidentiality or any other restrictive covenant or to the extent provided in any applicable company policy that provides for forfeiture or disgorgement, or as otherwise required by law or applicable stock exchange listing standards.
Amendment and Termination
The Administrator may amend our Cash Incentive Plan or any outstanding award for any purpose, and may at any time terminate our Cash Incentive Plan as to any future grant of awards.
PRINCIPAL AND SELLING STOCKHOLDERS
The following table and accompanying footnotes set forth information with respect to the beneficial ownership of shares of our common stock as of , 2021 by:
•
each individual or entity known by us to beneficially own more than 5% of our outstanding common stock;
•
each selling stockholder in this offering;
•
each member of our Board of Directors and each of our named executive officers; and
•
all members of our Board of Directors and our executive officers as a group.
Beneficial ownership has been determined in accordance with the applicable rules and regulations promulgated under the Exchange Act. The information is not necessarily indicative of beneficial ownership for any other purpose. Under these rules, beneficial ownership includes any shares as to which the individual or entity has sole or shared voting or investment power and any shares as to which the individual or entity has the right to acquire beneficial ownership within 60 days after , 2021 through the exercise of any option, warrant or other right. For purposes of calculating each person’s or group’s percentage ownership, shares of common stock issuable pursuant to options exercisable within 60 days after , 2021 are included as outstanding and beneficially owned for that person or group but are not treated as outstanding for the purpose of computing the percentage ownership of any other person or group. The inclusion in the following table of those shares, however, does not constitute an admission that the named stockholder is a direct or indirect beneficial owner. To our knowledge, except under applicable community property laws or as otherwise indicated, the persons named in the table have sole voting and sole investment control with respect to all shares shown as beneficially owned. For more information regarding the terms of our common stock, see “Description of Capital Stock.” For more information regarding our relationship with certain of the persons named below, see “Certain Relationships and Related Party Transactions.”
Except as otherwise indicated in the footnotes below, the address of each beneficial owner is c/o Hayward Holdings, Inc., 400 Connell Drive, Suite 6100, Berkeley Heights, NJ 07922.
The numbers listed below are based on shares of our common stock outstanding as of , 2021 after giving effect to the Reclassification as if it had occurred on that date. In addition, the following table does not reflect any shares of common stock that may be purchased in this offering or pursuant to our directed share program. The actual number of shares of common stock to be issued to each holder of Class B common stock in the Reclassification is subject to change based on any changes to the initial public offering price. See “The Reclassification.”
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Shares Owned
Before this Offering
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Shares
Offered
Hereby
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Shares Owned
After this Offering
(no option exercise)
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Shares Owned
After this Offering
(full option exercise)
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Name of Beneficial Owner
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Number
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Percentage
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Number
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Number
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Percentage
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Number
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Percentage
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Beneficial owners of more than 5% of our common stock:
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CCMP Capital Investors III, L.P. and related investment funds(1)
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%
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%
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%
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MSD Partners, L.P. and related investment fund(2)
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%
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%
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%
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Alberta Investment Management Corporation(3)
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%
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%
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%
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Directors and Named Executive Officers:
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Kevin Holleran(4)
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%
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%
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%
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Eifion Jones(5)
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%
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%
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%
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Anthony Colucci
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%
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%
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%
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Rick Roetken(6)
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%
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%
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%
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Mark McFadden(7)
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%
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%
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%
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Timothy Walsh(7)
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%
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%
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%
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Greg Brenneman(7)
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%
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%
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%
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Christopher Stevenson(7)
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Kevin Brown(8)
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%
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|
|
|
|
|
|
|
%
|
|
|
|
|
|
|
|
|
%
|
|
|
|
Douglas Londal(8)
|
|
|
|
|
|
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
%
|
|
|
|
|
|
|
|
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%
|
|
|
|
Christopher Bertrand(8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
Jason Peters(9)
|
|
|
|
|
|
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
%
|
|
|
|
|
|
|
|
|
%
|
|
|
|
Larry Silber(10)
|
|
|
|
|
|
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
%
|
|
|
|
|
|
|
|
|
%
|
|
|
|
Arthur Soucy(11)
|
|
|
|
|
|
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
%
|
|
|
|
|
|
|
|
|
%
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|
Ali Afraz
|
|
|
|
|
|
|
|
%
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|
|
|
|
|
|
|
|
|
|
|
%
|
|
|
|
|
|
|
|
|
%
|
|
|
|
Stephen Felice(12)
|
|
|
|
|
|
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
%
|
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|
|
|
|
|
|
%
|
|
|
|
All executive officers and directors as a group (19 persons)(13)
|
|
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|
|
|
|
|
%
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|
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|
|
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|
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%
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|
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%
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*
Indicates less than one percent.
(1)
Includes shares of our common stock held by CCMP Capital Investors III, L.P. (“CCMP Capital Investors”) and shares of our common stock held by CCMP Capital Investors III (Employee), L.P. (“CCMP Employee” and, together with CCMP Capital Investors, the “CCMP Investors”). The general partner of CCMP Capital Investors and CCMP Employee is CCMP Capital Associates III, L.P. (“CCMP Capital Associates”). The general partner of CCMP Capital Associates is CCMP Capital Associates III GP, LLC (“CCMP Capital Associates GP”). CCMP Capital Associates GP is wholly owned by CCMP Capital, LP. The general partner of CCMP Capital, LP is CCMP Capital GP, LLC (“CCMP Capital GP”). CCMP Capital GP ultimately exercises voting and investment power over the shares of our common stock held by the CCMP Investors. As a result, CCMP Capital GP may be deemed to share beneficial ownership with respect to the shares of our common stock held by the CCMP Investors. The investment committee of CCMP Capital GP with respect to the shares of our common stock includes Messrs. Brenneman
and Walsh, each of whom serves as a director of the Company. Each of the CCMP entities has an address of c/o CCMP Capital Advisors, LP, 277 Park Avenue, New York, New York 10172.
(2)
MSD Aqua Partners, LLC is the direct beneficial owner of the shares. MSD Partners, L.P. (“MSD Partners”) is the manager of, and may be deemed to have or share voting and/or dispositive power over, and beneficially own securities beneficially owned by MSD Aqua Partners, LLC. MSD Partners (GP), LLC (“MSD GP”) is the general partner of, and may be deemed to have or share voting and/or dispositive power over, and beneficially own securities beneficially owned by, MSD Partners. Each of John Phelan, Marc R. Lisker and Brendan Rogers is a manager of, and may be deemed to have or share voting and/or dispositive power over, and beneficially own securities beneficially owned by, MSD GP. The address of MSD GP is 645 Fifth Avenue, 21st Floor, New York, NY 10022.
(3)
Alberta Investment Management Corporation is a body corporate established as an agent of Her Majesty the Queen in Right of Alberta, the legal personification of the Province of Alberta. AIMCo manages funds on behalf of the Province of Alberta’s public pensions, public endowments and government funds for which it serves as investment manager. The address of AIMCo is 1600, 10250 101 Street NW, Edmonton, Alberta T5J 3P4 Canada.
(4)
Includes shares of our common stock that can be acquired upon the exercise of outstanding options and shares of our restricted common stock that will vest upon consummation of this offering.
(5)
Includes shares of our common stock that can be acquired upon the exercise of outstanding options.
(6)
Includes shares of our common stock that can be acquired upon the exercise of outstanding options.
(7)
Does not include shares of our common stock held by the CCMP Investors. Mark McFadden, a member of our Board of Directors, is a Managing Director of CCMP, Timothy Walsh, a member of our Board of Directors, is President and CEO of CCMP, Greg Brenneman, a member of our Board of Directors, is Executive Chairman of CCMP, and Christopher Stevenson, a member of our Board of Directors, is a Principal of CCMP Capital.
(8)
Does not include shares of our common stock held by MSD Partners. Kevin Brown, a member of our Board of Directors, is Co-Head of MSD Partners’ Private Capital Group, Douglas Londal, a member of our Board of Directors, is a Partner of MSD Capital, and Christopher Bertrand, a member of our Board of Directors, is Managing Director of MSD Partners’ Private Capital Group.
(9)
Does not include shares of our common stock held by AIMCo. Jason Peters, a member of our Board of Directors, is Director, Private Equity, for AIMCo.
(10)
Includes shares of our common stock that can be acquired upon the exercise of outstanding options.
(11)
Includes shares of our common stock that can be acquired upon the exercise of outstanding options.
(12)
Includes shares of our common stock that can be acquired upon the exercise of outstanding options.
(13)
Includes shares of our common stock that can be acquired upon the exercise of outstanding options.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
The agreements described in this section, or forms of such agreements as they will be in effect at the time of this offering, are filed as exhibits to the registration statement of which this prospectus forms a part, and the following descriptions are qualified by reference thereto.
Amended and Restated Stockholders Agreement
In connection with the closing of the Acquisition, we entered into a stockholders agreement (as amended, the “Stockholders Agreement”) with certain stockholders, including investments funds affiliated with the Sponsors, our directors and officers who hold shares of our common stock and certain other investors relating to rights and obligations with respect to ownership of our common stock, including the designation of certain director nominees, certain corporate governance rights, drag along rights, tag along rights, preemptive rights, information rights, demand and piggyback registration rights and related lockup obligations.
In connection with the consummation of this offering, we intend to amend and restate the Stockholders Agreement. The Stockholders Agreement, as so amended and restated, will provide affiliates of the Sponsors with certain demand registration rights, including shelf registration rights, following the expiration of the 180-day lockup period in respect of shares of our common stock held by them and will also provide that, in the event that we register additional shares of our common stock for sale to the public following completion of this offering, we will be required to give notice of such registration to such affiliates of the Sponsors and certain other stockholders, and, subject to certain limitations, include shares of our common stock held by them in such registration. In addition, we will be required to bear the registration expenses, other than underwriting discounts and commissions and transfer taxes, associated with any registration of shares described above and to indemnify such stockholders and certain other persons against certain liabilities that may arise under the Securities Act in connection with any such offering and sale of our shares.
Advisory Services Agreement
In connection with the closing of the Acquisition, Hayward Holdings, Hayward Intermediate, Inc. and Hayward Industries (collectively, the “Hayward Entities”) entered into an advisory services and monitoring agreement (the “Advisory Services Agreement”) with CCMP and MSD Partners. Certain of our directors are affiliated with CCMP and MSD Partners.
Pursuant to the terms of the Advisory Services Agreement, CCMP and MSD Partners agreed to provide the Hayward Entities with certain financial advisory services in exchange for an aggregate annual fee equal to $1.0 million multiplied by the quotient of (i) the number of shares of Class A stock owned by CCMP or MSD Partners, as applicable, divided by (ii) the number of shares of Class A stock owned collectively by the Sponsors.
In addition, the Hayward Entities agreed to reimburse CCMP and MSD Partners for their reasonable out-of-pocket expenses incurred in connection with the performance of these services. The Advisory Services Agreement provides for customary exculpation and indemnification provisions in favor of CCMP, MSD Partners and each of their respective affiliates. The Advisory Services Agreement will terminate pursuant to its terms upon consummation of this offering. Upon termination of the Advisory Services Agreement, CCMP and MSD Partners will be entitled to payment of all accrued and unpaid fees through the date of the consummation of this offering and certain expense reimbursements. The indemnification and exculpation provisions in favor of CCMP, MSD Partners and each of their respective affiliates will survive such termination.
CCMP received consulting fees and expense reimbursement totaling $ 0.4 million, $0.4 million and $0.4 million during the years ended December 31, 2020, 2019 and 2018, respectively. MSD Partners received consulting fees and expense reimbursement totaling $0.4 million, $0.4 million and $0.4 million during the years ended December 31, 2020, 2019 and 2018, respectively.
Special Dividend Side Letter
In connection with the closing of the Acquisition, we entered into a letter agreement with certain investments funds affiliated with AIMCo (the “AIMCo Investors”) regarding the payment of certain dividends on our Class C stock (the “Special Dividend Side Letter”). Pursuant to the terms of the Special Dividend Side Letter, we agreed to pay dividends in respect of the shares of Class C stock owned by each AIMCo Investor in an amount equal to $1.0 million multiplied by the quotient of (i) the number of shares of Class A stock owned by AIMCo divided by (ii) the number of shares of Class A stock owned collectively by the Sponsors.
In addition, we agreed to reimburse the AIMCo Investors for their reasonable out-of-pocket expenses to the same extent as CCMP and MSD Partners are entitled to reimbursement pursuant to the Advisory Services Agreement. The Special Dividend Side Letter will terminate pursuant to its terms upon termination of the Advisory Services Agreement in connection with this offering.
The AIMCo Investors received special dividends and expense reimbursements totaling $0.2 million, $0.2 million and $0.2 million during the years ended December 31, 2020, 2019 and 2018, respectively.
Arrangements with our Directors and Officers
In addition, we have certain agreements with our directors and officers which are described in the sections entitled “Executive Compensation—Agreements with our Named Executive Officers” and “Executive Compensation—Director Compensation.”
We intend to enter into indemnification agreements with our officers and directors. These agreements and our bylaws will require us to indemnify these individuals to the fullest extent permitted under Delaware law against liabilities that may arise by reason of their service to us, and to advance expenses incurred as a result of any proceeding against them as to which they could be indemnified. The indemnification provided under the indemnification agreements will not be exclusive of any other indemnity rights. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, we have been informed that in the opinion of the SEC such indemnification is against public policy and is therefore unenforceable.
Related Persons Transaction Policy
In connection with this offering, we will adopt a policy with respect to the review, approval and ratification of related party transactions. Under the policy, the nominating and corporate governance committee will be responsible for reviewing and approving related party transactions. The policy will apply to transactions, arrangements and relationships (including any indebtedness or guarantee of indebtedness) or any series of similar transactions, arrangements or relationships in which the aggregate amount involved will, or may be expected to, exceed $120,000 with respect to any fiscal year, and where we (or one of our subsidiaries) are a participant and in which a related party has or will have a direct or indirect material interest. In the course of reviewing potential related party transactions, the nominating and corporate governance committee will consider the nature of the related party’s interest in the transaction; the presence of standard prices, rates or charges or terms otherwise consistent with arms-length dealings with unrelated third parties; the materiality of the transaction to each party; the reasons for the company entering into the transaction with the related party; the potential effect of the transaction on the status of a director as an independent, outside or disinterested director or committee member; and any other factors the nominating and corporate governance committee may deem relevant.
DESCRIPTION OF CERTAIN INDEBTEDNESS
The following is a summary of certain of our indebtedness that is currently outstanding. The following descriptions do not purport to be complete and are qualified in their entirety by reference to the agreements and related documents referred to herein, copies of which have been filed as exhibits to the registration statement of which this prospectus forms a part, and may be obtained as described under “Where You Can Find More Information” in this prospectus.
Senior Secured Credit Facilities
Overview
In connection with the Acquisition, on August 4, 2017, Hayward Industries, as borrower, entered into (a) a $250.0 million asset-based lending facility (as amended, supplemented or otherwise modified from time to time prior to the date hereof, the “ABL Facility”) with Bank of America, N.A., as administrative agent and collateral agent (the “ABL Agent”), the lenders from time to time party thereto and the other parties party thereto (b) a $850.0 million first lien term loan facility (as amended, supplemented or otherwise modified from time to time prior to the date hereof, the “First Lien Term Facility”) with Bank of America, N.A., as administrative agent and collateral agent (the “First Lien Term Agent”), the lenders from time to time party thereto and the other parties party thereto and (c) a $285.0 million second lien term loan facility (as amended, supplemented or otherwise modified from time to time prior to the date hereof, the “Second Lien Term Facility” and, together with the First Lien Term Facility, the “Term Loan Facilities”, and collectively with the ABL Facility, the “Credit Facilities”) with Bank of America, N.A., as administrative agent and collateral agent (the “Second Lien Term Agent” and, together with the First Lien Term Agent, the “Term Loan Agent”), the lenders from time to time party thereto and the other parties party thereto. On September 28, 2018 (the “First Amendment Effective Date”), Hayward Industries entered into an incremental amendment to the First Lien Term Facility, which provided for additional first lien term loans in an aggregate principal amount of $150.0 million, the proceeds of which were used to, among other things, prepay a portion of the ABL Facility and prepay second lien term loans under the Second Lien Term Facility. Additionally, on October 28, 2020 (the “Second Amendment Effective Date”), Hayward Industries entered into the First Lien Incremental Term Facility, which provided for additional first lien term loans (the “2020 Incremental Term Loans”) in an aggregate principal amount of $150.0 million, the proceeds of which were used to fund a portion of a special distribution of approximately $275.0 million to the holders of Class A stock of Hayward Holdings.
ABL Facility
The ABL Facility consists of a $220.0 million U.S. revolving credit facility available in U.S. dollars and such other currencies acceptable to the revolving lenders (the “U.S. ABL Facility”) and a $30.0 million Canadian revolving credit facility available in Canadian dollars, U.S. dollars and such other currencies acceptable to the revolving lenders (the “Canadian ABL Facility”), in each case, providing for loans and letters of credit and subject to certain borrowing base limits. Proceeds from the ABL Facility are available to finance the working capital needs and for other general corporate purposes of Hayward Industries and its subsidiaries, including investments, restricted payments and any other purpose not prohibited by the ABL Facility. A portion of the ABL Facility not to exceed $15.0 million is available for the issuance of letters of credit in U.S. dollars and $5.0 million is available for the issuance of letters of credit in Canadian dollars. The ABL Facility also includes a $25.0 million swingline loan facility.
The ABL Facility provides the ABL Agent customary discretion to impose reserves or availability blocks, which could materially impair the amount of borrowings that would otherwise be available and may require repayment of certain amounts outstanding under the ABL Facility.
The ABL Facility provides that Hayward Industries may request increases to the ABL Facility in an aggregate principal amount not to exceed (w) the greater of (1) $100.0 million and (2) the amount by which the borrowing base exceeds the aggregate commitments then outstanding plus (x) in the case of any incremental facilities that serve to effectively replace any commitment under the ABL Facility that is terminated under the “yank-a-bank” provisions, an amount equal to the portion of the relevant terminated commitment, plus (y) the amount of any permanent voluntary reduction of the commitments under the
ABL Facility and/or any incremental revolving facility, or if the first net leverage ratio does not exceed 5.00:1.00 after giving pro forma effect to any such increase, an unlimited amount. The lenders are not obligated to provide such additional commitments, and any increase in commitments is subject to customary conditions precedent.
Additional borrowings under the ABL Facility will be subject to the satisfaction of customary conditions, including absence of events of default and availability.
First Lien Term Facility
The First Lien Term Facility provides that Hayward Industries may (a) request increases to the First Lien Term Facility and add one or more incremental term loan facilities and (b) add one or more incremental cash-flow revolving facilities and increase commitments under any then existing incremental cash-flow revolving facilities in an aggregate principal amount not to exceed (w) the greater of $125.0 million and 75.0% of consolidated EBITDA, less any other incremental borrowings incurred in reliance on that amount (including any such borrowings under the Second Lien Term Facility), plus (x) in the case of any incremental facilities that serve to effectively extend the maturity of any term loans or commitments or effectively replace any incremental cash-flow revolving facility, an amount equal to the reductions in the term loans or commitments to be replaced thereby or the terminated incremental cash-flow revolving facility, plus (y) the amount of certain voluntary prepayments of any term loans and any permanent reduction of the commitments under any incremental cash-flow revolving facility, plus (z) an unlimited amount so long as (1) if such incremental indebtedness is secured by a lien on the collateral on a pari passu basis with the First Lien Term Facility, Hayward Industries is in compliance on a pro forma basis with a first lien net leverage ratio of no greater than 5.00:1.00, (2) if such incremental indebtedness is secured by a lien on the collateral that is junior to the lien securing the First Lien Term Facility, Hayward Industries is in compliance on a pro forma basis with a secured net leverage ratio of no greater than 6.75:1.00, or (3) if such incremental indebtedness is unsecured, Hayward Industries is in compliance on a pro forma basis with either (i) a total net leverage ratio of no greater than 6.75:1.00 or (ii) a net interest coverage ratio of no greater than 2.00:1.00. The lenders are not obligated to provide such additional commitments, and the incurrence of any incremental indebtedness is subject to customary conditions precedent.
Second Lien Term Facility
The Second Lien Term Facility provides that Hayward Industries may (a) request increases to the Second Lien Term Facility and add one or more incremental term loan facilities and (b) add one or more incremental cash-flow revolving facilities and increase commitments under any then existing incremental cash-flow revolving facilities in an aggregate principal amount not to exceed (w) the greater of $125.0 million and 75.0% of consolidated EBITDA, less any other incremental borrowings incurred in reliance on that amount (including any such borrowings under the First Lien Term Facility), plus (x) in the case of any incremental facilities that serve to effectively extend the maturity of any term loans or commitments or effectively replace any incremental cash-flow revolving facility, an amount equal to the reductions in the term loans or commitments to be replaced thereby or the terminated incremental cash-flow revolving facility, plus (y) the amount of certain voluntary prepayments of any term loans and any permanent reduction of the commitments under any incremental cash-flow revolving facility, plus (z) an unlimited amount so long as (1) if such incremental indebtedness is secured by a lien on the collateral on a pari passu basis with the Second Lien Term Facility, Hayward Industries is in compliance on a pro forma basis with a secured net leverage ratio of no greater than 6.75:1.00, or (2) if such incremental indebtedness is unsecured, Hayward Industries is in compliance on a pro forma basis with either (i) a total net leverage ratio of no greater than 6.75:1.00 or (ii) a net interest coverage ratio of no greater than 2.00:1.00. The lenders are not obligated to provide such additional commitments, and the incurrence of any incremental indebtedness is subject to customary conditions precedent.
Interest Rate and Fees
ABL Facility: The interest rate applicable to loans under the ABL Facility denominated in (a) U.S. dollars is equal to an applicable interest rate margin, plus, at our option, either (1) a base rate determined by the reference to the highest of (A) the prime commercial lending rate publicly announced by the ABL
Agent as the “prime rate” in effect on such day, (B) the federal funds effective rate, plus 0.50%, and (C) the one-month LIBOR rate determined by reference to the cost of funds for U.S. dollar deposits, plus 1.00%, or (2) a LIBOR rate determined by reference to the costs of funds for U.S. dollar deposits for the specified interest period, as adjusted for certain statutory reserve requirements or (b) Canadian dollars is equal to an applicable interest rate margin, plus, at our option, either (1) the average rate applicable to Canadian dollar bankers’ acceptances (the “B/A Equivalent Rate”) or (2) the highest of (A) the prime commercial lending rate publicly announced by the ABL Agent in Canada as its “prime rate” as in effect on such day or (B) one-month B/A Equivalent Rate plus 1.0% per annum. All interest rate options applicable to loans under the ABL Facility are subject to a floor of 0%.
A commitment fee is charged on the average daily unused portion of the ABL Facility, adjusted quarterly, of (a) 0.375% per annum if the average daily unused portion of the non-defaulting revolving lenders commitments is less than 50% or (b) 0.25% per annum if the average daily unused portion of the non-defaulting revolving lenders commitments is equal to or greater than 50%.
Term Loan Facilities. Borrowings under the First Lien Term Facility (other than the 2020 Incremental Term Loans) bear interest at a rate per annum equal to, at our option (1) a margin of 2.50% plus a base rate determined by reference to the highest of (A) the federal funds effective rate in effect on such day plus 0.50%, (B) the one-month LIBOR rate determined by reference to the cost of funds for U.S. dollar deposits, plus 1.00% and (C) the prime commercial lending rate publicly announced by the Term Loan Agent as the “prime rate” in effect or (2) a margin of 3.50% plus a LIBOR rate (subject to a floor of 0%) determined by reference to the cost of funds for U.S. dollar deposits, as adjusted for certain statutory reserve requirements. 2020 Incremental Term Loans bear interest at a rate per annum equal to, at our option (1) a margin of 2.75% plus a base rate determined by reference to the highest of (A) the federal funds effective rate in effect on such day plus 0.50%, (B) the one-month LIBOR rate determined by reference to the cost of funds for U.S. dollar deposits, plus 1.00% and (C) the prime commercial lending rate publicly announced by the Term Loan Agent as the “prime rate” in effect or (2) a margin of 3.75% plus a LIBOR rate (subject to a floor of 0.75%) determined by reference to the cost of funds for U.S. dollar deposits, as adjusted for certain statutory reserve requirements. Borrowings under the Second Lien Term Facility bear interest at a rate per annum equal to, at our option (1) a margin of 7.25% plus a base rate determined by reference to the highest of (A) the federal funds effective rate in effect on such day plus 0.50%, (B) the one-month LIBOR rate determined by reference to the cost of funds for U.S. dollar deposits, plus 1.00% and (C) the prime commercial lending rate publicly announced by the Term Loan Agent as the “prime rate” in effect or (2) a margin of 8.25% plus a LIBOR rate (subject to a floor of 0%) determined by reference to the cost of funds for U.S. dollar deposits, as adjusted for certain statutory reserve requirements.
Mandatory Prepayments
ABL Facility. If at any time the aggregate amount of outstanding loans, unreimbursed letter of credit drawings and outstanding letters of credit under either the U.S. ABL Facility or the Canadian ABL Facility exceeds the lesser of (i) the applicable commitment amount under such facility and (ii) the then-applicable borrowing base for such facility, Hayward Industries must repay the outstanding loans under such facility (and cash collateralize outstanding letters of credit) in an aggregate amount equal to such excess. If at any time the aggregate amount of outstanding loans, unreimbursed letter of credit drawings and outstanding letters of credit under the ABL Facility exceeds the lesser of (i) the sum of all commitments under the ABL Facility and (ii) the then-applicable U.S. Borrowing Base plus the then-applicable Canadian Borrowing Base, Hayward Industries must repay the outstanding loans under such facility (and cash collateralize outstanding letters of credit) in an aggregate amount equal to such excess.
Term Loan Facilities. The Term Loan Facilities require Hayward Industries to prepay, subject to certain exceptions, outstanding term loans with:
•
100% of net cash proceeds of any incurrence of debt, other than the net cash proceeds of certain debt permitted under the Term Loan Facilities;
•
100% of net cash proceeds above a threshold amount of certain asset sales, subject to reinvestment rights and certain other exceptions; and
•
50% (subject to step-downs to 25% and 0% based upon (x) in the case of the First Lien Term Facility, pro forma first lien net leverage ratio levels of 4.50:1.00 and 3.75:1.00, respectively, and (y) in the case of the Second Lien Term Facility, pro forma secured net leverage ratio levels of 4.75:1.00 and 4.00:1.00, respectively) of our annual excess cash flow above a certain threshold amount.
Voluntary prepayment
We may voluntarily reduce the unutilized portion of the commitment amount and repay outstanding loans under either of the Credit Facilities at any time without premium or penalty other than (i) customary “breakage” costs with respect to LIBOR borrowings and (ii) any prepayment of 2020 Incremental Term Loans made on or prior to the date that is six months after the Second Amendment Effective Date as part of a repricing transaction shall be subject to a premium of 1.00% of the applicable 2020 Incremental Term Loans in the manner outlined in the definitive documentation for the First Lien Term Facility.
Amortization and final maturity
All outstanding revolving loans under the ABL Facility and second lien term loans under the Second Lien Term Facility are due and payable in full upon the expiration of its five-year term or the eight-year term, respectively. In the case of the first lien term loans borrowed under the First Lien Term Facility other than the 2020 Incremental Term Loans, Hayward Industries is required to make scheduled quarterly payments equal to the First Amendment Amortization Percentage (as defined below) of the principal amount of the term loans as of the First Amendment Effective Date, with the balance due on August 4, 2024. In the case of the 2020 Incremental Term Loans, Hayward Industries is required to make scheduled quarterly payments equal to 0.25% of the original principal amount of the term loans incurred on the Second Amendment Effective Date, with the balance due on August 4, 2026. For the purposes hereof, the “First Amendment Amortization Percentage” means the percentage equal to the product of (x) 0.25% multiplied by (y) the result of $850,000,000 divided by $841,500,000.
Guarantees and Security
All obligations under the Credit Facilities are unconditionally guaranteed jointly and severally on a senior basis by: (i) in the case of the Term Loan Facilities, Hayward Intermediate, certain of Hayward Industries’ existing and future direct and indirect wholly-owned domestic subsidiaries (collectively, the “U.S. Guarantors”); (ii) in the case of the U.S. ABL Facility, Hayward Industries and the U.S. Guarantors (other than any such person in its capacity as a primary obligor in respect of the relevant obligation); and (iii) in the case of the Canadian ABL Facility, by each of the Canadian ABL Facility borrower’s wholly-owned Canadian subsidiaries (subject to customary exceptions), Hayward Industries and the U.S. Guarantors.
All obligations under the Credit Facilities, and the guarantees of those obligations, are secured, subject to certain exceptions, by substantially all of the assets of the Hayward Industries under each such facility and the assets of the respective guarantors under each such facility.
The assets securing the U.S. ABL Facility and the Canadian ABL Facility (the “ABL Collateral”) include a first priority (subject to permitted liens and other exceptions) security interest in Hayward Industries’ and each guarantors’ personal property, consisting of accounts receivable, inventory, cash and cash equivalents (other than cash and cash equivalents constituting proceeds of Term Loan Collateral (as defined below), cash collateral subject to certain permitted liens or certain identifiable tax and trust funds), deposit accounts and securities accounts (other than any deposit account or securities account established solely to hold identified proceeds of Term Loan Collateral), and general intangibles, instruments, chattel paper, documents, commercial tort claims, letter of credit rights and supporting obligations related to the foregoing (other than capital stock and intellectual property), intellectual property to the extent attached to or necessary to sell the foregoing and books and records to the extent related to the foregoing, and, in each case, proceeds thereof, subject to customary exceptions.
The First Lien Term Facility and the Second Lien Term Facility are secured by a second priority lien and third priority lien, respectively, on and security interest in the ABL Collateral securing the ABL Facility.
The assets securing the First Lien Term Facility and the Second Lien Term Facility (the “Term Loan Collateral”) include a first priority security interest and second priority security interest, respectively, (subject to permitted liens and other exceptions) on 100% of the present and future capital stock of Hayward Industries and the subsidiary guarantors’ direct subsidiaries (but limited in the case of the voting capital stock of any first-tier foreign subsidiary and any direct or indirect domestic subsidiary of which substantially all of its assets consist of the equity and/or debt of one or more direct or indirect foreign subsidiaries, to 65% of such capital stock), substantially all of Hayward Industries’ and the subsidiary guarantors’ material owned real property and equipment and all other personal property of Hayward Industries and the subsidiary guarantors to the extent not constituting collateral securing the ABL Facility on a first priority basis, including, without limitation, contracts (other than those relating to collateral securing the ABL Facility on a first priority basis), patents, copyrights, trademarks, other general intangibles, intercompany notes and proceeds of the foregoing, subject to customary exceptions.
The ABL Facility is secured by a third priority lien on and security interest in the Term Loan Collateral.
Certain Covenants and Events of Default
The Credit Facilities contain a number of restrictive covenants that, among other things and subject to certain exceptions, restrict the ability of Hayward Industries’ and the ability of its subsidiaries to:
•
incur additional indebtedness;
•
pay dividends on capital stock or redeem, repurchase or retire capital stock;
•
make investments, acquisitions, loans and advances;
•
create negative pledge or restrictions on the payment of dividends or payment of other amounts owed from subsidiaries;
•
engage in transactions with affiliates;
•
sell, transfer or otherwise dispose of assets, including capital stock of subsidiaries;
•
materially alter the conduct of the business;
•
modify certain material documents;
•
change the fiscal year;
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consolidate, merge, liquidate or dissolve;
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incur liens; and
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make prepayments of subordinated or junior debt.
Hayward Intermediate is also subject to a “passive holding company” covenant under the Credit Facilities.
In addition, the ABL Facility contains a financial covenant requiring Hayward Industries to maintain a 1.0:1.0 minimum trailing four quarter fixed charge coverage ratio, to be tested at any time that excess availability under the ABL Facility decreases to a level below the greater of 10% of the Line Cap (as defined below) and either (i) $20.0 million if calculated from January 1 to July 31 of any year or (ii) $10.0 million if calculated from August 1 to December 1 of any year until the date on which excess availability for each day over a 30 consecutive day period exceeds the greater of 10% of the Line Cap and either (i) $20.0 million if calculated from January 1 to July 31 of any year or (ii) $10.0 million if calculated from August 1 to December 1 of any year. As used herein “Line Cap” means the lesser of (i) the aggregate commitments under the ABL Facility and (ii) the sum of the then-applicable U.S. borrowing base plus the then-applicable Canadian borrowing base.
The Credit Facilities also contain certain customary representations and warranties, affirmative covenants and reporting obligations. In addition, the lenders under the Credit Facilities are permitted to accelerate the loans and terminate commitments thereunder or exercise other specified remedies available to secured creditors upon the occurrence of certain events of default, subject to certain grace periods and
exceptions, which include, among others, payment defaults, breaches of representations and warranties, covenant defaults, cross-defaults to certain material indebtedness, certain events of bankruptcy, certain events under the Employee Retirement Income Security Act of 1974, as amended, material judgments and changes of control.
DESCRIPTION OF CAPITAL STOCK
General
Upon the closing of this offering, the total amount of our authorized capital stock will consist of shares of common stock, par value $0.001 per share and shares of undesignated preferred stock. As of December 31, 2020, we had outstanding 869,822.82 shares of Class A stock (including 949.49 shares of Class A restricted stock), 14,220.17 shares of Class B common stock (including 12,620.17 shares of Class B restricted common stock) and 100 shares of Class C stock.
As of December 31, 2020, we had 103 stockholders of record of Class A stock (including 1 holder of Class A restricted stock), 19 stockholders of record of Class B common stock (including 17 holders of Class B restricted common stock) and two stockholders of record of Class C stock and had outstanding options to purchase 67,949.20 restricted shares of Class B common stock, which options were exercisable at a weighted average exercise price of $209.80 per share.
Prior to the completion of this offering, we will reclassify our Class B common stock into common stock and then effect a -for-1 split of our common stock. In addition, following the reclassification of our Class B common stock and the stock split of our common stock and prior to the completion of this offering, (i) we will convert each outstanding share of our Class A stock into shares of our common stock plus an additional number of shares determined by dividing (a) the Class A Preference Amount of such share of Class A stock as adjusted to give effect to the stock split of our common stock, or $ per share, by (b) the initial public offering price of a share of our common stock in this offering, net of the per share underwriting discount, rounded to the nearest whole share, and (ii) we will redeem each outstanding share of our Class C stock for an aggregate price of $1.00. See “The Reclassification.”
After giving effect to this offering, we will have shares of common stock and no shares of preferred stock outstanding. The following summary describes all material provisions of our capital stock. We urge you to read our second restated certificate of incorporation and amended and restated bylaws, each of which will be in effect upon the completion of this offering, the forms of which are filed as exhibits to the registration statement of which this prospectus is a part.
Our second restated certificate of incorporation and amended and restated bylaws will contain provisions that are intended to enhance the likelihood of continuity and stability in the composition of the Board of Directors and which may have the effect of delaying, deferring or preventing a future takeover or change in control of our company unless such takeover or change in control is approved by our Board of Directors. These provisions include a classified board of directors, elimination of the ability of stockholders to call special meetings (except that the holders of 50% or more of the outstanding shares of our common stock may request that the Secretary call special meetings so long as the Sponsors beneficially own a majority of the outstanding shares of our common stock), advance notice procedures for stockholder proposals and the ability of our Board of Directors to issue preferred stock without stockholder approval that could be used to dilute a potential hostile acquiror.
Common Stock
Dividend Rights
Subject to preferences that may apply to shares of preferred stock outstanding at the time, holders of outstanding shares of our common stock will be entitled to receive dividends out of assets legally available at the times and in the amounts as the Board of Directors may from time to time determine.
Voting Rights
Each outstanding share of our common stock will be entitled to one vote on all matters submitted to a vote of stockholders. Holders of shares of our common stock shall have no cumulative voting rights.
Except as otherwise required under the Delaware General Corporation Law (the “DGCL”) or provided for in our second restated certificate of incorporation, all matters other than the election of directors will be determined by a majority of the votes cast on the matter and all elections of directors will
be determined by a plurality of the votes cast. Any director may resign at any time upon notice given in writing, including by electronic transmission, to the Company. Vacancies and newly-created directorships shall be filled exclusively by vote of a majority of the directors then in office, even if less than a quorum, or by a sole remaining director, except that any vacancy created by the removal of a director by the stockholders for cause shall be filled by vote of a majority of the outstanding shares of our common stock. No decrease in the number of directors constituting the Board of Directors shall shorten the term of any incumbent director.
Preemptive Rights
Our common stock will not be entitled to preemptive or other similar subscription rights to purchase any of our securities.
Conversion or Redemption Rights
Our common stock will not have any conversion rights and there will be no redemption or sinking fund provisions applicable to our common stock.
Liquidation Rights
Upon our liquidation, the holders of our common stock will be entitled to receive pro rata our assets that are legally available for distribution, after payment of all debts and other liabilities and subject to the prior rights of any holders of preferred stock then outstanding.
Stock Exchange Listing
We intend to apply to list our common stock on the New York Stock Exchange under the symbol “HAYW.”
Preferred Stock
Our second restated certificate of incorporation will authorize our Board of Directors to establish one or more series of preferred stock (including convertible preferred stock). Once effective, our Board of Directors may, without further action by our stockholders, from time to time, direct the issuance of shares of preferred stock in series and may, at the time of issuance, determine the designations, powers, preferences, privileges, and relative participating, optional or special rights as well as the qualifications, limitations or restrictions thereof, including dividend rights, conversion rights, voting rights, terms of redemption and liquidation preferences, any or all of which may be greater than the rights of the common stock. Satisfaction of any dividend preferences of outstanding shares of preferred stock would reduce the amount of funds available for the payment of dividends on shares of our common stock. Holders of shares of preferred stock may be entitled to receive a preference payment in the event of our liquidation before any payment is made to the holders of shares of our common stock. Under certain circumstances, the issuance of shares of preferred stock may render more difficult or tend to discourage a merger, tender offer or proxy contest, the assumption of control by a holder of a large block of our securities or the removal of incumbent management. Upon the affirmative vote of a majority of the total number of directors then in office, our Board of Directors, without stockholder approval, may issue shares of preferred stock with voting and conversion rights which could adversely affect the holders of shares of our common stock and the market value of our common stock. Upon consummation of this offering, there will be no shares of preferred stock outstanding, and we have no present intention to issue any shares of preferred stock.
Anti-Takeover Effects of Our Second Restated Certificate of Incorporation and Amended and Restated Bylaws and Certain Provisions of Delaware Law
Our second restated certificate of incorporation and amended and restated bylaws will contain certain provisions that are intended to enhance the likelihood of continuity and stability in the composition of the Board of Directors and which may have the effect of delaying, deferring or preventing a future takeover or change in control of the company unless such takeover or change in control is approved by the Board of Directors.
These provisions include:
Classified Board. Our second restated certificate of incorporation will provide that our Board of Directors will be divided into three classes of directors, with the classes as nearly equal in number as possible. As a result, approximately one-third of our Board of Directors will be elected each year. The classification of directors will have the effect of making it more difficult for stockholders to change the composition of our board. Our second restated certificate of incorporation will also provide that, subject to any rights of holders of preferred stock to elect additional directors under specified circumstances, the number of directors will be fixed exclusively pursuant to a resolution adopted by our Board of Directors. Upon completion of this offering, our Board of Directors will have members.
Special Meetings of Stockholders. Our second restated certificate of incorporation and amended and restated bylaws will provide that, except as otherwise required by law, special meetings of the stockholders may be called only (i) by our chairperson of the Board of Directors, (ii) by a resolution adopted by a majority of our Board of Directors, or (iii) by our Secretary at the request of the holders of 50% or more of the outstanding shares of our common stock so long as the Sponsors beneficially own a majority of the outstanding shares of our common stock.
Removal of Directors. Our second restated certificate of incorporation will provide that, so long as the Sponsors beneficially own a majority of the outstanding shares of our common stock, our directors may be removed only for cause by the affirmative vote of a majority of the voting power of our outstanding shares of capital stock entitled to vote generally in the election of directors, voting together as a single class. Following the date on which the Sponsors no longer beneficially own a majority of the outstanding shares of our common stock, no member of our Board of Directors may be removed from office except for cause by the affirmative vote of the holders of at least seventy-five percent (75%) of the voting power of our outstanding shares of capital stock entitled to vote thereon.
Elimination of Stockholder Action by Written Consent. Our second restated certificate of incorporation will eliminate the right of stockholders to act by written consent without a meeting following the date on which the Sponsors no longer beneficially own a majority of the outstanding shares of our common stock.
Advance Notice Procedures. Our amended and restated bylaws will establish an advance notice procedure for stockholder proposals to be brought before an annual meeting of our stockholders, including proposed nominations of persons for election to the Board of Directors. Stockholders at an annual meeting will only be able to consider proposals or nominations specified in the notice of meeting or brought before the meeting by or at the direction of the Board of Directors or by a stockholder who was a stockholder of record on the record date for the meeting, who is entitled to vote at the meeting and who has given our Secretary timely written notice, in proper form, of the stockholder’s intention to bring that business before the meeting. Although the bylaws will not give the Board of Directors the power to approve or disapprove stockholder nominations of candidates or proposals regarding other business to be conducted at a special or annual meeting, the bylaws may have the effect of precluding the conduct of certain business at a meeting if the proper procedures are not followed or may discourage or deter a potential acquiror from conducting a solicitation of proxies to elect its own slate of directors or otherwise attempting to obtain control of the company.
Authorized but Unissued Shares. Our authorized but unissued shares of common stock and preferred stock will be available for future issuance without stockholder approval. These additional shares may be utilized for a variety of corporate purposes, including future public offerings to raise additional capital, corporate acquisitions and employee benefit plans. The existence of authorized but unissued shares of common stock and preferred stock could render more difficult or discourage an attempt to obtain control of a majority of our common stock by means of a proxy contest, tender offer, merger or otherwise.
Business Combinations with Interested Stockholders. We will elect in our second restated certificate of incorporation not to be subject to Section 203 of the DGCL, an antitakeover law. In general, Section 203 prohibits a publicly held Delaware corporation from engaging in a business combination, such as a merger, with a person or group owning 15% or more of the Company’s voting stock for a period of three years following the date the person became an interested stockholder, unless (with certain exceptions)
the business combination or the transaction in which the person became an interested stockholder is approved in a prescribed manner. Accordingly, we are not subject to any anti-takeover effects of Section 203. However, our second restated certificate of incorporation will contain provisions that have the same effect as Section 203, except that they provide that the Sponsors and their respective successors, transferees and affiliates will not be deemed to be “interested stockholders,” regardless of the percentage of our voting stock owned by them, and accordingly will not be subject to such restrictions.
Choice of Forum. Our second restated certificate of incorporation will provide that, subject to limited exceptions, the Court of Chancery of the State of Delaware (or, if, and only if, the Court of Chancery of the State of Delaware dismisses a Covered Claim (as defined below) for lack of subject matter jurisdiction, any other state or federal court in the State of Delaware that does have subject matter jurisdiction) will, to the fullest extent permitted by applicable law, be the sole and exclusive forum for the following types of claims: (i) any derivative claim brought in the right of the Company, (ii) any claim asserting a breach of a fiduciary duty to the Company or the Company’s stockholders owed by any current or former director, officer or other employee or stockholder of the Company, (iii) any claim against the Company arising pursuant to any provision of the DGCL, our second restated certificate of incorporation or amended and restated bylaws, (iv) any claim to interpret, apply, enforce or determine the validity of our second restated certificate of incorporation or our amended and restated bylaws, (v) any claim against the Company governed by the internal affairs doctrine, and (vi) any other claim, not subject to exclusive federal jurisdiction and not asserting a cause of action arising under the Securities Act, as amended, brought in any action asserting one or more of the claims specified in clauses (a)(i) through (v) herein above (each a “Covered Claim”). This provision would not apply to claims brought to enforce a duty or liability created by the Exchange Act.
Our second restated certificate of incorporation will further provide that the federal district courts of the United States of America will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act. In addition, our second restated certificate of incorporation will provide that any person or entity purchasing or otherwise acquiring any interest in the shares of capital stock of the Company will be deemed to have notice of and consented to these choice-of-forum provisions and waived any argument relating to the inconvenience of the forums in connection with any Covered Claim.
The choice of forum provisions to be contained in our second restated certificate of incorporation may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or any of our directors, officers, other employees or stockholders, which may discourage lawsuits with respect to such claims, although our stockholders will not be deemed to have waived our compliance with federal securities laws and the rules and regulations thereunder. While the Delaware courts have determined that such choice of forum provisions are facially valid, it is possible that a court of law in another jurisdiction could rule that the choice of forum provisions to be contained in our second restated certificate of incorporation are inapplicable or unenforceable if they are challenged in a proceeding or otherwise, which could cause us to incur additional costs associated with resolving such action in other jurisdictions.
Amendment of Charter Provisions and Bylaws. The amendment of any of the above provisions, following the date on which the Sponsors no longer beneficially own a majority of the outstanding shares of our common stock, except for the provision making it possible for our Board of Directors to issue preferred stock, would require the affirmative vote of the holders of at least seventy-five percent (75%) of the voting power of our outstanding shares of capital stock entitled to vote thereon.
The provisions of Delaware law, our second restated certificate of incorporation and our amended and restated bylaws could have the effect of discouraging others from attempting hostile takeovers and, as a consequence, they may also inhibit temporary fluctuations in the market price of our common stock that often result from actual or rumored hostile takeover attempts. These provisions may also have the effect of preventing changes in the composition of our board and management. It is possible that these provisions could make it more difficult to accomplish transactions that stockholders may otherwise deem to be in their best interests.
Corporate Opportunities
Our second restated certificate of incorporation will provide that we renounce any interest or expectancy in the business opportunities of the Sponsors and all of their respective all of their respective
partners, principals, directors, officers, members, managers and/or employees, including any of the foregoing who serve as directors of the Company, and each such party shall not have any obligation to offer us those opportunities.
Limitations on Liability and Indemnification of Officers and Directors
Our second restated certificate of incorporation will limit the liability of our directors to the fullest extent permitted by the DGCL or any other law of the state of Delaware and our bylaws will provide that we may indemnify our directors and our officers that are appointed by the Board of Directors to the fullest extent permitted by applicable law. We expect to enter into indemnification agreements with our current directors and executive officers prior to the completion of this offering and expect to enter into a similar agreement with any new directors or executive officers. We expect to increase our directors’ and officers’ liability insurance coverage prior to the completion of this offering.
Transfer Agent and Registrar
The transfer agent and registrar for our common stock will be . Its address is . Its telephone number is .
SHARES ELIGIBLE FOR FUTURE SALE
Upon completion of this offering, we will have a total of shares of our common stock outstanding ( shares if the underwriters exercise in full their option to purchase additional shares in this offering). Of the outstanding shares of common stock, the shares sold in this offering by us or the selling stockholders (or shares if the underwriters exercise in full their option to purchase additional shares in this offering) will be freely tradable without restriction or further registration under the Securities Act, except that any shares held by our affiliates, as that term is defined under Rule 144 of the Securities Act (“Rule 144”), including our directors, executive officers and other affiliates (including affiliates of the Sponsors), may be sold only in compliance with the limitations described below.
The shares of common stock held by the Sponsors and by certain of our directors and executive officers after this offering, including shares of restricted stock held by Mr. Holleran that will vest upon completion of this offering, representing % of the total outstanding shares of our common stock following this offering, will be deemed “restricted securities” under the meaning of Rule 144 and may be sold in the public market only if registered under the Securities Act or if an exemption from registration is available, including the exemptions pursuant to Rule 144 and Rule 701 under the Securities Act (“Rule 701”), which we summarize below.
In addition, shares of common stock may be granted under our 2017 Plan, shares of our common stock will be authorized and reserved for issuance in relation to potential future awards under our 2021 Plan and shares of our common stock will be authorized and reserved for issuance under our ESPP.
Prior to this offering, there has not been a public market for our common stock, and we cannot predict what effect, if any, market sales of shares of common stock or the availability of shares of common stock for sale will have on the market price of our common stock prevailing from time to time. Nevertheless, sales of substantial amounts of common stock, including shares issued upon the exercise of outstanding options, in the public market, or the perception that such sales could occur, could materially and adversely affect the market price of our common stock and could impair our future ability to raise capital through the sale of our equity or equity-related securities at a time and price that we deem appropriate. See “Risk Factors—Risks Related to this Offering and Ownership of Our Common Stock—There may be sales of a substantial amount of our common stock after this offering by our current stockholders, and these sales could cause the price of our common stock to fall.”
Our second restated certificate of incorporation will authorize us to issue additional shares of common stock for the consideration and on the terms and conditions established by our Board of Directors in its sole discretion. In accordance with the DGCL and the provisions of our second restated certificate of incorporation, we may also issue preferred stock that has designations, preferences, rights, powers, and duties that are different from, and may be senior to, those applicable to shares of common stock. See “Description of Capital Stock.”
Rule 144
In general, under Rule 144, as currently in effect, once we have been subject to public company reporting requirements for at least 90 days, a person (or persons whose shares are aggregated) who is not deemed to be or have been one of our affiliates for purposes of the Securities Act at any time during 90 days preceding a sale and who has beneficially owned the shares proposed to be sold for at least six months, including the holding period of any prior owner other than an affiliate, is entitled to sell such shares without complying with the manner of sale, volume limitation or notice provisions of Rule 144, subject to compliance with the public information requirements of Rule 144. If such a person has beneficially owned the shares proposed to be sold for at least one year, including the holding period of a prior owner other than an affiliate, then such person is entitled to sell such shares without complying with any of the requirements of Rule 144.
In general, under Rule 144, as currently in effect, our affiliates or persons selling shares of our common stock on behalf of our affiliates, who have met the six month holding period for beneficial ownership of “restricted shares” of our common stock, are entitled to sell upon the expiration of the
lock-up agreements described below, within any three-month period beginning 90 days after the date of this prospectus, a number of shares that does not exceed the greater of:
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1% of the number of shares of our common stock then outstanding, which will equal approximately shares immediately after this offering (or shares if the underwriters exercise in full their option to purchase additional shares); or
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the average reported weekly trading volume of our common stock on the during the four calendar weeks preceding the filing of a notice on Form 144 with respect to such sale.
Sales under Rule 144 by our affiliates or persons selling shares on behalf of our affiliates are also subject to certain manner of sale provisions and notice requirements and to the availability of current public information about us. The sale of these shares, or the perception that sales will be made, could adversely affect the price of our common stock after this offering because a great supply of shares would be, or would be perceived to be, available for sale in the public market.
Rule 701
In general, under Rule 701 as currently in effect, any of our employees, directors, officers, consultants or advisors who received shares from us in connection with a compensatory stock or option plan or other written agreement before the effective date of this offering are entitled to sell such shares 90 days after the effective date of this offering in reliance on Rule 144, in the case of affiliates, without having to comply with the holding period requirements of Rule 144 and, in the case of non-affiliates, without having to comply with the public information, holding period, volume limitation or notice filing requirements of Rule 144.
Lock-Up Agreements
In connection with this offering, we, our directors and executive officers, the selling stockholders and substantially all holders of our common stock will sign lock-up agreements with the underwriters that will, subject to certain exceptions, restrict the disposition of, or hedging with respect to, the shares of our common stock or securities convertible into or exchangeable for shares of our common stock each held by them, during the period ending 180 days after the date of this prospectus, except with the prior written consent of BofA Securities, Inc. and Goldman Sachs & Co. LLC. See “Underwriting” for a description of these lock-up agreements.
Registration Statement on Form S-8
As promptly as possible after the completion of this offering, we intend to file a registration statement on Form S-8 under the Securities Act to register all of the shares of our common stock issued or reserved for future issuance under our equity incentive plans. This registration statement would cover approximately shares. Shares registered under the registration statement will generally be available for sale in the open market after the 180-day lock-up period immediately following the date of this prospectus.
Registration Rights
Beginning 180 days after the date of this prospectus, subject to certain exceptions, holders of shares of our common stock will be entitled to the registration rights described under “Certain Relationships and Related Party Transactions—Amended and Restated Stockholders Agreement.” Registration of these shares under the Securities Act would result in these shares becoming freely tradable without restriction under the Securities Act immediately upon effectiveness of the registration.
CERTAIN UNITED STATES FEDERAL INCOME AND ESTATE TAX
CONSEQUENCES TO NON-U.S. HOLDERS
The following is a summary of certain United States federal income and estate tax consequences to non-U.S. holders, defined below, of the purchase, ownership and disposition of shares of our common stock as of the date hereof. Except where noted, this summary relates only to shares of common stock purchased in this offering that are held as capital assets by a non-U.S. holder.
A “non-U.S. holder” means a beneficial owner of shares of our common stock (other than an entity treated as a partnership for United States federal income tax purposes) that, for United States federal income tax purposes, is not any of the following:
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an individual who is a citizen or resident of the United States;
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a corporation (or any other entity treated as a corporation for United States federal income tax purposes) created or organized in or under the laws of the United States, any state thereof or the District of Columbia;
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an estate the income of which is subject to United States federal income taxation regardless of its source; or
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a trust if it (1) is subject to the primary supervision of a court within the United States and one or more United States persons have the authority to control all substantial decisions of the trust or (2) has a valid election in effect under applicable United States Treasury regulations to be treated as a United States person.
This summary is based upon provisions of the United States Internal Revenue Code of 1986, as amended, or the Code, applicable United States Treasury regulations (“Treasury Regulations”), rulings and judicial decisions, all as of the date hereof. Those authorities are subject to different interpretations and may be changed, perhaps retroactively, so as to result in United States federal income and estate tax consequences different from those summarized below. This summary does not address all aspects of United States federal income and estate taxes and does not deal with foreign, state, local, alternative minimum or other tax considerations that may be relevant to non-U.S. holders in light of their particular circumstances (including the Medicare contribution tax on net investment income). In addition, this summary does not represent a detailed description of the United States federal income and estate tax consequences applicable to you if you are subject to special treatment under the United States federal income tax laws (including but not limited to if you are a United States expatriate, financial institution, insurance company, tax-exempt organization, trader, broker or dealer in securities, “controlled foreign corporation,” “passive foreign investment company,” a partnership or other pass-through entity for United States federal income tax purposes (or an investor in such a pass-through entity), a person who acquired shares of our common stock as compensation or otherwise in connection with the performance of services, or a person who has acquired shares of our common stock as part of a straddle, hedge, conversion transaction or other integrated investment). We cannot assure you that a change in law will not alter significantly the tax considerations that we describe in this summary.
If any entity or arrangement treated as a partnership for United States federal income tax purposes holds shares of our common stock, the tax treatment of a partner will generally depend upon the status of the partner and the activities of the partnership. If you are a partner of a partnership holding shares of our common stock, you should consult your tax advisors.
If you are considering the purchase of shares of our common stock, you should consult your own tax advisors concerning the particular United States federal income and estate tax consequences to you of the ownership and disposition of the shares of common stock, as well as the consequences to you arising under the laws of any other applicable taxing jurisdiction in light of your particular circumstances.
Dividends
Cash distributions on shares of our common stock will constitute dividends for United States federal income tax purposes to the extent paid from our current or accumulated earnings and profits, as determined under United States federal income tax principles. To the extent those distributions exceed both
our current and our accumulated earnings and profits, they will constitute a return of capital and will first reduce your tax basis in our common stock, but not below zero, and then will be treated as gain from the sale of our common stock, as described below under “— Gain on Disposition of Common Stock.”
Dividends paid to a non-U.S. holder generally will be subject to withholding of United States federal income tax at a 30% rate, or such lower rate as may be specified by an applicable income tax treaty. However, dividends that are effectively connected with the conduct of a trade or business by the non-U.S. holder within the United States (and, if required by an applicable income tax treaty, are attributable to a United States permanent establishment) generally will not be subject to such withholding tax, provided certain certification and disclosure requirements are satisfied. Instead, such dividends generally will be subject to United States federal income tax on a net income basis in the same manner as if the non-U.S. holder were a United States person as defined under the Code. A corporate non-U.S. holder may be subject to an additional “branch profits tax” at a 30% rate (or such lower rate as may be specified by an applicable income tax treaty) on earnings and profits attributable to such dividends that are effectively connected with its United States trade or business (and, if an income tax treaty applies, are attributable to its United States permanent establishment).
A non-U.S. holder of shares of our common stock who wishes to claim the benefit of an applicable treaty rate and avoid backup withholding, as discussed below, for dividends will be required (a) to complete the applicable Internal Revenue Service, or IRS, Form W-8 and certify under penalty of perjury that such holder is not a United States person as defined under the Code and is eligible for treaty benefits or (b) if shares of our common stock are held through certain foreign intermediaries, to satisfy the relevant certification requirements of applicable United States Treasury regulations. Special certification and other requirements apply to certain non-U.S. holders that are pass-through entities rather than corporations or individuals.
A non-U.S. holder of shares of our common stock eligible for a reduced rate of United States withholding tax pursuant to an income tax treaty may obtain a refund of any excess amounts withheld by timely filing an appropriate claim for refund with the IRS.
Gain on Disposition of Common Stock
Subject to the discussion of backup withholding and FATCA below, any gain realized by a non-U.S. holder on the disposition of shares of our common stock generally will not be subject to United States federal income tax unless:
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the gain is effectively connected with a trade or business of the non-U.S. holder in the United States (and, if required by an applicable income tax treaty, is attributable to a United States permanent establishment of the non-U.S. holder);
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the non-U.S. holder is an individual who is present in the United States for 183 days or more in the taxable year of that disposition, and certain other conditions are met; or
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we are or have been a “United States real property holding corporation” for United States federal income tax purposes and certain other conditions are met.
In the case of a non-U.S. holder described in the first bullet point above, any gain will be subject to United States federal income tax on a net income basis generally in the same manner as if the non-U.S. holder were a United States person as defined under the Code, and a non-U.S. holder that is a foreign corporation may also be subject to the branch profits tax equal to 30% of its effectively connected earnings and profits attributable to such gain (or, if an income tax treaty applies, at such lower rate as may be specified by the treaty on its gains attributable to its United States permanent establishment). Except as otherwise provided by an applicable income tax treaty, an individual non-U.S. holder described in the second bullet point above will be subject to a 30% tax on any gain derived from the sale, which may be offset by certain United States source capital losses, even though the individual is not considered a resident of the United States under the Code, provided the non-U.S. holder has timely filed United States federal income tax returns with respect to such losses.
With respect to the third bullet point above, we believe we currently are not, and we do not anticipate becoming, a USRPHC. Because the determination of whether we are a USRPHC depends on the
fair market value of our USRPIs relative to the fair market value of our non-U.S. real property interests and our other business assets, there can be no assurance that we are not currently a USRPHC and that we will not become a USRPHC in the future. Even if we are or were to become a USRPHC, gain arising from the sale or other taxable disposition by a non-U.S. holder of shares of our common stock will not be subject to U.S. federal income tax if shares of our common stock are “regularly traded” (as defined by applicable Treasury Regulations) on an established securities market, and such non-U.S. holder owned, actually and constructively, 5% or less of shares of our common stock throughout the shorter of the five-year period ending on the date of the sale or other taxable disposition or the non-U.S. holder’s holding period.
Non-U.S. holders should consult their tax advisors regarding any applicable income tax treaties that may provide for different rules.
Federal Estate Tax
Shares of our common stock that are owned (or treated as owned) by an individual who is not a citizen or resident of the United States (as specially defined for United States federal estate tax purposes) at the time of death will be included in such individual’s gross estate for United States federal estate tax purposes, unless an applicable estate or other tax treaty provides otherwise, and therefore may be subject to United States federal estate tax.
Information Reporting and Backup Withholding
Dividends paid to a non-U.S. holder and the amount of any tax withheld with respect to such dividends generally will be reported to the IRS, regardless of whether withholding was required. Copies of the information returns reporting such dividends and withholding may also be made available to the tax authorities in the country in which the non-U.S. holder resides under the provisions of an applicable income tax treaty or agreement.
A non-U.S. holder will be subject to backup withholding for dividends paid to such holder unless such holder certifies under penalty of perjury that it is not a United States person as defined under the Code (and the payor does not have actual knowledge or reason to know that such holder is a United States person as defined under the Code), or such holder otherwise establishes an exemption.
Information reporting and, depending on the circumstances, backup withholding will apply to the proceeds of a sale of shares of our common stock within the United States or conducted through certain United States-related financial intermediaries, unless the beneficial owner certifies under penalty of perjury that it is not a United States person as defined under the Code (and the payor does not have actual knowledge or reason to know that the beneficial owner is a United States person as defined under the Code), or such owner otherwise establishes an exemption.
Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be allowed as a refund or a credit against a non-U.S. holder’s United States federal income tax liability provided the required information is timely furnished to the IRS.
Additional FATCA Withholding Requirements
Sections 1471 through 1474 of the Code and related Treasury Regulations, together with other Treasury Department or IRS guidance issued thereunder, and intergovernmental agreements, legislation, rules and other official guidance adopted pursuant to such intergovernmental agreements (commonly referred to as “FATCA”) generally impose a U.S. federal withholding tax of 30% on certain payments, including dividends on our common stock, to certain non-U.S. entities (including certain intermediaries) unless such persons establish that they are compliant with or exempt from FATCA. This regime requires, among other things, a broad class of persons to enter into agreements with the IRS to obtain, disclose and report information about their investors and account holders. An intergovernmental agreement between the U.S. and an applicable foreign country may, however, modify these requirements. Prospective investors should consult their own tax advisors regarding the possible impact of these rules on their investment in our common stock, and the possible impact of these rules on the entities through which they hold our common stock.
Under the applicable Treasury Regulations and administrative guidance, withholding under FATCA generally applies to payments of dividends on shares of our common stock to such applicable non-U.S. entities that fail to establish they are compliant with or exempt from FATCA. While withholding under FATCA would have also applied to payments of gross proceeds from the sale or other disposition of stock on or after January 1, 2019 by such applicable non-U.S. entities, proposed Treasury Regulations eliminate FATCA withholding on payments of gross proceeds from the sale or other disposition of stock entirely. Taxpayers generally may rely on these proposed Treasury Regulations until final Treasury Regulations are issued.
Prospective investors should consult their tax advisors regarding the potential application of withholding under FATCA to their investment in shares of our common stock.
UNDERWRITING
BofA Securities, Inc., Goldman Sachs & Co. LLC and Nomura Securities International, Inc., are acting as representatives of each of the underwriters named below. Subject to the terms and conditions set forth in an underwriting agreement among us, the selling stockholders and the underwriters, we and the selling stockholders have agreed to sell to the underwriters, and each of the underwriters has agreed, severally and not jointly, to purchase from us and the selling stockholders, the number of shares of common stock set forth opposite its name below.
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Underwriter
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Number
of Shares
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BofA Securities, Inc.
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Goldman Sachs & Co. LLC
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Nomura Securities International, Inc.
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Credit Suisse Securities (USA) LLC
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Morgan Stanley & Co. LLC
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Robert W. Baird & Co. Incorporated
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Guggenheim Securities, LLC
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Jefferies LLC
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BMO Capital Markets Corp.
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KeyBanc Capital Markets Inc.
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William Blair & Company, L.L.C.
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Houlihan Lokey Capital, Inc.
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Moelis & Company LLC
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Total
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Subject to the terms and conditions set forth in the underwriting agreement, the underwriters have agreed, severally and not jointly, to purchase all of the shares sold under the underwriting agreement if any of these shares are purchased. If an underwriter defaults, the underwriting agreement provides that the purchase commitments of the nondefaulting underwriters may be increased or the underwriting agreement may be terminated.
We and the selling stockholders have agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act, or to contribute to payments the underwriters may be required to make in respect of those liabilities.
The underwriters are offering the shares, subject to prior sale, when, as and if issued to and accepted by them, subject to approval of legal matters by their counsel, including the validity of the shares, and other conditions contained in the underwriting agreement, such as the receipt by the underwriters of officer’s certificates and legal opinions. The underwriters reserve the right to withdraw, cancel or modify offers to the public and to reject orders in whole or in part. The underwriters may offer and sell shares through certain of their affiliates or other registered broker-dealers or selling agents.
Commissions and Discounts
The representatives have advised us and the selling stockholders that the underwriters propose initially to offer the shares to the public at the public offering price set forth on the cover page of this prospectus and to dealers at that price less a concession not in excess of $ per share. After the initial offering, the public offering price, concession or any other term of the offering may be changed.
The following table shows the public offering price, underwriting discount and proceeds before expenses to us and the selling stockholders. The information assumes either no exercise or full exercise by the underwriters of their option to purchase additional shares.
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Per Share
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Without Option
|
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With Option
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Public offering price
|
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$
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$
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|
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$
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|
Underwriting discount
|
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$
|
|
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$
|
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$
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Proceeds, before expenses, to us
|
|
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$
|
|
|
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$
|
|
|
|
|
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$
|
|
|
|
|
Proceeds, before expenses, to the selling stockholders
|
|
|
|
$
|
|
|
|
|
|
$
|
|
|
|
|
|
$
|
|
|
|
The expenses of the offering, not including the underwriting discount, are estimated at $ and are payable by us. We have agreed to reimburse the underwriters for expenses relating to clearance of this offering with the Financial Industry Regulatory Authority and other regulatory fees up to $ .
Option to Purchase Additional Shares
We and the selling stockholders have granted an option to the underwriters, exercisable for 30 days after the date of this prospectus, to purchase up to additional shares at the public offering price, less the underwriting discount. If the underwriters exercise this option, each will be obligated, subject to conditions contained in the underwriting agreement, to purchase a number of additional shares proportionate to that underwriter’s initial amount reflected in the above table.
No Sales of Similar Securities
We and the selling stockholders, our executive officers and directors and our other existing security holders have agreed not to sell or transfer any common stock or securities convertible into, exchangeable for, exercisable for, or repayable with common stock, for 180 days after the date of this prospectus without first obtaining the written consent of at least two of the three representatives of the underwriters. Specifically, we and these other persons have agreed, with certain limited exceptions, not to directly or indirectly
•
offer, pledge, sell or contract to sell any common stock,
•
sell any option or contract to purchase any common stock,
•
purchase any option or contract to sell any common stock,
•
grant any option, right or warrant for the sale of any common stock,
•
lend or otherwise dispose of or transfer any common stock,
•
request or demand that we file or make a confidential submission of a registration statement related to the common stock, or
•
enter into any swap or other agreement that transfers, in whole or in part, the economic consequence of ownership of any common stock whether any such swap or transaction is to be settled by delivery of shares or other securities, in cash or otherwise.
This lock-up provision applies to common stock and to securities convertible into or exchangeable or exercisable for or repayable with common stock. It also applies to common stock owned now or acquired later by the person executing the agreement or for which the person executing the agreement later acquires the power of disposition.
Listing
We expect the shares to be approved for listing on the New York Stock Exchange under the symbol “HAYW.”
Directed Share Program
At our request, the underwriters have reserved for sale, at the initial public offering price, up to % of the shares offered by this prospectus for sale to some of our directors, officers, employees and related persons through a directed share program. If these persons purchase reserved shares, this will reduce
the number of shares available for sale to the general public. Any reserved shares that are not so purchased will be offered by the underwriters to the general public on the same terms as the other shares offered by this prospectus.
Determination of Offering Price
Before this offering, there has been no public market for our common stock. The initial public offering price will be determined through negotiations among us, the selling stockholders and the representatives. In addition to prevailing market conditions, the factors to be considered in determining the initial public offering price are
•
the valuation multiples of publicly traded companies that the representatives believe to be comparable to us,
•
our financial information,
•
the history of, and the prospects for, our company and the industry in which we compete,
•
an assessment of our management, its past and present operations, and the prospects for, and timing of, our future revenues,
•
the present state of our development, and
•
the above factors in relation to market values and various valuation measures of other companies engaged in activities similar to ours.
An active trading market for the shares may not develop. It is also possible that after the offering the shares will not trade in the public market at or above the initial public offering price.
The underwriters do not expect to sell more than 5% of the shares in the aggregate to accounts over which they exercise discretionary authority.
Price Stabilization, Short Positions and Penalty Bids
Until the distribution of the shares is completed, SEC rules may limit underwriters and selling group members from bidding for and purchasing our common stock. However, the representatives may engage in transactions that stabilize the price of the common stock, such as bids or purchases to peg, fix or maintain that price.
In connection with the offering, the underwriters may purchase and sell our common stock in the open market. These transactions may include short sales, purchases on the open market to cover positions created by short sales and stabilizing transactions. Short sales involve the sale by the underwriters of a greater number of shares than they are required to purchase in the offering. “Covered” short sales are sales made in an amount not greater than the underwriters’ option to purchase additional shares described above. The underwriters may close out any covered short position by either exercising their option to purchase additional shares or purchasing shares in the open market. In determining the source of shares to close out the covered short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase shares through the option granted to them. “Naked” short sales are sales in excess of such option. The underwriters must close out any naked short position by purchasing shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of our common stock in the open market after pricing that could adversely affect investors who purchase in the offering. Stabilizing transactions consist of various bids for or purchases of shares of common stock made by the underwriters in the open market prior to the completion of the offering.
The underwriters may also impose a penalty bid. This occurs when a particular underwriter repays to the underwriters a portion of the underwriting discount received by it because the representatives have repurchased shares sold by or for the account of such underwriter in stabilizing or short covering transactions.
Similar to other purchase transactions, the underwriters’ purchases to cover the syndicate short sales may have the effect of raising or maintaining the market price of our common stock or preventing or
retarding a decline in the market price of our common stock. As a result, the price of our common stock may be higher than the price that might otherwise exist in the open market. The underwriters may conduct these transactions on the New York Stock Exchange, in the over-the-counter market or otherwise.
Neither we nor any of the underwriters make any representation or prediction as to the direction or magnitude of any effect that the transactions described above may have on the price of our common stock. In addition, neither we nor any of the underwriters make any representation that the representatives will engage in these transactions or that these transactions, once commenced, will not be discontinued without notice.
Electronic Distribution
In connection with the offering, certain of the underwriters or securities dealers may distribute prospectuses by electronic means, such as e-mail.
Other Relationships
Some of the underwriters and their affiliates have engaged in, and may in the future engage in, investment banking and other commercial dealings in the ordinary course of business with us or our affiliates. They have received, or may in the future receive, customary fees and commissions for these transactions. For example, certain of the underwriters or their affiliates are lenders under our Credit Facilities, and Bank of America, N.A., an affiliate of BofA Securities, Inc., is the administrative agent for our Credit Facilities. Because a portion of the net proceeds to us from this offering will be used to repay amounts outstanding under our Credit Facilities, such lenders will receive proceeds from this offering. See “Use of Proceeds.”
In addition, in the ordinary course of their business activities, the underwriters and their affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers. Such investments and securities activities may involve securities and/or instruments of ours or our affiliates. The underwriters and their affiliates may also make investment recommendations and/or publish or express independent research views in respect of such securities or financial instruments and may hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments.
European Economic Area
In relation to each Member State of the European Economic Area (each a “Relevant State”), no offer of shares which are the subject of this offering has been, or will be, made to the public in that Relevant State prior to the publication of a prospectus in relation to the Shares which has been approved by the competent authority in that Relevant State or, where appropriate, approved in another Relevant State and notified to the competent authority in that Relevant State, all in accordance with the Prospectus Regulation), except that offers of shares may be made to the public in that Relevant State at any time under the following exemptions under the Prospectus Regulation:
a.
to any legal entity which is a qualified investor as defined under the Prospectus Regulation;
b.
to fewer than 150 natural or legal persons (other than qualified investors as defined under the Prospectus Regulation), subject to obtaining the prior consent of the representatives for any such offer; or
c.
in any other circumstances falling within Article 1(4) of the Prospectus Regulation,
provided that no such offer of Shares shall require the Issuer or any underwriter to publish a prospectus pursuant to Article 3 of the Prospectus Regulation or supplement a prospectus pursuant to Article 23 of the Prospectus Regulation.
Each person in a Relevant State who initially acquires any Shares or to whom any offer is made will be deemed to have represented, acknowledged and agreed to and with the Company and the underwriters that it is a qualified investor within the meaning of the Prospectus Regulation.
In the case of any Shares being offered to a financial intermediary as that term is used in Article 5(1) of the Prospectus Regulation, each such financial intermediary will be deemed to have represented, acknowledged and agreed that the Shares acquired by it in the offer have not been acquired on a non-discretionary basis on behalf of, nor have they been acquired with a view to their offer or resale to, persons in circumstances which may give rise to an offer to the public other than their offer or resale in a Relevant State to qualified investors, in circumstances in which the prior consent of the representatives has been obtained to each such proposed offer or resale.
The Company, the underwriters and their affiliates will rely upon the truth and accuracy of the foregoing representations, acknowledgements and agreements.
For the purposes of this provision, the expression an “offer to the public” in relation to any Shares in any Relevant State means the communication in any form and by any means of sufficient information on the terms of the offer and any Shares to be offered so as to enable an investor to decide to purchase or subscribe for any Shares, and the expression “Prospectus Regulation” means Regulation (EU) 2017/1129.
The above selling restriction is in addition to any other selling restrictions set out below.
In connection with the offering, the underwriters are not acting for anyone other than the issuer and will not be responsible to anyone other than the issuer for providing the protections afforded to their clients nor for providing advice in relation to the offering.
Notice to Prospective Investors in the United Kingdom
In relation to the United Kingdom, no offer of shares which are the subject of this offering has been, or will be, made to the public in the United Kingdom prior to the publication of a prospectus in relation to the Shares which has been approved by the Financial Conduct Authority in the United Kingdom in accordance with the UK Prospectus Regulation and the FSMA, except that offers of Shares may be made to the public in the United Kingdom at any time under the following exemptions under the UK Prospectus Regulation and the FSMA:
a.
to any legal entity which is a qualified investor as defined under the UK Prospectus Regulation;
b.
to fewer than 150 natural or legal persons (other than qualified investors as defined under the UK Prospectus Regulation), subject to obtaining the prior consent of the representatives for any such offer; or
c.
at any time in other circumstances falling within section 86 of the FSMA,
provided that no such offer of Shares shall require the Issuer or any underwriter to publish a prospectus pursuant to Section 85 of the FSMA or Article 3 of the UK Prospectus Regulation or supplement a prospectus pursuant to Article 23 of the UK Prospectus Regulation.
Each person in the United Kingdom who initially acquires any Shares or to whom any offer is made will be deemed to have represented, acknowledged and agreed to and with the Company and the underwriters that it is a qualified investor within the meaning of the UK Prospectus Regulation.
In the case of any Shares being offered to a financial intermediary as that term is used in Article 5(1) of the UK Prospectus Regulation, each such financial intermediary will be deemed to have represented, acknowledged and agreed that the Shares acquired by it in the offer have not been acquired on a non-discretionary basis on behalf of, nor have they been acquired with a view to their offer or resale to, persons in circumstances which may give rise to an offer to the public other than their offer or resale in the United Kingdom to qualified investors, in circumstances in which the prior consent of the representatives has been obtained to each such proposed offer or resale.
The Company, the underwriters and their affiliates will rely upon the truth and accuracy of the foregoing representations, acknowledgements and agreements.
For the purposes of this provision, the expression an “offer to the public” in relation to any Shares in the United Kingdom means the communication in any form and by any means of sufficient information
on the terms of the offer and any Shares to be offered so as to enable an investor to decide to purchase or subscribe for any Shares, the expression “UK Prospectus Regulation” means Regulation (EU) 2017/1129 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018, and the expression “FSMA” means the Financial Services and Markets Act 2000.
In connection with the offering, the underwriters are not acting for anyone other than the issuer and will not be responsible to anyone other than the issuer for providing the protections afforded to their clients nor for providing advice in relation to the offering.
This document is for distribution only to persons who (i) have professional experience in matters relating to investments and who qualify as investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended, the “Financial Promotion Order”), (ii) are persons falling within Article 49(2)(a) to (d) (“high net worth companies, unincorporated associations etc.”) of the Financial Promotion Order, (iii) are outside the United Kingdom, or (iv) are persons to whom an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the Financial Services and Markets Act 2000, as amended (“FSMA”)) in connection with the issue or sale of any securities may otherwise lawfully be communicated or caused to be communicated (all such persons together being referred to as “relevant persons”). This document is directed only at relevant persons and must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this document relates is available only to relevant persons and will be engaged in only with relevant persons.
Notice to Prospective Investors in Switzerland
The shares may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange (“SIX”) or on any other stock exchange or regulated trading facility in Switzerland. This document has been prepared without regard to the disclosure standards for issuance prospectuses under art. 652a or art. 1156 of the Swiss Code of Obligations or the disclosure standards for listing prospectuses under art. 27 ff. of the SIX Listing Rules or the listing rules of any other stock exchange or regulated trading facility in Switzerland. Neither this document nor any other offering or marketing material relating to the shares or the offering may be publicly distributed or otherwise made publicly available in Switzerland.
Neither this document nor any other offering or marketing material relating to the offering, the Company, the shares have been or will be filed with or approved by any Swiss regulatory authority. In particular, this document will not be filed with, and the offer of shares will not be supervised by, the Swiss Financial Market Supervisory Authority FINMA (FINMA), and the offer of shares has not been and will not be authorized under the Swiss Federal Act on Collective Investment Schemes (“CISA”). The investor protection afforded to acquirers of interests in collective investment schemes under the CISA does not extend to acquirers of shares.
Notice to Prospective Investors in the Dubai International Financial Centre
This prospectus relates to an Exempt Offer in accordance with the Offered Securities Rules of the Dubai Financial Services Authority (“DFSA”). This prospectus is intended for distribution only to persons of a type specified in the Offered Securities Rules of the DFSA. It must not be delivered to, or relied on by, any other person. The DFSA has no responsibility for reviewing or verifying any documents in connection with Exempt Offers. The DFSA has not approved this prospectus nor taken steps to verify the information set forth herein and has no responsibility for the prospectus. The shares to which this prospectus relates may be illiquid and/or subject to restrictions on their resale. Prospective purchasers of the shares offered should conduct their own due diligence on the shares. If you do not understand the contents of this prospectus you should consult an authorized financial advisor.
Notice to Prospective Investors in Australia
No placement document, prospectus, product disclosure statement or other disclosure document has been lodged with the Australian Securities and Investments Commission (“ASIC”), in relation to the offering. This prospectus does not constitute a prospectus, product disclosure statement or other disclosure
document under the Corporations Act 2001 (the “Corporations Act”), and does not purport to include the information required for a prospectus, product disclosure statement or other disclosure document under the Corporations Act.
Any offer in Australia of the shares may only be made to persons (the “Exempt Investors”) who are “sophisticated investors” (within the meaning of section 708(8) of the Corporations Act), “professional investors” (within the meaning of section 708(11) of the Corporations Act) or otherwise pursuant to one or more exemptions contained in section 708 of the Corporations Act so that it is lawful to offer the shares without disclosure to investors under Chapter 6D of the Corporations Act.
The shares applied for by Exempt Investors in Australia must not be offered for sale in Australia in the period of 12 months after the date of allotment under the offering, except in circumstances where disclosure to investors under Chapter 6D of the Corporations Act would not be required pursuant to an exemption under section 708 of the Corporations Act or otherwise or where the offer is pursuant to a disclosure document which complies with Chapter 6D of the Corporations Act. Any person acquiring shares must observe such Australian on-sale restrictions.
This prospectus contains general information only and does not take account of the investment objectives, financial situation or particular needs of any particular person. It does not contain any securities recommendations or financial product advice. Before making an investment decision, investors need to consider whether the information in this prospectus is appropriate to their needs, objectives and circumstances, and, if necessary, seek expert advice on those matters.
Notice to Prospective Investors in Hong Kong
The shares have not been offered or sold and will not be offered or sold in Hong Kong, by means of any document, other than (a) to “professional investors” as defined in the Securities and Futures Ordinance (Cap. 571) of Hong Kong and any rules made under that Ordinance; or (b) in other circumstances which do not result in the document being a “prospectus” as defined in the Companies Ordinance (Cap. 32) of Hong Kong or which do not constitute an offer to the public within the meaning of that Ordinance. No advertisement, invitation or document relating to the shares has been or may be issued or has been or may be in the possession of any person for the purposes of issue, whether in Hong Kong or elsewhere, which is directed at, or the contents of which are likely to be accessed or read by, the public of Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to shares which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” as defined in the Securities and Futures Ordinance and any rules made under that Ordinance.
Notice to Prospective Investors in Japan
The shares have not been and will not be registered under the Financial Instruments and Exchange Law of Japan (Law No. 25 of 1948, as amended) and, accordingly, will not be offered or sold, directly or indirectly, in Japan, or for the benefit of any Japanese Person or to others for re-offering or resale, directly or indirectly, in Japan or to any Japanese Person, except in compliance with all applicable laws, regulations and ministerial guidelines promulgated by relevant Japanese governmental or regulatory authorities in effect at the relevant time. For the purposes of this paragraph, “Japanese Person” shall mean any person resident in Japan, including any corporation or other entity organized under the laws of Japan.
Notice to Prospective Investors in Singapore
This prospectus has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, the shares were not offered or sold or caused to be made the subject of an invitation for subscription or purchase and will not be offered or sold or caused to be made the subject of an invitation for subscription or purchase, and this prospectus or any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the shares, has not been circulated or distributed, nor will it be circulated or distributed, whether directly or indirectly, to any person in Singapore other than (i) to an institutional investor (as defined in Section 4A of the Securities and Futures Act (Chapter 289) of Singapore, as modified or amended from time to time (the “SFA”)) pursuant to Section 274 of the SFA, (ii) to a relevant person (as defined in Section 275(2) of the SFA) pursuant to Section 275(1) of the SFA, or
any person pursuant to Section 275(1A) of the SFA, and in accordance with the conditions specified in Section 275 of the SFA, or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA.
Where the shares are subscribed or purchased under Section 275 of the SFA by a relevant person which is:
(a)
a corporation (which is not an accredited investor (as defined in Section 4A of the SFA)) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or
(b)
a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary of the trust is an individual who is an accredited investor,
securities or securities-based derivatives contracts (each term as defined in Section 2(1) of the SFA) of that corporation or the beneficiaries’ rights and interest (howsoever described) in that trust shall not be transferred within six months after that corporation or that trust has acquired the shares pursuant to an offer made under Section 275 of the SFA except:
(a)
to an institutional investor or to a relevant person, or to any person arising from an offer referred to in Section 275(1A) or Section 276(4)(i)(B) of the SFA;
(b)
where no consideration is or will be given for the transfer;
(c)
where the transfer is by operation of law; or
(d)
as specified in Section 276(7) of the SFA.
Notice to Prospective Investors in Canada
The shares may be sold only to purchasers purchasing, or deemed to be purchasing, as principal that are accredited investors, as defined in National Instrument 45-106 Prospectus Exemptions or subsection 73.3(1) of the Securities Act (Ontario), and are permitted clients, as defined in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations. Any resale of the shares must be made in accordance with an exemption from, or in a transaction not subject to, the prospectus requirements of applicable securities laws.
Securities legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if this prospectus (including any amendment thereto) contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser’s province or territory. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser’s province or territory for particulars of these rights or consult with a legal advisor.
Pursuant to section 3A.3 (or, in the case of securities issued or guaranteed by the government of a non-Canadian jurisdiction, section 3A.4) of National Instrument 33-105 Underwriting Conflicts (NI 33-105), the underwriters are not required to comply with the disclosure requirements of NI 33-105 regarding underwriter conflicts of interest in connection with this offering.
LEGAL MATTERS
The validity of the shares of common stock offered by this prospectus will be passed upon for us by Ropes & Gray LLP, New York, New York. Certain legal matters relating to this offering will be passed upon for the underwriters by Davis Polk & Wardwell LLP, New York, New York.
EXPERTS
The financial statements as of December 31, 2020 and December 31, 2019 and for each of the two years in the period ended December 31, 2020 included in this Prospectus have been so included in reliance on the report of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to the common stock offered in this prospectus. This prospectus, filed as part of the registration statement, does not contain all of the information set forth in the registration statement and its exhibits and schedules, portions of which have been omitted as permitted by the rules and regulations of the SEC. For further information about us and our common stock, we refer you to the registration statement and to its exhibits and schedules. Statements in this prospectus about the contents of any contract, agreement or other document are not necessarily complete and, in each instance, we refer you to the copy of such contract, agreement or document filed as an exhibit to the registration statement, with each such statement being qualified in all respects by reference to the document to which it refers. You may inspect these reports and other information without charge at a website maintained by the SEC. The address of this site is http://www.sec.gov.
Upon completion of this offering, we will become subject to the informational requirements of the Exchange Act and will be required to file reports, proxy statements and other information with the SEC. You will be able to inspect and copy these reports, proxy statements and other information at the public reference facilities maintained by the SEC at the address noted above or inspect them without charge at the SEC’s website. We intend to furnish our stockholders with annual reports containing consolidated financial statements audited by an independent registered public accounting firm.
Hayward Holdings, Inc.
Consolidated Financial Statements
As of and for the years ended December 31, 2020 and 2019
Index
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F-2
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Consolidated Financial Statements
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|
|
|
|
|
|
F-3
|
|
|
|
|
|
|
|
|
F-4
|
|
|
|
|
|
|
|
|
F-5
|
|
|
|
|
|
|
|
|
F-6
|
|
|
|
|
|
|
|
|
F-7 – F-38
|
|
|
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of Hayward Holdings, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Hayward Holdings, Inc. and its subsidiaries (the “Company”) as of December 31, 2020 and 2019, and the related consolidated statements of operations and comprehensive income, of changes in redeemable stock and stockholders’ equity and of cash flows for the years then ended, including the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/ PricewaterhouseCoopers LLP
New York, New York
February 16, 2021
We have served as the Company’s auditor since 1999.
Hayward Holdings, Inc.
Consolidated Balance Sheets
(dollars in millions, except per share data)
|
|
|
|
December 31,
|
|
|
|
|
|
2020
|
|
|
2019
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
$
|
114.9
|
|
|
|
|
$
|
47.2
|
|
|
|
Accounts receivable, net of allowances of $1.4 and $1.6, respectively
|
|
|
|
|
140.2
|
|
|
|
|
|
184.9
|
|
|
|
Inventories, net
|
|
|
|
|
145.3
|
|
|
|
|
|
137.1
|
|
|
|
Prepaid expenses
|
|
|
|
|
10.3
|
|
|
|
|
|
6.4
|
|
|
|
Other current assets
|
|
|
|
|
13.7
|
|
|
|
|
|
10.2
|
|
|
|
Total current assets
|
|
|
|
|
424.4
|
|
|
|
|
|
385.8
|
|
|
|
Property, plant, and equipment, net
|
|
|
|
|
142.3
|
|
|
|
|
|
139.9
|
|
|
|
Goodwill
|
|
|
|
|
920.3
|
|
|
|
|
|
915.1
|
|
|
|
Trademark
|
|
|
|
|
736.0
|
|
|
|
|
|
736.0
|
|
|
|
Customer relationships, net
|
|
|
|
|
271.5
|
|
|
|
|
|
302.3
|
|
|
|
Other intangibles, net
|
|
|
|
|
106.7
|
|
|
|
|
|
115.3
|
|
|
|
Other non-current assets
|
|
|
|
|
5.9
|
|
|
|
|
|
8.7
|
|
|
|
Total assets
|
|
|
|
$
|
2,607.1
|
|
|
|
|
$
|
2,603.1
|
|
|
|
Liabilities, Redeemable Stock and Stockholders’ Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current portion of the long-term debt
|
|
|
|
$
|
2.8
|
|
|
|
|
$
|
0.4
|
|
|
|
Accounts payable
|
|
|
|
|
69.6
|
|
|
|
|
|
53.4
|
|
|
|
Accrued expenses and other liabilities
|
|
|
|
|
141.8
|
|
|
|
|
|
84.5
|
|
|
|
Income taxes payable
|
|
|
|
|
4.4
|
|
|
|
|
|
2.1
|
|
|
|
Total current liabilities
|
|
|
|
|
218.6
|
|
|
|
|
|
140.4
|
|
|
|
Long-term debt
|
|
|
|
|
1,300.3
|
|
|
|
|
|
1,147.8
|
|
|
|
Deferred tax liabilities, net
|
|
|
|
|
273.6
|
|
|
|
|
|
276.4
|
|
|
|
Other non-current liabilities
|
|
|
|
|
10.9
|
|
|
|
|
|
5.0
|
|
|
|
Total liabilities
|
|
|
|
|
1,803.4
|
|
|
|
|
|
1,569.6
|
|
|
|
Commitments and contingencies (Note 14)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Redeemable stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A stock $0.001 par value, 1,500,000 authorized; 872,598 issued and 869,823 outstanding at December 31, 2020; 872,547 issued and 872,297 outstanding at December 31, 2019
|
|
|
|
|
594.5
|
|
|
|
|
|
869.5
|
|
|
|
Class C stock $0.001 par value, 100 authorized; 100 issued and outstanding at December 31, 2020 and 2019
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
Stockholders’ equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class B common stock $0.001 par value, 150,000 authorized; 19,728 issued and
14,220 outstanding at December 31, 2020; 16,120 issued and 15,970 outstanding
at December 31, 2019
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
Additional paid-in capital
|
|
|
|
|
10.3
|
|
|
|
|
|
8.0
|
|
|
|
Common stock in treasury; 23,034 and 17,151 at December 31, 2020 and 2019, respectively
|
|
|
|
|
(3.7)
|
|
|
|
|
|
(1.2)
|
|
|
|
Retained earnings
|
|
|
|
|
203.0
|
|
|
|
|
|
159.9
|
|
|
|
Accumulated other comprehensive loss
|
|
|
|
|
(0.4)
|
|
|
|
|
|
(2.7)
|
|
|
|
Total stockholders’ equity
|
|
|
|
|
209.2
|
|
|
|
|
|
164.0
|
|
|
|
Total liabilities, redeemable stock and stockholders’ equity
|
|
|
|
$
|
2,607.1
|
|
|
|
|
$
|
2,603.1
|
|
|
See accompanying notes to consolidated financial statements.
Hayward Holdings, Inc.
Consolidated Statements of Operations and Comprehensive Income
(dollars in millions, except per share data)
|
|
|
|
December 31,
|
|
|
|
|
|
2020
|
|
|
2019
|
|
|
Net sales
|
|
|
|
$
|
875.4
|
|
|
|
|
$
|
733.4
|
|
|
|
Cost of sales
|
|
|
|
|
478.4
|
|
|
|
|
|
409.9
|
|
|
|
Gross profit
|
|
|
|
|
397.0
|
|
|
|
|
|
323.5
|
|
|
|
Selling, general, and administrative expenses
|
|
|
|
|
195.2
|
|
|
|
|
|
179.4
|
|
|
|
Research, development, and engineering
|
|
|
|
|
20.0
|
|
|
|
|
|
19.9
|
|
|
|
Acquisition and restructuring related expense (income)
|
|
|
|
|
19.3
|
|
|
|
|
|
(16.3)
|
|
|
|
Amortization of intangible assets
|
|
|
|
|
37.9
|
|
|
|
|
|
41.8
|
|
|
|
Operating income
|
|
|
|
|
124.6
|
|
|
|
|
|
98.7
|
|
|
|
Interest expense, net
|
|
|
|
|
73.6
|
|
|
|
|
|
84.5
|
|
|
|
Other (income) expense, net
|
|
|
|
|
(6.8)
|
|
|
|
|
|
2.1
|
|
|
|
Total other expense
|
|
|
|
|
66.8
|
|
|
|
|
|
86.6
|
|
|
|
Income from operations before income taxes
|
|
|
|
|
57.8
|
|
|
|
|
|
12.1
|
|
|
|
Provision for income taxes
|
|
|
|
|
14.5
|
|
|
|
|
|
3.6
|
|
|
|
Net income
|
|
|
|
$
|
43.3
|
|
|
|
|
$
|
8.5
|
|
|
|
Comprehensive income, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
$
|
43.3
|
|
|
|
|
$
|
8.5
|
|
|
|
Foreign currency translation adjustments, net of tax benefit of $1.4 million and expense of $1.5 million, respectively
|
|
|
|
|
5.2
|
|
|
|
|
|
8.8
|
|
|
|
Change in fair value of derivatives, net of tax benefit of $1.0 million and $3.3 million,
respectively
|
|
|
|
|
(2.9)
|
|
|
|
|
|
(9.4)
|
|
|
|
Comprehensive income
|
|
|
|
$
|
45.6
|
|
|
|
|
$
|
7.9
|
|
|
|
Earnings per Class B common share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
$
|
49.14
|
|
|
|
|
$
|
9.50
|
|
|
|
Diluted
|
|
|
|
$
|
48.81
|
|
|
|
|
$
|
9.42
|
|
|
|
Weighted average Class B common share outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
6,830
|
|
|
|
|
|
4,742
|
|
|
|
Diluted
|
|
|
|
|
12,661
|
|
|
|
|
|
12,493
|
|
|
See accompanying notes to consolidated financial statements.
Hayward Holdings, Inc.
Consolidated Statements of Changes in Redeemable Stock and Stockholders’ Equity
(dollars in millions, except per share data)
|
|
|
|
Redeemable
Class A and C Stock
|
|
|
|
Class B
Common Stock
|
|
|
Additional
Paid-in
Capital
|
|
|
Treasury
Stock
|
|
|
Retained
Earnings
|
|
|
Accumulated
Other
Comprehensive
Loss
|
|
|
Total
Stockholders’
Equity
|
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Balance at January 1, 2019
|
|
|
|
|
870,369
|
|
|
|
|
$
|
869.5
|
|
|
|
|
|
|
32,384
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
5.1
|
|
|
|
|
$
|
(0.2)
|
|
|
|
|
$
|
150.7
|
|
|
|
|
$
|
(2.1)
|
|
|
|
|
$
|
153.5
|
|
|
|
Change in accounting policy
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
0.9
|
|
|
|
|
|
—
|
|
|
|
|
|
0.9
|
|
|
|
Net income
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
8.5
|
|
|
|
|
|
—
|
|
|
|
|
|
8.5
|
|
|
|
Issuance of Class A stock
|
|
|
|
|
2,128
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
1.3
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
1.3
|
|
|
|
Cash distributions
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
(0.2)
|
|
|
|
|
|
—
|
|
|
|
|
|
(0.2)
|
|
|
|
Stock-based compensation
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
1.6
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
1.6
|
|
|
|
Exercise of stock options
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
|
487
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
Repurchase of stock
|
|
|
|
|
(100)
|
|
|
|
|
|
—
|
|
|
|
|
|
|
(16,901)
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
(1.0)
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
(1.0)
|
|
|
|
Comprehensive loss items
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
(0.6)
|
|
|
|
|
|
(0.6)
|
|
|
|
Balance at December 31, 2019
|
|
|
|
|
872,397
|
|
|
|
|
|
869.5
|
|
|
|
|
|
|
15,970
|
|
|
|
|
|
—
|
|
|
|
|
|
8.0
|
|
|
|
|
|
(1.2)
|
|
|
|
|
|
159.9
|
|
|
|
|
|
(2.7)
|
|
|
|
|
|
164.0
|
|
|
|
Net income
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
43.3
|
|
|
|
|
|
—
|
|
|
|
|
|
43.3
|
|
|
|
Issuance of Class A stock
|
|
|
|
|
51
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
0.1
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
0.1
|
|
|
|
Cash distributions
|
|
|
|
|
—
|
|
|
|
|
|
(275.0)
|
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
(0.2)
|
|
|
|
|
|
—
|
|
|
|
|
|
(0.2)
|
|
|
|
Stock-based compensation
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
1.9
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
1.9
|
|
|
|
Exercise of stock options
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
|
3,608
|
|
|
|
|
|
—
|
|
|
|
|
|
0.3
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
0.3
|
|
|
|
Repurchase of stock
|
|
|
|
|
(2,525)
|
|
|
|
|
|
—
|
|
|
|
|
|
|
(5,358)
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
(2.5)
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
(2.5)
|
|
|
|
Comprehensive income items
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
2.3
|
|
|
|
|
|
2.3
|
|
|
|
Balance at December 31, 2020
|
|
|
|
|
869,923
|
|
|
|
|
$
|
594.5
|
|
|
|
|
|
|
14,220
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
10.3
|
|
|
|
|
$
|
(3.7)
|
|
|
|
|
$
|
203.0
|
|
|
|
|
$
|
(0.4)
|
|
|
|
|
$
|
209.2
|
|
|
See accompanying notes to consolidated financial statements.
Hayward Holdings, Inc.
Consolidated Statements of Cash Flows
(dollars in millions, except per share data)
|
|
|
|
December 31,
|
|
|
|
|
|
2020
|
|
|
2019
|
|
|
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
$
|
43.3
|
|
|
|
|
$
|
8.5
|
|
|
|
Adjustments to reconcile net income to net cash provided by operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
|
|
18.8
|
|
|
|
|
|
17.2
|
|
|
|
Amortization of intangible assets
|
|
|
|
|
44.0
|
|
|
|
|
|
46.8
|
|
|
|
Amortization of deferred debt issuance costs
|
|
|
|
|
5.4
|
|
|
|
|
|
5.3
|
|
|
|
Stock-based compensation
|
|
|
|
|
1.9
|
|
|
|
|
|
1.6
|
|
|
|
Deferred income taxes
|
|
|
|
|
(0.3)
|
|
|
|
|
|
(16.6)
|
|
|
|
Loss (gain) on sale of property, plant, and equipment
|
|
|
|
|
2.0
|
|
|
|
|
|
(16.2)
|
|
|
|
Changes in operating assets and liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
|
|
47.1
|
|
|
|
|
|
2.2
|
|
|
|
Inventories
|
|
|
|
|
(4.7)
|
|
|
|
|
|
5.1
|
|
|
|
Other current and non-current assets
|
|
|
|
|
(13.0)
|
|
|
|
|
|
9.7
|
|
|
|
Accounts payable and accrued expenses and other liabilities
|
|
|
|
|
69.3
|
|
|
|
|
|
30.4
|
|
|
|
Net cash provided by operating activities
|
|
|
|
|
213.8
|
|
|
|
|
|
94.0
|
|
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of property, plant, and equipment
|
|
|
|
|
(14.2)
|
|
|
|
|
|
(25.0)
|
|
|
|
Purchases of intangibles
|
|
|
|
|
(1.4)
|
|
|
|
|
|
(1.7)
|
|
|
|
Proceeds from sale of property, plant, and equipment
|
|
|
|
|
0.5
|
|
|
|
|
|
28.5
|
|
|
|
Proceeds from settlements of investment currency hedge
|
|
|
|
|
2.1
|
|
|
|
|
|
2.2
|
|
|
|
Net cash (used in) provided by investing activities
|
|
|
|
|
(13.0)
|
|
|
|
|
|
4.0
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance of long-term debt
|
|
|
|
|
150.0
|
|
|
|
|
|
—
|
|
|
|
Debt issuance costs
|
|
|
|
|
(4.0)
|
|
|
|
|
|
—
|
|
|
|
Payments of long-term debt
|
|
|
|
|
(3.5)
|
|
|
|
|
|
(27.7)
|
|
|
|
Net change in revolving credit facility
|
|
|
|
|
—
|
|
|
|
|
|
(37.0)
|
|
|
|
Issuance of Class A stock
|
|
|
|
|
0.1
|
|
|
|
|
|
1.3
|
|
|
|
Distributions paid to Class A and Class C stockholders
|
|
|
|
|
(275.2)
|
|
|
|
|
|
(0.2)
|
|
|
|
Purchases of treasury stock
|
|
|
|
|
(2.5)
|
|
|
|
|
|
(1.0)
|
|
|
|
Other financing activity
|
|
|
|
|
—
|
|
|
|
|
|
(0.5)
|
|
|
|
Net cash used in financing activities
|
|
|
|
|
(135.1)
|
|
|
|
|
|
(65.1)
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents and restricted cash
|
|
|
|
|
2.4
|
|
|
|
|
|
—
|
|
|
|
Change in cash and cash equivalents and restricted cash
|
|
|
|
|
68.1
|
|
|
|
|
|
32.9
|
|
|
|
Cash and cash equivalents and restricted cash, beginning of year
|
|
|
|
|
47.2
|
|
|
|
|
|
14.3
|
|
|
|
Cash and cash equivalents and restricted cash, end of year
|
|
|
|
$
|
115.3
|
|
|
|
|
$
|
47.2
|
|
|
|
Supplemental disclosures of cash flow information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid-interest
|
|
|
|
$
|
68.5
|
|
|
|
|
$
|
79.2
|
|
|
|
Cash paid-income taxes
|
|
|
|
$
|
12.0
|
|
|
|
|
$
|
13.0
|
|
|
|
Equipment financed under capital leases
|
|
|
|
$
|
8.1
|
|
|
|
|
$
|
—
|
|
|
See accompanying notes to consolidated financial statements.
Hayward Holdings, Inc.
Notes to Consolidated Financial Statements
1. Nature of Operations and Organization
Hayward Holdings, Inc. (“Holdings” or the “Company”) is a global designer, manufacturer, and marketer of a broad portfolio of pool equipment and associated automation systems. The Company has facilities in the United States, Canada, Spain, France, Australia and China. Cash flow is impacted by the seasonality of the swimming pool business. Cash flow is usually higher in the second and third quarters due to terms of sale to our customers.
We were acquired by entities affiliated with CCMP Capital Advisors, LP (“CCMP”), MSD Partners, L.P. (“MSD Partners”) and Alberta Investment Management Corporation (“AIMCo” and, together with CCMP and MSD Partners, the “Sponsors”) and members of management and our board of directors (the “Board of Directors”) in June 2017 (the “Acquisition”).
2. Significant Accounting Policies
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Significant items subject to estimates and assumptions include the determination of the fair value of acquired assets and liabilities, the carrying value of goodwill and other intangible assets, valuation of allowances for receivables, inventories, deferred income tax assets, self-insurance and warranty obligations, legal and environmental liabilities, restructuring reserve liabilities, stock-based compensation and promotional program accruals. Actual results may differ significantly from those estimates.
Cash and Cash Equivalents
Cash equivalents primarily consist of cash on deposit with banks and liquid investments in next day, AAA rated money market, government securities, and treasury funds with an original term of three months or less at date of purchase. The Company’s cash and cash equivalent balances deposited at financial institutions may at times exceed federally insured limits. The Company does not believe that its cash balances are subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships.
Periodically throughout the period, the Company’s cash balance exceeded the amount insured by the Federal Deposit Insurance Corporation (“FDIC”). The Company sweeps available cash on hand daily either to reduce any revolver balance outstanding or deposit in an interest bearing account. In the event the Company receives a remittance via wire transmission after the sweep deadline, the cash will remain as on-hand overnight and may, from time to time, exceed the amount insured by the FDIC. In addition, we maintain cash balances at banking institutions in Australia, China, Canada, France, and Spain, which are not protected by FDIC insurance. We mitigate potential cash risk by maintaining bank accounts with credit worthy financial institutions.
Hayward Holdings, Inc.
Notes to Consolidated Financial Statements (Continued)
2. Significant Accounting Policies (Continued)
The following table provides supplemental cash flow information and a reconciliation of cash and cash equivalents and restricted cash to amounts reported within the consolidated balance sheets and consolidated statements of cash flows (in millions):
|
|
|
|
December 31,
|
|
|
|
|
|
2020
|
|
|
2019
|
|
|
Cash and cash equivalents
|
|
|
|
$
|
114.9
|
|
|
|
|
$
|
47.2
|
|
|
|
Restricted cash(a)
|
|
|
|
|
0.4
|
|
|
|
|
|
—
|
|
|
|
Total
|
|
|
|
$
|
115.3
|
|
|
|
|
$
|
47.2
|
|
|
(a)
included in Other current assets
Accounts Receivable, Net
Accounts receivable is presented net of an allowance for doubtful accounts. The Company’s allowance for doubtful accounts is determined based on a variety of factors that affect the potential collectability of related receivables, including length of time receivables are past due, customer credit ratings, financial stability of customers, specific one-time events and past customer history.
Activity in the Company’s allowance for doubtful accounts is as follows (in millions):
|
|
|
|
Balance at
Beginning of
Period
|
|
|
Charges
(Recoveries) to
Costs and
Expenses
|
|
|
Additions
(Deductions)
|
|
|
Other
|
|
|
Balance at End
of Period
|
|
|
2019
|
|
|
|
$
|
1.5
|
|
|
|
|
$
|
0.2
|
|
|
|
|
$
|
(0.1)
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
1.6
|
|
|
|
2020
|
|
|
|
$
|
1.6
|
|
|
|
|
$
|
(0.3)
|
|
|
|
|
$
|
0.1
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
1.4
|
|
|
Inventories
Inventories are stated at the lower of cost or market, net of obsolescence reserves on a first-in, first-out (“FIFO”) basis. Effective November 30, 2020, the Company changed its inventory cost method to FIFO for all U.S. inventories previously carried at last-in, first-out (“LIFO”) basis. Management determined that this change in accounting principle is preferable because the FIFO method improves comparability of the Company’s operating results with its industry peers and provides an increased level of consistency in the measurement of inventories in the Company’s consolidated financial statements. All international inventories were previously, and continue to be, measured using FIFO. The effects of the change in accounting principle from LIFO to FIFO have been retrospectively applied to all prior periods presented. The impact of the change was not material, including the increase to the opening retained earnings balance of $2.5 million, net of tax.
Property, Plant, and Equipment
Property, plant and equipment is recorded at cost and depreciated using the straight-line method of depreciation based upon the following estimated useful lives:
•
Buildings and improvements—10 to 40 years
•
Machinery, tools and equipment—3 to 20 years
Repairs and maintenance are charged to expense as incurred. Upon disposition, the asset and corresponding accumulated depreciation are removed from the related accounts and any gains or losses are reflected in operating income.
Hayward Holdings, Inc.
Notes to Consolidated Financial Statements (Continued)
2. Significant Accounting Policies (Continued)
The Company reviews the recoverability of long-lived assets to be held and used when events or changes in circumstances occur that indicate the carrying value of the asset or asset group may not be recoverable. The assessment of possible impairment is based on our ability to recover the carrying value of the asset or asset group from the expected undiscounted future pre-tax cash flows of the related operations. If these cash flows are less than the carrying value of such asset or asset group, an impairment loss is recognized for the difference between estimated fair value and carrying value. The measurement of impairment requires us to estimate future cash flows and the fair value of long-lived assets. We recorded no long-lived asset impairment charges for the years ended December 31, 2020 and 2019.
Goodwill and Intangible Assets
The purchase price in excess of net assets of businesses acquired is classified as goodwill in the accompanying consolidated balance sheets.
The Company tests goodwill at the reporting unit level, which is defined as an operating segment or one level below an operating segment that constitutes a business for which financial information is available and is regularly reviewed by the Chief Operating Decision Maker (“CODM”). The Company determined that it has five reporting units for this purpose. The Company tests for impairment at least annually or if there is an indication that goodwill may be impaired.
The Company has the option to first complete a qualitative assessment (i.e., “Step 0”) to determine whether it is more likely than not that the fair value of the business is less than its carrying amount. If the Company determines that this is the case, it is required to perform the currently prescribed quantitative impairment test to identify potential goodwill impairment and measure the amount of goodwill impairment loss to be charged for that reporting unit, if any.
Under the quantitative assessment, the Company compares the carrying value of goodwill at a reporting unit level to an estimate of the fair value of the respective reporting unit. Fair value of the reporting unit is estimated using a discounted six-year projected cash flow analyses and a terminal value calculation at the end of the six-year period. If the fair value of the reporting unit exceeds its carrying value, the goodwill associated with the reporting unit is not impaired. If the carrying value of the reporting unit exceeds its fair value, an impairment loss is recognized for the amount by which the reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill.
For the years ended December 31, 2020 and 2019, the Company completed its annual qualitative impairment analysis of goodwill for each of its reporting units at November 30, 2020 and 2019, respectively. The results of the qualitative assessments indicated that it was not more likely than not that the fair values of the reporting units were less than the carrying values.
Intangible assets with finite lives are amortized based on the estimated useful life of the intangible asset using a method that reflects the pattern in which the economic benefits of the intangible assets are consumed or otherwise used, or, if that pattern cannot be reliably determined using a straight-line amortization method.
Intangible assets with indefinite lives (i.e., trademarks) are not amortized; rather, they are tested for impairment whenever events or circumstances exist that would make it more likely than not that an impairment exists. The Company first assesses qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired. If adverse qualitative trends are identified that could negatively impact the fair value of the asset, then quantitative impairment tests are performed to compare the carrying value of the asset to its undiscounted expected future cash flows. If this test indicates that there is impairment, the impaired asset is written down to fair value.
For the years ended December 31, 2020 and 2019, the Company completed its annual qualitative impairment analysis of indefinite-lived intangible assets at November 30, 2020 and 2019, respectively. The
Hayward Holdings, Inc.
Notes to Consolidated Financial Statements (Continued)
2. Significant Accounting Policies (Continued)
results of the qualitative assessments indicated that it was not more likely than not that the fair values of the indefinite-lived intangible assets were less than the carrying values.
Fair Value Measurements
The Company measures certain of its assets and liabilities at fair value, which is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants, in either the principal market or the most advantageous market. The principal market is the market with the greatest level of activity and volume for the asset or liability.
The common framework for measuring fair value utilizes a three-level hierarchy to prioritize the inputs used in the valuation techniques to derive fair values. The basis for fair value measurements for each level within the hierarchy is described below with Level 1 having the highest priority and Level 3 having the lowest.
Level 1
Quoted prices in active markets for identical assets or liabilities.
Level 2
Quoted prices in active markets for similar assets or liabilities; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable in active markets.
Level 3
Valuations derived from valuation techniques in which one or more significant inputs are unobservable.
Derivatives
The Company manages its economic and transaction exposure to certain risks through the use of foreign currency derivative instruments and interest rate swaps. The Company’s objective in holding derivatives is to reduce the volatility of net earnings, cash flows and net asset value associated with changes in foreign currency exchange rates and interest rates. The Company does not hold derivative instruments for trading or speculative purposes.
In accordance with Accounting Standards Codification (“ASC”) Topic 815, Derivatives and Hedging, the Company records all derivative instruments on its consolidated balance sheet at fair value and evaluates hedge effectiveness prospectively and retrospectively when electing to apply hedge accounting. The Company formally documents all hedging relations at inception for derivative hedges and the underlying hedged items, as well as the risk management objectives and strategies for undertaking the hedge transaction.
The Company operates in multiple functional currencies. For foreign currency exposures, derivatives are used to limit the effects of foreign exchange rate fluctuations on financial results. In the normal course of business, the Company is exposed to the impact of interest rate changes and foreign currency fluctuations. The Company limits its exposure to these risks by following established risk management policies and procedures, including the use of derivatives. For interest rate exposures, derivatives are used to manage the related cost of debt. As a result of the use of derivative instruments, the Company is exposed to the risk that counterparties to derivative contracts will fail to meet their contractual obligations. To mitigate the counterparty credit risk, the Company has a policy of only entering into contracts with carefully selected AAA rated money market investments.
Changes in the fair value of derivative instruments designated as “cash flow” hedges, to the extent the hedges are highly effective, are recorded in other comprehensive loss, net of tax effects. Ineffective portions of cash flow hedges, if any, are recognized in current period income. Other comprehensive income or loss is reclassified into current period income when the hedged transaction affects earnings. Changes in the fair value of derivative instruments designated as “fair value” hedges, along with corresponding changes in the fair values of the hedged assets or liabilities, are recorded in current period income. Ineffective
Hayward Holdings, Inc.
Notes to Consolidated Financial Statements (Continued)
2. Significant Accounting Policies (Continued)
portions of fair value hedges are recognized in current period income. Changes in the fair value and realized gains or losses of derivative instruments designated as “net investment hedges” are recorded in cumulative translation adjustment until the hedged net investment is sold or liquidated.
Redeemable Stock
The Company accounts for its common stock subject to possible redemption in accordance with the guidance in ASC Topic 480, Distinguishing Liabilities from Equity. Conditionally redeemable stock (including stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. The Company’s Class A stock includes conversion features triggered upon an initial public offering and does not meet the definition of permanent equity. The Company’s Class C stock features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, stock subject to possible redemption is presented outside of the stockholders’ equity section of the Company’s consolidated balance sheet.
Revenue Recognition
Revenue is recognized by the Company, net of sales taxes, when goods or services obligated in a contract with a customer have been transferred, and no further performance obligation on such transfer is required, in an amount that reflects the consideration expected to be received. For the sale of the Company’s products, revenue is typically recognized upon shipment.
Customers are offered volume discounts and other promotional benefits. The Company estimates volume discounts, promotional benefits, and returns based upon the terms of the customer contracts and actual historical experience and records such amounts as a reduction of gross sales with an offsetting adjustment to accounts receivable. The Company regularly monitors the adequacy of these offsets by comparing to actual results.
The Company considers shipping and handling activities as a fulfillment activity. Net sales include outbound shipping and handling charges billed to customers. Cost of sales includes all costs incurred in connection with inbound and outbound shipping and handling.
Income Taxes
The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes. Under ASC Topic 740, deferred tax assets and deferred tax liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted rates in effect for the year in which the differences are expected to reverse. A valuation allowance is recorded if it is more likely than not that a deferred tax asset will not be realized.
The Company follows the guidance in ASC Topic 740-10 in assessing uncertain tax positions. The standard applies to all tax positions and clarifies the recognition of tax benefits in the financial statements by providing for a two-step approach of recognition and measurement. The first step involves assessing whether the tax position is more-likely-than-not to be sustained upon examination based upon its technical merits. The second step involves measurement of the amount to be recognized. Tax positions that meet the more-likely-than-not threshold are measured at the amount of tax benefit that is greater than 50% likely of being realized upon ultimate agreement with the taxing authority. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences impact income tax expense in the period in which such determination is made. Interest and penalties, if any, related to accrued liabilities for potential tax assessments are included in income tax expense. See Note 8. Income Taxes.
The Company’s policy is to record estimated interest and penalties related to uncertain tax positions in income tax expense of which there was no expense for the years ended December 31, 2020 and 2019.
Hayward Holdings, Inc.
Notes to Consolidated Financial Statements (Continued)
2. Significant Accounting Policies (Continued)
Concentration of Credit Risks
One customer, Pool Corporation (“POOL”), accounted for approximately 30% and 26% of consolidated sales for the years ended December 31, 2020 and 2019, respectively and represented 35% and 31% of total accounts receivable at December 31, 2020 and 2019, respectively. Acquisitions of customers by POOL in 2020 have contributed to these increases. No other customer accounted for sales or accounts receivable of greater than 10% of the relative total amounts. The Company has adequate availability of suppliers. The loss of any one supplier would not have a material effect on the Company’s operations.
Research, Development, and Engineering
The Company conducts research, development and engineering (“RD&E”) activities in its own facilities, and consist primarily of the development of new products, enhanced product applications, improved manufacturing and packaging processes. Costs of RD&E are primarily expensed as incurred. RD&E costs applicable to the development of software used in Company products are expensed as incurred until the software is determined to be technologically feasible and the RD&E activities for the other related components of the product have been completed. Once the software is determined to be technologically feasible, costs incurred are capitalized and amortized over the expected life of the product.
Advertising Costs
Advertising costs are expensed as incurred. Certain costs are deferred and included within other current assets on the Company’s consolidated balance sheets. These deferred costs are expensed as the events occur or as the materials are distributed. Advertising costs expensed were $9.1 million and $11.6 million for the years ended December 31, 2020 and 2019, respectively.
Stock-Based Compensation
The Company uses its Class A stock and Class B common stock for various forms of share-based compensation arrangements entered into with its employees and directors. Share-based compensation arrangements are accounted for at fair value on the date of grant. The fair value of stock options is determined using a Black-Scholes valuation model. The fair value of other share-based awards is based on the valuation of the Class B common stock on the date of grant. The fair value of time-based awards that are ultimately expected to vest is recognized as an expense on a straight-line basis over the requisite service period. The fair value of performance-based awards is recognized in the period the performance condition is probable of occurring. The Company recognizes forfeitures as they occur. Stock-based compensation costs are recorded in selling, general and administrative expenses in the consolidated statements of operations and comprehensive income. See Note 16. Stock-based Compensation.
Earnings per Share
The two-class method is an earnings allocation formula that determines earnings per share (“EPS”) for common stock and participating securities, according to rights to dividends declared and participation rights in undistributed earnings. Under this method, net earnings is reduced by the amount of dividends declared in the current period for each class of common stockholders and participating security holders. The remaining earnings or “undistributed earnings” are allocated between the classes of common stock and participating securities to the extent that each security may share in earnings as if all of the earnings for the period had been distributed. Once calculated, the earnings per common share is computed by dividing the net earnings attributable to each class of common stockholders by the weighted average number of common shares outstanding during each year presented. Diluted earnings attributable to common stockholders per common share has been computed by dividing the net earnings attributable to common stockholders by the weighted average number of common shares outstanding plus the dilutive effect of
Hayward Holdings, Inc.
Notes to Consolidated Financial Statements (Continued)
2. Significant Accounting Policies (Continued)
options and restricted shares outstanding during the applicable periods computed using the more dilutive of the two-class method, if-converted method or treasury method. In cases where the Company has a net loss, no dilutive effect is shown as options and restricted stock become anti-dilutive, and basic and diluted EPS are computed in the same manner.
The Company calculates basic earnings per share (“Basic EPS”) using the two-class method, which is required as the Company has multiple classes of common stock. Under the two-class method, earnings for the period are allocated on a pro-rata basis to the Class A and Class B common stockholders. The weighted-average number of Class A and Class B common shares outstanding during the period is then used to calculate basic EPS for each class of shares.
The Class C stock does not have substantive economic rights, including distribution upon liquidation, and is therefore not a participating security. As such, separate presentation of basic and diluted earnings per share of Class C stock under the two-class method has not been presented.
Stock options and other potential common shares are included in the calculation of diluted earnings per share (“Diluted EPS”), since they are assumed to be exercised or converted, except when their effect would be anti-dilutive.
Insurance
The Company obtains standard corporate insurance policies with an insured position subject to retention (deductible) for risks including but not limited to fire, flood, cyber, directors and officers, business interruption, ocean cargo, workers’ compensation in the United States, automobile, property and casualty, general liability, and product liability. The Company offers employee medical benefits in the United States under a self funded plan combined with stop-loss coverage to limit our exposure to large claims. Insurance claims filed and claims incurred but not recorded are accrued based upon estimates of the ultimate costs to be incurred using historical experience.
Foreign Currency Translation
The Company predominantly uses the U.S. dollar as its functional currency. The Company has international subsidiaries whose local currency has been determined to be their functional currency. For these subsidiaries, the assets and liabilities are translated using period-end exchange rates, and the revenues and expenses are translated at the average rates of exchange prevailing during the period. The adjustments resulting from translation are recorded separately in stockholders’ equity as a component of accumulated other comprehensive loss. The effect of exchange rate changes on intercompany transactions of a long term and permanent nature are credited or charged directly to a separate component of stockholders’ equity. Foreign currency transaction gains and losses, including the translation of assets or liabilities denominated in a currency other than the functional currency are recorded in other income or expense.
Recent Accounting Pronouncements Not Yet Adopted
The Company plans to adopt the following recent accounting pronouncements based on accommodations for Emerging Growth Companies.
Accounting for Leases
Accounting Standards Update (the ‘‘ASU’’) 2016-02, Leases, was issued by Financial Accounting Standards Board (the ‘‘FASB’’) in February 2016. This standard requires the Company, as the lessee, to recognize most leases on the balance sheet thereby resulting in the recognition of right of use assets and lease obligations for those leases currently classified as operating leases. The standard will be effective for the
Hayward Holdings, Inc.
Notes to Consolidated Financial Statements (Continued)
2. Significant Accounting Policies (Continued)
Company on January 1, 2022 and it is evaluating whether it will elect the optional transition method as well as the package of practical expedients, upon adoption.
In addition to the recognition of the rights of use assets and lease obligations, the Company anticipates changes in systems, processes and controls. While the requirements of the new guidance represent a material change from existing Generally Accepted Accounting Principles (the ‘‘GAAP’’), the underlying economics of items in scope and related cash flows are unchanged. The Company plans to focus on gathering data, developing procedures and testing before adoption. Focus areas include, but are not limited to (i) updating procedures to reflect new guidance; (ii) developing, testing, and implementing controls for newly developed procedures, as well as for additional annual reporting requirements.
New Credit Loss Standard
ASU 2016-13, Financial Instruments—Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments, was issued by FASB in June 2016. This standard is effective January 1, 2023, and will impact, at least to some extent, the Company’s accounting and disclosure requirements for its accounts receivable. The Company will continue to identify any other financial assets not excluded from scope. The Company does not currently expect to early adopt this standard and is currently evaluating the impact of this new accounting guidance on its consolidated financial statements.
The Company anticipates an impact on the systems, processes and controls. While the requirements of the new guidance represent a material change from existing GAAP, the underlying economics of items in scope and related cash flows are unchanged. The Company plans to focus on gathering data, developing procedures and testing before adoption. Focus areas include, but are not limited to (i) updating procedures to reflect new guidance requiring establishment of allowance for credit losses on accounts receivable; (ii) establishing procedures to identify and review all remaining financial assets within scope, (iii) developing, testing, and implementing controls for newly developed procedures, as well as for additional annual reporting requirements.
3. Revenue Recognition
The Company primarily sells pool equipment including pumps, filters, heaters, cleaners, salt chlorinators, automation, lighting, safety and flow control products to its customers. An arrangement with a customer contains a single performance obligation for sale of the products. Transfer of the individual product is considered the performance obligation. The Company ships its products via Free on Board (“FOB”) shipping point and recognizes revenue at the point-in-time of shipment to the customer. The Company’s standard customer payment terms are net thirty days. The Company has established an early-buy program for select customers for purchases made outside of peak season that extends favorable payment terms, not to exceed nine months, and applies the practical expedient in Accounting Standards Codification (the‘‘ASC’’) 606-10-32-18 to not adjust the amount of consideration for the effects of a significant financing component. The Company recognizes revenue net of incentive agreements, rebates, and other discounts.
Under some arrangements, the Company and its customer agree to an annual incentive agreement. These incentive agreements establish all potential rebates, incentives and other discounts. The transaction price is reduced for certain customer programs and incentive offerings including pricing arrangements and other volume-based incentives that represent variable consideration.
Volume-based incentives involve rebates that are negotiated at or prior to the time of sale with the customer and are redeemable only if the customer achieves a specified cumulative level of sales or sales increase. Under these incentive programs, at the time of sale, the Company determines the most likely amount of the rebate based on forecasted sales levels. These forecasts are updated at least quarterly for each customer, and the transaction price is reduced for the anticipated cost of the rebate.
Hayward Holdings, Inc.
Notes to Consolidated Financial Statements (Continued)
3. Revenue Recognition (Continued)
Under some arrangements, customers earn points under the Company’s reward programs, which may be redeemed within a defined period for goods, trips or cash equivalents. The Company’s reward programs provide a customer with a material right and, accordingly, are determined to be separate performance obligations. The Company allocates the transaction price between the product sale, based on a standard customer price list, and the reward program points, redeemable at defined program rates, to establish the relative stand-alone selling prices. Revenue allocated to the material right is deferred based on a rolling twelve month average redemption rate, and is subsequently recognized upon redemption of the reward points. Costs related to reward point redemption are recorded within cost of sales.
The following tables disaggregate net sales between product groups and geographic destinations, respectively (in millions):
|
|
|
|
December 31,
|
|
|
|
|
|
2020
|
|
|
2019
|
|
|
Product groups
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential pool
|
|
|
|
$
|
815.9
|
|
|
|
|
$
|
663.5
|
|
|
|
Commercial pool
|
|
|
|
|
24.4
|
|
|
|
|
|
29.2
|
|
|
|
Industrial flow control
|
|
|
|
|
35.1
|
|
|
|
|
|
40.7
|
|
|
|
Total
|
|
|
|
$
|
875.4
|
|
|
|
|
$
|
733.4
|
|
|
|
Geographic
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States
|
|
|
|
$
|
623.6
|
|
|
|
|
$
|
509.7
|
|
|
|
Canada
|
|
|
|
|
82.9
|
|
|
|
|
|
66.2
|
|
|
|
Europe
|
|
|
|
|
118.9
|
|
|
|
|
|
99.6
|
|
|
|
Rest of World
|
|
|
|
|
50.0
|
|
|
|
|
|
57.9
|
|
|
|
Total international revenue
|
|
|
|
|
251.8
|
|
|
|
|
|
223.7
|
|
|
|
Total
|
|
|
|
$
|
875.4
|
|
|
|
|
$
|
733.4
|
|
|
4. Inventories
Inventories consist of the following (in millions):
|
|
|
|
December 31,
|
|
|
|
|
|
2020
|
|
|
2019
|
|
|
Raw materials
|
|
|
|
$
|
67.9
|
|
|
|
|
$
|
56.1
|
|
|
|
Work in progress
|
|
|
|
|
13.5
|
|
|
|
|
|
11.0
|
|
|
|
Finished goods
|
|
|
|
|
63.9
|
|
|
|
|
|
70.0
|
|
|
|
Total
|
|
|
|
$
|
145.3
|
|
|
|
|
$
|
137.1
|
|
|
Activity in the Company’s inventory obsolescence reserve is as follows (in millions):
|
|
|
|
Balance at
Beginning of
Period
|
|
|
Charges to
Costs and
Expenses
|
|
|
Deductions
|
|
|
Other
|
|
|
Balance at End
of Period
|
|
|
2019
|
|
|
|
$
|
6.6
|
|
|
|
|
$
|
0.8
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
0.1
|
|
|
|
|
$
|
7.5
|
|
|
|
2020
|
|
|
|
$
|
7.5
|
|
|
|
|
$
|
6.8
|
|
|
|
|
$
|
(0.6)
|
|
|
|
|
$
|
0.3
|
|
|
|
|
$
|
14.0
|
|
|
Hayward Holdings, Inc.
Notes to Consolidated Financial Statements (Continued)
5. Property, Plant, and Equipment, Net
The carrying value of property, plant, and equipment is as follows (in millions):
|
|
|
|
December 31,
|
|
|
|
|
|
2020
|
|
|
2019
|
|
|
Land
|
|
|
|
$
|
11.4
|
|
|
|
|
$
|
11.1
|
|
|
|
Buildings and improvements
|
|
|
|
|
47.8
|
|
|
|
|
|
38.6
|
|
|
|
Machinery, tools and equipment
|
|
|
|
|
113.1
|
|
|
|
|
|
108.4
|
|
|
|
Construction in progress
|
|
|
|
|
11.5
|
|
|
|
|
|
15.5
|
|
|
|
Owned equipment
|
|
|
|
|
183.8
|
|
|
|
|
|
173.6
|
|
|
|
Buildings and improvements
|
|
|
|
|
1.1
|
|
|
|
|
|
0.8
|
|
|
|
Machinery, tools and equipment
|
|
|
|
|
9.3
|
|
|
|
|
|
1.2
|
|
|
|
Equipment under capital lease
|
|
|
|
|
10.4
|
|
|
|
|
|
2.0
|
|
|
|
Less: Accumulated depreciation
|
|
|
|
|
(51.9)
|
|
|
|
|
|
(35.7)
|
|
|
|
Total
|
|
|
|
$
|
142.3
|
|
|
|
|
$
|
139.9
|
|
|
Depreciation expense was $18.8 million and $17.2 million for the years ended December 31, 2020 and 2019, respectively.
The following table presents property, plant, and equipment, net, by country (in millions):
|
|
|
|
December 31,
|
|
|
|
|
|
2020
|
|
|
2019
|
|
|
United States
|
|
|
|
$
|
102.0
|
|
|
|
|
$
|
102.5
|
|
|
|
China
|
|
|
|
|
24.2
|
|
|
|
|
|
20.9
|
|
|
|
Canada
|
|
|
|
|
8.9
|
|
|
|
|
|
9.1
|
|
|
|
Spain
|
|
|
|
|
6.5
|
|
|
|
|
|
6.5
|
|
|
|
France
|
|
|
|
|
0.5
|
|
|
|
|
|
0.6
|
|
|
|
Other
|
|
|
|
|
0.2
|
|
|
|
|
|
0.3
|
|
|
|
Total
|
|
|
|
$
|
142.3
|
|
|
|
|
$
|
139.9
|
|
|
6. Goodwill and Intangible Assets
Goodwill
A summary of changes in goodwill is as follows (in millions):
|
|
|
|
North America
|
|
|
Europe & Rest
of World
|
|
|
Total
|
|
|
Balance at January 1, 2019
|
|
|
|
$
|
817.9
|
|
|
|
|
$
|
95.2
|
|
|
|
|
$
|
913.1
|
|
|
|
Currency translation
|
|
|
|
|
2.7
|
|
|
|
|
|
(0.7)
|
|
|
|
|
|
2.0
|
|
|
|
Balance at December 31, 2019
|
|
|
|
|
820.6
|
|
|
|
|
|
94.5
|
|
|
|
|
|
915.1
|
|
|
|
Currency translation
|
|
|
|
|
1.5
|
|
|
|
|
|
3.7
|
|
|
|
|
|
5.2
|
|
|
|
Balance at December 31, 2020
|
|
|
|
$
|
822.1
|
|
|
|
|
$
|
98.2
|
|
|
|
|
$
|
920.3
|
|
|
Hayward Holdings, Inc.
Notes to Consolidated Financial Statements (Continued)
6. Goodwill and Intangible Assets (Continued)
Intangible Assets
Intangible assets consist of the following (in millions):
|
|
|
|
Estimated
Useful Lives
|
|
|
Cost
|
|
|
Accumulated
Amortization
|
|
|
Net Carrying
Amount
January 1,
2020
|
|
|
Additions
|
|
|
Amortization
|
|
|
Currency
Translation
|
|
|
Net Carrying
Amount
December 31,
2020
|
|
|
Customer relationships
|
|
|
15 – 20
|
|
|
|
$
|
397.0
|
|
|
|
|
$
|
94.7
|
|
|
|
|
$
|
302.3
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
(33.5)
|
|
|
|
|
$
|
2.7
|
|
|
|
|
$
|
271.5
|
|
|
|
Trademarks
|
|
|
15
|
|
|
|
|
69.6
|
|
|
|
|
|
10.6
|
|
|
|
|
|
59.0
|
|
|
|
|
|
—
|
|
|
|
|
|
(4.4)
|
|
|
|
|
|
—
|
|
|
|
|
|
54.6
|
|
|
|
Product technology
|
|
|
10 – 15
|
|
|
|
|
67.2
|
|
|
|
|
|
10.9
|
|
|
|
|
|
56.3
|
|
|
|
|
|
2.2
|
|
|
|
|
|
(6.1)
|
|
|
|
|
|
(0.3)
|
|
|
|
|
|
52.1
|
|
|
|
Total amortizable intangibles
|
|
|
|
|
|
|
|
533.8
|
|
|
|
|
|
116.2
|
|
|
|
|
|
417.6
|
|
|
|
|
|
2.2
|
|
|
|
|
|
(44.0)
|
|
|
|
|
|
2.4
|
|
|
|
|
|
378.2
|
|
|
|
Trademarks
|
|
|
|
|
|
|
|
736.0
|
|
|
|
|
|
—
|
|
|
|
|
|
736.0
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
736.0
|
|
|
|
Total intangible assets
|
|
|
|
|
|
|
$
|
1,269.8
|
|
|
|
|
$
|
116.2
|
|
|
|
|
$
|
1,153.6
|
|
|
|
|
$
|
2.2
|
|
|
|
|
$
|
(44.0)
|
|
|
|
|
$
|
2.4
|
|
|
|
|
$
|
1,114.2
|
|
|
|
|
|
|
Estimated
Useful Lives
|
|
|
Cost
|
|
|
Accumulated
Amortization
|
|
|
Net Carrying
Amount
January 1,
2019
|
|
|
Additions
|
|
|
Amortization
|
|
|
Currency
Translation
|
|
|
Net Carrying
Amount
December 31,
2019
|
|
|
Customer relationships
|
|
|
15 – 20
|
|
|
|
$
|
395.7
|
|
|
|
|
$
|
57.6
|
|
|
|
|
$
|
338.2
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
(37.1)
|
|
|
|
|
$
|
1.2
|
|
|
|
|
$
|
302.3
|
|
|
|
Trademarks
|
|
|
15
|
|
|
|
|
69.8
|
|
|
|
|
|
5.9
|
|
|
|
|
|
63.7
|
|
|
|
|
|
—
|
|
|
|
|
|
(4.7)
|
|
|
|
|
|
—
|
|
|
|
|
|
59.0
|
|
|
|
Product technology
|
|
|
10 – 15
|
|
|
|
|
64.2
|
|
|
|
|
|
5.9
|
|
|
|
|
|
58.5
|
|
|
|
|
|
2.6
|
|
|
|
|
|
(5.0)
|
|
|
|
|
|
0.2
|
|
|
|
|
|
56.3
|
|
|
|
Total amortizable intangibles
|
|
|
|
|
|
|
|
529.7
|
|
|
|
|
|
69.4
|
|
|
|
|
|
460.4
|
|
|
|
|
|
2.6
|
|
|
|
|
|
(46.8)
|
|
|
|
|
|
1.4
|
|
|
|
|
|
417.6
|
|
|
|
Trademarks
|
|
|
|
|
|
|
|
736.0
|
|
|
|
|
|
—
|
|
|
|
|
|
736.0
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
736.0
|
|
|
|
Total intangible assets
|
|
|
|
|
|
|
$
|
1,265.7
|
|
|
|
|
$
|
69.4
|
|
|
|
|
$
|
1,196.4
|
|
|
|
|
$
|
2.6
|
|
|
|
|
$
|
(46.8)
|
|
|
|
|
$
|
1.4
|
|
|
|
|
$
|
1,153.6
|
|
|
Amortization expense was $44.0 million and $46.8 million (of which $6.1 million and $5.0 million is included within cost of sales) for the years ended December 31, 2020 and 2019, respectively.
At December 31, 2020, the weighted-average remaining lives of definite-lived intangible assets is approximately 14.2 years. The weighted-average remaining lives at December 31, 2020 for customer relationships, trademarks and product technology are approximately 15.4, 11.7 and 10.1 years, respectively.
Estimated future amortization expense related to amortizable intangibles as of December 31, 2020 is as follows (in millions):
|
|
2021
|
|
|
|
$
|
39.3
|
|
|
|
|
2022
|
|
|
|
|
36.2
|
|
|
|
|
2023
|
|
|
|
|
33.3
|
|
|
|
|
2024
|
|
|
|
|
30.8
|
|
|
|
|
2025
|
|
|
|
|
28.3
|
|
|
|
|
Thereafter
|
|
|
|
|
210.3
|
|
|
|
|
Total
|
|
|
|
$
|
378.2
|
|
|
Hayward Holdings, Inc.
Notes to Consolidated Financial Statements (Continued)
7. Accrued Expenses and Other Liabilities
Accrued expenses and other liabilities consist of the following (in millions):
|
|
|
|
December 31,
|
|
|
|
|
|
2020
|
|
|
2019
|
|
|
Selling, promotional and advertising
|
|
|
|
$
|
25.4
|
|
|
|
|
$
|
18.2
|
|
|
|
Employee compensation and benefits
|
|
|
|
|
34.2
|
|
|
|
|
|
13.8
|
|
|
|
Warranty reserve
|
|
|
|
|
16.4
|
|
|
|
|
|
14.2
|
|
|
|
Inventory purchases
|
|
|
|
|
13.7
|
|
|
|
|
|
7.4
|
|
|
|
Insurance reserve
|
|
|
|
|
9.8
|
|
|
|
|
|
11.3
|
|
|
|
Deferred income
|
|
|
|
|
11.7
|
|
|
|
|
|
8.7
|
|
|
|
Business restructuring costs
|
|
|
|
|
1.7
|
|
|
|
|
|
3.9
|
|
|
|
Derivative liability
|
|
|
|
|
9.3
|
|
|
|
|
|
0.3
|
|
|
|
Professional fees
|
|
|
|
|
2.9
|
|
|
|
|
|
1.0
|
|
|
|
Payroll taxes
|
|
|
|
|
3.2
|
|
|
|
|
|
0.7
|
|
|
|
Other accrued liabilities
|
|
|
|
|
13.5
|
|
|
|
|
|
5.0
|
|
|
|
Total
|
|
|
|
$
|
141.8
|
|
|
|
|
$
|
84.5
|
|
|
The Company offers warranties on certain of its products and records an accrual for estimated future claims. Such accruals are based on historical experience and management’s estimate of the level of future claims.
Changes in the warranty reserve are as follows (in millions):
|
|
Balance at January 1, 2019
|
|
|
|
$
|
12.2
|
|
|
|
|
Accrual for warranties issued during the period
|
|
|
|
|
25.3
|
|
|
|
|
Payments
|
|
|
|
|
(23.3)
|
|
|
|
|
Balance at December 31, 2019
|
|
|
|
|
14.2
|
|
|
|
|
Accrual for warranties issued during the period
|
|
|
|
|
27.6
|
|
|
|
|
Payments
|
|
|
|
|
(25.4)
|
|
|
|
|
Balance at December 31, 2020
|
|
|
|
$
|
16.4
|
|
|
8. Income Taxes
The components of income from operations before income taxes by jurisdiction are as follows (in millions):
|
|
|
|
December 31,
|
|
|
|
|
|
2020
|
|
|
2019
|
|
|
United States
|
|
|
|
$
|
38.7
|
|
|
|
|
$
|
13.9
|
|
|
|
International
|
|
|
|
|
19.1
|
|
|
|
|
|
(1.8)
|
|
|
|
Total
|
|
|
|
$
|
57.8
|
|
|
|
|
$
|
12.1
|
|
|
Hayward Holdings, Inc.
Notes to Consolidated Financial Statements (Continued)
8. Income Taxes (Continued)
The provision for income taxes is comprised of the following (in millions):
|
|
|
|
December 31,
|
|
|
|
|
|
2020
|
|
|
2019
|
|
|
Current
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal
|
|
|
|
$
|
3.2
|
|
|
|
|
$
|
14.3
|
|
|
|
State
|
|
|
|
|
3.2
|
|
|
|
|
|
3.6
|
|
|
|
International
|
|
|
|
|
8.4
|
|
|
|
|
|
2.3
|
|
|
|
|
|
|
|
|
14.8
|
|
|
|
|
|
20.2
|
|
|
|
Deferred
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal
|
|
|
|
|
1.8
|
|
|
|
|
|
(13.4)
|
|
|
|
State
|
|
|
|
|
1.1
|
|
|
|
|
|
(3.8)
|
|
|
|
International
|
|
|
|
|
(3.2)
|
|
|
|
|
|
0.6
|
|
|
|
|
|
|
|
|
(0.3)
|
|
|
|
|
|
(16.6)
|
|
|
|
Provision for income taxes
|
|
|
|
$
|
14.5
|
|
|
|
|
$
|
3.6
|
|
|
Reconciliation between the effective tax rate on income from operations and the statutory tax rate is as follows:
|
|
|
|
December 31,
|
|
|
|
|
|
2020
|
|
|
2019
|
|
|
U.S. federal statutory income tax rate
|
|
|
|
|
21.0%
|
|
|
|
|
|
21.0%
|
|
|
|
State and local income taxes—net of federal income tax benefit
|
|
|
|
|
7.1
|
|
|
|
|
|
(1.7)
|
|
|
|
International withholding taxes—net of federal income tax benefit
|
|
|
|
|
—
|
|
|
|
|
|
1.8
|
|
|
|
GILTI
|
|
|
|
|
(0.3)
|
|
|
|
|
|
—
|
|
|
|
Research & development tax credit
|
|
|
|
|
(1.7)
|
|
|
|
|
|
(6.5)
|
|
|
|
Foreign derived intangible income (“FDII”) deduction
|
|
|
|
|
(1.9)
|
|
|
|
|
|
(6.7)
|
|
|
|
Valuation allowance
|
|
|
|
|
(0.7)
|
|
|
|
|
|
34.2
|
|
|
|
Change in contingent consideration
|
|
|
|
|
—
|
|
|
|
|
|
(13.3)
|
|
|
|
Permanent differences
|
|
|
|
|
0.4
|
|
|
|
|
|
1.5
|
|
|
|
International rate differential
|
|
|
|
|
0.9
|
|
|
|
|
|
(1.1)
|
|
|
|
Other
|
|
|
|
|
0.3
|
|
|
|
|
|
0.5
|
|
|
|
Effective tax rate
|
|
|
|
|
25.1%
|
|
|
|
|
|
29.7%
|
|
|
Hayward Holdings, Inc.
Notes to Consolidated Financial Statements (Continued)
8. Income Taxes (Continued)
The tax effects of temporary differences that give rise to significant components of the deferred tax assets and liabilities are as follows (in millions):
|
|
|
|
December 31,
|
|
|
|
|
|
2020
|
|
|
2019
|
|
|
Deferred tax asset
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
|
$
|
7.1
|
|
|
|
|
$
|
18.1
|
|
|
|
Deferred compensation and stock options
|
|
|
|
|
1.7
|
|
|
|
|
|
1.6
|
|
|
|
Net operating loss carryforwards
|
|
|
|
|
6.3
|
|
|
|
|
|
7.4
|
|
|
|
Warranty reserve
|
|
|
|
|
3.7
|
|
|
|
|
|
3.3
|
|
|
|
Accrued liabilities
|
|
|
|
|
6.5
|
|
|
|
|
|
3.4
|
|
|
|
Insurance reserve
|
|
|
|
|
1.7
|
|
|
|
|
|
1.7
|
|
|
|
Tax credits
|
|
|
|
|
2.8
|
|
|
|
|
|
2.4
|
|
|
|
Inventory
|
|
|
|
|
5.4
|
|
|
|
|
|
3.2
|
|
|
|
Derivatives
|
|
|
|
|
0.9
|
|
|
|
|
|
—
|
|
|
|
Other
|
|
|
|
|
0.1
|
|
|
|
|
|
1.1
|
|
|
|
Total deferred tax asset
|
|
|
|
|
36.2
|
|
|
|
|
|
42.2
|
|
|
|
Deferred tax liability
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangible assets
|
|
|
|
|
(273.6)
|
|
|
|
|
|
(280.3)
|
|
|
|
Property, plant & equipment
|
|
|
|
|
(20.4)
|
|
|
|
|
|
(20.1)
|
|
|
|
Unrealized foreign exchange (gain)/loss
|
|
|
|
|
(1.4)
|
|
|
|
|
|
—
|
|
|
|
Other current assets
|
|
|
|
|
(2.1)
|
|
|
|
|
|
(1.8)
|
|
|
|
Change in accounting policy
|
|
|
|
|
(4.8)
|
|
|
|
|
|
(6.3)
|
|
|
|
Derivatives
|
|
|
|
|
—
|
|
|
|
|
|
(1.6)
|
|
|
|
Total deferred tax liability
|
|
|
|
|
(302.3)
|
|
|
|
|
|
(310.1)
|
|
|
|
Subtotal
|
|
|
|
|
(266.1)
|
|
|
|
|
|
(267.9)
|
|
|
|
Valuation allowance
|
|
|
|
|
(7.5)
|
|
|
|
|
|
(8.5)
|
|
|
|
Net deferred tax liability
|
|
|
|
$
|
(273.6)
|
|
|
|
|
$
|
(276.4)
|
|
|
Deferred taxes are reflected in the Company’s consolidated balance sheet based on tax jurisdiction as follows (in millions):
|
|
|
|
December 31,
|
|
|
|
|
|
2020
|
|
|
2019
|
|
|
Deferred tax asset
|
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
|
Deferred tax liability
|
|
|
|
|
(273.6)
|
|
|
|
|
|
(276.4)
|
|
|
|
Net deferred tax liability
|
|
|
|
$
|
(273.6)
|
|
|
|
|
$
|
(276.4)
|
|
|
The Company has U.S. net operating loss (“NOL”) carryforwards in the amount of $12.9 million and $13.0 million as of December 31, 2020 and 2019, respectively, from historical acquisitions. The NOL carryforwards expire between 2035 and 2037. The Internal Revenue Code of 1986 contains certain provisions that can limit a taxpayer’s ability to utilize net operating loss and tax credit carryforwards in any given year resulting from ownership changes in excess of 50 percent over a three-year period. The Company estimates that $10.4 million of these NOL carryforwards may be subject to limitation and potentially expire
Hayward Holdings, Inc.
Notes to Consolidated Financial Statements (Continued)
8. Income Taxes (Continued)
prior to their utilization. The Company maintains a valuation allowance on the portion of NOL carryforwards that may expire prior to their utilization.
In addition, the Company’s France subsidiary has NOL carryforwards totaling approximately $12.6 million and $15.5 million as of December 31, 2020 and 2019, respectively, which have no expiration. The Company recorded a valuation allowance related to this NOL carryforward as well as the other net deferred tax assets of the France subsidiary as of December 31, 2020 and 2019.
In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities and projected future taxable income in making this assessment. Management evaluates the need for valuation allowances on the deferred tax assets according to the provisions of ASC 740, Income Taxes. In making this determination, the Company assesses all available evidence (positive and negative) including recent earnings, internally-prepared income projections, and historical financial performance.
The Company’s total valuation allowance of $7.5 million and $8.5 million as of December 31, 2020 and 2019, respectively, consists of U.S. NOL carryforwards, net deferred tax assets of the Company’s France subsidiary, and U.S. tax credits. The 2020 change in the valuation allowance primarily relates to the utilization of the Company’s France subsidiary net operating losses. The 2019 change in the valuation allowance primarily relates to the recording of a $4.6 million valuation allowance on the net deferred tax assets of the Company’s France subsidiary.
The following table is a rollforward of the valuation allowance applied against certain deferred tax assets (in millions):
|
|
|
|
Balance at
Beginning of
Period
|
|
|
Provision for
income taxes
|
|
|
Deductions
|
|
|
Other
|
|
|
Balance at
End of Period
|
|
|
2019
|
|
|
|
$
|
3.8
|
|
|
|
|
$
|
4.6
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
0.1
|
|
|
|
|
$
|
8.5
|
|
|
|
2020
|
|
|
|
$
|
8.5
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
(1.0)
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
7.5
|
|
|
It is the Company’s practice and intention to reinvest the earnings of its non-U.S. subsidiaries in those operations. As of December 31, 2020 and 2019, the Company has not made a provision for U.S. state tax or additional foreign withholding taxes on approximately $68.2 million for 2020 and $45.5 million for 2019 of the undistributed earnings and profits that are indefinitely reinvested. Generally, the foreign earnings previously subject to the Transition Tax in the U.S. can be distributed without additional U.S. federal tax, however any such repatriation of previously unremitted foreign earnings could incur withholding and other foreign taxes, if applicable, as well as certain U.S. state taxes when remitted in any given year. Such amounts become subject to U.S. taxation upon the remittance of dividends and under certain other circumstances. It is not practicable to estimate the amount of deferred tax liability related to potential remittance from these foreign subsidiaries.
The Company will recognize a tax benefit in the financial statements for an uncertain tax position only if the Company’s assessment is that the position is “more likely than not” (i.e., a likelihood greater than 50 percent) to be allowed by the tax jurisdiction based solely on the technical merits of the position. The term “tax position” refers to a position in a previously filed tax return or a position expected to be taken in a future tax return that is reflected in measuring current or deferred income tax assets and liabilities for financial reporting purposes.
Hayward Holdings, Inc.
Notes to Consolidated Financial Statements (Continued)
8. Income Taxes (Continued)
The following table is a reconciliation of unrecognized tax benefits including any interest and penalties (in millions):
|
|
Balance at January 1, 2019
|
|
|
|
$
|
0.4
|
|
|
|
|
Currency
|
|
|
|
|
(0.1)
|
|
|
|
|
Balance at December 31, 2019
|
|
|
|
|
0.3
|
|
|
|
|
Currency
|
|
|
|
|
—
|
|
|
|
|
Balance at December 31, 2020
|
|
|
|
$
|
0.3
|
|
|
The Company files tax returns in various jurisdictions. The last completed Internal Revenue Service (“IRS”) audit was for the year 2011. With few exceptions, the Company is no longer subject to U.S. federal, state and local, examinations for years before 2017. The statute of limitations in non-U.S. jurisdictions generally ranges between three to four years. The Company’s policy is to record estimated interest and penalties related to uncertain tax positions in income tax expense, which as of December 31, 2020 and 2019 was zero. The Company believes that it is possible that approximately $0.3 million of unrecognized tax benefits may be recognized during the first quarter of 2021 as a result of a lapse of the statute of limitations.
On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was signed into law making changes to the Internal Revenue Code. Changes include, but are not limited to, the ability to elect to increase the interest deduction limitation from 30% to 50% of adjusted taxable income for 2019 and 2020. In 2020, the Company accounted for the impact of the CARES Act with the most impactful benefit being an increase in tax deductible interest expense. In addition certain technical corrections to the Tax Cuts and Jobs Act of 2017 (‘‘Jobs Act’’) were promulgated in 2020 which retroactively reduced our 2019 taxable income, allowing for a refund of taxes previously paid.
9. Long-Term Debt
Long-term debt consists of the following (in millions):
|
|
|
|
December 31,
|
|
|
|
|
|
2020
|
|
|
2019
|
|
|
First Lien Term Facility, due August 4, 2024
|
|
|
|
$
|
958.0
|
|
|
|
|
$
|
961.5
|
|
|
|
Incremental First Lien Term Facility, due August 4, 2026
|
|
|
|
|
150.0
|
|
|
|
|
|
—
|
|
|
|
Second Lien Term Facility, due August 4, 2025
|
|
|
|
|
205.0
|
|
|
|
|
|
205.0
|
|
|
|
ABL Revolving Credit Facility
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
Capital lease obligations
|
|
|
|
|
9.7
|
|
|
|
|
|
2.2
|
|
|
|
Subtotal
|
|
|
|
|
1,322.7
|
|
|
|
|
|
1,168.7
|
|
|
|
Less: Current portion of the long-term debt
|
|
|
|
|
(2.8)
|
|
|
|
|
|
(0.4)
|
|
|
|
Less: Unamortized debt issuance costs
|
|
|
|
|
(19.6)
|
|
|
|
|
|
(20.5)
|
|
|
|
Total
|
|
|
|
$
|
1,300.3
|
|
|
|
|
$
|
1,147.8
|
|
|
Interest expense for the year ended December 31, 2020 consisted of $68.5 million of interest on the outstanding debt, $5.4 million of amortization of deferred financing fees and $0.3 million of interest income. Interest expense for the year ended December 31, 2019 consisted of $79.3 million of interest on the outstanding debt, $5.3 million of amortization of deferred financing fees and $0.1 million of interest income.
Hayward Holdings, Inc.
Notes to Consolidated Financial Statements (Continued)
9. Long-Term Debt (Continued)
On August 4, 2017, the Company entered into: (i) a First Lien Credit Agreement pursuant to which it borrowed $850.0 million under a seven-year first lien term loan facility maturing on August 4, 2024 (the “First Lien Term Facility”), (ii) a Second Lien Credit Agreement pursuant to which it borrowed $285.0 million under an eight-year second lien term loan facility maturing on August 4, 2025 (the “Second Lien Term Facility”), and together with the First Lien Term Facility, the “Term Loan Facilities”) and (iii) an ABL Credit Agreement providing a five year $250.0 million asset-based revolving credit facility maturing on August 4, 2022 (the “ABL Revolving Credit Facility”).
Each of the Term Loan Facilities contain customary affirmative and negative covenants, including restrictions on indebtedness, liens, dividends, distributions, acquisitions, investments, sale or transfer of assets, transactions with affiliates and maintenance of certain financial ratios. The Term Loan Facilities also contain customary events of default, including a change of control.
The Term Facilities are guaranteed by substantially all of the Company’s domestic, wholly-owned subsidiaries and collateralized by substantially all of the assets of the Company and such guarantors. The First Lien Term Facility is secured by such collateral on a first priority basis and the Second Lien Facility is secured by such collateral on a second priority basis.
No event of default has occurred for either of the Term Loan Facilities or the Revolving Credit Facility as of December 31, 2020 and 2019.
First Lien Term Facility
On September 28, 2018, the Company entered into an amendment for the First Lien Credit Agreement (the “First Amendment”) which, among other things, increased borrowings by an aggregate principal amount equal to $150.0 million and increased the required quarterly payments of outstanding principal under the First Lien Credit Agreement from 0.25% to approximately 0.2525%. The Company used the increased borrowings to fund the acquisition of Paramount Leisure Industries, Inc., pay down approximately $80.0 million in term loans outstanding under the Second Lien Term Facility and pay all costs associated with the First Amendment and prepayment of the Second Lien Term Facility.
On October 28, 2020, the Company entered into a second incremental amendment to the First Lien Term Facility, which provided for additional first lien term loans in an aggregate principal amount of $150.0 million, the proceeds of which were used to fund a portion of a special distribution of approximately $275.0 million to the Class A stockholders. The special distribution reduced the liquidation preference of the Class A stock, and is considered a return of capital on the Class A stock for accounting purposes. At the Company’s option, borrowings under this 2020 Incremental Term Loan bear interest at either: (i) the alternative base rate plus a margin of 2.75% or (ii) the adjusted London interbank offered (“LIBO”) rate plus a margin of 3.75% subject to a LIBO floor of 0.75% per annum. The required quarterly payments of outstanding principal under the 2020 Incremental Term Loan is 0.25%. Additional borrowing under the amendment has a maturity date of August 4, 2026.
At the Company’s option, borrowings under the First Lien Term Facility bear interest at either: (i) the alternative base rate plus a margin of 2.50% or (ii) the adjusted London interbank offered (“LIBO”) rate plus a margin of 3.50%. Interest is paid quarterly beginning September 30, 2017. At December 31, 2020 and 2019, the interest rate was 4.93% and 5.30%, respectively.
The Company may voluntarily prepay any borrowings outstanding under the First Lien Term Facility without a premium or penalty. In the years ending December 31, 2020 and 2019, respectively, the Company voluntarily prepaid $3.5 million and $17.5 million of the borrowings outstanding under the First Lien Term Facility. In addition, the First Lien Credit Agreement requires mandatory principal payments to be made based on certain events, including annual excess cash flow (as calculated in accordance with the First Lien Credit Agreement), non-ordinary course sales of assets and the incurrence of debt not otherwise
Hayward Holdings, Inc.
Notes to Consolidated Financial Statements (Continued)
9. Long-Term Debt (Continued)
permitted under the First Lien Credit Agreement, each subject to certain exceptions and thresholds as set forth in the First Lien Credit Agreement.
Second Lien Term Facility
At the Company’s option, borrowings under the Second Lien Term Facility bear interest at either: (i) the alternative base rate plus a margin of 7.25% or (ii) the adjusted LIBO plus a margin of 8.25%. At December 31, 2020 and 2019, the interest rate was 9.98% and 10.05%, respectively.
Borrowings under the Second Lien Term Facility are not subject to scheduled amortization of principal. The Second Lien Credit Agreement requires mandatory prepayments substantially similar to the First Lien Credit Agreement, but voluntary prepayments under the Second Lien Credit Agreement are not permitted, subject to limited exceptions, until all amounts under the First Lien Credit Agreement have been paid in full.
ABL Revolving Credit Facility
The ABL Credit Agreement provides for an ABL Revolving Credit Facility in an aggregate amount of borrowings of up to $250.0 million, including letters of credit, subject to a borrowing base calculation based on available eligible receivables, inventory and qualified cash. The ABL Revolving Credit Facility is available for working capital and general corporate purposes. Approximately $220.0 million is available for borrowings in U.S. dollars, including up to $15.0 million in letters of credit, and $30.0 million is available for borrowings in equivalent Canadian dollars, including up to $5.0 million in letters of credit.
Unamortized debt issuance fees related to line of credit were $1.0 million and $1.6 million as of December 31, 2020 and 2019, respectively, which were recorded within Other non-current assets of the Company’s consolidated balance sheet.
At the Company’s option, borrowings denominated in U.S. dollars under the ABL Revolving Credit Facility bear interest either at (i) the alternative base rate plus an initial applicable margin of 0.50% or (ii) adjusted LIBO rate plus an initial applicable margin of 1.50%. Borrowings denominated in Canadian dollars under the ABL Revolving Credit Facility bear interest at the Canada’s prime rate plus an initial applicable margin of 0.50%.
The initial margins for such borrowings will be adjusted depending on the availability under the ABL Revolving Credit Facility. For LIBO rate borrowings, the applicable margins will be 1.25%, 1.50% and 1.75% and for alternative base rate and Canadian dollar borrowings, the applicable margins will be 0.25%, 0.50% and 0.75%. At December 31, 2020 and 2019, there were no balances outstanding on the ABL Revolving Credit Facility. In addition, the Company pays an annual unused commitment fee at a rate of 0.375% or 0.25% respectively based on whether the unused portion of the $250 million commitment facility is greater than or less than 50% of the borrowing base. The fee is calculated daily and payable quarterly.
The ABL Revolving Credit Facility contains customary affirmative and negative covenants, including restrictions on indebtedness, liens, dividends, distributions, acquisitions, investments, sale or transfer of assets and transactions with affiliates. The ABL Revolving Credit Facility also contains customary events of default, including upon a change in control. If availability under the ABL Revolving Credit Facility is less than a specified amount, the ABL Credit Agreement contains a requirement to maintain a fixed charge coverage ratio (as defined in the ABL Credit Agreement) of not less than 1.0 to 1.0. No event of default has occurred as of December 31, 2020 and 2019 and the Company did not trigger applicability of the fixed charge coverage ratio.
The U.S. dollar portion of the ABL Revolving Credit Facility is guaranteed by the same guarantors, and collateralized by the same assets, as the Term Loan Facilities. To the extent such collateral consists of
Hayward Holdings, Inc.
Notes to Consolidated Financial Statements (Continued)
9. Long-Term Debt (Continued)
inventory, receivables, deposit accounts and related assets, the rights of the lenders under the ABL Revolving Credit Facility in such collateral is senior and prior to the rights of the lenders under the Term Loan Facilities. With respect to other collateral, the rights of the lenders under the Term Loan Facilities are senior and prior to the rights of the lenders under the ABL Revolving Credit Facility. The Canadian dollar portion of the ABL Revolving Credit Facility is available to the Company’s Canada subsidiary, collateralized by substantially all of their assets. At December 31, 2020 and 2019, the Company had outstanding letters of credit totaling $4.4 million and $4.9 million, respectively.
At December 31, 2020, the principal payments of the Company’s long-term debt obligations are as follows (in millions):
|
|
2021
|
|
|
|
$
|
0.8
|
|
|
|
|
2022
|
|
|
|
|
11.3
|
|
|
|
|
2023
|
|
|
|
|
11.5
|
|
|
|
|
2024
|
|
|
|
|
939.0
|
|
|
|
|
2025
|
|
|
|
|
206.5
|
|
|
|
|
Thereafter
|
|
|
|
|
143.9
|
|
|
|
|
Total
|
|
|
|
$
|
1,313.0
|
|
|
10. Derivatives and Hedging Transactions
The Company holds derivative financial instruments for the purpose of hedging the risks of certain identifiable and anticipated transactions. In general, the types of risks hedged are those relating to the variability of future earnings and cash flows caused by movements in foreign currency exchange rates and interest rates. In hedging the transactions, the Company in the normal course of business, holds the following types of derivatives.
Interest Rate Swap Agreements
The Company enters into interest rate swap agreements designated as cash flow hedges to manage its interest rate risk related to its variable rate debt obligations. As cash flow hedges, unrealized gains are recognized as assets while unrealized losses are recognized as liabilities. The interest rate swap agreements are highly correlated to the changes in interest rates to which the Company is exposed. Unrealized gains and losses on these instruments have been designated as effective and as such, the related gains or losses have been recorded as a component of accumulated other comprehensive loss, net of tax.
As of December 31, 2020, the Company is a party to two interest rate swap agreements that effectively converts an initial notional amount of $550.0 million of its variable rate debt obligations to a fixed rate debt. The interest rate swap agreements expire in August 2021.
On December 23, 2020, the Company entered into three variable rate collar derivative foreign exchange contracts to hedge US $30 million of intercompany remittances through June 2021.
Net Investment Hedges
The Company uses net investment hedges to minimize its exposure to variability in the foreign currency translation of its net investment in one of its international subsidiaries. The effective portion of changes in the fair value of the hedging instrument is recognized in accumulated other comprehensive loss consistent with the related translation gains and losses of the hedged net investment. For net investment hedges, all critical terms of the hedged item and the hedging instrument are matched at inception and on an ongoing basis to minimize the risk of hedge ineffectiveness.
Hayward Holdings, Inc.
Notes to Consolidated Financial Statements (Continued)
10. Derivatives and Hedging Transactions (Continued)
At December 31, 2017, the Company entered into a four year euro-denominated cross currency swap agreement of €75.0 million to hedge the net investment in one of its foreign subsidiaries designated as a hedge expiring on August 31, 2021. Since both the notional value of the derivative designated as a hedge of a net investment in a foreign subsidiary equals the portion of the net investment designated as being hedged and the derivative relates solely to the foreign exchange rate between the functional currency of the hedged net investment and the Company’s functional currency, all changes in fair value of the derivative are reported in the cumulative translation adjustment accounts, net of tax within accumulated other comprehensive loss in the consolidated balance sheet.
The amounts recorded in accumulated other comprehensive loss will be reclassified to earnings only upon the sale or liquidation of the Company’s investment in one of its international subsidiaries or on maturity of the underlying agreements.
The following table summarizes the gross fair values and location on the consolidated balance sheet of the Company’s derivatives (in millions):
|
|
|
|
2020
|
|
|
2019
|
|
|
|
|
|
Accrued
Expenses and
Other Liabilities
|
|
|
Other Non-
Current Assets
|
|
|
Accrued
Expenses and
Other Liabilities
|
|
|
Other Non-
Current
Liabilities
|
|
|
Interest rate swaps
|
|
|
|
$
|
6.5
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
0.3
|
|
|
|
|
$
|
2.2
|
|
|
|
Net investment hedge
|
|
|
|
|
2.8
|
|
|
|
|
|
4.6
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
Total
|
|
|
|
$
|
9.3
|
|
|
|
|
$
|
4.6
|
|
|
|
|
$
|
0.3
|
|
|
|
|
$
|
2.2
|
|
|
The following tables present the effects of derivative instruments by contract type in accumulated other comprehensive loss in the consolidated statement of operations (in millions):
|
|
|
|
Unrealized Gain (Loss) Recognized
in AOCI
|
|
|
Gain (Loss) Reclassified From AOCI
to Earnings
|
|
|
Location of Gain (loss)
Reclassified from AOCI
into Earnings
|
|
|
|
|
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
|
|
|
|
Interest rate swaps
|
|
|
|
$
|
(2.9)
|
|
|
|
|
$
|
(9.4)
|
|
|
|
|
$
|
(6.6)
|
|
|
|
|
$
|
3.5
|
|
|
|
Interest Expense
|
|
|
|
Net investment hedge
|
|
|
|
|
(5.4)
|
|
|
|
|
|
2.8
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
N/A
|
|
|
|
Total
|
|
|
|
$
|
(8.3)
|
|
|
|
|
$
|
(6.6)
|
|
|
|
|
$
|
(6.6)
|
|
|
|
|
$
|
3.5
|
|
|
|
|
|
|
11. Fair Value Measurements
We are required to disclose the estimated fair values of all financial instruments, even if they are not carried at their fair value. The fair values of financial instruments are estimates based upon market conditions and perceived risks. These estimates require management’s judgment and may not be indicative of the future fair values of the assets and liabilities.
The Company’s financial instruments include cash and cash equivalents, accounts receivable, and accounts payable. The carrying amount of these instruments approximate fair value because of their short-term nature.
The Company’s interest rate swaps and the net investment hedge are measured in the financial statements at fair value on a recurring basis. The fair values of the interest rate swaps are estimated using industry standard valuation models using market-based observable inputs, including interest rate curves. The fair value of the net investment hedge is estimated using readily observable market inputs, such as quotations on forward foreign exchange points and foreign interest rates. These instruments are customary, over-the-counter contracts with various bank counterparties that are not traded in active markets. Accordingly, the fair value measurements of the interest rate swaps and the net investment hedge are categorized as Level 2.
Hayward Holdings, Inc.
Notes to Consolidated Financial Statements (Continued)
11. Fair Value Measurements (Continued)
As of December 31, 2020, the Company’s long-term debt instruments with a carrying value of $1,313.0 million had a fair value of approximately $1,304.6 million. As of December 31, 2019, the Company’s long-term debt instruments with a carrying value of $1,166.5 million had a fair value of approximately $1,149.1 million. The estimated fair value of the long-term debt is based on observable quoted prices in active markets for similar liabilities and is classified as a Level 2 input. The fair value of the revolving credit facility approximates its carrying value.
12. Segments and Related Information
In November 2020, the Company redefined its operational and management structure to align to its key geographies and go-to market strategy and now has two reportable segments: North America and Europe & Rest of World. Operating segments have not been aggregated to form the reportable segments. The Company determined its reportable segments based on how the CODM reviews the Company’s operating results in assessing performance and allocating resources. The CODM reviews net sales, gross profit and segment income for each of the reportable segments. Gross profit is defined as net sales less cost of sales incurred by the segment. The CODM does not evaluate reportable segments using asset information as these are managed on an enterprise wide basis. Segment income is defined as segment gross profit less sales, general, and administrative expenses (“SG&A”) and RD&E.
The North America segment manufactures and sells residential and commercial swimming pool equipment and supplies as well as equipment that controls the flow of fluids. This segment is composed of three reporting units.
The Europe & Rest of World segment manufactures and sells residential and commercial swimming pool equipment and supplies. This segment is composed of two reporting units.
The Company sells its products primarily through distributors and retailers. Financial information by reportable segment, net of intercompany transactions, is included in the following summary (in millions):
|
|
|
|
2020
|
|
|
2019
|
|
|
|
|
|
North America
|
|
|
Europe & Rest
of World
|
|
|
Total
|
|
|
North America
|
|
|
Europe & Rest
of World
|
|
|
Total
|
|
|
Net sales
|
|
|
|
$
|
706.5
|
|
|
|
|
$
|
168.9
|
|
|
|
|
$
|
875.4
|
|
|
|
|
$
|
575.9
|
|
|
|
|
$
|
157.5
|
|
|
|
|
$
|
733.4
|
|
|
|
Gross profit
|
|
|
|
$
|
334.6
|
|
|
|
|
$
|
62.4
|
|
|
|
|
$
|
397.0
|
|
|
|
|
$
|
267.0
|
|
|
|
|
$
|
56.5
|
|
|
|
|
$
|
323.5
|
|
|
|
Segment income
|
|
|
|
$
|
171.8
|
|
|
|
|
$
|
30.8
|
|
|
|
|
$
|
202.6
|
|
|
|
|
$
|
105.9
|
|
|
|
|
$
|
26.4
|
|
|
|
|
$
|
132.3
|
|
|
|
Capital expenditures
|
|
|
|
$
|
13.2
|
|
|
|
|
$
|
1.0
|
|
|
|
|
$
|
14.2
|
|
|
|
|
$
|
23.6
|
|
|
|
|
$
|
1.4
|
|
|
|
|
$
|
25.0
|
|
|
|
Depreciation
|
|
|
|
$
|
16.6
|
|
|
|
|
$
|
1.5
|
|
|
|
|
$
|
18.1
|
|
|
|
|
$
|
16.0
|
|
|
|
|
$
|
1.2
|
|
|
|
|
$
|
17.2
|
|
|
Hayward Holdings, Inc.
Notes to Consolidated Financial Statements (Continued)
12. Segments and Related Information (Continued)
The following table presents a reconciliation of segment income to income from operations before income taxes (in millions):
|
|
|
|
December 31,
|
|
|
|
|
|
2020
|
|
|
2019
|
|
|
Total segment income
|
|
|
|
$
|
202.6
|
|
|
|
|
$
|
132.3
|
|
|
|
Corporate expense, net
|
|
|
|
|
20.8
|
|
|
|
|
|
8.1
|
|
|
|
Acquisition and restructuring related expense (income)
|
|
|
|
|
19.3
|
|
|
|
|
|
(16.3)
|
|
|
|
Amortization of intangible assets
|
|
|
|
|
37.9
|
|
|
|
|
|
41.8
|
|
|
|
Operating income
|
|
|
|
|
124.6
|
|
|
|
|
|
98.7
|
|
|
|
Interest expense, net
|
|
|
|
|
73.6
|
|
|
|
|
|
84.5
|
|
|
|
Other (income) expense, net
|
|
|
|
|
(6.8)
|
|
|
|
|
|
2.1
|
|
|
|
Total other expense
|
|
|
|
|
66.8
|
|
|
|
|
|
86.6
|
|
|
|
Income from operations before income taxes
|
|
|
|
$
|
57.8
|
|
|
|
|
$
|
12.1
|
|
|
13. Earnings Per Share
Class A shares and Class B common shares participate in dividends on an as converted 1:1 basis following satisfaction of the dividend preference to Class A stockholders. The following table sets forth the computation of basic and diluted net income per share attributable to common stockholders (in millions, except share and per share amounts):
|
|
|
|
December 31,
|
|
|
|
|
|
2020
|
|
|
2019
|
|
|
Net income
|
|
|
|
$
|
43.3
|
|
|
|
|
$
|
8.5
|
|
|
|
Dividends paid to Class C stockholders
|
|
|
|
|
0.2
|
|
|
|
|
|
0.2
|
|
|
|
Net income attributable to Class A and Class B stockholders
|
|
|
|
|
43.1
|
|
|
|
|
|
8.3
|
|
|
|
Net income attributable to Class A stockholders, basic (a)
|
|
|
|
|
42.7
|
|
|
|
|
|
8.2
|
|
|
|
Net income attributable to Class B common stockholders
|
|
|
|
$
|
0.4
|
|
|
|
|
$
|
0.1
|
|
|
|
Weighted average number of Class B common shares outstanding, basic
|
|
|
|
|
6,830
|
|
|
|
|
|
4,742
|
|
|
|
Earnings per share attributable to Class B common stockholders, basic
|
|
|
|
$
|
49.14
|
|
|
|
|
$
|
9.50
|
|
|
|
|
|
|
December 31,
|
|
|
|
|
|
2020
|
|
|
2019
|
|
|
Net income
|
|
|
|
$
|
43.3
|
|
|
|
|
$
|
8.5
|
|
|
|
Dividends paid to Class C stockholders
|
|
|
|
|
0.2
|
|
|
|
|
|
0.2
|
|
|
|
Net income attributable to Class A and Class B stockholders
|
|
|
|
|
43.1
|
|
|
|
|
|
8.3
|
|
|
|
Net income attributable to Class A stockholders, diluted (a)
|
|
|
|
|
42.5
|
|
|
|
|
|
8.2
|
|
|
|
Net income attributable to Class B common stockholders
|
|
|
|
$
|
0.6
|
|
|
|
|
$
|
0.1
|
|
|
|
Weighted average number of Class B common shares outstanding,
diluted (b)
|
|
|
|
|
12,661
|
|
|
|
|
|
12,493
|
|
|
|
Earnings per share attributable to Class B common stockholders, diluted
|
|
|
|
$
|
48.81
|
|
|
|
|
$
|
9.42
|
|
|
Hayward Holdings, Inc.
Notes to Consolidated Financial Statements (Continued)
13. Earnings Per Share (Continued)
(a)
Net income attributable to Class A stockholders is impacted by the total shares of participating securities, basic and diluted, on an as converted basis
(b)
For the years ended December 31, 2020 and 2019 there were potential Class B common shares totaling approximately 20,913 and 14,250, respectively, that were excluded from the computation of diluted EPS as the inclusion of such shares would have been anti-dilutive.
14. Commitments and Contingencies
Litigation
The Company is involved in litigation arising in the normal course of business. Where appropriate, these matters have been submitted to the Company’s insurance carrier. The Company determines whether an estimated loss from a contingency should be accrued by assessing whether a loss is deemed probable and can be reasonably estimated. It is not possible to quantify the ultimate liability, if any, in these matters. Although the Company can give no assurances about the resolution of pending claims, litigation or other disputes and the effect such outcomes may have on the Company, in the opinion of management, it is remote that such litigation will have a material adverse effect on the financial position, results of operations or cash flows of the Company.
Lease Commitment Summary
The following table presents future minimum capital and operating lease payments and related sublease income under our non-cancelable lease arrangements with original or remaining terms in excess of one year as of December 31, 2020 (in millions):
|
|
|
|
Sub-lease
|
|
|
Operating
Leases
|
|
|
Capital Leases
|
|
|
2021
|
|
|
|
$
|
(0.5)
|
|
|
|
|
$
|
3.7
|
|
|
|
|
$
|
2.3
|
|
|
|
2022
|
|
|
|
|
(0.5)
|
|
|
|
|
|
4.4
|
|
|
|
|
|
2.2
|
|
|
|
2023
|
|
|
|
|
(0.5)
|
|
|
|
|
|
4.0
|
|
|
|
|
|
2.2
|
|
|
|
2024
|
|
|
|
|
(0.5)
|
|
|
|
|
|
3.2
|
|
|
|
|
|
2.1
|
|
|
|
2025
|
|
|
|
|
—
|
|
|
|
|
|
3.3
|
|
|
|
|
|
1.7
|
|
|
|
Thereafter
|
|
|
|
|
—
|
|
|
|
|
|
23.9
|
|
|
|
|
|
0.1
|
|
|
|
Total minimum lease payments
|
|
|
|
$
|
(2.0)
|
|
|
|
|
$
|
42.5
|
|
|
|
|
|
10.6
|
|
|
|
Less: amount representing interest
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.9)
|
|
|
|
Total aggregate finance lease and debt payments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
9.7
|
|
|
Lease expense was $7.8 million and $4.9 million for the years ended December 31, 2020 and 2019, respectively, recorded within cost of sales and selling, general and administrative expenses, depending on the nature of the lease.
15. Stockholders’ Equity
On August 4, 2017, the Company adopted its Stockholders’ Agreement to establish capitalization terms and voting rights. The outstanding capital stock of the Company consists of three classes of stock. The Company authorized 1,500,000 shares of Class A stock, at a par value of $0.001 per share. The Company also authorized 150,000 shares of Class B common stock at a par value of $0.001 per share. Collectively, Class A stock and Class B common stock are considered the “Voting Stock”, whereby each share is entitled to one vote.
Hayward Holdings, Inc.
Notes to Consolidated Financial Statements (Continued)
15. Stockholders’ Equity (Continued)
With respect to dividend rights and rights on liquidation, Class A stock ranks senior to the Class B common stock. Upon any liquidation, dissolution, or winding up of the Company, or a change of control (as defined in the Stockholders’ Agreement), the Class A stock shall be entitled to receive, on a preferred basis prior and in preference to any distribution in respect of the Class B common stock, an amount equal to the original purchase price, of the Class A stock minus any distributions paid to Class A stockholders. Thereafter, the Class A stock and Class B common stock will be entitled to share in any distribution on a pro rata basis based on the number of shares outstanding.
The outstanding shares of Class A stock will automatically convert into shares of Class B common stock in connection with the first sale of shares of Class B common stock to the public in a firm commitment underwritten public offering pursuant to a registration statement. At such time each outstanding share of Class A stock would convert into a share of common stock adjusted to give effect to any common stock split plus, an additional number of shares determined by dividing (a) the Class A preference amount of such share of Class A stock as adjusted to give effect to any stock split of common stock (the “Class A Preference Amount”), by (b) an initial public offering (“IPO’’) price of a share of common stock, net of the per share underwriting discount, rounded to the nearest whole share, and the Company would redeem each outstanding share of Class C stock for an aggregate price of $1.00.
In October 2020, the Board of Directors approved a distribution of $275.0 million, or $316.16 (three hundred and sixteen dollars and sixteen cents) per share of Class A stock of the Company.
The Company shall at all times reserve and keep available out of its authorized but unissued shares of Class B common stock, solely for effecting the conversion of shares of its Class A stock, such number that shall be sufficient to effect the conversion of all outstanding Class A stock. Class C stockholders do not have voting rights, and are entitled to receive a quarterly dividend. For the years ended December 31, 2020 and 2019, respectively, dividends declared and paid relating to Class C stock were $0.2 million. Upon a qualifying event, such as an IPO, Class C stock shall be redeemed by the Company for an aggregate purchase price of $1.00.
16. Stock-based Compensation
On August 4, 2017, the Company adopted the 2017 Equity Incentive Plan of Hayward Holdings (the “2017 Plan”), which provides for the issuance of stock options, restricted stock and restricted stock units to officers, directors and employees. The number of shares authorized for delivery under the 2017 Plan is 95,994.11 shares of Class B common stock. On May 21, 2018, the Company amended and restated the 2017 Plan to increase the number of shares authorized for delivery under the 2017 Plan to include 2,000 shares of Restricted Class A stock, and the 2017 Plan was subsequently amended and restated on November 22, 2019 to increase the number of shares of Restricted Class A stock authorized for delivery under the 2017 Plan to 2,949 shares. The stock options generally have a maximum term of up to 10 years and vest over a period determined by the Compensation Committee of the Board of Directors, generally 5 years. As of December 31, 2020 there were 14,425 remaining shares available for grant under the 2017 Plan.
Pursuant to the 2017 Plan, the Company has granted:
•
Class A restricted stock awards which vest and become exercisable upon a change of control or an IPO;
•
time-based Class B stock options which vest in five equal annual installments from the grant date;
•
performance-based Class B stock options which vest and become exercisable upon a qualifying change of control transaction and a minimum return equal to two times theinitial invested capital of certain holders of Class A shares (the “Minimum Return”), or an IPO and an average trade price greater than the Minimum Return over any consecutive 10-trading day period;
Hayward Holdings, Inc.
Notes to Consolidated Financial Statements (Continued)
16. Stock-based Compensation (Continued)
•
Class B time-based restricted stock awards which vest in five equal annual installments beginning on August 4, 2018; and
•
Class B performance-based restricted stock awards which vest upon a qualifying change of control transaction and the Minimum Return, or an IPO and an average trade price greater than the Minimum Return over any consecutive 10-trading day period .
Time-Based Stock Options
The following table summarizes activity for time-based stock option under our plan:
Intrinsic value in millions
|
|
|
|
Number of
Shares
|
|
|
Weighted-
Average
Exercise
Price
|
|
|
Weighted-
Average
Remaining
Contractual
Life (years)
|
|
|
Aggregate
Intrinsic Value
|
|
|
Outstanding as of January 1, 2019
|
|
|
|
|
23,478
|
|
|
|
|
$
|
97.75
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Granted
|
|
|
|
|
14,250
|
|
|
|
|
$
|
294.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercised
|
|
|
|
|
(487)
|
|
|
|
|
$
|
97.75
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forfeited
|
|
|
|
|
(1,837)
|
|
|
|
|
$
|
97.75
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding as of December 31, 2019
|
|
|
|
|
35,404
|
|
|
|
|
$
|
176.74
|
|
|
|
|
|
8.48
|
|
|
|
|
$
|
3.71
|
|
|
|
Granted
|
|
|
|
|
6,663
|
|
|
|
|
$
|
272.92
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercised
|
|
|
|
|
(3,608)
|
|
|
|
|
$
|
97.75
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forfeited
|
|
|
|
|
(3,739)
|
|
|
|
|
$
|
103.85
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding as of December 31, 2020
|
|
|
|
|
34,720
|
|
|
|
|
$
|
211.26
|
|
|
|
|
|
7.50
|
|
|
|
|
$
|
14.99
|
|
|
|
Options exercisable as of December 31, 2020
|
|
|
|
|
12,242
|
|
|
|
|
$
|
170.77
|
|
|
|
|
|
6.16
|
|
|
|
|
$
|
4.86
|
|
|
|
Options expected to vest as of December 31, 2020
|
|
|
|
|
22,478
|
|
|
|
|
$
|
233.31
|
|
|
|
|
|
8.23
|
|
|
|
|
$
|
10.13
|
|
|
|
|
|
|
Number of
Shares
|
|
|
Weighted-
Average Grant-
Date Fair Value
|
|
|
Options expected to vest as of December 31, 2019
|
|
|
|
|
28,223
|
|
|
|
|
$
|
270.15
|
|
|
|
Options expected to vest as of December 31, 2020
|
|
|
|
|
22,478
|
|
|
|
|
$
|
253.34
|
|
|
|
Options granted during the year ended December 31, 2020
|
|
|
|
|
6,663
|
|
|
|
|
$
|
197.97
|
|
|
|
Options vested during the year ended December 31, 2020
|
|
|
|
|
7,791
|
|
|
|
|
$
|
223.24
|
|
|
|
Options forfeited during the year ended December 31, 2020
|
|
|
|
|
3,739
|
|
|
|
|
$
|
317.93
|
|
|
Fair value of options granted
The total intrinsic value of time-based options that were exercised during 2020 was $1.2 million. At December 31, 2020, the total unrecognized compensation cost related to time-based stock options was $5.0 million. This cost is expected to be recognized over a weighted average period of 3.23 years.
The Company determined the fair value of these time-based stock options at the date of grant using the Black-Scholes option-pricing model. The principal assumptions used in the Black-Scholes option-pricing model for these stock options granted were as follows:
Hayward Holdings, Inc.
Notes to Consolidated Financial Statements (Continued)
16. Stock-based Compensation (Continued)
|
|
|
|
December 31,
|
|
|
|
|
|
2020
|
|
|
2019
|
|
|
Risk-free interest rate
|
|
|
|
|
0.13%
|
|
|
|
|
|
1.84%
|
|
|
|
Expected life (years)
|
|
|
|
|
1.5
|
|
|
|
|
|
4.0
|
|
|
|
Expected dividend yield
|
|
|
|
|
—%
|
|
|
|
|
|
—%
|
|
|
|
Expected volatility
|
|
|
|
|
58.00%
|
|
|
|
|
|
45.00%
|
|
|
The risk-free interest rate was based on the U.S. Treasury yield curve at date of grant over the expected term of these stock options. The expected volatility was based upon a comparable public company’s historical volatility.
Stock Options with Market and Performance Conditions
The following table summarizes activity for stock options with market and performance conditions under our plan:
Intrinsic value in millions
|
|
|
|
Number of
Shares
|
|
|
Weighted-
Average
Exercise Price
|
|
|
Weighted-
Average
Remaining
Contractual
Life (years)
|
|
|
Aggregate
Intrinsic
Value
|
|
|
Outstanding as of January 1, 2019
|
|
|
|
|
22,455
|
|
|
|
|
$
|
97.75
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Granted
|
|
|
|
|
14,250
|
|
|
|
|
$
|
294.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercised
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forfeited
|
|
|
|
|
(2,324)
|
|
|
|
|
$
|
97.75
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding as of December 31, 2019
|
|
|
|
|
34,381
|
|
|
|
|
$
|
179.09
|
|
|
|
|
|
8.51
|
|
|
|
|
$
|
3.53
|
|
|
|
Granted
|
|
|
|
|
5,163
|
|
|
|
|
$
|
272.92
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercised
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forfeited
|
|
|
|
|
(6,315)
|
|
|
|
|
$
|
102.26
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding as of December 31, 2020
|
|
|
|
|
33,229
|
|
|
|
|
$
|
205.18
|
|
|
|
|
|
7.69
|
|
|
|
|
$
|
16.17
|
|
|
|
Options exercisable as of December 31, 2020
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options expected to vest as of December 31, 2020
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Since these stock options vest upon a qualifying change of control transaction, and the Minimum Return, or an IPO, and an average trade price greater than the Minimum Return over any consecutive 10- trading day period the Company would recognize such stock-based compensation expense in the period in which these criteria are probable of being met. Upon the achievement of either of these conditions, any unvested performance-based stock options become 100% vested.
|
|
|
|
Number of
Shares
|
|
|
Weighted-
Average Grant-
Date Fair Value
|
|
|
Options granted during the year ended December 31, 2020
|
|
|
|
|
5,163
|
|
|
|
|
$
|
203.03
|
|
|
|
Options forfeited during the year ended December 31, 2020
|
|
|
|
|
6,315
|
|
|
|
|
$
|
261.19
|
|
|
Fair value of options granted
For the year December 31, 2020, the Company has not recognized any stock-based compensation related to these stock options as it has determined that neither a qualifying change of control transaction
Hayward Holdings, Inc.
Notes to Consolidated Financial Statements (Continued)
16. Stock-based Compensation (Continued)
nor an IPO is probable of occurring. At December 31, 2020, the total unrecognized compensation cost related to time-based stock options was $10.3 million.
The Company determined the fair value of these performance-based stock options at the date of grant using the Black-Scholes option pricing model. The principal assumptions used in the Black-Scholes option-pricing model for these stock options granted were as follows:
|
|
|
|
December 31,
|
|
|
|
|
|
2020
|
|
|
2019
|
|
|
Risk-free interest rate
|
|
|
|
|
0.13%
|
|
|
|
|
|
1.84%
|
|
|
|
Expected life (years)
|
|
|
|
|
1.5
|
|
|
|
|
|
4.0
|
|
|
|
Expected dividend yield
|
|
|
|
|
—%
|
|
|
|
|
|
—%
|
|
|
|
Expected volatility
|
|
|
|
|
58.00%
|
|
|
|
|
|
45.00%
|
|
|
The risk-free interest rate was based on the U.S. Treasury yield curve at date of grant over the expected term of these stock options. The expected volatility was based upon a comparable public companies historical volatility.
Time-Based Restricted Stock Awards
The following table summarizes activity for time-based restricted stock awards under our plan:
Grant date fair value in millions
|
|
|
|
Restricted A Stock
|
|
|
Restricted B Stock
|
|
|
|
|
|
Number of
Shares
|
|
|
Weighted
Average
Grant Date
Fair Value
|
|
|
Number of
Shares
|
|
|
Weighted
Average
Grant Date
Fair Value
|
|
|
Outstanding as of January 1, 2019
|
|
|
|
|
2,000
|
|
|
|
|
$
|
2.10
|
|
|
|
|
|
15,955
|
|
|
|
|
$
|
2.37
|
|
|
|
Modified
|
|
|
|
|
(2,000)
|
|
|
|
|
$
|
2.10
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
Redeemed
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
(6,234)
|
|
|
|
|
$
|
0.63
|
|
|
|
Outstanding as of December 31, 2019
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
9,721
|
|
|
|
|
$
|
1.73
|
|
|
|
Redeemed
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
(1,500)
|
|
|
|
|
$
|
0.27
|
|
|
|
Outstanding as of December 31, 2020
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
8,221
|
|
|
|
|
$
|
1.46
|
|
|
|
Restricted stock awards vested as of December 31, 2020
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
6,462
|
|
|
|
|
|
|
|
|
At December 31, 2020, the Company had $0.2 million of total unrecognized compensation costs relating to these restricted stock awards, which is expected to be recognized through August 4, 2022. Each share of the Company’s restricted stock is treated as an outstanding share for all purposes under Delaware General Corporation Law. Upon execution of an Award Agreement and payment of any applicable purchase price, a participant of restricted stock shall be considered the record owner of the shares of restricted stock, and shall be entitled to vote such shares of restricted stock unless otherwise specified in the Company’s certificate of incorporation or the applicable Award Agreement. There is no provision in the Company’s certificate of incorporation or any applicable award agreement that alters the voting rights associated with the shares of restricted stock. The unvested restricted stock awards do not have a nonforfeitable right to dividends and contain provisions restricting the transfer of the restricted stock. The Company or its assignees shall have the right, as may be specified in the relevant instrument, to repurchase some or all of the shares subject to the restricted stock award at such purchase price as set forth in the award agreement.
Hayward Holdings, Inc.
Notes to Consolidated Financial Statements (Continued)
16. Stock-based Compensation (Continued)
Performance-Based Restricted Stock Awards with Market and Performance Conditions
The following table summarizes activity for performance-based restricted stock awards under our plan:
Grant date fair value in millions
|
|
|
|
Restricted A Stock
|
|
|
Restricted B Stock
|
|
|
|
|
|
Number of
shares
|
|
|
Weighted
average
grant date
fair value
|
|
|
Number of
shares
|
|
|
Weighted
average
grant date
fair value
|
|
|
Outstanding as of January 1, 2019
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
15,955
|
|
|
|
|
$
|
1.56
|
|
|
|
Granted
|
|
|
|
|
949
|
|
|
|
|
$
|
1.00
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
Modified
|
|
|
|
|
2,000
|
|
|
|
|
$
|
2.10
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
Redeemed
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
(10,056)
|
|
|
|
|
$
|
0.98
|
|
|
|
Outstanding as of December 31, 2019
|
|
|
|
|
2,949
|
|
|
|
|
$
|
3.10
|
|
|
|
|
|
5,899
|
|
|
|
|
$
|
0.58
|
|
|
|
Forfeited
|
|
|
|
|
(2,000)
|
|
|
|
|
$
|
2.10
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
Redeemed
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
(1,500)
|
|
|
|
|
$
|
0.15
|
|
|
|
Outstanding as of December 31, 2020
|
|
|
|
|
949
|
|
|
|
|
$
|
1.00
|
|
|
|
|
|
4,399
|
|
|
|
|
$
|
0.43
|
|
|
|
Restricted stock awards vested as of December 31, 2020
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
Since these Class A restricted stock awards vest upon a qualifying change of control transaction, or an IPO, the Company would recognize such stock-based compensation expense in the period in which these criteria are probable of being met. Upon the occurrence of a qualifying change of control, or an IPO, any unvested performance-based restricted stock awards become fully vested.
Since these Class B restricted stock awards vest upon a qualifying change of control transaction, and the Minimum Return, or an IPO and an average trade price greater than the Minimum Return over any consecutive 10-trading day period, the Company would recognize such stock-based compensation expense in the period in which these criteria are probable of being met. Upon the achievement of either of these conditions, any unvested performance-based restricted stock awards become fully vested.
For the year ended December 31, 2020, the Company has not recognized any stock-based compensation related to these restricted stock awards as it has determined that a qualifying change of control transaction is not probable of occurring. As of December 31, 2020, the Company had $0.6 million of total unrecognized compensation costs relating to these restricted stock awards which will be recognized when a qualifying change in control transaction becomes probable. Each share of the Company’s restricted stock is treated as an outstanding share for all purposes under Delaware General Corporation Law. Upon execution of an Award Agreement and payment of any applicable purchase price, a participant of restricted stock shall be considered the record owner of the shares of restricted stock, and shall be entitled to vote such shares of restricted stock unless otherwise specified in the Company’s certificate of incorporation or the applicable Award Agreement. There is no provision in the Company’s certificate of incorporation or any applicable award agreement that alters the voting rights associated with the shares of restricted stock. The unvested restricted stock awards do not have a nonforfeitable right to dividends and contain provisions restricting the transfer of the restricted stock. The Company or its assignees shall have the right, as may be specified in the relevant instrument, to repurchase some or all of the shares subject to the restricted stock award at such purchase price as set forth in the award agreement.
17. Retirement Plans
The Company maintains the Hayward Industries Retirement Plan (“the Retirement Plan”), a Safe Harbor 401(k) Plan, for substantially all U.S. employees. Under the Retirement Plan the Company
Hayward Holdings, Inc.
Notes to Consolidated Financial Statements (Continued)
17. Retirement Plans (Continued)
contributes 3% of compensation as a non-elective contribution, following one year of service and 1,000 hours, regardless of employee deferrals and an additional non-elective contribution between 1-3% of compensation, based on age, for employees that were hired before January 1, 1996. Additionally, the Retirement Plan allows employees to elect to defer up to 60%, unless he/she is projected to be age 50 or older by the end of the taxable year, of their compensation on a pre-tax basis, not to exceed the IRS maximum and the Company matches each participant’s deferral contribution at 50% up to 6% of the employee’s deferral. The Company’s contribution to the Retirement Plan was approximately $5.2 million and $5.8 million for the years ended December 31, 2020 and 2019, respectively.
The Company maintains the nonqualified Hayward Industries Supplemental Retirement Plan (the “Supplemental Retirement Plan”). The Supplemental Retirement Plan allows key executives to contribute up to 25% of their total cash compensation (as defined in the Supplemental Retirement Plan). The Company matches up to 9% of the compensation contributed to the Supplemental Retirement Plan. The employer contributions vest immediately. The employer contribution was approximately $0.3 million for the years ended December 31, 2020 and 2019, respectively.
The value of investments related to the Supplemental Retirement Plan is included in other assets and a corresponding liability to participants is recorded in other liabilities of approximately $2.9 million and $2.4 million for the years ended December 31, 2020 and 2019, respectively.
18. Acquisition and Restructuring Related Expense (Income)
Acquisition and restructuring related income, net consists of the following (in millions):
|
|
|
|
December 31,
|
|
|
|
|
|
2020
|
|
|
2019
|
|
|
Gain on sale of real estate
|
|
|
|
$
|
—
|
|
|
|
|
$
|
(16.9)
|
|
|
|
Remeasurement of contingent consideration
|
|
|
|
|
—
|
|
|
|
|
|
(7.4)
|
|
|
|
Business restructuring costs
|
|
|
|
|
17.7
|
|
|
|
|
|
7.4
|
|
|
|
Other restructuring costs
|
|
|
|
|
1.6
|
|
|
|
|
|
0.6
|
|
|
|
Total
|
|
|
|
$
|
19.3
|
|
|
|
|
$
|
(16.3)
|
|
|
In 2019, we announced the cessation of certain manufacturing and distribution operations and sold the real estate associated with these operations with a one year lease back arrangement to allow for the orderly restructuring of these operations. The Company recognized a gain of $16.9 million on the sale of this real estate which is included within Acquisition and restructuring related income, net on the Company’s consolidated statement of operations and comprehensive income. The Company simultaneously entered into a one year lease-back arrangement with the buyer of this real estate through September 30, 2020 and exited the facility upon the expiration of the term. The sale and leaseback was accounted for as separate transactions based on their respective terms in accordance with ASC 840, Leases.
The Company recognizes severance charges on a straight-line basis over the notification period in accordance with ASC 420, Exit or Disposal Activities. Such charges include the facility closure described above and other one-time termination benefits (in millions):
Hayward Holdings, Inc.
Notes to Consolidated Financial Statements (Continued)
18. Acquisition and Restructuring Related Expense (Income) (Continued)
|
|
|
|
Liability as of
January 1,
2020
|
|
|
2020 Activity
|
|
|
Liability as of
December 31,
2020
|
|
|
|
|
|
Costs
Recognized
|
|
|
Cash
Payments
|
|
|
One-time termination benefits
|
|
|
|
$
|
6.3
|
|
|
|
|
$
|
4.0
|
|
|
|
|
$
|
(10.3)
|
|
|
|
|
$
|
—
|
|
|
|
Facility-related
|
|
|
|
|
—
|
|
|
|
|
|
11.3
|
|
|
|
|
|
(11.3)
|
|
|
|
|
|
—
|
|
|
|
Other
|
|
|
|
|
—
|
|
|
|
|
|
2.4
|
|
|
|
|
|
(2.4)
|
|
|
|
|
|
—
|
|
|
|
Total
|
|
|
|
$
|
6.3
|
|
|
|
|
$
|
17.7
|
|
|
|
|
$
|
(24.0)
|
|
|
|
|
$
|
—
|
|
|
|
|
|
|
Liability as of
January 1,
2019
|
|
|
2019 Activity
|
|
|
Liability as of
December 31,
2019
|
|
|
|
|
|
Costs
Recognized
|
|
|
Cash
Payments
|
|
|
One-time termination benefits
|
|
|
|
$
|
—
|
|
|
|
|
$
|
6.4
|
|
|
|
|
$
|
(0.1)
|
|
|
|
|
$
|
6.3
|
|
|
|
Facility-related
|
|
|
|
|
—
|
|
|
|
|
|
0.8
|
|
|
|
|
|
(0.8)
|
|
|
|
|
|
—
|
|
|
|
Other
|
|
|
|
|
—
|
|
|
|
|
|
0.2
|
|
|
|
|
|
(0.2)
|
|
|
|
|
|
—
|
|
|
|
Total
|
|
|
|
$
|
—
|
|
|
|
|
$
|
7.4
|
|
|
|
|
$
|
(1.1)
|
|
|
|
|
$
|
6.3
|
|
|
Restructuring costs are included within acquisition and restructuring related costs on the Company’s consolidated statement of operations and comprehensive income, while the restructuring liability is included as a component of accrued expenses and other liabilities on the consolidated balance sheet.
19. Related Party Transactions
The Company paid management fees to certain sponsors of the Company in the amount of $0.8 million for the years ended December 31, 2020 and 2019. In addition, $0.2 million in Class C dividends were paid to one sponsor in lieu of management fees for each of the years ended December 31, 2020 and 2019. In October 2020, the Board of Directors approved a distribution of $275.0 million, or $316.16 per share to the Class A stockholders of the Company. The distribution reduced the liquidation preference of the Class A stock. Sponsors received $267.2 million of the total distribution.
20. Condensed Financial Information of Registrant (Parent Company Only)
Hayward Holdings, Inc. balance sheets are as follows (in millions, except per share data):
|
|
|
|
December 31,
|
|
|
|
|
|
2020
|
|
|
2019
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment in subsidiaries
|
|
|
|
$
|
1,080.2
|
|
|
|
|
$
|
1,034.1
|
|
|
|
Total assets
|
|
|
|
$
|
1,080.2
|
|
|
|
|
$
|
1,034.1
|
|
|
|
Liabilities, Redeemable Stock and Stockholders’ Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intercompany liabilities
|
|
|
|
$
|
276.5
|
|
|
|
|
$
|
0.6
|
|
|
|
Total current liabilities
|
|
|
|
$
|
276.5
|
|
|
|
|
$
|
0.6
|
|
|
|
Total liabilities
|
|
|
|
|
276.5
|
|
|
|
|
|
0.6
|
|
|
|
Redeemable stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A stock $0.001 par value, 1,500,000 authorized; 872,598 issued and
869,823 outstanding at December 31, 2020; 872,547 issued and 872,297
outstanding at December 31, 2019
|
|
|
|
|
594.5
|
|
|
|
|
|
869.5
|
|
|
Hayward Holdings, Inc.
Notes to Consolidated Financial Statements (Continued)
20. Condensed Financial Information of Registrant (Parent Company Only) (Continued)
|
|
|
|
December 31,
|
|
|
|
|
|
2020
|
|
|
2019
|
|
|
Class C stock $0.001 par value, 100 authorized; 100 issued and outstanding at December 31, 2020 and 2019
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
Stockholders’ equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class B common stock $0.001 par value, 150,000 authorized; 19,728 issued and 14,220 outstanding at December 31, 2020; 16,120 issued and 15,970 outstanding at December 31, 2019
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
Additional paid-in capital
|
|
|
|
|
10.3
|
|
|
|
|
|
8.0
|
|
|
|
Common stock in treasury; 23,034 and 17,151 at December 31, 2020 and
2019, respectively
|
|
|
|
|
(3.7)
|
|
|
|
|
|
(1.2)
|
|
|
|
Retained earnings
|
|
|
|
|
203.0
|
|
|
|
|
|
159.9
|
|
|
|
Accumulated other comprehensive loss
|
|
|
|
|
(0.4)
|
|
|
|
|
|
(2.7)
|
|
|
|
Total stockholders’ equity
|
|
|
|
|
209.2
|
|
|
|
|
|
164.0
|
|
|
|
Total liabilities, redeemable stock and stockholders’ equity
|
|
|
|
$
|
1,080.2
|
|
|
|
|
$
|
1,034.1
|
|
|
|
|
Hayward Holdings, Inc. statement of operations are as follows (in millions):
|
|
|
|
December 31,
|
|
|
|
|
|
2020
|
|
|
2019
|
|
|
Equity income in subsidiaries
|
|
|
|
$
|
43.1
|
|
|
|
|
$
|
8.3
|
|
|
|
Other income, net
|
|
|
|
|
0.2
|
|
|
|
|
|
0.2
|
|
|
|
Total other expense, net
|
|
|
|
|
43.3
|
|
|
|
|
|
8.5
|
|
|
|
Net income
|
|
|
|
$
|
43.3
|
|
|
|
|
$
|
8.5
|
|
|
A statement of cash flows has not been presented as Hayward Holdings, Inc. did not have any cash as of, or for, the years ended December 31, 2020 and 2019 other than distributions paid to Class A and Class C stockholders of $275.2 million and $0.2 million in the years ended December 31, 2020 and 2019, respectively.
Basis of Presentation
These condensed parent company only financial statements have been prepared in accordance with Rule 12-04, Schedule I of Regulation S-X, as the restricted net assets of the subsidiaries of Hayward Holdings, Inc. (as defined in Rule 4-08(e)(3) of Regulation S-X) exceed 25% of the consolidated net assets of the Company. The ability of Hayward Holdings, Inc.’s operating subsidiaries to pay dividends is restricted by the credit agreements governing the subsidiaries’ credit facilities. Under the credit agreements, dividends may only be paid to Hayward Holdings, Inc. for corporate overhead expenses and otherwise pursuant to customary dollar baskets and “builder” baskets (based on 50% of cumulative adjusted “Consolidated Net Income” as defined in the credit agreements) from July 1, 2017 to the applicable date of determination (taken as one accounting period, which was $160.3 million and $100.9 million as of December 31, 2020 and December 31, 2019, respectively) and equity proceeds among other things, an unlimited amount under the asset based revolving credit agreement subject to satisfying minimum availability requirements for borrowings under the credit agreement and the absence of certain defaults, and an unlimited amount under the term loan credit agreements subject to Hayward Industries, Inc.’s total leverage not exceeding certain thresholds on a pro forma basis.
These condensed parent company financial statements have been prepared using the same accounting principles and policies described in the notes to the consolidated financial statements, with the
Hayward Holdings, Inc.
Notes to Consolidated Financial Statements (Continued)
20. Condensed Financial Information of Registrant (Parent Company Only) (Continued)
only exception being that the parent company accounts for its subsidiaries using the equity method.
21. Subsequent Events
The Company evaluates events and transactions that occur subsequent to the balance sheet date but prior to the issuance date of the financial statements to determine the necessity for recognition and/or reporting of any of these events and transactions in the financial statements. The Company has evaluated subsequent events through February 16, 2021, the date that these consolidated financial statements were available to be issued. For purposes of these consolidated financial statements, the Company has not evaluated any subsequent events after this date.
Shares
Hayward Holdings, Inc.
Common Stock
P r o s p e c t u s
BofA Securities
Goldman Sachs & Co. LLC
Nomura
Credit Suisse
Morgan Stanley
Baird
Guggenheim Securities
Jefferies
BMO Capital Markets
KeyBanc Capital Markets
William Blair
Houlihan Lokey
Moelis & Company
, 2021
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13.
Other Expenses of Issuance and Distribution.
The following table sets forth the expenses payable by the registrant in connection with the issuance and distribution of the securities being registered hereby (other than underwriting discounts and commissions). All of such expenses are estimates, except for the Securities and Exchange Commission (the “SEC”), registration fee, the Financial Industry Regulatory Authority (“FINRA”) filing fee and listing fee.
|
|
SEC registration fee
|
|
|
|
$
|
10,910.00
|
|
|
|
|
FINRA filing fee
|
|
|
|
|
*
|
|
|
|
|
Listing fee
|
|
|
|
|
*
|
|
|
|
|
Printing fees and expenses
|
|
|
|
|
*
|
|
|
|
|
Legal fees and expenses
|
|
|
|
|
*
|
|
|
|
|
Blue sky fees and expenses
|
|
|
|
|
*
|
|
|
|
|
Registrar and transfer agent fees
|
|
|
|
|
*
|
|
|
|
|
Accounting fees and expenses
|
|
|
|
|
*
|
|
|
|
|
Miscellaneous expenses
|
|
|
|
|
*
|
|
|
|
|
Total
|
|
|
|
$
|
*
|
|
|
*
To be completed by amendment.
Item 14.
Indemnification of Directors and Officers.
Section 145 of the General Corporation Law of the State of Delaware provides as follows:
A corporation shall have the power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit or proceeding if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe the person’s conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that the person’s conduct was unlawful.
A corporation shall have the power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys’ fees) actually and reasonably incurred by the person in connection with the defense or settlement of such action or suit if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.
As permitted by the DGCL, we will include in our second restated certificate of incorporation a provision to eliminate the personal liability of our directors for monetary damages for breach of their fiduciary duties as directors, subject to certain exceptions. In addition, our second restated certificate of incorporation and amended and restated bylaws will provide that we are required to indemnify our officers and directors under certain circumstances, including those circumstances in which indemnification would otherwise be discretionary, and we are required to advance expenses to our officers and directors as incurred in connection with proceedings against them for which they may be indemnified.
We intend to enter into indemnification agreements with our directors and officers. These agreements will provide broader indemnity rights than those provided under the DGCL and our second restated certificate of incorporation. The indemnification agreements are not intended to deny or otherwise limit third-party or derivative suits against us or our directors or officers, but to the extent a director or officer were entitled to indemnity or contribution under the indemnification agreement, the financial burden of a third-party suit would be borne by us, and we would not benefit from derivative recoveries against the director or officer. Such recoveries would accrue to our benefit but would be offset by our obligations to the director or officer under the indemnification agreement.
The underwriting agreement provides that the underwriters are obligated, under certain circumstances, to indemnify our directors, officers and controlling persons against certain liabilities, including liabilities under the Securities Act. Reference is made to the form of underwriting agreement filed as Exhibit 1.1 hereto.
We maintain directors’ and officers’ liability insurance for the benefit of our directors and officers.
Item 15.
Recent Sales of Unregistered Securities.
Since December 31, 2017, we have issued an aggregate of (i) 7,485.34 shares of our Class A stock (including 2,949.49 shares of our Class A restricted stock), (ii) 5,067.30 shares of our Class B common stock (including 500 shares of our Class B restricted common stock) and (iii) options to purchase of 64,585 shares of Class B common stock at a weighted average exercise price of $251.81 per share under our 2017 Plan.
The issuances of the securities in the transactions described above were issued without registration in reliance on the exemptions afforded by Section 4(a)(2) of the Securities Act and Rules 506 and 701 promulgated thereunder.
The foregoing share numbers do not reflect the Reclassification.
Item 16.
Exhibits and Financial Statement Schedules.
|
Exhibit
No.
|
|
|
Description
|
|
|
|
|
1
|
.1*
|
|
|
|
Form of Underwriting Agreement.
|
|
|
|
|
3
|
.1*
|
|
|
|
Form of Second Restated Certificate of Incorporation of Hayward Holdings, Inc., to be effective
upon consummation of this offering.
|
|
|
|
|
3
|
.2*
|
|
|
|
Form of Amended and Restated Bylaws of Hayward Holdings, Inc., to be effective upon consummation of this offering.
|
|
|
|
|
4
|
.1*
|
|
|
|
Form of Stockholders’ Agreement, by and among Hayward Holdings, Inc., CCMP Capital Investors III, L.P., CCMP Capital Investors III (Employee), L.P., MSD Aqua Partners, LLC, PE16PX Rocky Mountain Ltd., PE16GV Rocky Mountain Ltd. and certain other stockholders.
|
|
|
|
|
5
|
.1*
|
|
|
|
Opinion of Ropes & Gray LLP as to the legality of the common stock.
|
|
|
Exhibit
No.
|
|
|
Description
|
|
|
|
|
10
|
.1
|
|
|
|
|
|
|
|
|
10
|
.2
|
|
|
|
|
|
|
|
|
10
|
.3
|
|
|
|
|
|
|
|
|
10
|
.4
|
|
|
|
|
|
|
|
|
10
|
.5
|
|
|
|
ABL Credit Agreement, dated August 4, 2017, by and among Hayward Acquisition Corp., Hayward Intermediate, Inc., Hayward Pool Products Canada, Inc. / Produits De Piscines Hayward Canada, Inc., Bank of America, N.A., as administrative agent and collateral agent, the Swingline Lender, the Issuing Bank and the Lenders from time to time party thereto.
|
|
|
|
|
10
|
.6
|
|
|
|
Amendment No. 1 to ABL Credit Agreement, dated August 4, 2017, by and among Hayward
Industries, Inc., Hayward Intermediate, Inc., Hayward Pool Products Canada, Inc. / Produits De
Piscines Hayward Canada, Inc., Bank of America, N.A., as administrative agent and collateral
agent, the Swingline Lender, the Issuing Bank and the Lenders from time to time party thereto.
|
|
|
|
|
10
|
.7
|
|
|
|
|
|
|
|
|
10
|
.8
|
|
|
|
|
|
|
|
|
10
|
.9
|
|
|
|
Form of Class B Restricted Stock Subscription Agreement under the 2017 Plan.
|
|
|
|
|
10
|
.10
|
|
|
|
Form of Non-Qualified Stock Option Agreement under the 2017 Plan.
|
|
|
|
|
10
|
.11
|
|
|
|
Non-Qualified Stock Option Agreement under the 2017 Plan, by the Registrant and Kevin P. Holleran, granted December 24, 2019.
|
|
|
|
|
10
|
.12
|
|
|
|
Restricted Stock Agreement under the 2017 Plan, by the Registrant and Kevin P. Holleran, granted December 24, 2019.
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|
|
|
|
10
|
.13
|
|
|
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Non-Qualified Stock Option Agreement under the 2017 Plan, by the Registrant and Eifion Jones,
granted April 14, 2020.
|
|
|
|
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10
|
.14
|
|
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Non-Qualified Stock Option Agreement under the 2017 Plan, by the Registrant and Lawrence Silber, granted December 21, 2019.
|
|
|
|
|
10
|
.15*
|
|
|
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Hayward Holdings, Inc. 2021 Equity Incentive Plan.
|
|
|
|
|
10
|
.16*
|
|
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Form of Restricted Stock Unit Agreement under the 2021 Plan.
|
|
|
|
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10
|
.17*
|
|
|
|
Form of Non-Statutory Stock Option Agreement under the 2021 Plan.
|
|
|
|
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10
|
.18*
|
|
|
|
Hayward Holdings, Inc. 2021 Employee Stock Purchase Plan.
|
|
|
|
|
10
|
.19
|
|
|
|
|
|
|
|
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21
|
.1
|
|
|
|
|
|
|
|
|
23
|
.1
|
|
|
|
|
|
|
|
|
23
|
.2*
|
|
|
|
Consent of Ropes & Gray LLP (included in Exhibit 5.1 to this Registration Statement).
|
|
|
|
|
24
|
.1
|
|
|
|
|
|
*
To be included by amendment.
Item 17.
Undertakings.
a)
The undersigned registrant hereby undertakes to provide to the underwriters at the closing
specified in the underwriting agreements, certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.
b)
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act, and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
c)
The undersigned registrant hereby undertakes that:
(1)
for purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective; and
(2)
for the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the Township of Berkeley Heights, State of New Jersey, on the 16th day of February, 2021.
HAYWARD HOLDINGS, INC.
By:
/s/ Kevin Holleran
Name:
Kevin Holleran
Title:
President and Chief Executive Officer
Power of Attorney
Each individual whose signature appears below constitutes and appoints Kevin Holleran and Eifion Jones, and each of them, his or her true and lawful attorney-in-fact and agent, acting alone, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any or all amendments to this Registration Statement, including post-effective amendments and registration statements filed pursuant to Rule 462(b) and otherwise, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the SEC, granting unto said attorney-in-fact full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as such person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement and power of attorney has been signed by the following persons in the capacities indicated on February 16, 2021.
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Signature
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Capacity
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/s/ Kevin Holleran
Kevin Holleran
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President, Chief Executive Officer and Director
(Principal Executive Officer)
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/s/ Eifion Jones
Eifion Jones
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Senior Vice President and Chief Financial Officer
(Principal Financial Officer)
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/s/ Michael Colicchio
Michael Colicchio
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Vice President and Corporate Controller
(Principal Accounting Officer)
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/s/ Mark McFadden
Mark McFadden
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Director
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/s/ Timothy Walsh
Timothy Walsh
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Director
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/s/ Greg Brenneman
Greg Brenneman
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Director
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Signature
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Capacity
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/s/ Kevin D. Brown
Kevin D. Brown
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Director
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/s/ Douglas Londal
Douglas Londal
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Director
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/s/ Jason Peters
Jason Peters
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Director
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/s/ Larry Silber
Larry Silber
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Director
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/s/ Arthur Soucy
Arthur Soucy
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Director
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/s/ Ali Afraz
Ali Afraz
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Director
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/s/ Stephen Felice
Stephen Felice
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Director
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/s/ Christopher Bertrand
Christopher Bertrand
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Director
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/s/ Christopher Stevenson
Christopher Stevenson
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Director
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Exhibit
10.1
EXECUTION
VERSION
FIRST LIEN CREDIT AGREEMENT
Dated as of August 4, 2017
among
HAYWARD ACQUISITION CORP.,
as Initial Borrower,
to be merged with and into
HAYWARD INDUSTRIES, INC.,
as survivor of the Merger and Borrower,
HAYWARD INTERMEDIATE, INC.,
as Holdings,
THE FINANCIAL INSTITUTIONS PARTY HERETO,
as Lenders,
BANK OF AMERICA, N.A.
as Administrative Agent
and
BANK OF AMERICA, N.A., JEFFERIES FINANCE
LLC, MORGAN STANLEY SENIOR
FUNDING, INC. and NOMURA SECURITIES INTERNATIONAL, INC.,
as Joint Lead Arrangers and Joint Bookrunners
TABLE OF CONTENTS
Page
|
ARTICLE I DEFINITIONS
|
2
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|
|
|
|
Section 1.01. Defined Terms
|
2
|
|
Section 1.02. Classification of Loans and Borrowings
|
59
|
|
Section 1.03. Terms Generally
|
60
|
|
Section 1.04. Accounting Terms; GAAP
|
61
|
|
Section 1.05. Effectuation of Transactions
|
61
|
|
Section 1.06. Timing of Payment of Performance
|
61
|
|
Section 1.07. Times of Day
|
61
|
|
Section 1.08. Currency Generally
|
62
|
|
Section 1.09. Cashless Rollovers
|
62
|
|
Section 1.10. Certain Conditions, Calculations and Tests
|
63
|
|
Section 1.11. Rounding
|
65
|
|
|
|
|
ARTICLE II THE CREDITS
|
66
|
|
|
|
|
Section 2.01. Commitments
|
66
|
|
Section 2.02. Loans and Borrowings
|
66
|
|
Section 2.03. Requests for Borrowings
|
67
|
|
Section 2.04. [Reserved].
|
68
|
|
Section 2.05. [Reserved].
|
68
|
|
Section 2.06. [Reserved]
|
68
|
|
Section 2.07. Funding of Borrowings
|
68
|
|
Section 2.08. Type; Interest Elections
|
68
|
|
Section 2.09. Termination and Reduction of Commitments
|
69
|
|
Section 2.10. Repayment of Loans; Evidence of Debt
|
70
|
|
Section 2.11. Prepayment of Loans
|
70
|
|
Section 2.12. Fees
|
76
|
|
Section 2.13. Interest
|
76
|
|
Section 2.14. Alternate Rate of Interest
|
77
|
|
Section 2.15. Increased Costs
|
77
|
|
Section 2.16. Break Funding Payments
|
79
|
|
Section 2.17. Taxes
|
79
|
|
Section 2.18. Payments Generally; Allocation of Proceeds; Sharing of Payments
|
83
|
|
Section 2.19. Mitigation Obligations; Replacement of Lenders
|
85
|
|
Section 2.20. Illegality
|
86
|
|
Section 2.21. Defaulting Lenders
|
86
|
|
Section 2.22. Incremental Credit Extensions
|
87
|
|
Section 2.23. Extensions of Loans and Additional Revolving Commitments
|
91
|
|
ARTICLE III REPRESENTATIONS AND WARRANTIES
|
94
|
|
|
|
|
Section 3.01. Organization; Powers
|
94
|
|
Section 3.02. Authorization; Enforceability
|
94
|
|
Section 3.03. Governmental Approvals; No Conflicts
|
94
|
|
Section 3.04. Financial Condition; No Material Adverse Effect
|
94
|
|
Section 3.05. Properties
|
95
|
|
Section 3.06. Litigation and Environmental Matters
|
95
|
|
Section 3.07. Compliance with Laws
|
95
|
|
Section 3.08. Investment Company Status
|
96
|
|
Section 3.09. Taxes
|
96
|
|
Section 3.10. ERISA
|
96
|
|
Section 3.11. Disclosure
|
96
|
|
Section 3.12. Solvency
|
97
|
|
Section 3.13. Capitalization and Subsidiaries
|
97
|
|
Section 3.14. Security Interest in Collateral
|
97
|
|
Section 3.15. Labor Disputes
|
97
|
|
Section 3.16. Federal Reserve Regulations
|
97
|
|
Section 3.17. Economic and Trade Sanctions and Anti-Corruption Laws
|
97
|
|
|
|
|
ARTICLE IV CONDITIONS
|
98
|
|
|
|
|
Section 4.01. Closing Date
|
98
|
|
|
|
|
ARTICLE V AFFIRMATIVE COVENANTS
|
101
|
|
|
|
|
Section 5.01. Financial Statements and Other Reports
|
101
|
|
Section 5.02. Existence
|
104
|
|
Section 5.03. Payment of Taxes
|
105
|
|
Section 5.04. Maintenance of Properties
|
105
|
|
Section 5.05. Insurance
|
105
|
|
Section 5.06. Inspections
|
105
|
|
Section 5.07. Maintenance of Books and Records
|
106
|
|
Section 5.08. Compliance with Laws
|
106
|
|
Section 5.09. Compliance with Environmental Laws
|
106
|
|
Section 5.10. Designation of Subsidiaries
|
106
|
|
Section 5.11. Use of Proceeds
|
107
|
|
Section 5.12. Covenant to Guarantee Obligations and Give Security
|
107
|
|
Section 5.13. [Reserved]
|
108
|
|
Section 5.14. Further Assurances
|
108
|
|
|
|
|
ARTICLE VI NEGATIVE COVENANTS
|
108
|
|
|
|
|
Section 6.01. Indebtedness
|
109
|
|
Section 6.02. Liens
|
115
|
|
Section 6.03. No Further Negative Pledges
|
118
|
|
Section 6.04. Restricted Payments; Certain Payments of Indebtedness
|
120
|
|
Section 6.05. Restrictions on Subsidiary Distributions
|
124
|
|
Section 6.06. Investments
|
126
|
|
Section 6.07. Fundamental Changes; Disposition of Assets
|
129
|
|
Section 6.08. Sale and Lease-Back Transactions
|
132
|
|
Section 6.09. Transactions with Affiliates
|
133
|
|
Section 6.10. Conduct of Business
|
134
|
|
Section 6.11. [Reserved].
|
135
|
|
Section 6.12. Amendments of or Waivers with Respect to Restricted Debt
|
135
|
|
Section 6.13. Fiscal Year
|
135
|
|
Section 6.14. Permitted Activities of Holdings
|
135
|
|
ARTICLE VII EVENTS OF DEFAULT
|
136
|
|
|
|
|
Section 7.01. Events of Default
|
136
|
|
|
|
|
ARTICLE VIII THE ADMINISTRATIVE AGENT
|
140
|
|
|
|
|
ARTICLE IX MISCELLANEOUS
|
147
|
|
|
|
|
Section 9.01. Notices
|
147
|
|
Section 9.02. Waivers; Amendments
|
151
|
|
Section 9.03. Expenses; Indemnity
|
158
|
|
Section 9.04. Waiver of Claim
|
159
|
|
Section 9.05. Successors and Assigns
|
159
|
|
Section 9.06. Survival
|
168
|
|
Section 9.07. Counterparts; Integration; Effectiveness; Electronic Execution
|
168
|
|
Section 9.08. Severability
|
168
|
|
Section 9.09. Right of Setoff
|
169
|
|
Section 9.10. Governing Law; Jurisdiction; Consent to Service of Process
|
169
|
|
Section 9.11. Waiver of Jury Trial
|
170
|
|
Section 9.12. Headings
|
170
|
|
Section 9.13. Confidentiality
|
171
|
|
Section 9.14. No Fiduciary Duty
|
172
|
|
Section 9.15. Several Obligations
|
172
|
|
Section 9.16. USA PATRIOT Act
|
172
|
|
Section 9.17. Disclosure
|
172
|
|
Section 9.18. Appointment for Perfection
|
172
|
|
Section 9.19. Interest Rate Limitation
|
172
|
|
Section 9.20. Intercreditor Agreement
|
173
|
|
Section 9.21. Conflicts
|
173
|
|
Section 9.22. Release of Guarantors
|
173
|
|
Section 9.23. Acknowledgement and Consent to Bail-In of EEA Financial Institutions
|
174
|
|
Section 9.24. Lender Representation
|
174
|
|
SCHEDULES:
|
|
|
|
|
|
|
|
Schedule 1.01(a)
|
–
|
Commitment Schedule
|
|
Schedule 3.05
|
–
|
Fee Owned Real Estate Assets
|
|
Schedule 3.13
|
–
|
Subsidiaries
|
|
Schedule 3.15
|
–
|
Labor Disputes
|
|
Schedule 5.10
|
–
|
Unrestricted Subsidiaries
|
|
Schedule 6.01
|
–
|
Existing Indebtedness
|
|
Schedule 6.02
|
–
|
Existing Liens
|
|
Schedule 6.06
|
–
|
Existing Investments
|
|
Schedule 6.07(s)
|
–
|
Dispositions
|
|
Schedule 9.01
|
–
|
Borrower’s Website Address for Electronic Delivery
|
|
|
|
|
|
EXHIBITS:
|
|
|
|
|
|
|
|
Exhibit A-1
|
–
|
Form of Assignment and Assumption
|
|
Exhibit A-2
|
–
|
Form of Affiliated Lender Assignment and Assumption
|
|
Exhibit B
|
–
|
Form of Borrowing Request
|
|
Exhibit C
|
–
|
Form of Compliance Certificate
|
|
Exhibit D
|
–
|
Form of Interest Election Request
|
|
Exhibit E
|
–
|
Form of Perfection Certificate
|
|
Exhibit F
|
–
|
Form of Perfection Certificate Supplement
|
|
Exhibit G
|
–
|
Form of Promissory Note
|
|
Exhibit H
|
–
|
Form of Guaranty Agreement
|
|
Exhibit I
|
–
|
Form of Security Agreement
|
|
Exhibit J-1
|
–
|
Form of U.S. Tax Compliance Certificate (For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax Purposes)
|
|
Exhibit J-2
|
–
|
Form of U.S. Tax Compliance Certificate (For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax Purposes)
|
|
Exhibit J-3
|
–
|
Form of U.S. Tax Compliance Certificate (For Foreign Participants That Are Partnerships For U.S. Federal Income Tax Purposes)
|
|
Exhibit J-4
|
–
|
Form of U.S. Tax Compliance Certificate (For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)
|
|
Exhibit K
|
–
|
Form of Solvency Certificate
|
|
Exhibit L
|
–
|
Form of ABL Intercreditor Agreement
|
|
Exhibit M
|
–
|
Form of Term Intercreditor Agreement
|
|
Exhibit N
|
–
|
Form of Pari Passu Intercreditor Agreement
|
FIRST LIEN CREDIT AGREEMENT
FIRST LIEN CREDIT AGREEMENT,
dated as of August 4, 2017 (this “Agreement”), by and among Hayward Acquisition Corp., a New Jersey corporation
(the “Initial Borrower”, to be merged with and into the Company (as defined below) pursuant to the Merger (as
defined below), with the Company as survivor of the Merger, the “Borrower”), Hayward Intermediate, Inc., a Delaware
corporation (“Holdings”), the Lenders from time to time party hereto including Bank of America, N.A. (“Bank
of America”), in its capacities as administrative agent and collateral agent (the “Administrative Agent”)
with Bank of America, Jefferies Finance LLC (“Jefferies”), Morgan Stanley Senior Funding, Inc. (“Morgan
Stanley”) and Nomura Securities International, Inc. (“Nomura”) as joint lead arrangers and joint bookrunners
(in such capacities, the “Arrangers” and each an “Arranger”).
RECITALS
A. Pursuant
to the terms of the Merger Agreement, the Initial Borrower, a wholly-owned direct subsidiary of Holdings, will merge (the “Merger”)
with and into Hayward Industries, Inc., a New Jersey corporation (the “Company”), with the Company to be the
surviving corporation of the Merger and a wholly-owned direct subsidiary of Holdings.
B. To
fund a portion of the Acquisition, the Sponsors and certain other investors (including the Co-Investors and members of management,
affiliates and direct or indirect existing shareholders of the Company and its Subsidiaries prior to the Merger) will, directly
or indirectly (including through a Parent Company), make Cash equity contributions to Holdings or purchase equity interests of
a Parent Company for Cash (or, in the case of the Co-Investors, Cash or non-cash equity contributions, including through contribution,
conversion or other “rollover” of existing direct or indirect Capital Stock with respect to the Company) in respect
of Qualified Capital Stock, which, in the case of Cash shall, directly or indirectly, be contributed to the Borrower (except to
the extent to be utilized by a direct or indirect parent of the Borrower to make any payments required to consummate the Transactions)
in the form of Qualified Capital Stock (such contribution, purchase, retention, rollover and/or conversion, collectively, the “Equity
Contribution”), and the aggregate Equity Contribution will constitute not less than 30% of the sum of (i) the aggregate
gross proceeds received from the Loans borrowed under this Agreement on the Closing Date, but excluding any gross proceeds received
from any increase in the Initial Term Loans to fund original issue discount or upfront fees, (ii) the aggregate gross proceeds
received from the loans borrowed under the Second Lien Credit Agreement on the Closing Date, (iii) the aggregate gross proceeds
received from the loans borrowed under the ABL Facility on the Closing Date, but excluding (A) the aggregate gross proceeds received
from loans borrowed under the ABL Facility to fund original issue discount or upfront fees in respect of the Initial Term Loans
hereunder and to finance working capital adjustments, the working capital needs and other general corporate purposes of the Borrower
and its subsidiaries and (B) any letter of credit issued or deemed issued under the ABL Facility and (iv) the Equity Contribution;
provided that the Sponsors’ investment on the Closing Date will constitute not less than 50.1% direct or indirect
beneficial ownership in the Borrower immediately upon consummation of the Transactions.
C. The
Initial Borrower (i) has requested that the Lenders extend credit in the form of Initial Term Loans in an original aggregate principal
amount equal to $850,000,000, subject to increase as provided herein, (ii) intends to obtain term loans under the Second Lien Credit
Agreement in an original aggregate principal amount equal to $285,000,000 and (iii) intends to obtain, together with its wholly-owned
Canadian Subsidiary, an asset-based revolving credit facility under the ABL Credit Agreement in an original aggregate principal
amount equal to $250,000,000.
D. The
Lenders are willing to extend such credit to the Borrower on the terms and subject to the conditions set forth herein. Accordingly,
the parties hereto agree as follows:
ARTICLE
I
DEFINITIONS
Section 1.01.
Defined Terms. As used in this Agreement, the following
terms have the meanings specified below:
“ABL Agent”
means Bank of America, N.A. in its capacity as administrative agent and collateral agent with respect to the ABL Facility as of
the Closing Date, or any successor or other administrative agent and collateral agent with respect to any other ABL Facility.
“ABL Canadian
Collateral” means “Canadian Collateral” as defined in the ABL Credit Agreement.
“ABL Credit
Agreement” means that certain ABL Credit Agreement, dated as of the Closing Date, by and among Holdings, the Borrower,
the other borrowers and guarantors party thereto, the lenders party thereto in their capacities as lenders thereunder, the swingline
lenders and letter of credit issuers party thereto in their capacities as such and the ABL Agent and the other agents party thereto
and any other credit agreement, indenture or similar agreement governing any ABL Facility.
“ABL Facility”
means the credit facility governed by the ABL Credit Agreement and any Refinancing Indebtedness that refinances or replaces any
part of the loans, notes, guarantees, other credit facilities or commitments thereunder.
“ABL Intercreditor
Agreement” means (a) the ABL Intercreditor Agreement substantially in the form of Exhibit L hereto, dated as of the Closing
Date, by and among the Administrative Agent, the ABL Agent, the Second Lien Agent and the other parties thereto from time to time
and acknowledged by the Loan Parties, as amended, restated, amended and restated, supplemented or otherwise modified from time
to time; (b) an intercreditor agreement substantially in the form of the ABL Intercreditor Agreement as in effect on the Closing
Date with any material modifications which are reasonably acceptable to the Borrower and the Administrative Agent; and (c) if requested
by the Borrower, an intercreditor agreement the terms of which are consistent with market terms governing security arrangements
for the sharing of Liens and Collateral proceeds on a Split Collateral Basis in the case of an asset based ABL Facility at the
time the intercreditor agreement is proposed to be established, so long as the terms of such intercreditor agreement are reasonably
satisfactory to the Administrative Agent and the Borrower; provided, that (i) if required by the Administrative Agent prior
to agreeing that any form (or modification) is reasonably acceptable to it, the form of any other intercreditor agreement shall
be deemed acceptable to the Administrative Agent (and the Lenders) if posted to the Lenders and not objected to by the Required
Lenders within five (5) Business Days thereafter, and (ii) any ABL Intercreditor Agreement shall be limited to terms governing
the sharing of Liens and the relative rights and obligations of the secured parties regarding Collateral and the proceeds thereof
and shall not restrict or limit any Indebtedness or the terms and conditions thereof (including any amendments and refinancings)
to the extent such Indebtedness would otherwise be permitted by the Loan Documents.
“ABL Loans”
shall mean revolving loans under any ABL Facility.
“ABL US Priority
Collateral” means ABL Priority Collateral (as defined in the ABL Intercreditor Agreement) of the US Loan Parties.
“ABR”,
when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, bears interest
at a rate determined by reference to the Alternate Base Rate.
“ABR Loan”
means a Loan bearing interest at a rate determined by reference to the Alternate Base Rate.
“Acceptable
Intercreditor Agreement” means (a) in the case of Indebtedness that is secured by a Lien on the Collateral on a senior
basis pari passu with the First Priority Secured Obligations (and any Class of Term Loans secured on senior “first
lien” basis), (i) a Pari Passu Intercreditor Agreement, (ii) an intercreditor agreement substantially in the form of the
Pari Passu Intercreditor Agreement with any material modifications which are reasonably acceptable to the Borrower and the Administrative
Agent, or (iii) if requested by the Borrower, an intercreditor agreement the terms of which are consistent with market terms governing
security arrangements for the sharing of Liens and Collateral proceeds on a pari passu basis at the time the intercreditor
agreement is proposed to be established in light of the type of Indebtedness subject thereto, so long as the terms of such intercreditor
agreement are reasonably satisfactory to the Administrative Agent and the Borrower; (b) in the case of Indebtedness that is secured
by a Lien on the Collateral on a junior basis with respect to the Initial Term Loans (and any Class of Term Loans secured on senior
“first lien” basis), (i) the Term Intercreditor Agreement, (ii) an intercreditor agreement substantially in the form
of the Term Intercreditor Agreement with any material modifications which are reasonably acceptable to the Borrower and the Administrative
Agent, or (iii) if requested by the Borrower, an intercreditor agreement the terms of which are consistent with market terms governing
security arrangements for the sharing of Liens and Collateral proceeds on a junior secured basis at the time the intercreditor
agreement is proposed to be established in light of the type of Indebtedness subject thereto, so long as the terms of such intercreditor
agreement are reasonably satisfactory to the Administrative Agent and the Borrower; (c) to the extent the ABL Facility is outstanding,
any ABL Intercreditor Agreement (or an Acceptable Intercreditor Agreement under clause (a) above in the case of any ABL
Facility secured by the Collateral on a senior pari passu basis with the First Priority Secured Obligations (and not a Split
Collateral Basis)); and (d) any Additional Agreement the terms of which are consistent with market terms governing, as applicable,
security arrangements for the sharing of Liens and Collateral proceeds and/or payment subordination provisions, in each case on
a basis applicable to the specified intercreditor arrangement at the time the intercreditor or subordination agreement, as applicable,
is proposed to be established in light of the type of Indebtedness subject thereto, so long as the terms of such intercreditor
or subordination agreement, as applicable, are reasonably satisfactory to the Administrative Agent and the Borrower; provided,
that (A) if required by the Administrative Agent prior to agreeing that any form (or modification) is reasonably acceptable to
it, the form of any other intercreditor agreement shall be deemed acceptable to the Administrative Agent (and the Lenders) if posted
to the Lenders and not objected to by the Required Lenders within five (5) Business Days thereafter, and (B) any Acceptable Intercreditor
Agreement shall be limited to terms governing the sharing of Liens and the relative rights and obligations of the secured parties
regarding Collateral and the proceeds thereof and shall not restrict or limit any Indebtedness or the terms and conditions thereof
(including any amendments and refinancings) to the extent such Indebtedness would otherwise be permitted by the Loan Documents.
“ACH”
means automated clearing house transfers.
“Acquisition”
means (a) the acquisition of, and business combination with, the Company through the Merger and (b) the other transactions contemplated
by the Merger Agreement.
“Additional
Agreement” has the meaning assigned to such term in Article 8.
“Additional
Commitments” means any commitments hereunder added pursuant to Sections 2.22, 2.23 or 9.02(c).
“Additional
Lender” has the meaning assigned to such term in Section 2.22(b).
“Additional
Loans” means any Additional Revolving Loans and any Additional Term Loans.
“Additional
Revolving Commitments” means any revolving credit commitment added pursuant to Sections 2.22, 2.23
or 9.02(c)(ii).
“Additional
Revolving Facility” means any revolving credit facility added pursuant to Sections 2.22, 2.23
or 9.02(c)(ii).
“Additional
Revolving Loans” means any revolving loan made hereunder pursuant to any Additional Revolving Commitments.
“Additional
Term Commitments” means any term commitment added pursuant to Sections 2.22, 2.23 or 9.02(c)(i).
“Additional
Term Facility” means any term loan facility added pursuant to Sections 2.22, 2.23 or 9.02(c)(i).
“Additional
Term Loans” means any term loan added pursuant to Sections 2.22, 2.23 or 9.02(c)(i).
“Administrative
Agent” has the meaning assigned to such term in the preamble to this Agreement.
“Administrative
Questionnaire” has the meaning assigned to such term in Section 2.22(d).
“Adverse Proceeding”
means any action, suit, proceeding (whether administrative, judicial or otherwise), governmental investigation or arbitration (whether
or not purportedly on behalf of Holdings, the Borrower or any of their respective Restricted Subsidiaries) at law or in equity,
or before or by any Governmental Authority, domestic or foreign (including any Environmental Claim), whether pending or, to the
knowledge of Holdings, the Borrower or any of their respective Restricted Subsidiaries, threatened in writing, against or affecting
Holdings, the Borrower or any of their respective Restricted Subsidiaries or any property of Holdings, the Borrower or any of their
respective Restricted Subsidiaries.
“Affiliate”
means, as applied to any Person, any other Person directly or indirectly Controlling, Controlled by, or under common Control with,
that Person. No Person shall be an “Affiliate” of Holdings or any subsidiary thereof solely because it is an unrelated
portfolio company of the Sponsors and none of the Administrative Agent, the Arrangers, any Lender (other than any Affiliated Lender
or any Debt Fund Affiliate) or any of their respective Affiliates shall be considered an Affiliate of Holdings or any subsidiary
thereof. For purposes of this Agreement and the other Loan Documents, Jefferies LLC and its Affiliates shall be deemed to be Affiliates
of Jefferies Finance LLC and its Affiliates.
“Affiliated
Lender” means any Non-Debt Fund Affiliate, Holdings, the Borrower and/or any subsidiary of Holdings.
“Affiliated
Lender Assignment and Assumption” means an assignment and assumption entered into by a Lender and an Affiliated Lender
(with the consent of any party whose consent is required by Section 9.05) and accepted by the Administrative Agent in the
form of Exhibit A-2 or any other form approved by the Administrative Agent and the Borrower.
“Affiliated
Lender Cap” has the meaning assigned to such term in Section 9.05(h)(iv).
“Agreement”
has the meaning assigned to such term in the preamble to this First Lien Credit Agreement.
“AHYDO”
has the meaning assigned to such term in Section 2.11(b)(ix).
“AIMCo”
has the meaning assigned to such term in the definition of “Sponsor”.
“All-In Yield”
means, as to any Indebtedness, the yield thereof, whether in the form of interest rate, margin, original issue discount, upfront
fees, a LIBO Rate or Alternate Base Rate floor, or otherwise, in each case, incurred or payable directly by the Borrower ratably
to all lenders of such Indebtedness; provided that (a) original issue discount and upfront fees shall be equated to interest
rate assuming a 4-year life to maturity (or, if less, the stated life to maturity at the time of its incurrence of the applicable
indebtedness), (b) “All-In Yield” shall not include arrangement fees, structuring fees, commitment fees, underwriting
fees, placement fees, success fees, advisory fees, ticking and unused line fees, consent or amendment fees and any similar fees
(regardless of whether shared or paid, in whole or in part, with or to any or all lenders) and any other fees not generally paid
ratably to all lenders of such Indebtedness, and (c) if any Incremental Term Facility includes an Alternate Base Rate or LIBO Rate
floor that is greater than the Alternate Base Rate or LIBO Rate floor applicable to the Initial Term Loans, such differential between
interest rate floors shall be included in the calculation of All-In Yield, but only to the extent an increase in the Alternate
Base Rate or LIBO Rate floor applicable to the Initial Term Loans would cause an increase in the interest rate then in effect thereunder,
and in such case the Alternate Base Rate or LIBO Rate floors (but not the applicable rate, unless otherwise elected by the Borrower)
applicable to the Initial Term Loans shall be increased to the extent of such differential between interest rate floors.
“Alternate Base
Rate” means, for any day, a fluctuating rate per annum equal to the highest of (a) the Federal Funds Effective Rate
in effect on such day plus 0.50%, (b) to the extent ascertainable, the Published LIBO Rate (which rate shall be calculated
based upon an Interest Period of one month and shall be determined on a daily basis) plus 1.00%, (c) the Prime Rate
and (d) 0.00% per annum. Any change in the Alternate Base Rate due to a change in the Federal Funds Effective Rate or the Published
LIBO Rate, as the case may be, shall be effective from and including the effective date of such change in the Federal Funds Effective
Rate or the Published LIBO Rate, as the case may be. Any change in the Prime Rate announced by Bank of America shall be effective
from and including the opening of business on the day specified in the public announcement of such change.
“Applicable
Percentage” means, with respect to any Term Lender for any Class, a percentage equal to a fraction the numerator of which
is the aggregate outstanding principal amount of the Term Loans and unused Additional Term Commitments of such Term Lender for
such Class and the denominator of which is the aggregate outstanding principal amount of the Term Loans and unused Additional Term
Commitments of all Term Lenders for such Class; provided that for purposes of Section 2.21 and otherwise herein,
when there is a Defaulting Lender, any such Defaulting Lender’s Commitment shall be disregarded in the relevant calculations.
“Applicable
Price” has the meaning assigned to such term in the definition of “Dutch Auction”.
“Applicable
Rate” means, for any day, with respect to any Initial Term Loans (i) that are LIBO Rate Loans, 3.50% per annum and
(ii) that are ABR Loans, 2.50% per annum.
“Approved Fund”
means, with respect to any Lender, any Person (other than a natural person or a Disqualified Institution) that is engaged in making,
purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its activities
and is administered, advised or managed by (a) such Lender, (b) any Affiliate of such Lender or (c) any entity or any Affiliate
of any entity that administers, advises or manages such Lender.
“Arrangers”
has the meaning assigned to such term in the preamble to this Agreement.
“Assignment
and Assumption” means an assignment and assumption entered into by a Lender and an assignee (with the consent of any
party whose consent is required by Section 9.05), and accepted by the Administrative Agent in the form of Exhibit A-1
or any other form approved by the Administrative Agent and the Borrower.
“Auction”
has the meaning assigned to such term in the definition of “Dutch Auction”.
“Auction Agent”
means (a) the Administrative Agent or any of its Affiliates to the extent the Administrative Agent or such Affiliate has agreed
to act in such capacity or (b) any other financial institution or advisor engaged by the Borrower (whether or not an Affiliate
of the Administrative Agent) to act as an arranger in connection with any Auction pursuant to the definition of “Dutch Auction”.
“Auction Amount”
has the meaning assigned to such term in the definition of “Dutch Auction”.
“Auction Notice”
has the meaning assigned to such term in the definition of “Dutch Auction”.
“Auction Party”
has the meaning set forth in the definition of “Dutch Auction”.
“Auction Response
Date” has the meaning assigned to such term in the definition of “Dutch Auction”.
“Available Amount”
means, at any time, an amount equal to, without duplication:
(a) the
sum of:
(i) the
greater of $40,000,000 and 25% of Consolidated Adjusted EBITDA plus
(ii) the
CNI Growth Amount; plus
(iii) the
amount of any Cash and Cash Equivalents (including from the proceeds of any property or assets (including Capital Stock)) and
the Fair Market Value of property or assets contributed to the Borrower or any of its Restricted Subsidiaries by any Parent
Company or received by the Borrower or any of its Restricted Subsidiaries in return for any issuance of Qualified Capital
Stock to any Parent Company (but excluding any amounts (w) constituting a “Cure Amount” (as defined in the ABL
Credit Agreement) or similar term with respect to an equity cure of a financial covenant default, (x) received from the
Borrower or any Restricted Subsidiary, (y) for all purposes other than Investments in Restricted Subsidiaries, the proceeds
of equity used to incur Contribution Indebtedness, or (z) consisting of the proceeds of any loan or advance made pursuant to Section
6.06(h)(ii)), in each case, during the period from and including the day immediately following the Closing Date through
and including such time; plus
(iv) the
aggregate principal amount of any Indebtedness or Disqualified Capital Stock, in each case, of the Borrower or any Restricted Subsidiary
(other than Indebtedness or such Disqualified Capital Stock issued to the Borrower or any Restricted Subsidiary), which has been
directly or indirectly converted into or exchanged for Qualified Capital Stock of the Borrower, any Restricted Subsidiary or any
Parent Company (or contributed to the Borrower, any Restricted Subsidiary or any Parent Company and cancelled), together with the
Fair Market Value of any Cash Equivalents and the Fair Market Value of any property or assets received by the Borrower or such
Restricted Subsidiary upon such exchange or conversion, in each case, during the period from and including the day immediately
following the Closing Date through and including such time; plus
(v) the
net proceeds received by the Borrower or any Restricted Subsidiary during the period from and including the day immediately following
the Closing Date through and including such time in connection with the Disposition to any Person (other than the Borrower or any
Restricted Subsidiary) of any acquisition or Investment made in reliance on amounts available under Section 6.06(r);
plus
(vi) to
the extent not already reflected as a return of capital with respect to any Investment made in reliance on any provision of Section
6.06 for purposes of determining the outstanding amount of such Investment, the aggregate proceeds received by the Borrower
or any Restricted Subsidiary during the period from and including the day immediately following the Closing Date through and including
such time in connection with returns, profits, distributions and similar amounts received in Cash, Cash Equivalents and/or the
Fair Market Value of any property or assets, including cash principal repayments and interest payments of loans, in each case,
received in respect of any Investment made after the Closing Date in reliance on amounts available under Section 6.06(r);
plus
(vii) an
amount equal to the sum of (A) the amount of any Investments by the Borrower or any Restricted Subsidiary in reliance on amounts
available under Section 6.06(r) in any Unrestricted Subsidiary (in an amount not to exceed the aggregate amount of Investments
in such Unrestricted Subsidiary) that has been redesignated as a Restricted Subsidiary or has been merged, consolidated or amalgamated
with or into, or is liquidated, wound up or dissolved into, the Borrower or any Restricted Subsidiary and (B) the amount of Cash,
Cash Equivalents and the Fair Market Value of the property or assets of any Unrestricted Subsidiary that have been transferred,
conveyed or otherwise distributed (in an amount not to exceed the aggregate amount of Investments in such Unrestricted Subsidiary)
to the Borrower or any Restricted Subsidiary, in each case, during the period from and including the day immediately following
the Closing Date through and including such time; plus
(viii) to
the extent not otherwise applied to prepay term loans outstanding under the Second Lien Facility in accordance with the terms thereof,
the amount of any Declined Proceeds; minus
(b) an
amount equal to the sum of (i) Restricted Payments made pursuant to Section 6.04(a)(iii), plus (ii) Restricted
Debt Payments made pursuant to Section 6.04(b)(vi), plus (iii) Investments made pursuant to Section 6.06(r),
in each case, after the Closing Date and prior to such time or contemporaneously therewith.
“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.
“Banking Services”
means each and any of the following bank services provided to any Loan Party (a) under any arrangement that is in effect on the
Closing Date between any Loan Party and a counterparty that is (or is an Affiliate of) the Administrative Agent, any Lender or
an Arranger as of the Closing Date or (b) under any arrangement that is entered into after the Closing Date by any Loan Party with
any counterparty that is (or is an Affiliate of) the Administrative Agent, any Lender or an Arranger at the time such arrangement
is entered into: commercial credit cards, stored value cards, purchasing cards, treasury management services, netting services,
overdraft protections, check drawing services, automated payment services (including depository, overdraft, controlled disbursement,
ACH transactions, return items and interstate depository network services), employee credit card programs, cash pooling services
and any arrangements or services similar to any of the foregoing and/or otherwise in connection with Cash management and Deposit
Accounts.
“Banking Services
Obligations” means any and all obligations of any Loan Party, whether absolute or contingent and however and whenever
created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor),
in connection with Banking Services, in each case, that has been designated to the Administrative Agent in writing by the Borrower
as being Banking Services Obligations for the purposes of the Loan Documents, it being understood that each counterparty thereto
shall be deemed (A) to appoint the Administrative Agent as its agent under the applicable Loan Documents and (B) to agree to be
bound by the provisions of Article 8, Section 9.03, Section 9.10 and the Intercreditor Agreements (and any other
applicable Acceptable Intercreditor Agreement) as if it were a Lender.
“Bankruptcy
Code” means Title 11 of the United States Code (11 U.S.C. § 101 et seq.).
“Board”
means the Board of Governors of the Federal Reserve System of the U.S.
“Borrower”
has the meaning assigned to such term in the preamble to this Agreement.
“Borrower Materials”
has the meaning assigned to such term in Section 9.01(d).
“Borrowing”
means any Loans of the same Type and Class made, converted or continued on the same date and, in the case of LIBO Rate Loans, as
to which a single Interest Period is in effect.
“Borrowing Request”
means a request by the Borrower for a Borrowing in accordance with Section 2.03 and substantially in the form attached
hereto as Exhibit B or such other form that is reasonably acceptable to the Administrative Agent and the Borrower (including
any form on an electronic platform or electronic transmission system as shall be approved by the Administrative Agent), appropriately
completed and signed by a Responsible Officer of the Borrower.
“Business Day”
means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required
by law to remain closed; provided that when used in connection with a LIBO Rate Loan, the term “Business Day”
shall also exclude any day on which banks are not open for dealings in Dollar deposits in the London interbank market.
“Calculation
Period” means, with respect to Excess Cash Flow, each annual period consisting of a Fiscal Year of the Borrower.
“Canadian Restricted
Subsidiary” means a Restricted Subsidiary that is incorporated or organized under the laws of Canada or any province
or territory thereof.
“Capital Lease”
means, as applied to any Person, any lease of any property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is or should be accounted for as a capital lease on the balance sheet of that Person.
“Capital Stock”
means any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation,
any and all equivalent ownership interests in a Person (other than a corporation), including partnership interests and membership
interests, and any and all warrants, rights or options to purchase or other arrangements or rights to acquire any of the foregoing,
but excluding for the avoidance of doubt any Indebtedness convertible into or exchangeable for any of the foregoing.
“Captive Insurance
Subsidiary” means any Restricted Subsidiary of the Borrower that is maintained as a self-insurance subsidiary and is
subject to regulation as an insurance company (and any Restricted Subsidiary thereof).
“Cash”
means money, currency or a credit balance in any Deposit Account.
“Cash
Equivalents” means, as at any date of determination, (a) readily marketable securities (i) issued or directly
and unconditionally guaranteed or insured as to interest and principal by the U.S. government or (ii) issued by any agency or
instrumentality of the U.S. the obligations of which are backed by the full faith and credit of the U.S., in each case
maturing within one year after such date and, in each case, repurchase agreements and reverse repurchase agreements relating
thereto; (b) readily marketable direct obligations issued by any state of the U.S. or any political subdivision of any such
state or any public instrumentality thereof or by any foreign government, in each case maturing within one year after such
date and having, at the time of the acquisition thereof, a rating of at least A-2 from S&P or at least P-2 from
Moody’s (or, if at any time neither S&P nor Moody’s shall be rating such obligations, an equivalent rating
from another nationally recognized statistical rating agency) and, in each case, repurchase agreements and reverse repurchase
agreements relating thereto; (c) commercial paper maturing no more than one year from the date of creation thereof and
having, at the time of the acquisition thereof, a rating of at least A-2 from S&P or at least P-2 from Moody’s (or,
if at any time neither S&P nor Moody’s shall be rating such obligations, an equivalent rating from another
nationally recognized statistical rating agency); (d) deposits, money market deposits, time deposit accounts, certificates of
deposit or bankers’ acceptances (or similar instruments) maturing within one year after such date and issued or
accepted by any Lender or by any bank organized under, or authorized to operate as a bank under, the laws of the U.S., any
state thereof or the District of Columbia or any political subdivision thereof and that has capital and surplus of not less
than $100,000,000 and, in each case, repurchase agreements and reverse repurchase agreements relating thereto; and (e) shares
of any money market mutual fund that has (i) substantially all of its assets invested in the types of investments referred to
in clauses (a) through (d) above, (ii) net assets of not less than $250,000,000 and (iii) a rating of at least
A-2 from S&P or at least P-2 from Moody’s. Cash Equivalents shall also include (x) Investments of the type and
maturity described in clauses (a) through (e) above of foreign obligors, which Investments or obligors (or the
parent companies thereof) have the ratings described in such clauses or equivalent ratings from comparable foreign rating
agencies and (y) other short-term Investments utilized by Foreign Subsidiaries in accordance with normal investment practices
for cash management in Investments analogous to the Investments described in clauses (a) through (e) and in
this paragraph.
“Change in Law”
means (a) the adoption of any law, treaty, rule or regulation after the Closing Date, (b) any change in any law, treaty, rule or
regulation or in the interpretation or application thereof by any Governmental Authority after the Closing Date or (c) compliance
by any Lender (or, for purposes of Section 2.15(b), by any lending office of such Lender or by such Lender’s holding
company, if any) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority
made or issued after the Closing Date (other than any such request, guideline or directive to comply with any law, rule or regulation
that was in effect on the Closing Date). For purposes of this definition and Section 2.15, (x) the Dodd-Frank Wall
Street Reform and Consumer Protection Act and all requests, rules, guidelines, requirements and directives thereunder or issued
in connection therewith or in implementation thereof and (y) all requests, rules, guidelines, requirements or directives promulgated
by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or
U.S. or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case described in clauses (a),
(b) and (c) above, be deemed to be a Change in Law, regardless of the date enacted, adopted, issued or implemented.
“Change of Control”
means the earliest to occur of:
(a) at
any time prior to a Qualifying IPO, the Permitted Holders ceasing to beneficially own, either directly or indirectly (within the
meaning of Rule 13d-3 and Rule 13d-5 under the Exchange Act), Capital Stock representing more than 50% of the total voting power
of all of the outstanding voting stock of Holdings;
(b) at
any time on or after a Qualifying IPO, the acquisition, directly or indirectly, by any Person or group (within the meaning of Section
13(d)(3) or Section 14(d)(2) of the Exchange Act), including any group acting for the purpose of acquiring, holding or disposing
of Securities (within the meaning of Rule 13d-5(b)(1) under the Exchange Act, but excluding (i) any employee benefit plan and/or
Person acting as the trustee, agent or other fiduciary or administrator therefor, (ii) one or more Permitted Holders, (iii) any
group directly or indirectly controlled by one or more Permitted Holders, and (iv) any underwriter in connection with any Qualifying
IPO solely for the purposes of facilitating the distribution of such Capital Stock), of Capital Stock representing more than the
greater of (A) 40% of the total voting power of all of the outstanding voting stock of Holdings and (B) the percentage of the total
voting power of all of the outstanding voting stock of Holdings beneficially owned, directly or indirectly, by the Permitted Holders;
and
(c) the
Borrower ceasing to be a direct or indirect Wholly-Owned Subsidiary of Holdings (or any permitted successor hereunder);
provided
that (x) a “Change of Control” shall not be deemed to have occurred with respect to clauses (a) or (b) above if
the Permitted Holders have, at such time, the right or ability by voting power, contract or otherwise to elect or designate
for election a majority of the board of directors or similar governing body of Holdings, and (y) the creation of a Parent
Company shall not in and of itself cause a Change of Control so long as at the time such Person became a Parent Company, (1)
there is no change in the direct or indirect beneficial ownership of the total voting power of all of the outstanding voting
stock of Holdings by the Permitted Holders or (2) no Person and no group (within the meaning of Section 13(d)(3) or Section
14(d)(2) of the Exchange Act), including any such group acting for the purpose of acquiring, holding or disposing of
Securities (within the meaning of Rule 13d-5(b)(1) under the Exchange Act) (other than one or more Permitted Holders or any
group directly or indirectly controlled by one or more Permitted Holders), shall have beneficial ownership (within the
meaning of Rule 13d-3 under the Exchange Act, or any successor provisions), directly or indirectly, of 50% or more, in the
case of clause (a) above, or 40% or more, in the case of clause (b) above, of the total voting power of all of
the outstanding voting stock of Holdings.
“Charge”
means any charge, fee, loss, expense, cost, accrual or reserve of any kind.
“Charged Amounts”
has the meaning assigned to such term in Section 9.19.
“Class”,
when used in reference to (a) any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are Initial
Term Loans, Additional Term Loans of any series established as a separate “Class” pursuant to Section 2.22,
2.23 or 9.02(c)(i), Additional Revolving Loans of any series established as a separate “class” pursuant
to Section 2.22, 2.23 or 9.02(c)(ii), (b) any Commitment, refers to whether such Commitment is an Initial
Term Loan Commitment, an Additional Term Commitment of any series established as a separate “Class” pursuant to Section
2.22, 2.23 or 9.02(c)(i), an Additional Revolving Commitment of any series established as a separate “Class”
pursuant to Section 2.22, 2.23 or 9.02(c)(ii) or a commitment to make any other Commitments under any other
Credit Facilities established as a separate “Class” and (c) any Lender, refers to whether such Lender has a Loan or
Commitment of a particular Class. For purposes of this definition, any separate series or tranche shall be treated as a separate
“Class” regardless of whether such series or tranche is specifically as a separate “Class”.
“Closing Date”
means the date on which the conditions specified in Section 4.01 are satisfied (or waived in accordance with Section 9.02).
“Closing Date
Material Adverse Effect” means a Material Adverse Effect (as defined in the Merger Agreement (as in effect on the Closing
Date)).
“CNI Growth
Amount” means, at any date of determination, an amount equal to 50% of the Consolidated Net Income of the Borrower and
the Restricted Subsidiaries for the period (taken as one accounting period) commencing on July 1, 2017, to the end of the most
recently ended fiscal quarter for which internal financial statements of the Borrower are available preceding such date; provided,
that such cumulative amount shall (a) be determined in good faith by the Borrower and (b) not be less than zero.
“Code”
means the Internal Revenue Code of 1986, as amended.
“Co-Investors”
means, individually and collectively, (a) any current and former officers, directors and members of the management of the Borrower,
any Parent Company and/or any Subsidiary of the Borrower, solely to the extent that such Persons own Capital Stock in the Borrower
or any direct or indirect parent thereof on the Closing Date, (b) any Person directly or indirectly owning Capital Stock of the
Company immediately prior to the Merger investing directly or indirectly in any Parent Company on the Closing Date (including by
contributing, converting, exchanging or otherwise “rolling over” such Capital Stock) or is subject to a binding agreement
on the Closing Date with respect thereto, and (c) any other Person (other than the Sponsors) making a cash equity investment directly
or indirectly in any Parent Company on the Closing Date, so long as, in each case, immediately after giving effect thereto, the
Sponsors’ investment will constitute not less than 50.1% direct or indirect beneficial ownership of Holdings upon consummation
of the Transactions.
“Collateral”
means any and all property of any Loan Party subject (or purported to be subject) to a Lien under any Collateral Document and any
and all other property of any Loan Party, now existing or hereafter acquired, that is or becomes subject (or purported to be subject)
to a Lien pursuant to any Collateral Document to secure the Secured Obligations.
“Collateral
and Guarantee Requirement” means, at any time, subject to (x) the applicable limitations set forth in this Agreement
and/or any other Loan Document and (y) the time periods (and extensions thereof) set forth in Section 5.12, the requirement
that the Administrative Agent shall have received in the case of any Restricted Subsidiary that is required to become a Loan Party
after the Closing Date pursuant to Section 5.12 (including by ceasing to be an Excluded Subsidiary):
(a) (i)
a joinder to the Loan Guaranty in substantially the form attached as an exhibit thereto, (ii) a supplement to the Security Agreement
in substantially the form attached as an exhibit thereto, (iii) if such Restricted Subsidiary owns registrations of or applications
for U.S. Patents, Trademarks and/or Copyrights that constitute Collateral, an Intellectual Property Security Agreement, (iv) a
completed Perfection Certificate, (v) Uniform Commercial Code financing statements in appropriate form for filing in such jurisdictions
as the Administrative Agent may reasonably request and (vi) an executed joinder to the Intercreditor Agreements (and any other
applicable Acceptable Intercreditor Agreement) in substantially the form attached as an exhibit thereto; and
(b) each
item of Collateral that such Restricted Subsidiary is required to deliver under Section 4.02 of the Security Agreement (which,
for the avoidance of doubt, shall be delivered within the time periods set forth in Section 5.12 and shall exclude Excluded
Assets);
Notwithstanding any provision
of this Agreement or any other Loan Document to the contrary,
(A) no control
agreements, other control arrangements or perfection by “control” shall be required (except as provided in clauses
(y) and (z) below) and no Loan Party shall be required to perfect a security interest in any Collateral, in each case
(to the extent applicable), other than perfection by (w) filing of a UCC-1 financing statement, (x) with respect to IP Rights,
filings with the United States Patent and Trademark Office or the United States Copyright Office, (y) delivery of certificates
evidencing Capital Stock and notes and other evidence of indebtedness, in each case, to the extent required to be pledged as Collateral
and required to be delivered pursuant to the Security Agreement, and (z) to the extent control agreements have been delivered under
the ABL Facility with respect to the ABL US Priority Collateral, second-priority control agreements with respect to the ABL US
Priority Collateral;
(B)(i) no
action (including any filings or registrations) outside of the United States in order to create or perfect any security interest
in any asset located outside of the United States (including with respect to intellectual property and equity interests) shall
be required and (ii) no security or pledge agreements shall be governed by any other law other than the laws of New York (except
the laws of any other U.S. state may govern to the extent necessary to create or perfect a security interest in any portion of
the Collateral); and
(C) the Loan
Parties shall not be required to collaterally assign to the Administrative Agent their respective rights under (w) the Merger Agreement,
(x) any documentation governing permitted acquisition or investment not prohibited under the terms of this Agreement, (y) any representation
and warranty insurance policy or (z) any business interruption policy.
With respect to any Collateral
that is ABL US Priority Collateral, to the extent that the ABL Agent determines that any such property or assets shall not become
part of, or shall be excluded from, the collateral under the ABL Facility, or that any delivery or notice requirement in respect
of any such Collateral shall be extended or waived, the Administrative Agent shall automatically be deemed to accept such determination
and shall execute any documentation, if applicable, requested by the Borrower in connection therewith, including termination and
release documents.
“Collateral
Documents” means, collectively, (a) the Security Agreement, (b) each Intellectual Property Security Agreement,
(c) any supplement to any of the foregoing delivered to the Administrative Agent pursuant to the definition of “Collateral
and Guarantee Requirement” and (d) each of the other instruments and documents pursuant to which any Loan Party grants
a Lien on any Collateral as security for payment of the Secured Obligations.
“Commercial
Tort Claim” has the meaning set forth in Article 9 of the UCC.
“Commitment”
means, with respect to each Lender, such Lender’s Initial Term Loan Commitment, Additional Commitments and any other commitment
to provide Loans under a Credit Facility, as applicable, in effect as of such time.
“Commitment
Schedule” means the Schedule attached hereto as Schedule 1.01(a).
“Commodity Exchange
Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.).
“Company”
has the meaning assigned to such term in the Recitals to this Agreement.
“Company Competitor”
means (a) any Person that is or becomes (i) a competitor of the Borrower and/or any of its subsidiaries and/or the Company and/or
any of its subsidiaries, or (ii) an Affiliate of a Person described in clause (a)(i) and, in each case, identified in writing
to the Administrative Agent, (b) any reasonably identifiable Affiliate of any person described in clause (a) above (on the
basis of such Affiliate’s name) (other than any Debt Fund Affiliate), and/or (c) any Affiliate of any Person described in
clause (a) or clause (b) above identified by name in a written notice to the Administrative Agent.
“Compliance
Certificate” means a Compliance Certificate substantially in the form of Exhibit C.
“Confidential
Information” has the meaning assigned to such term in Section 9.13.
“Consolidated
Adjusted EBITDA” means, as to any Person for any period, an amount determined for such Person on a consolidated basis
equal to the total of (a) Consolidated Net Income for such period plus (b) the sum, without duplication, of (to the extent
deducted in calculating Consolidated Net Income, other than in respect of clauses (xi), (xiii), (xv), (xvi)
and (xviii) below) the amounts of:
(i) consolidated
total interest expense determined in accordance with GAAP and, to the extent not reflected in such consolidated total
interest expense, annual agency fees paid to the administrative agents and collateral agents under any credit facilities,
costs associated with obtaining hedging arrangements and breakage costs in respect of hedging arrangements related to
interest rates), any expense resulting from the discounting of any indebtedness in connection with the application of
recapitalization accounting or, if applicable, purchase accounting in connection with the Transactions or any acquisition,
penalties and interest relating to taxes, any “additional interest” or “liquidated damages” with
respect to other securities for failure to timely comply with registration rights obligations, amortization or expensing of
deferred financing fees, amendment and consent fees, debt issuance costs, commissions, fees, expenses and discounted
liabilities and any other amounts of non-Cash interest, any expensing of bridge, commitment and other financing fees and any
other fees related to the Transactions or any acquisitions after the Closing Date, commissions, discounts, yield and other
fees and charges (including any interest expense) related to any qualified securitization facility, any accretion of accrued
interest on discounted liabilities and any prepayment premium or penalty, interest expense attributable to a parent company
resulting from push-down accounting and any lease, rental or other expense in connection with any lease that is not a
capitalized lease, any losses on hedging obligations or other derivative instruments entered into for the purpose of hedging
interest rate risk (net of interest income and gains on such hedging obligations), costs of surety bonds in connection with
financing activities (whether amortized or immediately expensed), fees and expenses paid to (or for the benefit of) any
arranger, any administrative or collateral agent, any lender or any other secured party under the Loan Documents, the ABL
Credit Agreement (and any related loan documents) and the Second Lien Credit Agreement (and any related loan documents) or to
(or for the benefit of) any other holder of permitted Indebtedness in connection with its services hereunder (including fees
and expenses in connection with any modifications of the Loan Documents), other bank or any other Person in connection with
its services as administrative agent or trustee, or similar capacity under any other Indebtedness permitted hereunder and
financing fees;
(ii) provision
for Taxes during such period (including pursuant to any Tax sharing arrangement or any distributions or other Restricted Payments
for the payment of any Tax), including, in each case, arising out of tax examinations, repatriation of amounts from a Foreign Subsidiary
and (without duplication) any payment to a Parent Company pursuant to Section 6.04(a)(i) and (iv) in respect of Taxes;
(iii) depreciation
and amortization (including, without limitation, amortization of goodwill, software and other intangible assets);
(iv) any
non-Cash Charge (provided, that to the extent any such non-Cash Charge represents an accrual or reserve for any actual or
potential cash items in any future period (including of the type described in clause (vii) below), (A) such Person may elect
(in its sole discretion) not to add back such non-Cash Charge in the then-current period, in which case, any cash payment in respect
thereof in any future period shall be not subtracted from Consolidated Adjusted EBITDA, and (B) to the extent such Person elects
(in its sole discretion) to add back such non-Cash Charge in the then-current period, any cash payment in respect thereof in any
subsequent periods shall be subtracted from Consolidated Adjusted EBITDA pursuant to clause (c)(v) below);
(v) (A) Transaction
Costs, and (B) transaction fees and Charges (1) incurred or amortized for such period in connection with the consummation of any
transaction (or any transaction proposed and not consummated), (2) incurred in connection with any Qualifying IPO (or any Qualifying
IPO proposed and not consummated) and/or (3) that are actually reimbursed or reimbursable by third parties pursuant to indemnification
or reimbursement provisions or similar agreements or insurance; provided, that in respect of any fee, cost, expense or reserve
that is added back in reliance on clause (3) above, such Person in good faith expects to receive reimbursement for such
fee, cost, expense or reserve within the next four Fiscal Quarters (it being understood that to the extent any reimbursement amount
is not actually received within such Fiscal Quarters, such reimbursement amount shall be deducted in calculating Consolidated Adjusted
EBITDA for such Fiscal Quarters pursuant to clause (c)(iii) below);
(vi) Public
Company Costs;
(vii) (A)
management, monitoring, consulting, transaction and advisory fees (including termination fees) and indemnities and expenses actually
paid or accrued by, or on behalf of, such Person or any of its subsidiaries (1) to the Investors (or their Affiliates or management
companies) to the extent permitted under this Agreement or (2) as permitted by Section 6.09(f); (B) the amount of payments
made to option holders of any Parent Company in connection with, or as a result of, any distribution being made to shareholders
of such Person, which payments are being made to compensate such option holders as though they were shareholders at the time of,
and entitled to share in, such distribution, including any cash consideration for any repurchase of equity, in each case to the
extent permitted under the Loan Documents and (C) the amount of fees, expenses and indemnities paid to directors, including of
Holdings or any Parent Company;
(viii) losses
or discounts on sales of receivables and related assets in connection with any receivables financing permitted under this Agreement;
(ix) any
Charges (or net income) attributable to any interest, non-controlling interest and/or minority interest of any third party in any
Restricted Subsidiary;
(x) the
amount of earnout obligation expense incurred in connection with (including adjustments thereto) (A) the Acquisition, (B) acquisitions
and Investments consummated prior to the Closing Date and (C) any Permitted Acquisition or other Investment permitted by this Agreement,
in each case, which is paid or accrued during the applicable period;
(xi) pro
forma “run rate” cost savings (including sourcing and supply chain savings), operating expense reductions, operating
and productivity improvements and synergies (net of actual amounts realized) projected by the Borrower in good faith that are reasonably
identifiable and factually supportable (in the good faith determination of such Person) in connection with (A) the Transactions
related to actions that have been taken (including prior to the Closing Date) or with respect to which substantial steps have been
taken or are expected to be taken (in the good faith determination of the Borrower) within 24 months after the Closing Date (or,
in respect of any pricing increases only, within 12 months after the Closing Date) and (B) any permitted acquisitions, Investments,
Dispositions and other Specified Transactions, and any operating and productivity improvements, restructurings, cost savings initiatives
and other initiatives (including the modification and renegotiation of contracts and other arrangements, pricing adjustments, supply
chain optimization (including consolidating or changing suppliers, supply base reduction and reduction in materials costs), product
and warranty improvements (including lean manufacturing initiatives, design, engineering and automation optimization and discontinuing
or replacing products) and other items of the type described in clause (xii) below) projected by the Borrower in good faith
to result from actions that have been taken (including prior to completion of any such acquisitions, Investments, Dispositions
and other Specified Transactions) or with respect to which substantial steps have been taken or are expected to be taken (in the
good faith determination of the Borrower) within 24 months (or, in respect of any pricing increases only, within 12 months) after
any such acquisitions, Investments, Dispositions and other Specified Transactions or operating improvements, restructurings, cost
savings initiatives and other initiatives; pro forma “run rate” shall be the full benefit associated with any
action taken, committed to be taken or with respect to which substantial steps have been taken or are expected to be taken calculated
on a Pro Forma Basis as though such cost savings, operating expense reductions and synergies had been fully realized on the first
day of the applicable period for the entirety of such period;
(xii) (A)
Charges attributable to the undertaking and/or implementation of operating improvements, operating expense reductions, cost
savings initiatives and other initiatives, transitions, openings and pre-openings, business optimization, restructurings and
integration (including inventory optimization programs, software development, systems upgrade, closure or consolidation of
facilities and plants, curtailments, entry into new markets, strategic initiatives and contracts, consulting fees, signing or
retention costs, retention or completion bonuses, expansion and relocation expenses, severance payments, modifications to
pension and post-retirement employee benefit plans or other post-employment benefit costs representing amortization of
unrecognized prior service costs, actuarial losses, including amortization of such amounts arising in prior periods,
amortization of the unrecognized net obligation (and loss or cost) existing at the date of initial application of FASB
Accounting Standards Codification 715, and any other items of a similar nature, new systems design and implementation and
startup costs), (B) reductions, improvements, enhancements, synergies and initiatives as contemplated in clause (xi)
above, and (C) Charges related to legal settlement, fines, judgments or orders, including with respect to warranty
claims;
(xiii) to
the extent not otherwise included in Consolidated Net Income, proceeds of business interruption insurance in an amount representing
the earnings for the applicable period that such proceeds are intended to replace (whether or not then received so long as such
Person in good faith expects to receive such proceeds within the next four Fiscal Quarters (it being understood that to the extent
not actually received within such Fiscal Quarters, such proceeds shall be deducted in calculating Consolidated Adjusted EBITDA
pursuant to clause (c)(iv) below)) and (B) the amount of any cash tax benefits related to the tax amortization of intangible
assets in such period;
(xiv) (A)
unrealized net losses in the Fair Market Value of any arrangements under Hedge Agreements and/or other derivative instrument pursuant
to (in the case of such other derivative instruments) FASB ASC No. 815 – Derivatives and Hedging and (B) any net loss (less
all fees and expenses or charges related thereto) attributable to the early extinguishment of indebtedness (and the termination
of any associated hedging arrangements);
(xv) the
amount of (A) any Charge to the extent that a corresponding amount is received in cash by such Person from a Person other than
such Person or any Restricted Subsidiary of such Person under any agreement providing for reimbursement of such Charge and (B)
any Charge with respect to any liability or casualty event, business interruption or any product recall, (1) so long as such Person
has submitted in good faith, and reasonably expects to receive payment in connection with, a claim for reimbursement of such amounts
under its relevant insurance policy (with a deduction in the applicable future period for any amount so added back to the extent
not so reimbursed within the next four Fiscal Quarters) or (2) without duplication of amounts included in a prior period under
clause (B)(1) above, to the extent such Charge is covered by insurance proceeds received in cash during such period (it
being understood that if the amount received in cash under any such agreement in any period exceeds the amount of Charge paid during
such period such excess amounts received may be carried forward and applied against any Charge in any future period);
(xvi) the
amount of Cash actually received (or the amount of the benefit of any netting arrangement resulting in reduced Cash Charges) during
such period, to the extent not included in Consolidated Net Income in any period or related non-Cash gain deducted in the calculation
of Consolidated Adjusted EBITDA in any prior period;
(xvii) the
excess of rent expense during such period over actual Cash rent paid over due to the use of straight line rent for GAAP purposes;
and
(xviii) Other
Agreed Adjustments, minus (c) to the extent such amounts increase Consolidated Net Income, without duplication:
(i) non-Cash
gains or income; provided, that to the extent any non-Cash gain or income represents an accrual or deferred income in respect
of actual potential Cash items in any future period, such Person may elect (in its sole discretion) not to deduct such non-Cash
gain or income in the then-current period;
(ii) unrealized
net gains in the Fair Market Value of any arrangements under Hedge Agreements;
(iii) the
amount added back to Consolidated Adjusted EBITDA pursuant to clause (b)(v)(B)(3) above in a prior period to the extent
the relevant reimbursement amounts were not received within the time period required by such clause and are required to be deducted
from Consolidated Adjusted EBITDA for such required time periods pursuant to clause (b)(v)(B)(3) above;
(iv) the
amount added back to Consolidated Adjusted EBITDA pursuant to clause (b)(xiii) above in a prior period to the extent the
relevant business interruption insurance proceeds were not received within the time period required by such clause and are required
to be deducted from Consolidated Adjusted EBITDA pursuant to clause (b)(xiii) above;
(v) to
the extent that such Person added back the amount of any non-Cash charge to Consolidated Adjusted EBITDA pursuant to clause
(b)(iv) above in a prior period, the cash payment in respect thereof in the relevant future period (except as otherwise provided
in clause (b)(iv) above); and
(vi) the
excess of actual Cash rent paid over rent expense during such period due to the use of straight line rent for GAAP purposes.
Notwithstanding anything
to the contrary herein, to the extent applicable, (i) Consolidated Adjusted EBITDA for the Fiscal Quarter ended on or around
June 30, 2016 shall be deemed to be $51,453,000, (ii) Consolidated Adjusted EBITDA for the Fiscal Quarter ended on or around September
30, 2016 shall be deemed to be $23,046,000, (iii) Consolidated Adjusted EBITDA for the Fiscal Quarter ended on or around December
31, 2016 shall be deemed to be $55,795,000 and (iv) Consolidated Adjusted EBITDA for the Fiscal Quarter ended on or around March
31, 2017 shall be deemed to be $39,888,000, in each case, as subject to adjustment pursuant to clause (b) of this definition
to the extent applicable to any such Fiscal Quarter (and not otherwise already included in such amounts) and otherwise adjusted
on a Pro Forma Basis.
“Consolidated
First Lien Debt” means, as to any Person determined on a consolidated basis, at any date of determination, the aggregate
principal amount of Consolidated Total Debt outstanding on such date (i) under this Agreement or (ii) that is secured by a Lien
on the Collateral on a pari passu or senior basis with the First Priority Secured Obligations (it being understood that
Consolidated Total Debt outstanding on any applicable date of determination (subject to Section 1.10) under any ABL Facility
secured on a Split Collateral Basis (including the ABL Facility as of the Closing Date) or a “cash flow” based ABL
Facility secured by the Collateral on a senior basis pari passu with the First Priority Secured Obligations subject to an
Acceptable Intercreditor Agreement under clause (a) of the definition thereof, in each case, shall constitute Consolidated
First Lien Debt).
“Consolidated
Interest Expense” means, as to any Person determined on a consolidated basis at any date of determination, the sum,
without duplication, of (a) consolidated Cash interest of the Borrower and its Restricted Subsidiaries determined in
accordance with GAAP, (i) including (A) the Cash interest component of Capital Lease obligations and (B) net Cash payments
made (less net Cash payments received) pursuant to obligations under permitted hedging arrangements related to interest
rates; but (ii) excluding (to the extent such expense was deducted in computing Consolidated Net Income and not added back in
computing Consolidated Adjusted EBITDA) (A) annual agency fees paid to the administrative agents and collateral agents under
any credit facilities, (B) costs associated with obtaining hedging arrangements and breakage costs in respect of hedging
arrangements related to interest rates), (C) any expense resulting from the discounting of any Indebtedness in connection
with the application of recapitalization accounting or, if applicable, purchase accounting in connection with the
Transactions or any acquisition, (D) penalties and interest relating to Taxes, (E) any “additional interest” or
“liquidated damages” with respect to other securities for failure to timely comply with registration rights
obligations, (F) amortization or expensing of deferred financing fees, amendment and consent fees, debt issuance costs,
commissions, fees, expenses and discounted liabilities and any other amounts of non-Cash interest, (G) any expensing of
bridge, commitment and other financing fees and any other fees related to the Transactions or any acquisitions after the
Closing Date, (H) commissions, discounts, yield and other fees and charges (including any interest expense) related to any
qualified securitization facility, (I) any accretion of accrued interest on discounted liabilities and any prepayment premium
or penalty, (J) interest expense attributable to a parent company resulting from push-down accounting and (K) any lease,
rental or other expense in connection with any lease that is not a Capital Lease, net of (b) Cash interest income of the
Borrower and its Restricted Subsidiaries.
“Consolidated
Net Income” means, as to any Person determined on a consolidated basis (the “Subject Person”) for
any period, the net income (or loss) of the Subject Person for such period taken as a single accounting period determined in accordance
with GAAP; provided that there shall be excluded, without duplication:
(a) (i)
the income of any Person (other than a Restricted Subsidiary of the Subject Person) in which any other Person (other than the Subject
Person or any of its Restricted Subsidiaries) has a joint interest, except that the amount of dividends or distributions or other
payments (including any ordinary course dividend, distribution or other payment) paid in cash (or to the extent converted into
cash) to the Subject Person or any of its Restricted Subsidiaries by such Person during such period (regardless of whether such
payment is in respect of the income of such Person in the current period or any prior period) shall be included in Consolidated
Net Income or (ii) the loss of any Person (other than a Restricted Subsidiary of the Subject Person) in which any other Person
(other than the Subject Person or any of its Restricted Subsidiaries) has a joint interest, other than to the extent that the Subject
Person or any of its Restricted Subsidiaries has contributed cash or Cash Equivalents to such Person in respect of such loss during
such period for the express purpose of funding such losses (but shall exclude any other Investment in such Person);
(b) gains
or losses (less all fees and expenses chargeable thereto) attributable to any sales or dispositions of Capital Stock or assets
(including asset retirement costs) or of returned surplus assets, in each case, outside of the ordinary course of business;
(c) gains
or losses from extraordinary items, any one-time event or item, and nonrecurring or unusual items (including costs of and payments
of actual or prospective legal settlements, fines, judgments or orders), including in connection with any acquisition;
(d) any
unrealized or realized net foreign currency translation or transaction gains or losses impacting net income (including currency
re-measurements of Indebtedness); provided that notwithstanding anything to the contrary herein, realized gains and losses
in respect of any Designated Operational FX Hedge shall be included in the calculation of Consolidated Net Income;
(e) any
net gains, Charges or losses with respect to (i) any disposed (other than Dispositions of assets and inventory in the ordinary
course of business), abandoned, divested and/or discontinued asset, property or operation (other than, at the option of the Borrower,
any asset, property or operation pending the disposal, abandonment, divestiture and/or termination thereof), (ii) any disposal
(other than Dispositions of assets and inventory in the ordinary course of business), abandonment, divestiture and/or discontinuation
of any asset, property or operation (other than, at the option of such Person, relating to assets or property held for sale pending
the Disposition thereof) and/or (iii) facilities or plants that have been closed during such period or for which Charges and losses
were required to be recorded pursuant to GAAP;
(f) (i)
any net income or loss (less all fees and expenses or charges related thereto) attributable to the early extinguishment of Indebtedness
(and the termination of any associated Hedge Agreements) and (ii) any other losses and expenses incurred in connection with the
early termination, refinancing or prepayment of guarantee obligations, operating leases and other similar contractual obligations;
(g) (i)
any Charges incurred pursuant to any management equity plan, profits interest or stock option plan or any other management or employee
benefit plan or agreement, pension plan, any stock subscription or shareholder agreement or any distributor equity plan or agreement,
or any similar equity plan or agreement, including any fair value adjustments that may be required under liquidity puts for such
arrangements and (ii) any Charges in connection with the rollover, acceleration or payout of Capital Stock held by management of
any Parent Company, the Borrower and/or any Restricted Subsidiary, in each case, to the extent that any such Charge is funded with
net cash proceeds contributed to relevant Person as a capital contribution or as a result of the sale or issuance of Qualified
Capital Stock;
(h) accruals
and reserves that are established or adjusted within 12 months after the Closing Date (or after the closing of any consummated
acquisition or Investment) that are required to be established or adjusted as a result of the Transactions (or such acquisition
or Investment) in accordance with GAAP or as a result of the adoption or modification of accounting policies in accordance with
GAAP;
(i) any
(A) write-off or amortization made in such period of deferred financing costs and premiums paid or other expenses incurred directly
in connection with any early extinguishment of Indebtedness, (B) impairment Charges, write-offs or write-downs of any assets and
(C) amortization of intangible assets;
(j) (A)
effects of adjustments (including the effects of such adjustments pushed down to the Subject Person and its subsidiaries) in the
Subject Person’s consolidated financial statements pursuant to GAAP (including in the inventory, property and equipment,
software, goodwill, intangible assets, in-process research and development, deferred revenue, deferred rent, deferred trade incentives
and other lease-related items, advanced billings and debt line items thereof) resulting from the application of recapitalization
accounting or acquisition accounting, as the case may be, in relation to the Transactions or any consummated acquisition or Investment
or the amortization or write-off of any amounts thereof, net of Taxes and (B) the cumulative effect of changes in accounting principles
or policies made in such period in accordance with GAAP which affect Consolidated Net Income (except that, if the Borrower determines
in good faith that the cumulative effects thereof are not material to the interests of the Lenders, the effects of any change,
adoption or modification of any such principles or policies may be included);
(k) the
income or loss of any Person accrued prior to the date on which such Person becomes a Restricted Subsidiary of such Person or is
merged into or consolidated or amalgamated with such Person’s assets are acquired by such Person or any Restricted Subsidiary
of such Person.
(l) any
costs or expenses incurred during such period relating to environmental remediation, litigation, or other disputes in respect of
events and exposures that occurred prior to the Closing Date; and
(m) any
deferred tax expense associated with tax deductions or net operating losses arising as a result of the Transactions, or the release
of any valuation allowance related to such items.
“Consolidated
Secured Debt” means, as to any Person determined on a consolidated basis, at any date of determination, the aggregate
principal amount of Consolidated Total Debt outstanding on such date that is secured by a Lien on the Collateral.
“Consolidated
Total Assets” means, as to any Person determined on a consolidated basis, at any date of determination, all amounts that
would, in conformity with GAAP, be set forth opposite the caption “total assets” (or any like caption) on a consolidated
balance sheet of the applicable Person at such date.
“Consolidated
Total Debt” means, as to any Person determined on a consolidated basis, at any date of determination, an amount equal
to (a) the aggregate principal amount of all Indebtedness for borrowed money (which shall be deemed to include LC Disbursements
(as defined in the ABL Credit Agreement) that have not been reimbursed within the time periods required by the ABL Credit Agreement)
and the outstanding principal balance of all Indebtedness with respect to Capital Leases and purchase money Indebtedness, in each
case, in an amount that would be reflected on a balance sheet prepared as of such date on a consolidated basis in accordance with
GAAP (but excluding, for the avoidance of doubt, (i) any letter of credit, bank guarantees and performance or similar bonds, (ii)
any intercompany Indebtedness eliminated in accordance with GAAP during consolidation and (iii) any such Indebtedness for which
such Person has irrevocably deposited in trust or escrow the necessary funds (including Cash and Cash Equivalents) for the payment,
redemption or satisfaction of Indebtedness), minus, (b) the aggregate amount of (i) unrestricted Cash and Cash Equivalents
of such Person in an amount that would be reflected on a balance sheet prepared as of such date on a consolidated basis in accordance
with GAAP and (ii) Cash and Cash Equivalents restricted in favor of the Credit Facilities, the ABL Facility and any Second Lien
Facility (which may also include Cash and Cash Equivalents securing other Indebtedness that is secured by a Lien on the Collateral
along with the Credit Facilities, the ABL Facility and any Second Lien Facility).
“Consolidated
Working Capital” means, with respect to the Borrower, as at any date of determination, the excess of Current Assets over
Current Liabilities.
“Consolidated
Working Capital Adjustment” means, with respect to the Borrower, for any period on a consolidated basis, the amount (which
may be a negative number) by which Consolidated Working Capital as of the beginning of such period exceeds (or is less than) Consolidated
Working Capital as of the end of such period; provided that there shall be excluded (a) the effect of reclassification during
such period between current assets and long term assets and current liabilities and long term liabilities (with a corresponding
restatement of the prior period to give effect to such reclassification), (b) the effect of any Disposition of any Person, facility
or line of business or acquisition of any Person, facility or line of business during such period, (c) the effect of any fluctuations
in the amount of accrued and contingent obligations under any Hedge Agreement, and (d) the application of purchase or recapitalization
accounting.
“Contract Consideration”
has the meaning assigned to such term in the definition of “Excess Cash Flow”.
“Contractual
Obligation” means, as applied to any Person, any provision of any Security issued by that Person or of any indenture,
mortgage, deed of trust, contract, undertaking, agreement or other instrument to which that Person is a party or by which it or
any of its properties is bound or to which it or any of its properties is subject.
“Contribution
Indebtedness” has the meaning assigned to such term in Section 6.01(r).
“Control”
means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled”
have meanings correlative thereto.
“Copyright”
means the following: (a) all copyrights, rights and interests in copyrights, works protectable by copyright whether published or
unpublished, copyright registrations and copyright applications; (b) all renewals of any of the foregoing; (c) all income, royalties,
damages, and payments now or hereafter due and/or payable under any of the foregoing, including, without limitation, damages or
payments for past, present or future infringements for any of the foregoing; (d) the right to sue for past, present, and future
infringements of any of the foregoing; and (e) all rights corresponding to any of the foregoing.
“Credit Facilities”
means the Term Facility, together with any Additional Revolving Facility, Additional Term Facility and any other facility created
or established under this Agreement.
“Current Assets”
means, as to any Person determined on a consolidated basis, at any date of determination, consolidated current assets as would
be reflected on a balance sheet prepared as of such date on a consolidated basis in accordance with GAAP, but excluding, without
duplication, (a) Cash and Cash Equivalents, (b) the current portion of current and deferred Taxes, (c) permitted loans made to
third parties, (d) assets held for sale, (e) pension assets, (f) deferred bank fees and (g) derivative financial instruments.
“Current Liabilities”
means, as to any Person determined on a consolidated basis, at any date of determination, the consolidated current liabilities
as would be reflected on a balance sheet prepared as of such date on a consolidated basis in accordance with GAAP, but excluding,
without duplication, (a) the current portion of any long-term Indebtedness, (b) outstanding revolving loans and letter of credit
exposure (whether under this Agreement or otherwise), (c) the Consolidated Interest Expense, (d) the current portion of any Capital
Lease, (e) the current portion of current and deferred Taxes, (f) liabilities in respect of unpaid earn-outs, (g) the current portion
of any other long-term liabilities, (h) accruals relating to restructuring reserves, (i) liabilities in respect of funds of third
parties on deposit with the Borrower or any of its Restricted Subsidiaries and (j) any liabilities recorded in connection with
stock-based awards, partnership interest-based awards, awards of profits interests, deferred compensation awards and similar incentive
based compensation awards or arrangements.
“Debt Fund
Affiliate” means (a) with respect to any Disqualified Institution, any debt fund, investment vehicle, regulated
bank entity or unregulated lending entity (in each case, other than any person that would otherwise be a Disqualified
Institution pursuant to clause (a) or (c) of the definition of “Disqualified Institution”) that is
(i) primarily engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of
credit in the ordinary course of business and (ii) managed, sponsored or advised by any Person that is Controlling,
Controlled by or under common Control with such Disqualified Institution or Affiliate thereof, but only to the extent that no
personnel associated or involved with the investment in such Disqualified Institution or such Affiliate thereof (A) makes (or
has the right to make or participate with others in making) investment decisions on behalf of, or otherwise cause the
direction of the investment policies of, such debt fund, investment vehicle, regulated bank entity or unregulated entity or
(B) has access, directly or indirectly (including through such Disqualified Institution or any of its Affiliates), to any
information (other than information that is publicly available) relating to Holdings, the Borrower, the Company and/or any of
their respective subsidiaries and/or of their respective businesses and (b) with respect to any other entity (i) any
Affiliate of the Sponsors (other than a natural person, Holdings, the Borrower or their respective subsidiaries) that is
primarily engaged in, or advises funds or other investment vehicles that are engaged in, making, purchasing, holding or
otherwise investing in commercial loans, bonds and similar extensions of credit in the ordinary course of business and whose
managers have fiduciary duties to the investors thereof that are independent of (or in addition to) their duties to Holdings,
the Borrower, any Restricted Subsidiary or any Sponsor (or any investor thereof) and (ii) for purposes of any investment in
Term Loans (or participations therein) made by or on behalf of AIMCo by persons at AIMCo that are not engaged in making,
acquiring or holding equity investments in Holdings, the Borrower or its Restricted Subsidiaries or similar private equity
investments, AIMCo.
“Debtor Relief
Laws” means the Bankruptcy Code of the U.S., and all other liquidation, conservatorship, bankruptcy, general assignment
for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization or similar debtor relief laws
of the U.S. or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.
“Declined Proceeds”
has the meaning assigned to such term in Section 2.11(b)(v).
“Default”
means any event or condition which upon notice, lapse of time or both would become an Event of Default.
“Defaulting
Lender” means any Lender that has (a) defaulted in its obligations under this Agreement, including without limitation,
to make a Loan within two Business Days of the date required to be made by it hereunder, (b) notified the Administrative Agent
or any Loan Party in writing that it does not intend to satisfy any such obligation or has made a public statement to the effect
that it does not intend to comply with its funding obligations under this Agreement or under agreements in which it commits to
extend credit generally, (c) failed, within two Business Days after the request of Administrative Agent or the Borrower, to confirm
in writing that it will comply with the terms of this Agreement relating to its obligations to fund prospective Loans; provided
that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation
by the Administrative Agent if received prior to the applicable funding date, (d) become (or any parent company thereof has become)
(i) insolvent or been determined by any Governmental Authority having regulatory authority over such Person or its assets, to be
insolvent, or the assets or management of which has been taken over by any Governmental Authority or (ii) the subject of a Bail-In
Action or (e) become the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, administrator,
assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or custodian,
appointed for it, or has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in, any
such proceeding or appointment, unless in the case of any Lender subject to this clause (e), the Borrower and the Administrative
Agent shall each have determined that such Lender intends, and has all approvals required to enable it (in form and substance satisfactory
to each of the Borrower and the Administrative Agent), to continue to perform its obligations as a Lender hereunder; provided
that no Lender shall be deemed to be a Defaulting Lender solely by virtue of the ownership or acquisition of any Capital Stock
in such Lender or its parent by any Governmental Authority; provided that, such action does not result in or provide such
Lender with immunity from the jurisdiction of courts within the U.S. or from the enforcement of judgments or writs of attachment
on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contract or
agreement to which such Lender is a party.
“Deposit Account”
means a demand, time, savings, passbook or like account with a bank, savings and loan association, credit union or like organization,
other than an account evidenced by a negotiable certificate of deposit.
“Derivative
Transaction” means (a) any interest-rate transaction, including any interest-rate swap, basis swap, forward rate agreement,
interest rate option (including a cap, collar or floor), and any other instrument linked to interest rates that gives rise to similar
credit risks (including when-issued securities and forward deposits accepted), (b) any exchange-rate transaction, including any
cross-currency interest-rate swap, any forward foreign-exchange contract, any currency option, and any other instrument linked
to exchange rates that gives rise to similar credit risks, (c) any equity derivative transaction, including any equity-linked swap,
any equity-linked option, any forward equity-linked contract, and any other instrument linked to equities that gives rise to similar
credit risk and (d) any commodity (including precious metal) derivative transaction, including any commodity-linked swap, any commodity-linked
option, any forward commodity-linked contract, and any other instrument linked to commodities that gives rise to similar credit
risks; provided that no phantom stock or similar plan providing for payments only on account of services provided by current
or former directors, officers, employees, members of management, managers or consultants of the Borrower or its subsidiaries shall
be a Derivative Transaction.
“Designated
Non-Cash Consideration” means the Fair Market Value of non-Cash consideration received by the Borrower or any Restricted
Subsidiary in connection with any Disposition pursuant to Section 6.07(h) and/or Section 6.08 that is designated
as Designated Non-Cash Consideration pursuant to a certificate of a Responsible Officer of the Borrower, setting forth the basis
of such valuation (which amount will be reduced by the amount of Cash or Cash Equivalents received in connection with a subsequent
sale or conversion of such Designated Non-Cash Consideration to Cash or Cash Equivalents).
“Designated
Operational FX Hedge” means any Hedge Agreement entered into for the purpose of hedging currency-related risks in respect
of the revenues, cash flows or other balance sheet items of Holdings, the Borrower and/or any Restricted Subsidiaries and designated
at the time entered into (or on or prior to the Closing Date, with respect to any Hedge Agreement entered into on or prior to the
Closing Date) as a Designated Operational FX Hedge by the Borrower in writing to the Administrative Agent.
“Discount Range”
has the meaning assigned to such term in the definition of “Dutch Auction”.
“Disposition”
or “Dispose” means the sale, lease, sublease, or other disposition of any property of any Person.
“Disqualified
Capital Stock” means any Capital Stock which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or upon the happening of any event, (a) matures (excluding any maturity as the
result of an optional redemption by the issuer thereof) or is mandatorily redeemable (other than for Qualified Capital
Stock), pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof (other than
for Qualified Capital Stock), in whole or in part, on or prior to 91 days following the Latest Maturity Date at the time such
Capital Stock is issued (it being understood that if any such redemption is in part, only such part coming into effect prior
to 91 days following the Latest Maturity Date shall constitute Disqualified Capital Stock), (b) is or becomes convertible
into or exchangeable (unless at the sole option of the issuer thereof) for (i) debt securities or (ii) any Capital Stock that
would constitute Disqualified Capital Stock, in each case at any time on or prior to 91 days following the Latest Maturity
Date at the time such Capital Stock is issued, (c) contains any mandatory repurchase obligation or any other repurchase
obligation at the option of the holder thereof (other than for Qualified Capital Stock), in whole or in part, which may come
into effect prior to 91 days following the Latest Maturity Date at the time such Capital Stock is issued (it being understood
that if any such repurchase obligation is in part, only such part coming into effect prior to 91 days following the Latest
Maturity Date shall constitute Disqualified Capital Stock) or (d) requires scheduled payments of dividends in Cash on or
prior to 91 days following the Latest Maturity Date at the time such Capital Stock is issued; provided that any
Capital Stock that would not constitute Disqualified Capital Stock but for provisions thereof giving holders thereof (or the
holders of any security into or for which such Capital Stock is convertible, exchangeable or exercisable) the right to
require the issuer thereof to redeem such Capital Stock upon the occurrence of any change in control, Qualifying IPO or any
Disposition occurring prior to 91 days following the Latest Maturity Date at the time such Capital Stock is issued shall not
constitute Disqualified Capital Stock if (x) such Capital Stock provides that the issuer thereof will not redeem any such
Capital Stock pursuant to such provisions prior to the Termination Date or (y) such redemption is subject to events that
would cause the Termination Date to occur.
Notwithstanding the preceding
sentence, (A) if such Capital Stock is issued pursuant to any plan for the benefit of directors, officers, employees, members of
management, managers or consultants or by any such plan to such directors, officers, employees, members of management, managers
or consultants, in each case in the ordinary course of business of Holdings, the Borrower or any Restricted Subsidiary, such Capital
Stock shall not constitute Disqualified Capital Stock solely because it may be required to be repurchased by the issuer thereof
in order to satisfy applicable statutory or regulatory obligations, and (B) no Capital Stock held by any future, present or former
employee, director, officer, manager, member of management or consultant (or their respective Affiliates or Immediate Family Members)
of the Borrower (or any Parent Company or any subsidiary) shall be considered Disqualified Capital Stock because such stock is
redeemable or subject to repurchase pursuant to any management equity subscription agreement, stock option, stock appreciation
right or other stock award agreement, stock ownership plan, put agreement, stockholder agreement or similar agreement that may
be in effect from time to time.
“Disqualified
Institution” means:
(a) (i)
any Person that is identified in writing to the Administrative Agent prior to the Closing Date (or if identified after the Closing
Date the disqualification of such person is reasonably acceptable to the Administrative Agent in its reasonable discretion), (ii)
any reasonably identifiable Affiliate of any Person described in clause (i) above (on the basis of such Affiliate’s
name) and (iii) any other Affiliate of any Person described in clauses (i) and/or (ii) above that is identified by
name in a written notice to the Administrative Agent;
(b) any
Company Competitor (it being understood and agreed that no Debt Fund Affiliate of any Company Competitor may be designated as Disqualified
Institution pursuant to this clause (b)); and/or
(c) any
Affiliate of any Initial Committed Lender (other than Bank of America) that is engaged as a principal primarily in private equity,
mezzanine financing or venture capital; provided, that no written notice delivered pursuant to clauses (a)(i), (a)(iii)
above or clauses (a) and/or (c) of the definition of “Company Competitor” shall apply retroactively to
disqualify any person that has previously acquired a valid assignment or participation interest in the Term Loans.
“Dollars”
or “$” refers to lawful money of the U.S.
“Domestic Subsidiary”
means any direct or indirect subsidiary of the Borrower organized under the laws of the United States, any state or the District
of Columbia.
“Dutch Auction”
means an auction (an “Auction”) conducted by Holdings, the Borrower, any subsidiary of the Borrower, any Affiliated
Lender or any Debt Fund Affiliate (any such Person, the “Auction Party”) in order to purchase Initial Term Loans
(or any other Term Loans), in accordance with the following procedures; provided that no Auction Party shall initiate an
Auction unless (I) at least five Business Days have passed since the consummation of the most recent purchase of Term Loans pursuant
to an Auction conducted hereunder; or (II) at least three Business Days have passed since the date of the last Failed Auction which
was withdrawn pursuant to clause (c)(i) below:
(a) Notice
Procedures. In connection with any Auction, the Auction Party will provide notification to the Auction Agent (for distribution
to the relevant Lenders) of the Term Loans that will be the subject of the Auction (an “Auction Notice”). Each
Auction Notice shall be in a form reasonably acceptable to the Auction Agent and shall (i) specify the maximum aggregate principal
amount of the Term Loans subject to the Auction, in a minimum amount of $10,000,000 and whole increments of $1,000,000 in excess
thereof (or, in any case, such lesser amount of such Term Loans then outstanding or which is otherwise reasonably acceptable to
the Auction Agent and the Administrative Agent (if different from the Auction Agent)) (the “Auction Amount”),
(ii) specify the discount to par (which may be a range (the “Discount Range”) of percentages of the par principal
amount of the Term Loans subject to such Auction), that represents the range of purchase prices that the Auction Party would be
willing to accept in the Auction, (iii) be extended, at the sole discretion of the Auction Party, to (x) each Lender and/or
(y) each Lender with respect to any Term Loan on an individual Class basis, (iv) remain outstanding through the Auction Response
Date and (v) at the option of the Auction Party, be subject to one of more conditions or contingencies. The Auction Agent will
promptly provide each appropriate Lender with a copy of the Auction Notice and a form of the Return Bid to be submitted by a responding
Lender to the Auction Agent (or its delegate) by no later than 5:00 p.m. on the date specified in the Auction Notice (or such later
date as the Auction Party may agree with the reasonable consent of the Auction Agent) (the “Auction Response Date”).
(b) Reply
Procedures. In connection with any Auction, each Lender holding the relevant Term Loans subject to such Auction may, in its
sole discretion, participate in such Auction and may provide the Auction Agent with a notice of participation (the “Return
Bid”) which shall be in a form reasonably acceptable to the Auction Agent, and shall specify (i) a discount to par (that
must be expressed as a price at which it is willing to sell all or any portion of such Term Loans) (the “Reply Price”),
which (when expressed as a percentage of the par principal amount of such Term Loans) must be within the Discount Range, and (ii)
a principal amount of such Term Loans, which must be in whole increments of $1,000,000 (or, in any case, such lesser amount of
such Term Loans of such Lender then outstanding or which is otherwise reasonably acceptable to the Auction Agent) (the “Reply
Amount”). Lenders may only submit one Return Bid per Auction, but each Return Bid may contain up to three bids only one
of which may result in a Qualifying Bid. In addition to the Return Bid, the participating Lender must execute and deliver, to be
held in escrow by the Auction Agent, an Assignment and Assumption with the dollar amount of the Term Loans to be assigned to be
left in blank, which amount shall be completed by the Auction Agent in accordance with the final determination of such Lender’s
Qualifying Bid pursuant to clause (c) below. Any Lender whose Return Bid is not received by the Auction Agent by the Auction
Response Date shall be deemed to have declined to participate in the relevant Auction with respect to all of its Term Loans.
(c) Acceptance
Procedures. Based on the Reply Prices and Reply Amounts received by the Auction Agent prior to the applicable Auction
Response Date, the Auction Agent, in consultation with the Auction Party, will determine the applicable price (the
“Applicable Price”) for the Auction, which will be the lowest Reply Price for which the Auction Party can
complete the Auction at the Auction Amount; provided that, in the event that the Reply Amounts are insufficient to
allow the Auction Party to complete a purchase of the entire Auction Amount (any such Auction, a “Failed
Auction”), the Auction Party shall either, at its election, (i) withdraw the Auction or (ii) complete the Auction
at an Applicable Price equal to the highest Reply Price. The Auction Party shall purchase the relevant Term Loans (or the
respective portions thereof) from each Lender with a Reply Price that is equal to or lower than the Applicable Price
(“Qualifying Bids”) at the Applicable Price; provided that if the aggregate proceeds required to
purchase all Term Loans subject to Qualifying Bids would exceed the Auction Amount for such Auction, the Auction Party shall
purchase such Term Loans at the Applicable Price ratably based on the principal amounts of such Qualifying Bids (subject to
rounding requirements specified by the Auction Agent in its discretion). If a Lender has submitted a Return Bid containing
multiple bids at different Reply Prices, only the bid with the lowest Reply Price that is equal to or less than the
Applicable Price will be deemed to be the Qualifying Bid of such Lender (e.g., a Reply Price of $100 with a discount
to par of 1%, when compared to an Applicable Price of $100 with a 2% discount to par, will not be deemed to be a Qualifying
Bid, while, however, a Reply Price of $100 with a discount to par of 2.50% would be deemed to be a Qualifying Bid). The
Auction Agent shall promptly, and in any case within five Business Days following the Auction Response Date with respect to
an Auction, notify (I) the Borrower of the respective Lenders’ responses to such solicitation, the effective date of
the purchase of Term Loans pursuant to such Auction, the Applicable Price, and the aggregate principal amount of the Term
Loans and the Classes thereof to be purchased pursuant to such Auction, (II) each participating Lender of the effective date
of the purchase of Term Loans pursuant to such Auction, the Applicable Price, and the aggregate principal amount and the
Classes of Term Loans to be purchased at the Applicable Price on such date, (III) each participating Lender of the aggregate
principal amount and the Classes of the Term Loans of such Lender to be purchased at the Applicable Price on such date and
(IV) if applicable, each participating Lender of any rounding and/or proration pursuant to the second preceding sentence.
Each determination by the Auction Agent of the amounts stated in the foregoing notices to the Borrower and Lenders shall be
conclusive and binding for all purposes absent manifest error.
(d) Additional
Procedures.
(i) Once
initiated by an Auction Notice, the Auction Party may not withdraw an Auction other than a Failed Auction or one or more conditions
or contingencies have not been satisfied (or waived by the Auction Party). Furthermore, in connection with any Auction, upon submission
by a Lender of a Qualifying Bid, such Lender (each, a “Qualifying Lender”) will be obligated to sell the entirety
or its allocable portion of the Reply Amount, as the case may be, at the Applicable Price.
(ii) To
the extent not expressly provided for herein, each purchase of Term Loans pursuant to an Auction shall be consummated pursuant
to procedures consistent with the provisions in this definition, established by the Auction Agent acting in its reasonable discretion
and as reasonably agreed by the Borrower.
(iii) In
connection with any Auction, the Borrower and the Lenders acknowledge and agree that the Auction Agent may require one or more
conditions or contingencies to any Auction, including the payment of customary fees and expenses by the Auction Party in connection
therewith as agreed between the Auction Party and the Auction Agent.
(iv) Notwithstanding
anything in any Loan Document to the contrary, for purposes of this definition, each notice or other communication required
to be delivered or otherwise provided to the Auction Agent (or its delegate) shall be deemed to have been given upon the
Auction Agent’s (or its delegate’s) actual receipt during normal business hours of such notice or communication; provided
that any notice or communication actually received outside of normal business hours shall be deemed to have been given as of
the opening of business on the next Business Day.
(v) The
Borrower and the Lenders acknowledge and agree that the Auction Agent may perform any and all of its duties under this definition
by itself or through any Affiliate of the Auction Agent and expressly consent to any such delegation of duties by the Auction Agent
to such Affiliate and the performance of such delegated duties by such Affiliate. The exculpatory provisions pursuant to this Agreement
shall apply to each Affiliate of the Auction Agent and its respective activities in connection with any purchase of Term Loans
provided for in this definition as well as activities of the Auction Agent.
“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 Assignee”
means (a) any Lender, (b) any commercial bank, insurance company, or finance company, financial institution, any fund that invests
in loans or any other “accredited investor” (as defined in Regulation D of the Securities Act), (c) any Affiliate of
any Lender, (d) any Approved Fund of any Lender or (e) to the extent permitted under Section 9.05(g) and/or 9.05(h),
any Affiliated Lender or any Debt Fund Affiliate; provided that in any event, “Eligible Assignee” shall not
include (i) any natural person, (ii) any Disqualified Institution or (iii) except as permitted under Section 9.05(g)
and/or 9.05(h), the Borrower or any of its Affiliates.
“Environment”
means ambient air, indoor air, surface water, groundwater, drinking water, land surface and subsurface strata and natural resources
such as wetlands, flora and fauna.
“Environmental
Claim” means any investigation, notice, notice of violation, claim, action, suit, proceeding, demand, abatement order
or other order or directive (conditional or otherwise), by any Governmental Authority or any other Person, arising (a) pursuant
to or in connection with any actual or alleged violation of any Environmental Law; (b) in connection with any Hazardous Material
or any actual or alleged Hazardous Materials Activity; or (c) in connection with any actual or alleged damage, injury, threat or
harm to the Environment.
“Environmental
Laws” means any and all current or future applicable foreign or domestic, federal or state (or any subdivision of
either of them), statutes, ordinances, orders, rules, regulations, judgments, Governmental Authorizations, or any other
applicable requirements of Governmental Authorities and the common law relating to (a) environmental matters, including those
relating to any Hazardous Materials Activity; or (b) the generation, use, storage, transportation or disposal of or exposure
to Hazardous Materials, in any manner applicable to the Borrower or any of its Restricted Subsidiaries or any Facility.
“Environmental
Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental
investigation or remediation, fines, penalties or indemnities), directly or indirectly resulting from or based upon (a) violation
of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials,
(c) exposure to any Hazardous Materials, (d) the Release or threatened Release of any Hazardous Materials into the Environment
or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to
any of the foregoing.
“Equity Contribution”
has the meaning assigned to such term in the Recitals to this Agreement.
“ERISA”
means the Employee Retirement Income Security Act of 1974.
“ERISA Affiliate”
means, as applied to any Person, (a) any corporation which is a member of a controlled group of corporations within the meaning
of Section 414(b) of the Code of which that Person is a member; and (b) any trade or business (whether or not incorporated)
which is a member of a group of trades or businesses under common control within the meaning of Section 414(c) of the Code
of which that Person is a member.
“ERISA Event”
means (a) a “reportable event” within the meaning of Section 4043 of ERISA and the regulations issued thereunder
with respect to any Pension Plan (excluding those for which the 30-day notice period has been waived); (b) the failure to meet
the minimum funding standard of Section 412 of the Code with respect to any Pension Plan, or the filing of any request for
or receipt of a minimum funding waiver under Section 412 of the Code with respect to any Pension Plan or a failure to make a required
contribution to a Multiemployer Plan; (c) the provision by the administrator of any Pension Plan pursuant to Section 4041(a)(2)
of ERISA of a notice of intent to terminate such plan in a distress termination described in Section 4041(c) of ERISA; (d)
the withdrawal by the Borrower, any of its Restricted Subsidiaries or any of their respective ERISA Affiliates from any Pension
Plan with two or more contributing sponsors or the termination of any such Pension Plan resulting in liability to the Borrower,
any of its Restricted Subsidiaries or any of their respective ERISA Affiliates pursuant to Section 4063 or 4064 of ERISA;
(e) the institution by the PBGC of proceedings to terminate any Pension Plan; (f) the imposition of liability on the Borrower,
any of its Restricted Subsidiaries or any of their respective ERISA Affiliates pursuant to Section 4062(e) or 4069 of ERISA
or by reason of the application of Section 4212(c) of ERISA; (g) a complete or partial withdrawal (within the meaning of Sections
4203 and 4205 of ERISA) of the Borrower, any of its Restricted Subsidiaries or any of their respective ERISA Affiliates from any
Multiemployer Plan, or the receipt by the Borrower, any of its Restricted Subsidiaries or any of their respective ERISA Affiliates
of notice from any Multiemployer Plan that it is in insolvency pursuant to Section 4245 of ERISA, or that it intends to terminate
or has terminated under Section 4041A or 4042 of ERISA or is in “endangered” or “critical” status,
within the meaning of Section 432 of the Code or Section 305 of ERISA; (h) a failure by the Borrower, any of its Restricted Subsidiaries
or any of their respective ERISA Affiliates to pay when due (after expiration of any applicable grace period) any installment payment
with respect to withdrawal liability under Section 4201 of ERISA; (i) a determination that any Pension Plan is, or is reasonably
expected to be, in “at-risk” status, within the meaning of Section 430(i)(4) of the Code or Section 303(i)(4) of ERISA;
or (j) the incurrence of liability or the imposition of a Lien pursuant to Section 436 or 430(k) of the Code or pursuant
to ERISA with respect to any Pension Plan.
“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 assigned to such term in Article 7.
“Excess Cash
Flow” means, for any Calculation Period, an amount (if positive) equal to:
(a) the
sum, without duplication, of the amounts for such Calculation Period of the following:
(i) Consolidated
Adjusted EBITDA for such Calculation Period without giving effect to clauses (b)(xi) and (b)(xviii) of the definition
thereof, plus
(ii) the
Consolidated Working Capital Adjustment for such Calculation Period, plus
(iii) cash
gains of the type described in clauses (b), (c), (d), (e) and (f) of the definition of “Consolidated
Net Income” during such Calculation Period, to the extent not otherwise included in Consolidated Adjusted EBITDA (except
to the extent such gains consist of proceeds applied pursuant to Section 2.11(b)(ii)), plus
(iv) to
the extent not otherwise included in the calculation of Consolidated Adjusted EBITDA for such Calculation Period, cash payments
received by the Borrower or any of its Restricted Subsidiaries with respect to amounts deducted from Excess Cash Flow in a prior
Calculation Period pursuant to clause (b)(vii) below, minus
(b) the
sum, without duplication, of the amounts for such Calculation Period of the following:
(i) permanent
repayments of long-term Indebtedness, including for purposes of clarity, the current portion of any such Indebtedness (including
(x) payments under Sections 2.10(a) or (b) and (y) prepayments of Initial Term Loans and Additional Term Loans to
the extent (and only to the extent) made with the Net Proceeds of a Prepayment Asset Sale or Net Insurance/Condemnation Proceeds
resulted in an increase to Consolidated Net Income and not in excess of the amount of such increase, but excluding (A) the amount
of all deductions and reductions to the amount of mandatory prepayments pursuant to clause (B) of Section 2.11(b)(i),
(B) all other repayments of the Initial Term Loans or Additional Term Loans and (C) repayments of any loans under the ABL Facility,
any Additional Revolving Loans or loans under any other revolving credit facility or arrangement, except to the extent a corresponding
amount of the commitments under the ABL Facility or such revolving credit facility or arrangement are permanently reduced in connection
with such repayments), in each case, to the extent not financed with Long-Term Funded Indebtedness; plus
(ii) all
Cash payments in respect of capital expenditures as would be reported in the Borrower’s consolidated statement of cash flows
made during such Calculation Period and, at the option of the Borrower, in the case of any Calculation Period, any Cash payments
in respect of any such capital expenditures made prior to the date of the Excess Cash Flow payment in respect of such Calculation
Period (except, in each case, to the extent financed with Long-Term Funded Indebtedness); plus
(iii) (A)
amounts added back pursuant to clauses (b)(i), (b)(ii), (b)(v) (other than clause (b)(v)(B)(3)), (b)(vi), (b)(vii), (b)(ix), (b)(x)
(to the extent actually paid in such period), (b)(xii), and (b)(xvii) of the definition of “Consolidated
Adjusted EBITDA”, to the extent paid in Cash, and (B) amounts added back in calculating Consolidated Adjusted EBITDA or
included in Consolidated Net Income, to the extent consisting of non-Cash or unrealized items; plus
(iv) any
Charges (or net income) attributable to any non-controlling interest and/or minority interest of any third party in any Restricted
Subsidiary; plus
(v) Cash
payments made during such Calculation Period (or, at the option of the Borrower (in its sole discretion), made after such Calculation
Period and prior to the date of the applicable Excess Cash Flow payment) in respect of Permitted Acquisitions and other Investments
permitted by Section 6.06 or otherwise consented to by the Required Lenders (other than Investments in (x) Cash and Cash
Equivalents and (y) the Borrower or any of its Restricted Subsidiaries), except, in each case, to the extent financed with Long-Term
Funded Indebtedness; plus
(vi) (A)
the aggregate amount of all Restricted Payments made under Sections 6.04(a)(i), (ii), (iv), (vi),
(xi) and (xiii) or otherwise consented to by the Required Lenders, in each case to the extent actually paid in Cash
during such Calculation Period, or, at the option of the Borrower, made after such Calculation Period and prior to the date of
the applicable Excess Cash Flow payment, except, in each case, to the extent financed with Long-Term Funded Indebtedness, and (B)
to the extent paid in Cash, amounts paid with respect to the Transactions (including under Section 6.04(a)(vii)) after the Closing
Date, to satisfy any payment obligations owing under the Merger Agreement and amounts required to be paid in connection with, or
as a result, of any working capital and purchase price adjustments; plus
(vii) amounts
added back under clause (b)(v)(B)(3), (b)(xiii) or (b)(xv) of the definition of “Consolidated Adjusted
EBITDA” to the extent such amounts have not yet been received by the Borrower or its Restricted Subsidiaries, plus
(viii) an
amount equal to all expenses, charges and losses either (A) excluded in calculating Consolidated Net Income or (B) added back
in calculating Consolidated Adjusted EBITDA, in the case of clauses (A) and (B), to the extent paid in Cash, plus
(ix) without
duplication of amounts deducted from Excess Cash Flow in respect of any prior Calculation Period, at the option of the Borrower,
the aggregate consideration required to be paid in Cash by the Borrower or its Restricted Subsidiaries pursuant to binding contracts
(the “Contract Consideration”) entered into prior to or during such Calculation Period relating to capital expenditures,
acquisitions or Investments permitted by Section 6.06 (other than Investments in (x) Cash and Cash Equivalents and
(y) the Borrower or any of its Restricted Subsidiaries) and Restricted Payments permitted by Section 6.04(a) (other than
pursuant to Section 6.04(a)(iii)) to be consummated or made during the period of four consecutive Fiscal Quarters of the Borrower
following the end of such Calculation Period (except, in each case, to the extent financed with Long-Term Funded Indebtedness);
provided that to the extent the aggregate amount actually utilized to finance such capital expenditures, acquisitions or
Investments during such subsequent period of four consecutive Fiscal Quarters is less than the Contract Consideration, the amount
of the resulting shortfall shall be added to the calculation of Excess Cash Flow at the end of such subsequent period of four consecutive
Fiscal Quarters, plus
(x) to
the extent not expensed (or exceeding the amount expensed) during such Calculation Period or not deducted (or exceeding the amount
deducted) in calculating Consolidated Net Income (or exceeding the amount added back in calculating Consolidated Adjusted EBITDA),
the aggregate amount of expenditures, fees, costs and expenses paid in Cash by the Borrower and its Restricted Subsidiaries during
such Calculation Period, other than to the extent financed with Long-Term Funded Indebtedness, plus
(xi) Cash
payments (without duplication Taxes subject to clauses (iii) and (vi) above) made during such Calculation Period
for any liability the accrual of which in a prior Calculation Period did not increase Excess Cash Flow in such prior Calculation
Period (provided there was no other deduction to Consolidated Adjusted EBITDA or Excess Cash Flow related to such payment),
except to the extent financed with Long-Term Funded Indebtedness, plus
(xii) Cash
expenditures made in respect of any Hedge Agreement during such Calculation Period to the extent (A) not otherwise deducted in
the calculation of Consolidated Net Income or Consolidated Adjusted EBITDA and (B) not financed with Long-Term Funded Indebtedness,
plus
(xiii) amounts
paid in Cash (except to the extent financed with Long-Term Funded Indebtedness) during such Calculation Period on account of (A)
items that were accounted for as non-Cash reductions of Consolidated Net Income or Consolidated Adjusted EBITDA in a prior Calculation
Period and (B) reserves or amounts established in purchase accounting to the extent such reserves or amounts are added back to,
or not deducted from, Consolidated Net Income, plus
(xiv) cash
payments made by the Borrower or its Restricted Subsidiaries during such Calculation Period in respect of long-term liabilities
(other than in respect of Long-Term Funded Indebtedness, which is governed by clause (b)(i) above), including for purposes
of clarity, the current portion of any such liabilities of the Borrower or its Restricted Subsidiaries, except to the extent such
cash payments were (A) deducted in the calculation of Consolidated Net Income or Consolidated Adjusted EBITDA for such Calculation
Period or (B) financed with Long-Term Funded Indebtedness, plus
(xv) an
amount equal to any non-Cash credit or income included in Consolidated Net Income and any non-Cash Charges added back to Consolidated
Net Income in calculating Consolidated Adjusted EBITDA.
“Exchange Act”
means the Securities Exchange Act of 1934 and the rules and regulations of the SEC promulgated thereunder.
“Excluded Assets”
means each of the following:
(a) any
assets (including any lease, licenses or agreement) subject to a purchase money security interest, capital lease or similar
arrangement permitted by this Agreement as to which the grant of a security interest therein would (i) constitute a
violation of a restriction in favor of a third party (other than Holdings, the Borrower or any of its subsidiaries) or result
in the abandonment, invalidation or unenforceability of any right of the relevant Loan Party, or (ii) result in a breach,
termination (or a right of termination) or default under such contract, instrument, lease, license, agreement or other
document (including pursuant to any “change of control” or similar provision); provided, however,
that any such asset will only constitute an Excluded Asset under clause (i) or clause (ii) above to the
extent such violation or breach, termination (or right of termination) or default would not be rendered ineffective pursuant
to Sections 9-406, 9-407, 9-408 or 9-409 of the UCC (or any successor provision or provisions) of any relevant jurisdiction
or any other applicable law; provided further that any such asset shall cease to constitute an Excluded Asset at such
time as the condition causing such violation, breach, termination (or right of termination) or default or right to amend or
require other actions no longer exists and to the extent severable, the security interest granted under the applicable
Collateral Document shall attach immediately to any portion of such contract, instrument, lease, license, agreement or
document that does not result in any of the consequences specified in clauses (i) and (ii) above;
(b) the
Capital Stock of any (i) Immaterial Subsidiary, (ii) Captive Insurance Subsidiary, (iii) Unrestricted Subsidiary (except to the
extent the security interest in such Capital Stock may be perfected by the filing of a Form UCC-1 (or similar) financing statement),
(iv) not-for-profit subsidiary, (v) special purpose entity used for any permitted securitization facility (to the extent pledge
thereof is not permitted under securitization agreements applicable to such entities), (vi) any Restricted Subsidiary that is not
a Wholly-Owned Subsidiary and is not permitted to be pledged pursuant to such entity’s organizational documents without (A)
the consent of one or more unaffiliated third parties other than Holdings, the Borrower or any of its subsidiaries (after giving
effect to Sections 9-406, 9-407, 9-408 or 9-409 of the UCC (or any successor provision or provisions) of any relevant jurisdiction
or any other applicable law) or (B) giving rise to a “right of first refusal”, a “right of first offer”
or a similar right that may be exercised by any third party other than Holdings, the Borrower or any of its subsidiaries, (vii)
any subsidiary that is prohibited from having its stock pledged by (A) any law or regulation or would require governmental (including
regulatory) consent, approval or authorization, or (B) any Contractual Obligation that exists on the Closing Date or at the same
time such subsidiary becomes a subsidiary of the Borrower and not entered into in contemplation of such subsidiary becoming a subsidiary
of the Borrower, (viii) any Restricted Subsidiary acquired by the Borrower or any of its Restricted Subsidiaries after the Closing
Date that, at the time of the relevant acquisition (and not entered into in contemplation of such acquisition), is an obligor in
respect of any Indebtedness permitted to be assumed by the Borrower or such Restricted Subsidiary to the extent (and for so long
as) the documentation governing the applicable assumed Indebtedness prohibits the Capital Stock of such Restricted Subsidiary from
being pledged, and (ix) any person that is not (A) the Borrower or (B) a Restricted Subsidiary that is a direct, first tier subsidiary
of the Borrower or a Subsidiary Guarantor;
(c) any
IP Rights in any non-U.S. jurisdictions and any intent-to-use Trademark application prior to the filing of a “Statement of
Use” or an “Amendment to Allege Use” with respect thereto, only to the extent, if any, that, and solely during
the period, if any, in which, the grant of a security interest therein would impair the validity or enforceability of such intent-to-use
Trademark application or any registration issuing therefrom under applicable law;
(d) any
asset (including governmental licenses or state or local franchises, charters, authorizations and agreements), the grant or
perfection of a security interest in which would (i) be prohibited or restricted by applicable law or (ii) require any
governmental consent, approval, license or authorization that has not been obtained (after giving effect to Sections 9-406,
9-407, 9-408 or 9-409 of the UCC and other applicable laws), (iii) be prohibited by enforceable anti-assignment provisions of
applicable Requirements of Law, except, in the case of this clause (iii), to the extent such prohibition would be
rendered ineffective under the UCC or other applicable law notwithstanding such prohibition, or (iv) be prohibited by
enforceable anti-assignment provisions of contracts governing such asset in existence on the Closing Date or on the date of
acquisition of the relevant asset (and in each case not entered into in anticipation of the Closing Date or such acquisition
and except, in each case, to the extent that term in such contract providing for such prohibition purports to prohibit the
granting of a security interest over all assets of such Loan Party or any other Loan Party) other than to the extent such
prohibition would be rendered ineffective under the UCC or other applicable law;
(e) (i) any
leasehold Real Estate Asset and (ii) any owned Real Estate Asset;
(f) any
leasehold interests in any other asset or property (except to the extent the security interest in such leasehold interest may be
perfected by the filing of a Form UCC-1 financing statement);
(g) any
motor vehicles and other assets subject to certificates of title;
(h) any
Margin Stock;
(i) the
Capital Stock of any Foreign Subsidiary or any Foreign Subsidiary Holdco, other than 65% of the issued and outstanding Capital
Stock of any Restricted Subsidiary that is a direct, first-tier Restricted Subsidiary of the Borrower or a Subsidiary Guarantor
and owned by the Borrower or such Subsidiary Guarantor;
(j) (i)
Commercial Tort Claims with a value (as reasonably estimated by the Borrower) of less than $10,000,000 (except as to which perfection
of the security interest in such commercial tort claims is accomplished by the filing of a Form UCC-1 financing statement) and
(ii) Letter-of-Credit Rights (except to the extent constituting a supporting obligation for other Collateral as to which perfection
of the security interest in such Letter-of-Credit Rights may be perfected by the filing of a Form UCC-1 financing statement);
(k) except
to the extent constituting ABL US Priority Collateral required to be subject to the “Collateral and Guarantee Requirement”
pursuant to clause (A)(z) of the definition thereof, any (i) Cash or Cash Equivalents (other than Cash and Cash Equivalents to
the extent constituting proceeds with respect to Collateral), and (ii) deposit, securities and similar accounts (including securities
entitlements), payroll and other employee wage and benefit accounts, tax accounts (including, without limitation, sales tax accounts)
and any tax benefits, escrow accounts, fiduciary or trust accounts for the benefit of third parties and any funds and other property
held in or maintained in any such accounts;
(l) any
accounts receivable and related assets that are sold or disposed of in connection with any factoring or similar arrangement permitted
by this Agreement;
(m) any
asset or property (including the Capital Stock of any Restricted Subsidiary), the grant or perfection of a security interest in
which would result in material and adverse tax liabilities or consequences to Holdings, the Borrower or any Restricted Subsidiary
(including with respect to any tax distribution paid or payable to any Parent Company), as reasonably determined by the Borrower
in consultation with the Administrative Agent;
(n) any
asset with respect to which the Administrative Agent and the Borrower have reasonably determined that the cost, burden, difficulty
or consequence (including any effect on the ability of the relevant Loan Party to conduct its operations and business in the ordinary
course of business) of obtaining or perfecting a security interest therein outweighs the benefit of a security interest to the
relevant Secured Parties afforded thereby; and
(o) the
ABL Canadian Collateral; provided that, Excluded Assets shall not include any proceeds, substitutions or replacements
of any Excluded Assets referred to in clauses (a) through (o).
“Excluded
Subsidiary” means:
(a) any
Restricted Subsidiary that is not a Wholly-Owned Subsidiary;
(b) any
Immaterial Subsidiary;
(c) any
Restricted Subsidiary that is prohibited from providing a Guarantee by (i) law or regulation or whose provision of a Guarantee
would require a governmental (including regulatory) consent, approval, license or authorization in order to provide a Guarantee
or (ii) any contractual obligation existing on the Closing Date or at the time such Restricted Subsidiary becomes a subsidiary
(which Contractual Obligation was not entered into in contemplation of such Restricted Subsidiary becoming a subsidiary) from providing
a Loan Guaranty;
(d) any
direct or indirect subsidiary of the Borrower that is (i) a not-for-profit subsidiary, (ii) a Captive Insurance Subsidiary, (iii)
a special purpose entity used for any permitted securitization or receivables facility or financing, (iv) a Foreign Subsidiary
or a subsidiary of a Foreign Subsidiary, (v) a Foreign Subsidiary Holdco or a direct or indirect subsidiary of a Foreign Subsidiary
Holdco, or (vi) an Unrestricted Subsidiary;
(e) any
Restricted Subsidiary with respect to which, in the reasonable judgment of the Borrower (in consultation with the Administrative
Agent), the burden or cost of providing a Loan Guaranty outweighs the benefits afforded thereby;
(f) solely
in the case of any obligation under any Secured Hedging Obligations that constitutes a “swap” within the meaning of
section 1(a)(47) of the Commodity Exchange Act, any subsidiary of Holdings that is not an “Eligible Contract Participant”
as defined under the Commodity Exchange Act (after giving effect to any applicable customary “keepwell” provision under
the Loan Guaranty);
(g) any
Restricted Subsidiary acquired by the Borrower or any of its Restricted Subsidiaries after the Closing Date that, at the time of
the relevant acquisition (and not entered into in contemplation of such acquisition), is an obligor in respect of assumed Indebtedness
that is permitted hereunder to the extent (and for so long as) the documentation governing the applicable assumed Indebtedness
prohibits such Restricted Subsidiary from providing a Loan Guaranty;
(h) any
subsidiary of the Borrower where the provision of a Loan Guaranty would result in material adverse tax consequences to Holdings,
the Borrower or any Restricted Subsidiary, as reasonably determined by the Borrower in consultation with the Administrative Agent;
and
(i) any
subsidiary as reasonably agreed between the Borrower and the Administrative Agent.
“Excluded
Swap Obligation” means, with respect to any Guarantor, any Swap Obligation if, and to the extent that, all or a
portion of the Loan Guaranty of such Guarantor of, or the grant by such Guarantor of a security interest to secure, such Swap
Obligation (or any Loan 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 Guarantor’s failure for any reason to constitute an “eligible contract participant” as defined in the
Commodity Exchange Act and the regulations thereunder (determined after giving effect to Section 3.20 of the Loan
Guaranty and any other “keepwell,” support or other agreement for the benefit of such Guarantor) at the time the
Loan Guaranty of such Guarantor 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 Loan Guaranty or security interest
is or becomes illegal.
“Excluded Taxes”
means, with respect to the Administrative Agent, any Lender or any other recipient of any payment to be made by or on account of
any obligation of any Loan Party hereunder or under any other Loan Document, (a) Taxes imposed on (or measured by) its net income
or franchise Taxes (i) by the jurisdiction under the laws of which such recipient is organized or in which its principal office
is located or, in the case of any Lender, in which its applicable lending office is located or (ii) that are Other Connection Taxes,
(b) any branch profits Taxes imposed under Section 884(a) of the Code or any similar Tax, imposed by any jurisdiction described
in clause (a), (c) in the case of any Lender, any U.S. federal withholding Tax that is imposed on amounts that are (or would
be) required to be withheld pursuant to a Requirement of Law in effect at the time such Lender becomes a party to this Agreement
(or designates a new lending office), except (i) pursuant to an assignment or designation of a new lending office under Section
2.19 and (ii) to the extent that such Lender (or its assignor, if any) was entitled, immediately prior to the designation of
a new lending office (or assignment), to receive additional amounts from any Loan Party with respect to such withholding Tax pursuant
to Section 2.17, (d) any Tax imposed as a result of a failure by the Administrative Agent or any Lender to comply with
Section 2.17(f), and (e) any U.S. federal withholding Tax under FATCA.
“Extended Revolving
Credit Commitment” has the meaning assigned to such term in Section 2.23(a).
“Extended Revolving
Loans” has the meaning assigned to such term in Section 2.23(a).
“Extended Term
Loans” has the meaning assigned to such term in Section 2.23(a).
“Extension”
has the meaning assigned to such term in Section 2.23(a).
“Extension Offer”
has the meaning assigned to such term in Section 2.23(a).
“Facility”
means any real property (including all buildings, fixtures or other improvements located thereon) now, hereafter or, except with
respect to Articles 5 and 6, hereof owned, leased, operated or used by the Borrower or any of its Restricted Subsidiaries.
“Failed Auction”
has the meaning assigned to such term in the definition of “Dutch Auction”.
“Fair Market
Value” means, with respect to any property, assets (including Capital Stock and Indebtedness) or obligations, the fair
market value thereof as reasonably determined by the Borrower (after taking into account, with respect to property and assets,
any liabilities with respect thereto that impact such fair market value).
“FATCA”
means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is
substantively comparable and not materially more onerous to comply with), any current or future regulations or official
interpretations thereof, any agreements entered into pursuant to current Section 1471(b)(1) of the Code (or any amended or
successor version described above), any intergovernmental agreement between the U.S. and any other jurisdiction that
facilitates the implementation of such Sections of the Code and any treaty, law, regulation or other official guidance
enacted in any other jurisdiction relating to any such intergovernmental agreement.
“FCPA”
has the meaning assigned to such term in Section 3.17(b).
“Federal Funds
Effective Rate” means, for any day, 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 that is a Business Day, the average of the quotations for such day for such transactions
received by Administrative Agent from three Federal funds brokers of recognized standing selected by it.
“First Lien
Leverage Ratio” means the ratio, as of any date of determination, of (a) Consolidated First Lien Debt to (b) Consolidated
Adjusted EBITDA, in each case for the Borrower and its Restricted Subsidiaries on a consolidated basis.
“Fee Letter”
means that certain Fee Letter, dated as of June 7, 2017, between Bank of America, Merrill Lynch, Pierce, Fenner & Smith Incorporated,
Jefferies, Morgan Stanley, Nomura and the Borrower and any other fee letter with respect to the Credit Facilities in effect on
or after the Closing Date.
“First Priority”
means, with respect to any Lien purported to be created in any Collateral pursuant to any Collateral Document, that, subject to
the Intercreditor Agreements (and any other applicable Acceptable Intercreditor Agreement), such Lien is senior in priority to
any other Lien to which such Collateral is subject, other than any Permitted Lien.
“First Priority
Secured Obligations” means the Secured Obligations in respect of the Initial Term Loans and any other Credit Facilities
secured by the Collateral on a pari passu basis with the Initial Term Loans (as incurred and secured on the Closing Date).
“Fiscal Quarter”
means a fiscal quarter of any Fiscal Year.
“Fiscal Year”
means the fiscal year of the Borrower ending on December, 31 of each calendar year.
“Fixed Basket”
means any category of exceptions, thresholds, baskets, or other provisions in this Agreement based on a fixed Dollar amount and/or
percentage of Consolidated Adjusted EBITDA or Consolidated Total Assets as of any date of determination (including in Article
VI and the Shared Fixed Incremental Amount and clause (b) of the definition of “Incremental Cap”).
“Foreign Lender”
means any Lender that is not a “United States person” within the meaning of Section 7701(a)(30) of the Code.
“Foreign Subsidiary”
means any Restricted Subsidiary that is not a Domestic Subsidiary.
“Foreign Subsidiary
Holdco” means a direct or indirect Restricted Subsidiary of the Borrower that (i) has no material assets other than the
capital stock and, if applicable, indebtedness of one or more subsidiaries that are Foreign Subsidiaries or other Foreign Subsidiary
Holdcos or (ii) is treated as a disregarded entity for U.S. federal income tax purposes and owns capital stock of one or more Foreign
Subsidiaries or other Foreign Subsidiary Holdcos.
“Funding Account”
has the meaning assigned to such term in Section 2.03(f).
“GAAP”
means generally accepted accounting principles in the U.S. in effect and applicable to the accounting period in respect of which
reference to GAAP is made, subject to Section 1.04(a); provided, that, unless the Borrower elects otherwise or exercises
its rights under Section 1.04(a), the accounting for operating leases and capital leases under GAAP as in effect on the
date hereof (including, without limitation, Accounting Standards Codification 840) shall apply for the purposes of determining
compliance with the provisions of this Agreement (including the definition of Capital Lease, Consolidated Total Debt and Indebtedness),
as applied by the Borrower in good faith.
“Governmental
Authority” means any federal, state, municipal, national or other government, governmental department, commission, board,
bureau, court, agency or instrumentality or political subdivision thereof or any entity or officer exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to any government or any court, in each case whether associated
with a state or locality of the U.S., the U.S., or a foreign government or any other political subdivision thereof, including central
banks and supra national bodies.
“Governmental
Authorization” means any permit, license, authorization, plan, directive, consent order or consent decree of or from
any Governmental Authority.
“Granting Lender”
has the meaning assigned to such term in Section 9.05(e).
“Guarantee”
of or by any Person (the “Guarantor”) means any obligation, contingent or otherwise, of the Guarantor guaranteeing
or having the economic effect of guaranteeing any Indebtedness or other monetary obligation of any other Person (the “Primary
Obligor”) in any manner and including any obligation of the Guarantor (a) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Indebtedness or other monetary obligation or to purchase (or to advance or supply funds for
the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose
of assuring the owner of such Indebtedness or other monetary obligation of the payment thereof, (c) to maintain working capital,
equity capital or any other financial statement condition or liquidity of the Primary Obligor so as to enable the Primary Obligor
to pay such Indebtedness or other monetary obligation, (d) as an account party in respect of any letter of credit or letter of
guaranty issued to support such Indebtedness or monetary obligation, (e) entered into for the purpose of assuring in any other
manner the obligee in respect of such Indebtedness or other monetary obligation of the payment or performance thereof or to protect
such obligee against loss in respect thereof (in whole or in part) or (f) secured by any Lien on any assets of such Guarantor
securing any Indebtedness or other monetary obligation of any other Person, whether or not such Indebtedness or monetary other
obligation is assumed by such Guarantor (or any right, contingent or otherwise, of any holder of such Indebtedness or other monetary
obligation to obtain any such Lien); provided that the term “Guarantee” shall not include endorsements for collection
or deposit in the ordinary course of business, or customary and reasonable indemnity obligations in effect on the Closing Date
or entered into in connection with any acquisition, Disposition or other transaction permitted under this Agreement (other than
such obligations with respect to Indebtedness). The amount of any Guarantee shall be deemed to be an amount equal to the stated
or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if
not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person
in good faith.
“Hazardous Materials”
means any chemical, material, substance or waste, or any constituent thereof, which is prohibited, defined, listed or regulated
as “toxic”, “hazardous” or as a “pollutant” or “contaminant” or words of similar
meaning or effect by any Environmental Law, including asbestos and asbestos-related material.
“Hazardous Materials
Activity” means any past, current, proposed or threatened activity, event or occurrence involving any Hazardous Material,
including the use, manufacture, possession, storage, holding, presence, existence, location, Release, threatened Release, discharge,
placement, generation, transportation, processing, construction, treatment, abatement, removal, remediation, disposal, disposition
or handling of any Hazardous Material, and any corrective action or response action with respect to any of the foregoing.
“Hedge Agreement”
means any agreement with respect to any Derivative Transaction between any Loan Party or any Restricted Subsidiary and any other
Person.
“Hedging Obligations”
means, with respect to any Person, the obligations of such Person under any Hedge Agreement.
“Holdings”
has the meaning assigned to such term in the preamble to this Agreement.
“IFRS”
means international accounting standards within the meaning of the IAS Regulation 1606/2002, as in effect from time to time (subject
to the provisions of Section 1.04), to the extent applicable to the relevant financial statements.
“Immaterial
Subsidiary” means, as of any date of determination, any Restricted Subsidiary of the Borrower that has been designated
by the Borrower as an “Immaterial Subsidiary” for purposes of this Agreement, provided that the Consolidated
Total Assets and Consolidated Adjusted EBITDA (as so determined) of all Immaterial Subsidiaries shall not exceed 5.0% of Consolidated
Total Assets and 5.0% of Consolidated Adjusted EBITDA, in each case, of the Borrower and its Restricted Subsidiaries for the relevant
Test Period; provided further that, at all times prior to the first delivery of financial statements pursuant to Section
5.01(a) or (b), this definition shall be applied based on the pro forma consolidated financial statements delivered
pursuant to Section 4.01.
“Immediate Family
Member” means, with respect to any individual, such individual’s child, stepchild, grandchild or more remote descendant,
parent, stepparent, grandparent, spouse, former spouse, domestic partner, former domestic partner, sibling, mother-in-law, father-in-law,
son-in-law and daughter-in-law (including adoptive relationships), any trust, partnership or other bona fide estate-planning vehicle
the only beneficiaries of which are any of the foregoing individuals, such individual’s estate (or an executor or administrator
acting on its behalf), heirs or legatees or any private foundation or fund that is controlled by any of the foregoing individuals
or any donor-advised fund of which any such individual is the donor.
“Incremental
Cap” means:
(a) the
Shared Fixed Incremental Amount; plus
(b) the
aggregate amount of voluntary prepayments, redemptions, repurchases or other retirements of (i) the Term Loans, (ii) any
Incremental Term Facilities and Incremental Equivalent Debt and any permanent reduction of any Incremental Revolving
Commitments, in each case, to the extent not increasing the Shared Fixed Incremental Amount pursuant to clause (c)
of the definition thereof, and (iii) any Replacement Term Loans, Replacement Revolving Facility and Replacement Notes in
respect of the preceding subclauses (i) and (ii) of this clause (b); provided, that, in each
case, (A) the relevant prepayment is not funded with Long-Term Funded Indebtedness, and (B) any such increase in the
Incremental Cap resulting from such prepayments, redemptions, repurchases or other retirements of (x) Indebtedness secured on
a junior priority basis with the respect to the Collateral initially incurred under this clause (b) or clause
(c) below may only be used to incur Incremental Facilities or Incremental Equivalent Debt that is secured on a junior
priority basis with the respect to the Collateral or unsecured and (y) unsecured Indebtedness may only be used to incur
Incremental Facilities or Incremental Equivalent Debt that is unsecured; plus
(c) an
unlimited amount so long as, in the case of this clause (c), after giving effect to the relevant Incremental Facility,
(i) if such Incremental Facility is secured by a Lien on the Collateral that is pari passu with the Lien securing the First
Priority Secured Obligations, the First Lien Leverage Ratio would not exceed 5.00:1.00, (ii) if such Incremental Facility is secured
by a Lien on the Collateral that is junior to the Lien securing the Initial Term Loans, the Secured Leverage Ratio would not exceed
6.75:1.00 or (iii) if such Incremental Facility is unsecured, either (A) the Total Leverage Ratio would not exceed 6.75:1.00 or
(B) the Net Interest Coverage Ratio is not less than 2.00:1.00, in each case of this clause (c), calculated on a Pro Forma
Basis as of the last day of the most recent period of four consecutive Fiscal Quarters then ended for which financial statements
are internally available, including the application of the proceeds thereof (without “netting” the Cash proceeds of
the applicable Incremental Facility) and related transactions (and giving effect to other permitted pro forma adjustments),
and, in the case of any Incremental Revolving Facility being established at such time, assuming a full drawing under such Incremental
Revolving Facility.
“Incremental
Commitment” means any commitment made by a lender to provide all or any portion of any Incremental Facility or Incremental
Loans.
“Incremental
Equivalent Debt” has the meaning assigned to such term in Section 6.01(aa).
“Incremental
Facilities” has the meaning assigned to such term in Section 2.22(a).
“Incremental
Loans” has the meaning assigned to such term in Section 2.22(a).
“Incremental
Revolving Commitment” means any commitment made by a lender to provide all or any portion of any Incremental Revolving
Facility.
“Incremental
Revolving Facility” has the meaning assigned to such term in Section 2.22(a).
“Incremental
Revolving Loans” has the meaning assigned to such term in Section 2.22(a).
“Incremental
Term Facility” has the meaning assigned to such term in Section 2.22(a).
“Incremental
Term Loans” has the meaning assigned to such term in Section 2.22(a).
“Incurrence-Based
Basket” means any category of exceptions, thresholds, baskets, or other provisions in this Agreement based on complying
(including on a Pro Forma Basis) with any financial ratio (including, without limitation any First Lien Leverage Ratio, any Secured
Leverage Ratio, any Total Leverage Ratio, any Net Interest Coverage Ratio and/or clause (c) of the definition of Incremental
Cap).
“Indebtedness”
as applied to any Person means, without duplication, (a) all indebtedness for borrowed money; (b) that portion of obligations
with respect to Capital Leases to the extent recorded as a liability on a balance sheet (excluding the footnotes thereto) of
such Person prepared in accordance with GAAP; (c) all obligations of such Person evidenced by bonds, debentures, notes or
similar instruments to the extent the same would appear as a liability on a balance sheet (excluding the footnotes thereto)
of such Person prepared in accordance with GAAP; (d) any obligation owed for all or any part of the deferred purchase price
of property or services (other than any earn out obligation, purchase price and working capital adjustment obligations and
any similar obligation except to the extent reflected as a liability on the balance sheet (excluding the footnotes thereto)
in accordance with GAAP and not paid within thirty (30) days after becoming due and payable), which purchase price is due
more than three hundred sixty four (364) days from the date of incurrence of the obligation in respect thereof; (e) all
Indebtedness of other Persons secured by any Lien on any property or asset owned or held by such Person regardless of whether
the Indebtedness secured thereby shall have been assumed by such Person in an amount equal to the lesser of (i) the aggregate
unpaid amount of such Indebtedness and (ii) the Fair Market Value of the property or asset subject to such Lien; (f) the face
amount of any letter of credit issued for the account of such Person or as to which such Person is otherwise liable for
reimbursement of drawings; (g) the Guarantee by such Person of the Indebtedness of another; (h) all obligations of such
Person in respect of any Disqualified Capital Stock and (i) all net obligations of such Person in respect of any Derivative
Transaction, including any Hedge Agreement, whether or not entered into for hedging or speculative purposes. For all purposes
hereof, the Indebtedness of any Person shall include the Indebtedness of any partnership or any joint venture (other than any
joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or a joint
venturer, except to the extent such Person’s liability for such Indebtedness is otherwise limited and only to the
extent such Indebtedness would otherwise be included in the calculation of Consolidated Total Debt; provided that,
notwithstanding anything herein to the contrary, the term “Indebtedness” shall exclude, and shall be calculated
without giving effect to, (A) the effects of Accounting Standards Codification Topic 815 and related interpretations to the
extent such effects would otherwise increase or decrease an amount of Indebtedness for any purpose hereunder as a result of
accounting for any embedded derivatives created by the terms of such Indebtedness and any such amounts that would have
constituted Indebtedness hereunder but for the application of this proviso shall not be deemed an incurrence of Indebtedness
hereunder, (B) the effects of Statement of Financial Accounting Standards No. 133 and related interpretations to the extent
such effects would otherwise increase or decrease an amount of Indebtedness for any purpose under this Agreement as a result
of accounting for any embedded derivative created by the terms of such Indebtedness (it being understood that any such
amounts that would have constituted Indebtedness under this Agreement but for the application of this sentence shall not be
deemed to be an incurrence of Indebtedness under this Agreement), (C) liabilities under vendor agreements to the extent such
liabilities may be satisfied exclusively through non-cash means such as purchase volume earning credits, (D) reserves for
deferred taxes, (E) any obligations incurred under ERISA, (F) accrued expenses and trade accounts payable in the ordinary
course of business (including on an inter-company basis), (G) liabilities associated with customer prepayments and deposits,
(H) Indebtedness that is non-recourse to the credit of such Person and (I) for all purposes under this Agreement other than
for purposes of Section 6.01, intercompany Indebtedness among Holdings and its Restricted Subsidiaries.
“Indemnified
Taxes” means Taxes, other than Excluded Taxes or Other 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.
“Indemnitee”
has the meaning assigned to such term in Section 9.03(b).
“Information”
has the meaning set forth in Section 3.11(a).
“Initial Borrower”
has the meaning assigned to such term in the preamble to this Agreement.
“Initial Committed
Lenders” means Bank of America, Jefferies, Morgan Stanley and Nomura, in their capacities as Lenders on the Closing Date.
“Initial Term
Lender” means any Lender with an Initial Term Loan Commitment or holding Initial Term Loans.
“Initial Term
Loan Commitment” means, with respect to each Initial Term Lender, the commitment of such Initial Term Lender to make
Initial Term Loans hereunder in an aggregate amount not to exceed the amount set forth opposite such Initial Term Lender’s
name on the Commitment Schedule, as the same may be (a) reduced from time to time pursuant to Section 2.09 and (b) reduced
or increased from time to time pursuant to (i) assignments by or to such Initial Term Lender pursuant to Section 9.05 or
(ii) an Additional Term Commitment of the same Class. The aggregate amount of the Initial Term Loan Commitments on the Closing
Date is $850,000,000.
“Initial Term
Loan Maturity Date” means the date that is seven years after the Closing Date.
“Initial Term
Loans” means the term loans made by the Term Lenders to the Borrower pursuant to Section 2.01(a).
“Intellectual
Property Security Agreement” means any agreement executed on or after the Closing Date confirming or effecting the grant
of any Lien on IP Rights owned by any Loan Party to the Administrative Agent, for the benefit of the Secured Parties, in accordance
with this Agreement and the Security Agreement, including any of the following: (a) a Trademark Security Agreement substantially
in the form attached as an exhibit to the Security Agreement, (b) a Patent Security Agreement substantially in the form attached
as an exhibit to the Security Agreement or (c) a Copyright Security Agreement attached as an exhibit to the Security Agreement,
together with any and all supplements or amendments thereto.
“Intercreditor
Agreements” means the ABL Intercreditor Agreement, the Pari Passu Intercreditor Agreement (if any) and/or the Term Intercreditor
Agreement, as the context may require.
“Interest Election
Request” means a request by the Borrower in the form of Exhibit D or another form reasonably acceptable to
the Administrative Agent to convert or continue a Borrowing in accordance with Section 2.08.
“Interest Payment
Date” means (a) with respect to any ABR Loan, the last Business Day of each March, June, September and December (commencing
on September 30, 2017) or the maturity date applicable to such Loan, (b) with respect to any LIBO Rate Loan, the last day of the
Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a LIBO Rate Borrowing with an Interest
Period of more than three months’ duration, each day that would have been an Interest Payment Date had successive Interest
Periods of three months’ duration been applicable to such Borrowing and (c) to the extent necessary to create a fungible
Class of Loans in connection with the incurrence of any Additional Loans, as reasonably determined by the Administrative Agent
and the Borrower, the date of the incurrence of such Additional Loans.
“Interest
Period” means with respect to any LIBO Rate Borrowing, the period commencing on the date of such Borrowing and
ending on the numerically corresponding day in the calendar month that is one, two, three or six months (or, to the extent
available to all relevant affected Lenders, twelve months) thereafter, as the Borrower may elect; provided that
(i) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the
next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case
such Interest Period shall end on the next preceding Business Day, (ii) any Interest Period that commences on the last
Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month
of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period,
(iii) the Borrower may not elect any interest period that would result in such Interest Period extending beyond the
Maturity Date and (iv) the initial Interest Period after the Closing Date shall be deemed to end on August 31, 2017. For
purposes hereof, the date of a Borrowing initially shall be the date on which such Borrowing is made and thereafter shall be
the effective date of the most recent conversion or continuation of such Borrowing.
“Investment”
means (a) any purchase or other acquisition by the Borrower or any of its Restricted Subsidiaries of any of the Securities of any
other Person (other than any Loan Party), (b) the acquisition by purchase or otherwise (other than any purchase or other acquisition
of inventory, materials, supplies and/or equipment in the ordinary course of business) of all or substantially all of the business,
property or fixed assets of any other Person or any division or line of business or other business unit of any other Person and
(c) any loan, advance (other than any advance to any current or former employee, officer, director, member of management, manager,
consultant or independent contractor of the Borrower, any Restricted Subsidiary or any Parent Company for moving, entertainment
and travel expenses, drawing accounts and similar expenditures in the ordinary course of business) or capital contribution by the
Borrower or any of its Restricted Subsidiaries to any other Person. Subject to Section 5.10, the amount of any Investment
shall be the original cost of such Investment, plus the cost of all additions thereto, without any adjustments for increases
or decreases in value, or write-ups, write-downs or write-offs with respect thereto, but giving effect to any repayments of principal
in the case of any Investment in the form of a loan and any return of capital or return on Investment in the case of any equity
Investment (whether as a distribution, dividend, redemption or sale but not in excess of the amount of the relevant initial Investment).
“Investors”
means (a) the Sponsors, (b) the Co-Investors and (c) any other Person making a cash equity investment directly or indirectly in
any Parent Company after the Closing Date, so long as in the case of this clause (c), (i) no such Person’s direct
or indirect beneficial ownership of Holdings is greater than the Sponsors’ direct or indirect beneficial ownership of Holdings,
and (ii) the aggregate direct or indirect beneficial ownership of Holdings by such Persons does not exceed 40% of the aggregate
direct or indirect beneficial ownership of Holdings of all Investors collectively, in each case, other than any Person who is a
Lender on the Closing Date (and such Person shall not be deemed to be an Affiliate of an Investor under this Agreement).
“IP Rights”
has the meaning assigned to such term in Section 3.05(c).
“IRS”
means the U.S. Internal Revenue Service.
“Jefferies”
has the meaning assigned to such term in the preamble to this Agreement.
“Junior Lien
Indebtedness” means any Indebtedness that is secured by a security interest on the Collateral (other than Indebtedness
among Holdings and/or its subsidiaries) that is expressly junior or subordinated to the Lien on the Collateral securing the Initial
Term Loans (and any other Class of Loans that are Second Priority Obligations (as defined in the Term Intercreditor Agreement)).
“Latest Maturity
Date” means, as of any date of determination, the latest maturity or expiration date applicable to any Loan or commitment
hereunder at such time, including the latest maturity or expiration date of any Initial Term Loan, Additional Term Loan, Additional
Revolving Loan or Additional Commitment.
“Latest Revolving
Loan Maturity Date” means, as of any date of determination, the latest maturity or expiration date applicable to any
Additional Revolving Loan or any Additional Revolving Commitment.
“Latest Term
Loan Maturity Date” means, as of any date of determination, the latest maturity or expiration date applicable to any
term loan or term commitment hereunder at such time, including the latest maturity or expiration date of any Term Loan or any Additional
Term Commitment.
“LCT Election”
has the meaning assigned to such term in Section 1.10(a).
“LCT Test Date”
has the meaning assigned to such term in Section 1.10(a).
“Legal Reservations”
means the application of relevant Debtor Relief Laws, general principles of equity and/or principles of good faith and fair dealing.
“Lenders”
means the Initial Term Lenders, any Additional Lender, any lender with a Commitment or an outstanding Loan and any other Person
that becomes a party hereto pursuant to an Assignment and Assumption, other than any such Person that ceases to be a party hereto
pursuant to an Assignment and Assumption.
“Letter-of-Credit
Right” has the meaning set forth in Article 9 of the UCC.
“LIBO Rate”
means, the Published LIBO Rate, as adjusted to reflect applicable reserves prescribed by governmental authorities; provided
that, in respect of the Term Loans, in no event shall the LIBO Rate be less than 0.00% per annum.
“LIBO Rate Loan”
means a Loan bearing interest at a rate determined by reference to the LIBO Rate.
“Lien”
means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, or
preference, priority or other security interest or preferential arrangement of any kind or nature whatsoever (including any conditional
sale or other title retention agreement, any easement, right of way or other encumbrance on title to real property, and any Capital
Lease having substantially the same economic effect as any of the foregoing), in each case, in the nature of security; provided
that in no event shall an operating lease in and of itself be deemed to constitute a Lien on any asset.
“Limited Condition
Transaction” has the meaning assigned to such term in Section 1.10(a).
“Loan Documents”
means this Agreement, any Promissory Note, each Loan Guaranty, the Collateral Documents, the Intercreditor Agreements, any other
applicable Acceptable Intercreditor Agreement, the Fee Letter and any other document or instrument designated by the Borrower and
the Administrative Agent as a “Loan Document.” Any reference in this Agreement or any other Loan Document to a Loan
Document shall include all appendices, exhibits or schedules thereto.
“Loan Guaranty”
means (a) the First Lien Loan Guaranty, dated as of the date hereof and executed by each Loan Party party thereto and by the Administrative
Agent for the benefit of the Secured Parties, (b)(i) each other guaranty agreement in substantially the form attached as Exhibit
H or (ii) another form of guaranty that is otherwise reasonably satisfactory to the Administrative Agent and the Borrower
or (iii) any supplement or joinder to any of the foregoing, in each case, executed by any Person pursuant to Section 5.12
or as provided in the definition of “Subsidiary Guarantor”.
“Loan Installment
Date” has the meaning assigned to such term in Section 2.10(a).
“Loan Parties”
means Holdings, the Borrower, each Subsidiary Guarantor, and in each case their respective successors and permitted assigns.
“Loans”
means any Initial Term Loan, any Additional Term Loan, any Additional Revolving Loan and any loan under any other Credit Facility.
“Long-Term Funded
Indebtedness” means any funded Indebtedness of the Borrower or its Restricted Subsidiaries) having a maturity of greater
than one (1) year; provided, that Long-Term Funded Indebtedness shall exclude all Indebtedness under any revolving credit
facility or line of credit.
“Margin Stock”
has the meaning assigned to such term in Regulation U.
“Material Adverse
Effect” means (a) for any purpose on or prior to the Closing Date, a Closing Date Material Adverse Effect and (b) for
any purpose after the Closing Date, a material adverse effect on (i) the business, assets, financial condition or results of operations,
in each case, of Holdings, the Borrower and its Restricted Subsidiaries, taken as a whole, (ii) the rights and remedies (taken
as a whole) of the Administrative Agent (on behalf of the Lenders) under the applicable Loan Documents or (iii) the ability of
the Loan Parties (taken as a whole) to perform their payment obligations under the applicable Loan Documents.
“Material Debt
Instrument” means any promissory note payable to, or in favor, of a Loan Party with an aggregate principal amount outstanding,
in each case, of not less than $15,000,000.
“Maturity Date”
means (a) with respect to the Initial Term Loans, the Initial Term Loan Maturity Date, (b) as to any Replacement Term Loans incurred
pursuant to Section 9.02(c), the final maturity date for such Replacement Term Loan as set forth in the applicable Refinancing
Amendment, (c) as to any Replacement Revolving Facility established pursuant to Section 9.02(c), the final maturity date
for such Replacement Revolving Facility as set forth in the applicable Refinancing Amendment, (d) with respect to any Incremental
Term Loans, the final maturity date set forth in the applicable documentation with respect thereto, (e) with respect to any Incremental
Revolving Facility, the final maturity date set forth in the applicable documentation with respect thereto, and (f) with respect
to any other Loans, the final maturity date for such Loans as set forth in the applicable Credit Facility.
“Maximum Rate”
has the meaning assigned to such term in Section 9.19.
“Merger”
has the meaning assigned to such term in the Recitals to this Agreement.
“Merger Agreement”
means that certain Agreement and Plan of Merger, dated as of June 7, 2017, by and among, inter alios, Holdings, the Initial
Borrower, the Company and the other parties thereto, together with the exhibits and disclosure schedules thereto.
“Minimum Extension
Condition” has the meaning assigned to such term in Section 2.23(b).
“Moody’s”
means Moody’s Investors Service, Inc.
“Morgan Stanley”
has the meaning assigned to such term in the preamble to this Agreement.
“Multiemployer
Plan” means any employee benefit plan which is a “multiemployer plan” as defined in Section 3(37)
of ERISA, that is subject to the provisions of Title IV of ERISA, and in respect of which the Borrower or any of its
Restricted Subsidiaries, or any of their respective ERISA Affiliates, makes or is obligated to make contributions or with
respect to which any of them has any ongoing obligation or liability, contingent or otherwise.
“Narrative Report”
means, with respect to the financial statements with respect to which it is delivered, a management discussion and narrative report
describing the operations of Holdings, the Borrower and its Restricted Subsidiaries for the applicable Fiscal Quarter or Fiscal
Year and for the period from the beginning of the then-current Fiscal Year to the end of the period to which the relevant financial
statements relate.
“Net Insurance/Condemnation
Proceeds” means an amount equal to: (a) any Cash payments or proceeds (including Cash Equivalents) received by the Borrower
or any of its Restricted Subsidiaries (i) under any casualty insurance policy in respect of a covered loss thereunder of any
assets of the Borrower or any of its Restricted Subsidiaries or (ii) as a result of the taking of any assets of the Borrower
or any of its Restricted Subsidiaries by any Person pursuant to the power of eminent domain, condemnation or otherwise, or pursuant
to a sale of any such assets to a purchaser with such power under threat of such a taking, minus (b) (i) any actual out-of-pocket
costs and expenses incurred by the Borrower or any of its Restricted Subsidiaries in connection with the adjustment, settlement
or collection of any claims of the Borrower or the relevant Restricted Subsidiary in respect thereof, (ii) payment of the outstanding
principal amount of, premium or penalty, if any, and interest and other amounts on any Indebtedness (other than the Loans, Indebtedness
under any Second Lien Facility and any Indebtedness secured by a Lien that is pari passu with or expressly subordinated
to the Lien on the Collateral securing the Secured Obligations or Second Lien Obligations) that is secured by a Lien on the assets
in question and that is required to be repaid or otherwise comes due or would be in default under the terms thereof as a result
of such loss, taking or sale, (iii) in the case of a taking, the reasonable out-of-pocket costs of putting any affected property
in a safe and secure position, (iv) any selling costs and out-of-pocket expenses (including reasonable broker’s fees or commissions,
legal fees, accountants’ fees, investment banking fees, survey costs, title insurance premiums, and related search and recording
charges, transfer taxes, deed or mortgage recording taxes, other customary expenses and brokerage, consultant and other customary
fees actually incurred and paid to unaffiliated third parties in connection therewith, transfer and similar Taxes and the Borrower’s
good faith estimate of income Taxes paid or payable) in connection with any sale or taking of such assets as described in clause
(a) of this definition, (v) any amounts provided as a reserve in accordance with GAAP against any liabilities under any indemnification
obligation or purchase price adjustments associated with any sale or taking of such assets as referred to in clause (a)
of this definition (provided that to the extent and at the time any such amounts are released from such reserve, such amounts
shall constitute Net Insurance/Condemnation Proceeds) and (vi) in the case of any covered loss or taking from a non-Wholly-Owned
Subsidiary, the pro rata portion thereof (calculated without regard to this clause (vi)) attributable to minority
interests and not available for distribution to or for the account of the Borrower or a Wholly-Owned Subsidiary as a result thereof.
“Net Interest
Coverage Ratio” means, as of any date of determination, the ratio of (a) Consolidated Adjusted EBITDA to (b) Consolidated
Interest Expense, in each case for the Borrower and its Restricted Subsidiaries on a consolidated basis.
“Net
Proceeds” means (a) with respect to any Disposition (including any Prepayment Asset Sale), the Cash proceeds
(including Cash Equivalents and Cash proceeds subsequently received (as and when received) in respect of non-Cash
consideration initially received), net of (i) selling costs and out-of-pocket expenses (including reasonable broker’s
fees or commissions, legal fees, accountants’ fees, investment banking fees, survey costs, title insurance premiums,
and related search and recording charges, transfer taxes, deed or mortgage recording taxes, other customary expenses and
brokerage, consultant and other customary fees actually incurred and paid to unaffiliated third parties in connection
therewith and transfer and similar Taxes and the Borrower’s good faith estimate of income Taxes paid or payable
(including pursuant to Tax sharing arrangements or any Tax distributions) in connection with such Disposition including, in
the case of a Disposition by a Foreign Subsidiary, any additional Taxes that are or would be payable or reserved against as a
result of repatriation), (ii) amounts provided as a reserve in accordance with GAAP against any liabilities under any
indemnification obligation or purchase price adjustment associated with such Disposition (provided that to the extent
and at the time any such amounts are released from such reserve, such amounts shall constitute Net Proceeds), (iii) the
principal amount, premium or penalty, if any, interest and other amounts on any Indebtedness (other than the Loans,
Indebtedness under any Second Lien Facility and any other Indebtedness secured by a Lien that is pari passu with or
expressly subordinated to the Lien on the Collateral securing the Secured Obligations or Second Lien Obligations) which is
secured by the asset sold in such Disposition and which is required to be repaid or otherwise comes due or would be in
default and is repaid (other than any such Indebtedness that is assumed by the purchaser of such asset) (iv) Cash
escrows (until released from escrow to the Borrower or any of its Restricted Subsidiaries) from the sale price for such
Disposition and (v) in the case of any Disposition by a non-Wholly-Owned Subsidiary, the pro rata portion of the Net
Proceeds thereof (calculated without regard to this clause (v)) attributable to minority interests and not available
for distribution to or for the account of the Borrower or a Wholly-Owned Subsidiary as a result thereof; and (b) with respect
to any issuance or incurrence of Indebtedness or Capital Stock, the Cash proceeds thereof, net of all Taxes and customary
fees, commissions, costs, underwriting discounts and other fees and expenses incurred in connection therewith.
“Nomura”
has the meaning assigned to such term in the preamble to this Agreement.
“Non-Consenting
Lender” has the meaning assigned to such term in Section 2.19(b).
“Non-Debt Fund
Affiliate” means the Investors and their Affiliates (other than Holdings, the Borrower or their respective subsidiaries,
a natural person or any Affiliate thereof that is a Debt Fund Affiliate), and any direct or indirect parent of Holdings.
“Non-Guarantor
Subsidiary” means any subsidiary of the Borrower that is not a Subsidiary Guarantor.
“Obligations”
means all unpaid principal of and accrued and unpaid interest (including interest, fees and expenses accruing during the pendency
of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding)
on the Loans, Commitments, all accrued and unpaid fees and all expenses, reimbursements, indemnities and all other liabilities
and obligations of the Loan Parties to the Lenders or to any Lender, the Administrative Agent or any indemnified party arising
under the Loan Documents in respect of any Loan, whether direct or indirect (including those acquired by assumption), absolute,
contingent, due or to become due, now existing or hereafter arising.
“OFAC”
has the meaning assigned to such term in Section 3.17.
“Organizational
Documents” means (a) with respect to any corporation, its certificate or articles of incorporation or organization
and its by-laws, (b) with respect to any limited partnership, its certificate of limited partnership and its partnership
agreement, (c) with respect to any general partnership, its partnership agreement, (d) with respect to any limited liability
company, its articles of organization or certificate of formation, and its operating agreement, and (e) with respect to any
other form of entity, such other organizational documents required by local law or customary under such jurisdiction to
document the formation and governance principles of such type of entity. In the event that any term or condition of this
Agreement or any other Loan Document requires any Organizational Document to be certified by a secretary of state or similar
governmental official, the reference to any such “Organizational Document” shall only be to a document of a type
customarily certified by such governmental official.
“Other Agreed
Adjustments” means any add-backs and adjustments (including pro forma adjustments pursuant to clause (b)(xi)
of the definition of “Consolidated Adjusted EBITDA”), to the extent not otherwise included in Consolidated Net Income,
of the type reflected in (a) the Sponsor Model (b) the quality of earnings report delivered to the Arrangers on or prior to June
7, 2017, and (c) the confidential information memorandum in respect of the Initial Term Loans, in each case, which add-backs and
adjustments shall not, for the avoidance of doubt, be limited to the time periods or amounts in respect of which such add backs
and adjustments were identified therein.
“Other Applicable
Indebtedness” has the meaning assigned to such term in Section 2.11(b)(ii).
“Other Connection
Taxes” means, with respect to any Lender or the Administrative Agent, Taxes imposed as a result of a present or former
connection between such recipient and the jurisdiction imposing such Tax (other than connections arising solely from such recipient
having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected
a security interest under, or engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an
interest in any Loan or Loan Document).
“Other Taxes”
means any and all present or future stamp, court or documentary taxes or any intangible, recording, filing or other similar Taxes,
charges or similar levies arising from any payment made hereunder or from the execution, delivery or enforcement of, or otherwise
with respect to, this Agreement or any other Loan Document, but not including, for the avoidance of doubt, any such Taxes that
are Other Connection Taxes imposed with respect to an assignment, grant of a participation, designation of a different lending
office or other transfer (other than an assignment or designation of a different lending office made pursuant to Section 2.19)
or Excluded Taxes.
“Parent Company”
means Holdings and any other Person of which the Borrower is an indirect Wholly-Owned Subsidiary.
“Pari Passu
Intercreditor Agreement” means the Intercreditor Agreement substantially in the form of Exhibit N hereto.
“Participant”
has the meaning assigned to such term in Section 9.05(c).
“Participant
Register” has the meaning assigned to such term in Section 9.05(c).
“Patent”
means the following: (a) any and all patents and patent applications; (b) all inventions described and claimed therein; (c) all
reissues, divisions, continuations, renewals, extensions and continuations in part thereof; (d) all income, royalties, damages,
claims, and payments now or hereafter due or payable under and with respect thereto, including, without limitation, damages and
payments for past, present and future infringements thereof; (e) all rights to sue for past, present, and future infringements
thereof; and (f) all rights corresponding to any of the foregoing.
“PBGC”
means the Pension Benefit Guaranty Corporation.
“Pension
Plan” means any “employee pension benefit plan”, as defined in Section 3(2) of ERISA (other than a
Multiemployer Plan), that is subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of
ERISA, which the Borrower or any of its Restricted Subsidiaries, or any of their respective ERISA Affiliates, maintains or
contributes to or has an obligation to contribute to, or otherwise has any liability, contingent or otherwise.
“Perfection
Certificate” means a certificate substantially in the form of Exhibit E.
“Perfection
Certificate Supplement” means a supplement to the Perfection Certificate substantially in the form of Exhibit F.
“Perfection
Requirements” means the filing of appropriate financing statements with the office of the Secretary of State or other
appropriate office of the state of organization of each Loan Party, the filing of appropriate assignments or notices with the U.S.
Patent and Trademark Office and the U.S. Copyright Office, in each case in favor of the Administrative Agent for the benefit of
the Secured Parties and the delivery to the Administrative Agent of any stock certificate or Material Debt Instrument required
to be delivered pursuant to the applicable Loan Documents, together with instruments of transfer executed in blank, in each case,
subject in all respects to the definitions of “Collateral and Guarantee Requirement” and “Excluded Assets”
and the last paragraph of Section 4.01.
“Permitted Acquisition”
means any acquisition by the Borrower or any of its Restricted Subsidiaries, whether by purchase, merger, amalgamation or otherwise,
of all or substantially all of the assets of, or any business line, unit or division or product line of, any Person or of a majority
of the outstanding Capital Stock of any Person (but in any event including any Investment in (x) any Person that results in such
Person becoming a Restricted Subsidiary of the Borrower, (y) any Restricted Subsidiary which serves to increase the Borrower’s
or any Restricted Subsidiary’s respective equity ownership in such Restricted Subsidiary or (z) any joint venture for the
purpose of increasing the Borrower’s or its relevant Restricted Subsidiary’s ownership interest in such joint venture);
provided, that the total consideration paid by Loan Parties (including pursuant to an Investment in any Restricted Subsidiary)
for (a) the Capital Stock of any Person that does not become a Guarantor and (b) in the case of an asset acquisition, assets that
are not acquired by the Borrower or any Guarantor, when taken together with the total consideration for all such Persons and assets
so acquired after the Closing Date, shall not exceed an amount outstanding equal to the sum of (i) the greater of $60,000,000 and
35.0% of Consolidated Adjusted EBITDA and (ii) amounts otherwise available under clauses (b)(iii), (d) (solely
with respect to Investments in joint ventures), (q), (r), (bb) and (dd) of Section 6.06; provided,
further, that the limitation described in the foregoing proviso shall not apply (A) to any acquisition to the extent such
acquisition is made with the proceeds of sales of the Qualified Capital Stock of, or common equity capital contributions to, the
Borrower or any Restricted Subsidiary, (B) to any acquisition to the extent at least 75.0% of the Consolidated Adjusted EBITDA
(as determined by the Borrower in good faith) of the Person(s) (or assets) acquired in such acquisition (for this purpose and for
the component definitions used therein, determined on a consolidated basis for such Persons and their respective Restricted Subsidiaries)
is generated by Person(s) that will become (or, in the case of asset acquisitions, are acquired by) Subsidiary Guarantors (or,
if less than 75.0%, after giving pro forma effect thereto, the percentage of Consolidated Adjusted EBITDA attributable to
Loan Parties would be greater than the percentage immediately prior thereto), (C) to the portion of such consideration provided
by Restricted Subsidiaries that are not Loan Parties, including through cash flow, asset sale proceeds and Indebtedness proceeds
of such Restricted Subsidiaries and/or (D) if the Total Leverage Ratio would not exceed 6.25:1.00 calculated on a Pro Forma Basis.
In the event the amount available under the first proviso above is reduced as a result of any acquisition of any Restricted Subsidiary
that does not become a Loan Party (or any assets that are not transferred to a Loan Party) and such Restricted Subsidiary subsequently
becomes a Loan Party (or such assets are subsequently transferred to a Loan Party), the amount available under such limit shall
be proportionately increased as a result thereof.
“Permitted
Holders” means (a) the Investors and (b) any Person with which one or more Investors form a “group”
(within the meaning of Section 14(d) of the Exchange Act) so long as, in the case of this clause (b), the relevant
Investors beneficially own more than 50% of the relevant voting stock beneficially owned by the group.
“Permitted Liens”
means Liens permitted pursuant to Section 6.02.
“Permitted Senior
Secured Debt” means any Indebtedness permitted under Section 6.01 that is secured by the Collateral on a pari
passu basis with the First Priority Secured Obligations (which shall be deemed to include any ABL Facility secured on a Split
Collateral Basis (including the ABL Facility as of the Closing Date) subject to an ABL Intercreditor Agreement), including, in
each case, any refinancing of such Indebtedness permitted under Section 6.01.
“Person”
means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental
Authority or any other entity.
“Plan”
means any “employee pension benefit plan” within the meaning of Section 3(2) of ERISA (other than a Multiemployer Plan)
maintained by the Borrower or any of its Restricted Subsidiaries for employees of the Borrower or any of its Restricted Subsidiaries
or any such Pension Plan to which the Borrower or any of its Restricted Subsidiaries is required to contribute on behalf of any
of its employees.
“Platform”
has the meaning assigned to such term in Section 9.01(d).
“Prepayment
Asset Sale” means any Disposition by the Borrower or its Restricted Subsidiaries made pursuant to, Section 6.07(h),
Section 6.07(n), Section 6.07(q), clause (ii) to the proviso to Section 6.07(r) (to the extent
provided therein) and Section 6.08.
“Primary Obligor”
has the meaning assigned to such term in the definition of “Guarantee”.
“Prime Rate”
means the rate set by Bank of America based upon various factors including Bank of America’s costs and desired return, general
economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above,
or below such announced rate.
“Pro Forma Basis”
or “pro forma effect” means, as to any calculation of any financial ratio or test (including the Total
Leverage Ratio, the First Lien Leverage Ratio, the Secured Leverage Ratio, the Net Interest Coverage Ratio, Consolidated Adjusted
EBITDA, Consolidated Total Assets or any component definitions of any of the foregoing), such financial ratio or test shall be
calculated on a pro forma basis in accordance with Section 1.10 and shall give pro forma effect to any Specified
Transactions (and if applicable, any Limited Condition Transaction) and other pro forma adjustments pursuant to Section
1.10.
“Projections”
means the projections of the Borrower and its subsidiaries included in the Sponsor Model, including any financial estimates, forecasts
and other forward looking financial information set forth therein.
“Promissory
Note” means a promissory note of the Borrower payable to any Lender or its registered assigns, in substantially the form
of Exhibit G, evidencing the aggregate outstanding principal amount of Loans of the Borrower to such Lender resulting
from the Loans made by such Lender.
“Public Company
Costs” means any Charge associated with, or in anticipation of, or preparation for, compliance with the requirements
of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in connection therewith and Charges relating to compliance
with the provisions of the Securities Act and the Exchange Act (and, in each case, similar Requirements of Law under other jurisdictions),
as applicable to companies with equity or debt securities held by the public, the rules of national securities exchange companies
with listed equity or debt securities, directors’ or managers’ compensation, fees and expense reimbursement, any Charge
relating to investor relations, shareholder meetings and reports to shareholders or debtholders, directors’ and officers’
insurance and other executive costs, legal and other professional fees and listing fees.
“Public Lender”
has the meaning assigned to such term in Section 9.01(d).
“Published LIBO
Rate” means, with respect to any Interest Period when used in reference to any Loan or Borrowing, (a) the rate of
interest as published on the applicable Bloomberg screen page (or on any successor or substitute page of such service, or any successor
to such service as determined by Administrative Agent) as the London interbank offered rate for deposits in Dollars for a term
comparable to such Interest Period, at approximately 11:00 a.m. (London time) on the date which is two Business Days prior to the
commencement of such Interest Period (but if more than one rate is specified on such page, the rate will be an arithmetic average
of all such rates) and (b) if such rate is not available at such time for any reason, then the “Published LIBO Rate”
for such Interest Period shall be the interest rate per annum reasonably determined by the Administrative Agent in good faith to
be the rate per annum at which deposits in Dollars for delivery on the first day of such Interest Period in immediately available
funds in the approximate amount of the LIBO Rate Loan being made, continued or converted by the Administrative Agent and with a
term equivalent to such Interest Period would be offered to the Administrative Agent by major banks in the London or other offshore
interbank market for Dollars at their request at approximately 11:00 a.m. (London time) two Business Days prior to the commencement
of such Interest Period.
“Qualified Capital
Stock” of any Person means any Capital Stock of such Person that is not Disqualified Capital Stock.
“Qualifying
Bid” has the meaning assigned to such term in the definition of “Dutch Auction”.
“Qualifying
IPO” means the issuance and sale by the Borrower or any Parent Company of its common Capital Stock in an underwritten
primary public offering (other than a public offering pursuant to a registration statement on Form S-8) pursuant to an effective
registration statement filed with the SEC in accordance with the Securities Act (whether alone or in connection with a secondary
public offering) pursuant to which Net Proceeds of at least $35,000,000 are received by, or contributed to, the Borrower.
“Qualifying
Lender” has the meaning assigned to such term in the definition of “Dutch Auction”.
“Real Estate
Asset” means, at any time of determination, all right, title and interest (fee, leasehold or otherwise) of any Loan Party
in and to real property (including, but not limited to, land, improvements and fixtures thereon).
“Refinancing”
has the meaning assigned to such term in Section 4.01(p).
“Refinancing
Amendment” means an amendment to this Agreement in form and substance reasonably satisfactory to the Administrative Agent
and the Borrower executed by (a) Holdings and the Borrower, (b) the Administrative Agent and (c) each Lender that agrees to
provide all or any portion of the Replacement Term Loans or the Replacement Revolving Facility, as applicable, being incurred pursuant
thereto and in accordance with Section 9.02(c).
“Refinancing
Indebtedness” has the meaning assigned to such term in Section 6.01(p).
“Refunding Capital
Stock” has the meaning assigned to such term in Section 6.04(a)(ix).
“Register”
has the meaning assigned to such term in Section 9.05(b)(iv).
“Regulation
D” means Regulation D of the Board as from time to time in effect and all official rulings and interpretations thereunder
or thereof.
“Regulation
T” means Regulation T of the Board as from time to time in effect and all official rulings and interpretations thereunder
or thereof.
“Regulation
U” means Regulation U of the Board as from time to time in effect and all official rulings and interpretations thereunder
or thereof.
“Regulation
X” means Regulation X of the Board as from time to time in effect and all official rulings and interpretations thereunder
or thereof.
“Related Funds”
means, with respect to any Lender that is an Approved Fund, any other Approved Fund that is managed by the same investment advisor
as such Lender or by an Affiliate of such investment advisor.
“Related Parties”
means, with respect to any specified Person, such Person’s Affiliates and the respective directors, managers, officers, trustees,
employees, partners, agents, advisors and other representatives of such Person and such Person’s Affiliates.
“Release”
means any release, spill, emission, leaking, pumping, pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping,
leaching or migration of any Hazardous Material into the Environment, including the movement of any Hazardous Material through
the air, soil, surface water or groundwater.
“Replaced Revolving
Facility” has the meaning assigned to such term in Section 9.02(c)(ii).
“Replaced Term
Loans” has the meaning assigned to such term in Section 9.02(c).
“Replacement
Notes” means any Refinancing Indebtedness (whether issued in a public offering, Rule 144A under the Securities Act or
other private placement or bridge financing in lieu of the foregoing or otherwise) incurred in respect of Indebtedness permitted
under Section 6.01(a).
“Replacement
Revolving Facility” has the meaning assigned to such term in Section 9.02(c)(ii).
“Replacement
Term Loans” has the meaning assigned to such term in Section 9.02(c)(i).
“Reply Amount”
has the meaning assigned to such term in the definition of “Dutch Auction”.
“Reply Price”
has the meaning assigned to such term in the definition of “Dutch Auction”.
“Representative”
has the meaning assigned to such term in Section 9.13.
“Repricing Transaction”
means any of the following, but solely to the extent effected and consummated for the primary purpose of reducing the All-In Yield
of the Initial Term Loans: (a) the prepayment, repayment, refinancing, substitution or replacement of all or a portion of the Initial
Term Loans substantially concurrently with the incurrence by any Loan Party of any term loans (including any Replacement Term Loans)
pari passu in right of payment with the existing Initial Term Loans being so prepaid, repaid, refinanced, substituted or
replaced in right of payment and secured by a Lien on the Collateral on a pari passu basis with the Liens securing such
Initial Term Loans, having an All-In Yield that is less than the effective All-In Yield applicable to the Initial Term Loans so
prepaid, repaid, refinanced, substituted or replaced, and (b) any amendment, waiver or other modification to this Agreement that
would have the effect of reducing the All-In Yield of the Initial Term Loans in lieu of a transaction described in clause (a);
provided, that the determinations of All-In Yield for any Repricing Transaction shall be made in a manner consistent with
generally accepted financial practices and reasonably determined by the Administrative Agent, and in any event consistent with
the second proviso to Section 2.22(a)(v)) and shall disregard any fluctuation in any “base” or reference rate;
provided, further, that in none of the events in the preceding clauses (a) and (b) shall constitute
a Repricing Transaction if effected or consummated in connection with a Change of Control, Qualifying IPO or Transformational Event.
Any determination by the Administrative Agent and the Borrower contemplated by preceding clauses (a) and (b) shall
be conclusive and binding on all Lenders, and the Administrative Agent shall have no liability to any Person with respect to such
determination absent bad faith, gross negligence or willful misconduct.
“Required Excess
Cash Flow Percentage” means, as of any date of determination, (a) if the First Lien Leverage Ratio is greater than 4.50:1.00,
50%, (b) if the First Lien Leverage Ratio is less than or equal to 4.50:1.00 and greater than 3.75:1.00, 25% and (c) if the First
Lien Leverage Ratio is less than or equal to 3.75:1.00, 0%; it being understood and agreed that, for purposes of this definition
as it applies to the determination of the amount of Excess Cash Flow that is required to be applied to prepay the Term Loans under
Section 2.11(b)(i) for any Calculation Period, the First Lien Leverage Ratio shall be determined on a Pro Forma Basis as
of the last day of the relevant Calculation Period (but without giving effect to the mandatory payment itself from Excess Cash
Flow required by Section 2.11(b)(i)).
“Required Facility
Lenders” means, with respect to any Credit Facility of any Class, at any time, Lenders having Loans or unused Commitments
representing more than 50% of the sum of the total Loans and such unused commitments under such Credit Facility at such time.
“Required Lenders”
means, at any time, Lenders having Loans or unused Commitments representing more than 50% of the sum of the total Loans and such
unused Commitments at such time.
“Requirements
of Law” means, with respect to any Person, collectively, the common law and all federal, state, local, foreign, multinational
or international laws, statutes, codes, treaties, standards, rules and regulations, guidelines, ordinances, orders, judgments,
writs, injunctions, decrees (including administrative or judicial precedents or authorities) and the interpretation or administration
thereof by, and other determinations, directives, requirements or requests of any Governmental Authority, in each case whether
or not having the force of law and that are applicable to or binding upon such Person or any of its property or to which such Person
or any of its property is subject.
“Responsible
Officer” of any Person means the chief executive officer, the president, the chief financial officer, the
treasurer, any assistant treasurer, any executive vice president, any senior vice president, any vice president or the chief
operating officer of such Person and any other individual or similar official thereof responsible for the administration of
the obligations of such Person in respect of this Agreement, and, as to any document delivered on the Closing Date, shall
include any secretary or assistant secretary or any other individual or similar official thereof with substantially
equivalent responsibilities of a Loan Party and, solely for purposes of notices given pursuant to Article II, any other
officer of the applicable Loan Party so designated by any of the foregoing officers in a notice to the Administrative Agent
or any other officer or employee of the applicable Loan Party designated in or pursuant to an agreement between the
applicable Loan Party and the Administrative Agent. Any document delivered hereunder that is signed by a Responsible Officer
of any Loan Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other
action on the part of such Loan Party, and such Responsible Officer shall be conclusively presumed to have acted on behalf of
such Loan Party.
“Responsible
Officer Certification” means, with respect to the financial statements for which such certification is required, the
certification of a Responsible Officer of the Borrower that such financial statements fairly present, in all material respects,
in accordance with GAAP, the consolidated financial condition of the Borrower as at the dates indicated and its consolidated income
and cash flows for the periods indicated, subject to changes resulting from audit and normal year-end adjustments.
“Restricted
Amount” has the meaning set forth in Section 2.11(b)(iv)(B).
“Restricted
Debt” has the meaning set forth in Section 6.04(b).
“Restricted
Debt Payment” has the meaning set forth in Section 6.04(b).
“Restricted
Payment” means (a) any dividend or other distribution on account of any shares of any class of the Capital Stock of the
Borrower, except a dividend payable solely in shares of Qualified Capital Stock to the holders of such class; (b) any redemption,
retirement, sinking fund or similar payment, purchase or other acquisition for value of any shares of any class of the Capital
Stock of the Borrower and (c) any payment made to retire, or to obtain the surrender of, any outstanding warrants, options or other
rights to acquire shares of any class of the Capital Stock of the Borrower now or hereafter outstanding.
“Restricted
Subsidiary” means, as to any Person, any subsidiary of such Person that is not an Unrestricted Subsidiary. Unless otherwise
specified, “Restricted Subsidiary” shall mean any Restricted Subsidiary of the Borrower.
“Return Bid”
has the meaning assigned to such term in the definition of “Dutch Auction”.
“Revolving Lender”
means a Lender with any Additional Revolving Commitment or an outstanding Additional Revolving Loan.
“Revolving Loans”
means any Additional Revolving Loans and any revolving loans under any other Credit Facility.
“S&P”
means Standard & Poor’s Financial Services LLC, a subsidiary of the McGraw-Hill Companies, Inc.
“Sale and Lease-Back
Transaction” has the meaning assigned to such term in Section 6.08.
“Sanctions”
has the meaning assigned to such term in Section 3.17.
“SEC”
means the Securities and Exchange Commission, or any Governmental Authority succeeding to any or all of its functions.
“Second Lien
Agent” means the administrative agent under the Second Lien Credit Agreement.
“Second Lien
Credit Agreement” means the Second Lien Credit Agreement, dated as of the Closing Date, among, inter alios, Holdings,
the Borrower, the Second Lien Agent and the lenders from time to time party thereto and any other document governing any Second
Lien Facilities.
“Second Lien
Facility” means the credit facility governed by the Second Lien Credit Agreement and one or more debt facilities or other
financing arrangements (including indentures) providing for loans, notes or other long-term indebtedness that replace or refinance
such credit facility, including any such replacement or refinancing facility or indenture that increases or decreases the amount
permitted to be borrowed thereunder or alters the maturity thereof and whether by the same or any other agent, lender or group
of lenders, and any amendments, supplements, modifications, extensions, renewals, restatements, amendments and restatements or
refundings thereof or any such indentures or credit facilities that replace or refinance such credit facility (or any subsequent
replacement thereof), in each case to the extent permitted pursuant to Section 6.01(p) (or any other provision in Section
6.01, so long as, if applicable, any corresponding Lien is (x) junior to the Lien securing the Initial Term Loans and (y) permitted
by Section 6.02).
“Second Lien
Obligations” means (a) the “Secured Obligations” as defined in the Second Lien Credit Agreement and with
respect to any other Second Lien Facility, any equivalent term under such Second Lien Facility, (b) all unpaid principal and accrued
and unpaid interest and fees owing respect to any “Incremental Loans” and “Incremental Equivalent Debt”
(each as defined in the Second Lien Credit Agreement or any equivalent term under any documentation governing any Second Lien Facility)
and (c) all unpaid principal and accrued and unpaid interest and fees owing with respect to any refinancing Indebtedness in respect
of any or all of the foregoing.
“Secured Hedging
Obligations” means all Hedging Obligations (other than any Excluded Swap Obligations) under each Hedge Agreement between
any Loan Party and a counterparty that is or becomes an Administrative Agent, a Lender, an Arranger or any Affiliate of the Administrative
Agent, a Lender or an Arranger, for which such Loan Party agrees to provide security and in each case that has been designated
to the Administrative Agent in writing by the Borrower as being a Secured Hedging Obligation for purposes of the Loan Documents,
it being understood that each counterparty thereto shall be deemed (A) to appoint the Administrative Agent as its agent under the
applicable Loan Documents and (B) to agree to be bound by the provisions of Article 8, Section 9.03, Section
9.10 and the Intercreditor Agreements (and any other applicable Acceptable Intercreditor Agreement) as if it were a Lender.
“Secured Leverage
Ratio” means the ratio, as of any date of determination, of (a) Consolidated Secured Debt to (b) Consolidated Adjusted
EBITDA, in each case for the Borrower and its Restricted Subsidiaries on a consolidated basis.
“Secured Obligations”
means all Obligations, together with (a) all Banking Services Obligations and (b) all Secured Hedging Obligations.
“Secured Parties”
means (a) the Lenders, (b) the Administrative Agent, (c) each counterparty to a Hedge Agreement with a Loan Party the obligations
under which constitute Secured Hedging Obligations, (d) each provider of Banking Services to any Loan Party the obligations under
which constitute Banking Services Obligations, (e) the Arrangers and (f) the beneficiaries of each indemnification obligation undertaken
by any Loan Party under any Loan Document.
“Securities”
means any stock, shares, units, partnership interests, voting trust certificates, certificates of interest or participation in
any profit-sharing agreement or arrangement, options, warrants, bonds, debentures, notes, or other evidences of indebtedness, secured
or unsecured, convertible, subordinated or otherwise, or in general any instruments commonly known as “securities”
or any certificates of interest, shares or participations in temporary or interim certificates for the purchase or acquisition
of, or any right to subscribe to, purchase or acquire, any of the foregoing; provided that “Securities” shall
not include any earn-out agreement or obligation or any employee bonus or other incentive compensation plan or agreement.
“Securities
Act” means the Securities Act of 1933 and the rules and regulations of the SEC promulgated thereunder.
“Security Agreement”
means the First Lien Pledge and Security Agreement, substantially in the form of Exhibit I, among the Loan Parties and the
Administrative Agent for the benefit of the Secured Parties.
“Shared Fixed
Incremental Amount” means an amount equal to (a) the greater of $125,000,000 and an amount equal to 75.0% of Consolidated
Adjusted EBITDA for the most recently ended four consecutive Fiscal Quarters for which financial statements are internally available,
minus (b) to the extent issued and/or incurred under this Shared Fixed Incremental Amount, the aggregate principal amount
of all Incremental Facilities, Incremental Equivalent Debt, and all “Incremental Facilities” and all “Incremental
Equivalent Debt” (in each case, as defined under the Second Lien Credit Agreement or any equivalent term under any documentation
governing any Second Lien Facility), plus (c) the aggregate amount of voluntary prepayments, redemptions, repurchases and
other retirements of indebtedness referred to in clause (b) above and any Replacement Term Loans, Replacement Revolving
Facility, Replacement Notes and any equivalent term under the documentation governing any Second Lien Facility, in respect thereof
(with in the case of any revolving facility, a corresponding reduction in commitments) to the extent such prepayments, redemptions,
repurchases and other retirements were not funded with Long-Term Funded Indebtedness.
“SPC”
has the meaning assigned to such term in Section 9.05(e).
“Specified Merger
Agreement Representations” means the representations and warranties made by or on behalf of (or related to) the Company,
its subsidiaries or their respective businesses in the Merger Agreement which are material to the interests of the Lenders, but
which are required to be true and correct only to the extent that the Borrower (or its applicable Affiliate) has the right to terminate,
taking into account any cure provisions, its obligations under the Merger Agreement or to decline to consummate the Acquisition
as a result of a breach of such representations and warranties.
“Specified Representations”
means the representations and warranties set forth in Section 3.01(a)(i), Section 3.01(b) (as it relates to
the due authorization, execution, delivery and performance of the Loan Documents and the enforceability thereof), Section 3.02
(as it relates to the due authorization, execution, delivery and performance of the Loan Documents and the enforceability thereof),
Section 3.03(b)(i), Section 3.08, Section 3.12, Section 3.14 (as it relates to the creation, validity
and perfection of the security interests in the Collateral, subject to the last paragraph of Section 4.01), Section 3.16
and Sections 3.17(a)(ii), (b)(ii) and (c).
“Specified
Transaction” means (a) (i) any incurrence or issuance of any Indebtedness (excluding any borrowings under any ABL
Facility, Additional Revolving Facility incurred substantially concurrently with such Specified Transaction), and (ii) any
prepayment, redemptions, repurchases and other retirements of any Indebtedness (in the case of any Additional Revolving
Facility, to the extent accompanied by a permanent reduction in the commitments thereunder), (b) to the extent applicable in
determining the First Lien Leverage Ratio or the Secured Leverage Ratio, the incurrence of any Lien on Collateral, (c) any
Permitted Acquisition and any Investment that results in a Person becoming a Restricted Subsidiary, (d) any Restricted
Payment, (e) any Restricted Debt Payment, (f) any Disposition, whether by purchase, merger or otherwise, of (i) all or
substantially all of the assets of, or any business line, unit or division or product line of, the Borrower or any Restricted
Subsidiary, (ii) the Capital Stock of any Restricted Subsidiary that results in such Restricted Subsidiary no longer being a
Restricted Subsidiary of the Borrower, or (iii) any asset pursuant to Section 6.07(h) having a Fair Market Value
greater than $50,000,000, (h) to the extent elected by the Borrower to be excluded in calculating Consolidated Adjusted
EBITDA, any designation of operations or assets of the Borrower or a Restricted Subsidiary as discontinued operations in
accordance with GAAP, (i) solely for the purposes of determining the applicable amount of Cash and Cash Equivalents, any
contribution of capital to (and the Net Proceeds from the issuance of any Qualified Capital Stock by) the Borrower or a
Restricted Subsidiary, (j) any designation of a Restricted Subsidiary as an Unrestricted Subsidiary or an Unrestricted
Subsidiary as a Restricted Subsidiary in compliance with this Agreement, and (i) any other transaction that by the terms of
this Agreement requires a financial ratio to be calculated on Pro Forma Basis or after giving pro forma effect
thereto.
“Split Collateral
Basis” means, with respect to any ABL Facility, the obligations thereunder are secured by ABL US Priority Collateral
(or similar current assets) on a senior priority basis relative to the First Priority Secured Obligations and secured by all other
Collateral on a junior priority basis relative to the First Priority Secured Obligations, in each case, as provided in an ABL Intercreditor
Agreement.
“Sponsors”
means (a) CCMP Capital Advisors, LLC and any of its controlled Affiliates and funds managed or advised by any of them or any of
their respective controlled Affiliates, (b) MSD Partners, L.P. and any of its controlled Affiliates and funds managed or advised
by any of them or any of their respective controlled Affiliates and (c) The Alberta Investment Management Corporation (together
with (i) any entity to which it directly or indirectly provides or will provide investment management services pursuant to the
Alberta Investment Management Corporation Act and (ii) any entity that directly or indirectly controls, is controlled by or is
under common control with one or more of the entities described in the foregoing clause (i), “AIMCo”).
“Sponsor Model”
means the financial model delivered by the Sponsors to the Arrangers on June 10, 2017.
“Subject Loans”
means, as of any date of determination, any outstanding Term Loans subject to ratable prepayment requirements in accordance with
Section 2.11(b)(vi) on such date of determination.
“Subject Person”
has the meaning assigned to such term in the definition of “Consolidated Net Income”.
“Subject Proceeds”
has the meaning assigned to such term in Section 2.11(b)(ii).
“Subordinated
Indebtedness” means any Indebtedness (other than Indebtedness among Holdings and/or its subsidiaries) of the Borrower
or any of its Restricted Subsidiaries that is expressly subordinated in right of payment to the Obligations.
“subsidiary”
means, with respect to any Person, any corporation, partnership, limited liability company, association, joint venture or
other business entity of which more than 50% of the total voting power of stock or other ownership interests entitled
(without regard to the occurrence of any contingency) to vote in the election of the Person or Persons (whether directors,
trustees or other Persons performing similar functions) having the power to direct or cause the direction of the management
and policies thereof is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other
subsidiaries of such Person or a combination thereof, in each case to the extent such entity’s financial results are
required to be included in such Person’s consolidated financial statements under GAAP; provided that in
determining the percentage of ownership interests of any Person controlled by another Person, no ownership interests in the
nature of a “qualifying share” of the former Person shall be deemed to be outstanding. Unless otherwise
specified, “subsidiary” shall mean any subsidiary of the Borrower.
“Subsidiary
Guarantor” means (x) on the Closing Date, each Restricted Subsidiary of the Borrower (other than any subsidiary that
is an Excluded Subsidiary) and (y) thereafter, each subsidiary of the Borrower that guarantees the Secured Obligations pursuant
to the terms of this Agreement, in each case, until such time as the relevant subsidiary is released from its obligations under
the Loan Guaranty in accordance with the terms and provisions hereof. Notwithstanding the foregoing, the Borrower may elect, in
its sole discretion, to cause any Restricted Subsidiary that is not otherwise required to be a Subsidiary Guarantor to provide
a Loan Guaranty by causing such Restricted Subsidiary to execute a joinder to the Loan Guaranty in substantially the form attached
as an exhibit thereto, and any such Restricted Subsidiary shall be a Loan Party and Subsidiary Guarantor hereunder for all purposes;
provided that upon such election such Restricted Subsidiary shall no longer be deemed to be an Excluded Subsidiary; provided,
further, that the Borrower may elect to re-designate such Restricted Subsidiary as an Excluded Subsidiary (and such Restricted
Subsidiary shall be released from its Loan Guaranty pursuant to Section 9.22), provided that, at the time of such designation,
the Investments in such Restricted Subsidiary made while such Restricted Subsidiary was a Loan Party and the Indebtedness and Liens
of such Restricted Subsidiary incurred while such Restricted Subsidiary was a Loan Party will be deemed to constitute Investments,
Indebtedness and Liens of a Restricted Subsidiary that is not a Loan Party for purposes of this Agreement.
“Successor Borrower”
has the meaning assigned to such term in Section 6.07(a).
“Swap Obligations”
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.
“Taxes”
means any and all present and future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments,
fees or other charges in the nature of a tax imposed by any Governmental Authority, including any interest, additions to tax or
penalties applicable thereto.
“Term Intercreditor
Agreement” means the Term Intercreditor Agreement substantially in the form of Exhibit M hereto, dated as of the Closing
Date, among, inter alios, the Second Lien Agent, as agent for the Existing Second Priority Secured Creditors (as defined therein),
the Administrative Agent, as agent for the Existing First Priority Secured Creditors (as defined therein), and the Loan Parties
from time to time party thereto.
“Term Facility”
means any facility of any Class of Term Loans provided to or for the benefit of the Borrower pursuant to the terms of this Agreement.
“Term Lender”
means a Lender with a Commitment or outstanding Term Loan under any Term Facility.
“Term Loan”
means the Initial Term Loans, any Additional Term Loans and any term loan under any other Credit Facility.
“Termination
Date” means the date that all (if any) Additional Commitments have expired or terminated and the principal of and interest
on each Loan and all fees, expenses and other amounts payable under any Loan Document (other than (a) contingent indemnification
obligations and (b) Banking Services Obligations or Hedging Obligations that are not being terminated as to which arrangements
reasonably satisfactory to the applicable counterparty have been made) have been paid in full.
“Test Period”
means, as of any date, the period of four consecutive Fiscal Quarters determined in accordance with, and subject to, Section
1.10(c).
“Threshold Amount”
means $40,000,000.
“Total Leverage
Ratio” means the ratio, as of any date of determination, of (a) Consolidated Total Debt to (b) Consolidated Adjusted
EBITDA, in each case for the Borrower and its Restricted Subsidiaries on a consolidated basis.
“Trademark”
means the following: (a) all trademarks (including service marks), common law marks, trade names, trade dress, domain names and
logos, slogans and other indicia of origin under the laws of any jurisdiction in the world, and the registrations and applications
for registration thereof and the goodwill of the business connected to the use of and symbolized by the foregoing; (b) all renewals
of the foregoing; (c) all income, royalties, damages, and payments now or hereafter due or payable with respect thereto, including,
without limitation, damages, claims and payments for past, present and future infringements or dilutions thereof; (d) all rights
to sue for past, present, and future infringements or dilutions of any of the foregoing, including the right to settle suits involving
claims and demands for royalties owing; and (e) all rights corresponding to any of the foregoing.
“Transaction
Costs” means fees, premiums, expenses and other transaction costs (including original issue discount or upfront fees)
payable or otherwise borne by Holdings and its subsidiaries in connection with the Transactions and the transactions contemplated
thereby.
“Transactions”
means, collectively, (a) the execution, delivery and performance by the Loan Parties of the Loan Documents to which they are
a party and the Borrowing of Loans hereunder, (b) the transactions contemplated by the Merger Agreement on the Closing Date,
(c) the Equity Contribution, (d) the Refinancing, (e) the execution, delivery and performance by the Loan Parties of
the Loan Documents (as defined in the Second Lien Credit Agreement) to which they are a party and the incurrence of Indebtedness
under the Second Lien Credit Agreement on the Closing Date (f) the execution, delivery and performance by the Loan Parties of the
Loan Documents (as defined in the ABL Credit Agreement) to which they are a party and the incurrence of Indebtedness under the
ABL Agreement on the Closing Date and (g) the payment of the Transaction Costs.
“Transformational
Event” means any acquisition or investment by the Borrower or any Restricted Subsidiary that is (a) not permitted by
the terms of this Agreement immediately prior to the consummation of such acquisition or investment, (b) if permitted by the terms
of this Agreement immediately prior to the consummation of such acquisition or investment, would not provide the Borrower and its
subsidiaries with adequate flexibility under this Agreement for the continuation and/or expansion of their combined operations
following such consummation, as determined by the Borrower acting in good faith, or (c) any acquisition or investment involving
aggregate consideration in excess of $170,000,000.
“Treasury Capital
Stock” has the meaning assigned to such term in Section 6.04(a)(ix).
“Treasury Regulations”
means the U.S. federal income tax regulations promulgated under the Code.
“Type”,
when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans comprising
such Borrowing, is determined by reference to the LIBO Rate or the Alternate Base Rate.
“UCC”
means the Uniform Commercial Code as in effect from time to time in the State of New York or any other state the laws of which
are required to be applied in connection with the creation or perfection of security interests.
“Unrestricted
Subsidiary” means any subsidiary of the Borrower designated by the Borrower as an Unrestricted Subsidiary on the Closing
Date and listed on Schedule 5.10 or after the Closing Date pursuant to Section 5.10.
“U.S.”
means the United States of America.
“U.S. Tax Compliance
Certificate” has the meaning assigned to such term in Section 2.17(f).
“USA PATRIOT
Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism
Act of 2001 (Title III of Pub. L. No. 107-56 (signed into law October 26, 2001)).
“Weighted Average
Life to Maturity” means, when applied to any Indebtedness at any date, the number of years obtained by dividing: (a)
the sum of the products obtained by multiplying (i) the amount of each then remaining installment, sinking fund, serial maturity
or other required scheduled payments of principal, including payment at final maturity, in respect thereof, by (ii) the number
of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment; by (b) the
then outstanding principal amount of such Indebtedness; provided that the effects of any prepayments made on such Indebtedness
shall be disregarded in making such calculation.
“Wholly-Owned
Subsidiary” of any Person means a subsidiary of such Person, 100% of the Capital Stock of which (other than directors’
qualifying shares or shares required by law to be owned by a resident of the relevant jurisdiction) shall be owned by such Person
or by one or more Wholly-Owned Subsidiaries of such Person.
“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.
Section 1.02.
Classification of Loans and Borrowings. For purposes
of this Agreement, Loans may be classified and referred to by Class (e.g., a “Term Loan”) or by Type (e.g.,
a “LIBO Rate Loan”) or by Class and Type (e.g., a “LIBO Rate Term Loan”). Borrowings also may be
classified and referred to by Class (e.g., a “Term Borrowing”) or by Type (e.g., a “LIBO Rate Borrowing”)
or by Class and Type (e.g., a “LIBO Rate Term Borrowing”).
Section 1.03.
Terms Generally.
(a) The
definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and neuter forms.
(b) The words “include”, “includes” and “including” shall be deemed to be followed by the
phrase “without limitation”. The word “will” shall be construed to have the same meaning and effect as
the word “shall”.
(c) Unless the context requires otherwise (i) any definition of or reference to any agreement, instrument or other document
herein or in any Loan Document (or any Loan Document (as defined in the Second Lien Credit Agreement)) shall be construed as referring
to such agreement, instrument or other document as from time to time amended, restated, amended and restated, supplemented or otherwise
modified or extended, replaced or refinanced (subject to any restrictions or qualifications on such amendments, restatements, amendment
and restatements, supplements or modifications or extensions, replacements or refinancings set forth herein), (ii) any reference
to any law in any Loan Document shall include all statutory and regulatory provisions consolidating, amending, replacing, supplementing
or interpreting such law, (iii) any reference herein or in any Loan Document to any Person shall be construed to include such Person’s
successors and permitted assigns, (iv) the words “herein”, “hereof” and “hereunder”, and words
of similar import, when used in any Loan Document, shall be construed to refer to such Loan Document in its entirety and not to
any particular provision hereof, (v) all references herein or in any Loan Document to Articles, Sections, clauses, paragraphs,
Exhibits and Schedules shall be construed to refer to Articles, Sections, clauses and paragraphs of, and Exhibits and Schedules
to, such Loan Document, (vi) in the computation of periods of time in any Loan Document from a specified date to a later specified
date, the word “from” means “from and including”, the words “to” and “until” mean
“to but excluding” and the word “through” means “to and including” and (vii) the words “asset”
and “property”, when used in any Loan Document, shall be construed to have the same meaning and effect and to refer
to any and all tangible and intangible assets and properties, including Cash, securities, accounts and contract rights.
(d) Notwithstanding anything else provided herein or in any other Loan Document, any interest, fee or principal payments on
any Indebtedness due and payable (or paid) as of the last Business Day of a calendar month, calendar quarter or calendar year,
as applicable, shall be deemed to have been due and payable (or paid) as of the end of the respective fiscal month, Fiscal Quarter
or Fiscal Year, as applicable, ended closest to such calendar period for purposes of all calculations of Consolidated Secured Debt,
Consolidated First Lien Debt, Consolidated Total Debt, Consolidated Adjusted EBITDA and Excess Cash Flow hereunder.
Section 1.04. Accounting Terms; GAAP.
(a) All
financial statements to be delivered pursuant to this Agreement shall be prepared in accordance with GAAP as in effect from
time to time and, except as otherwise expressly provided herein, all terms of an accounting or financial nature that are used
in calculating the Total Leverage Ratio, the First Lien Leverage Ratio, the Secured Leverage Ratio, Consolidated Adjusted
EBITDA or Consolidated Total Assets shall be construed and interpreted in accordance with GAAP, as in effect from time to
time; provided, that (i) if the Borrower notifies the Administrative Agent that the Borrower requests an amendment to
any provision hereof to eliminate the effect of any change occurring after the date of delivery of the financial statements
described in Section 3.04(a) in GAAP or in the application thereof (including the conversion to IFRS as described
below) on the operation of such provision (or if the Administrative Agent notifies the Borrower that the Required Lenders
request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or
after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in
effect and applied immediately before such change becomes or became effective until such notice shall have been withdrawn or
such provision amended in accordance herewith, and (ii) if such an amendment is requested by the Borrower or the Required
Lenders, then the Borrower and the Administrative Agent shall negotiate in good faith to enter into an amendment of the
relevant affected provisions (without the payment of any amendment or similar fee to the Lenders) to preserve the original
intent thereof in light of such change in GAAP or the application thereof. All terms of an accounting or financial nature
used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made without giving
effect to (i) any election under Accounting Standards Codification 825-10-25 (previously referred to as Statement of
Financial Accounting Standards 159) (or any other Accounting Standards Codification or Financial Accounting Standard having a
similar result or effect) to value any Indebtedness or other liabilities of the Borrower or any subsidiary at “fair
value”, as defined therein and (ii) any treatment of Indebtedness in respect of convertible debt instruments under
Accounting Standards Codification 470-20 (or any other Accounting Standards Codification or Financial Accounting Standard
having a similar result or effect) to value any such Indebtedness in a reduced or bifurcated manner as described therein, and
such Indebtedness shall at all times be valued at the full stated principal amount thereof. If the Borrower notifies the
Administrative Agent that the Borrower (or its applicable Parent Company) is required to report under IFRS or has elected to
do so through an early adoption policy, “GAAP” shall mean international financial reporting standards
pursuant to IFRS (provided that after such conversion, the Borrower cannot elect to report under GAAP).
(b) Notwithstanding anything to the contrary contained in paragraph (a) above or in the definition of “Capital
Lease”, in the event of an accounting change requiring all leases to be capitalized, except as expressly provided in the
definition of GAAP with respect thereto, only those leases (assuming for purposes hereof that such leases were in existence on
the date hereof) that would constitute Capital Leases in conformity with GAAP on the date hereof shall be considered Capital Leases,
and all calculations and deliverables under this Agreement or any other Loan Document shall be made or delivered, as applicable,
in accordance therewith.
Section 1.05. Effectuation of Transactions. Each of the representations
and warranties contained in this Agreement (and all corresponding definitions) is made after giving effect to the Transactions,
unless the context otherwise requires.
Section 1.06. Timing of Payment of Performance. Subject to the
definitions of Interest Payment Date and Interest Period, when payment of any obligation or the performance of any covenant, duty
or obligation is stated to be due or required on a day which is not a Business Day, the date of such payment (other than as described
in the definition of “Interest Period”) or performance shall extend to the immediately succeeding Business Day, and,
in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension.
Section 1.07. Times of Day. Unless otherwise specified, all references
herein to times of day shall be references to New York City time (daylight or standard, as applicable).
Section 1.08. Currency Generally.
(a) For
purposes of any determination under Article 5, Article 6 (other than the calculation of compliance with
any financial ratio for purposes of taking any action hereunder) or Article 7 with respect to the amount of Specified
Transaction, in a currency other than Dollars, (i) the Dollar equivalent amount of a Specified Transaction in a currency
other than Dollars shall be calculated based on the rate of exchange quoted by the Bloomberg Foreign Exchange Rates &
World Currencies Page (or any successor page thereto, or in the event such rate does not appear on any Bloomberg Page, by
reference to such other publicly available service for displaying exchange rates as may be agreed upon by the Administrative
Agent and the Borrower) for such foreign currency, as in effect at 11:00 a.m. (London time) on the date of such Specified
Transaction (which, in the case of any Restricted Payment, shall be deemed to be the date of the declaration thereof and, in
the case of the incurrence of Indebtedness, shall be deemed to be on the date first committed); provided that if any
Indebtedness is incurred (and, if applicable, associated Lien granted) to refinance or replace other Indebtedness denominated
in a currency other than Dollars, and the relevant refinancing or replacement would cause the applicable Dollar-denominated
restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing or
replacement, such Dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of
such refinancing or replacement Indebtedness (and, if applicable, associated Lien granted) does not exceed an amount
sufficient to repay the principal amount of such Indebtedness being refinanced or replaced, except by an amount equal to (x)
unpaid accrued interest and premiums (including tender premiums) thereon plus other reasonable and customary fees and
expenses (including upfront fees and original issue discount) incurred in connection with such refinancing or replacement,
(y) any existing commitments unutilized thereunder and (z) additional amounts permitted to be incurred under Section 6.01
and (ii) for the avoidance of doubt, no Default or Event of Default shall be deemed to have occurred solely as a result
of a change in the rate of currency exchange occurring after the time of any Specified Transaction so long as such Specified
Transaction was permitted at the time incurred, made, acquired, committed, entered or declared as set forth in clause (i).
(b) Each provision of this Agreement shall be subject to such reasonable changes of construction as the Administrative Agent
may from time to time specify with the Borrower’s consent to appropriately reflect a change in currency of any country and
any relevant market convention or practice relating to such change in currency.
Section 1.09. Cashless Rollovers. Notwithstanding anything to the
contrary contained in this Agreement or in any other Loan Document, to the extent that any Lender extends the maturity date of,
or replaces, renews or refinances, any of its then-existing Loans with Incremental Loans, Replacement Term Loans, Loans
in connection with any Replacement Revolving Facility, Extended Term Loans, Extended Revolving Loans or loans incurred under a
new credit facility, in each case, to the extent such extension, replacement, renewal or refinancing is effected by means of a
“cashless roll” by such Lender, such extension, replacement, renewal or refinancing shall be deemed to comply with
any requirement hereunder or any other Loan Document that such payment be made “in Dollars”, “in immediately
available funds”, “in Cash” or any other similar requirement.
Section 1.10. Certain Conditions, Calculations and Tests.
(a) Notwithstanding
anything to the contrary herein, with respect to any intended acquisition, Investment (other than Investments in the Borrower
or any Restricted Subsidiary), Restricted Payment and/or Restricted Debt Payment (each, taken together with any related
actions and transactions (including, in the case of any Indebtedness (including any Incremental Facilities), the incurrence,
repayment and other intended uses of proceeds), a “Limited Condition Transaction”), to the extent that the
terms of this Agreement require satisfaction of, or compliance with, any condition, test or requirement, in order to effect,
incur or consummate such Limited Condition Transaction (including (w) compliance with any financial ratio or test (including,
without limitation, Section 2.22, any First Lien Leverage Ratio, any Secured Leverage Ratio, any Total Leverage Ratio,
any Net Interest Coverage Ratio and/or the amount of Consolidated Adjusted EBITDA or Consolidated Total Assets (including any
component definitions of the foregoing)), (x) the making or accuracy of any representations and warranties, (y) the absence
of a Default or Event of Default (or any type of Default or Event of Default) and/or (z) any other condition, test or
requirement), at the election of the Borrower (a “LCT Election”), the date of determination of whether any
relevant conditions, tests and requirements are satisfied or complied with shall be made on, and shall be deemed to be, the
date (the “LCT Test Date”) that the definitive agreements for such Limited Condition Transaction are
entered into (or, if applicable, delivery of notice of redemption, prepayment, declaration of dividend or similar event),
giving pro forma effect to such Limited Condition Transaction (including any related actions and transactions) pursuant to
this Section 1.10. If the Borrower has made an LCT Election for any Limited Condition Transaction and such Limited
Condition Transaction (including any related actions and transactions) would be permitted on the LCT Test Date, (i) each such
condition, test and requirement shall be deemed satisfied and complied with for all purposes of such Limited Condition
Transaction and (ii) any change in status of any such condition, test and requirement between the LCT Test Date and the
taking of the relevant actions or consummation of the relevant transactions such that any applicable financial ratios or
tests, baskets, conditions, requirements or provisions would be exceeded, breached or otherwise no longer complied with or
satisfied for any reason (including due to fluctuations in Consolidated Adjusted EBITDA or Consolidated Total Assets or the
Person subject to such Limited Condition Transaction) shall be disregarded such that all financial ratios or tests, baskets,
conditions, requirements or provisions shall continue to be deemed complied with and satisfied for all purposes of such
Limited Condition Transaction, all applicable transactions and actions will permitted and no Default or Event of Default
shall be deemed to exist or to have occurred or resulted from such change in status or Limited Condition Transaction; provided,
that (A) if financial statements for one or more subsequent fiscal quarters shall have become available subsequent to the LCT
Test Date, the Borrower may elect, in its sole discretion, to re-determine all financial ratios or tests, baskets,
conditions, requirements or provisions on the basis of such financial statements, in which case, such date of redetermination
shall thereafter be deemed to be the applicable LCT Test Date for purposes of such ratios, tests or baskets, and (B) except
as contemplated in the foregoing clause (A), compliance with such financial ratios or tests, baskets, conditions,
requirements or provisions shall not be determined or tested at any time for purposes of such Limited Condition Transaction
after the applicable LCT Test Date. If the Borrower has made an LCT Election, then in connection with any subsequent
calculation of any financial ratios or tests (including any Incurrence-Based Baskets), thresholds and availability (including
under any Fixed Basket) under this Agreement with respect to any unrelated transactions or actions on or following the
applicable LCT Test Date and prior to the earlier of the date on which such Limited Condition Transaction is consummated or
the definitive agreement (or, if applicable, notice, declaration or similar event) for such Limited Condition Transaction is
terminated or expires without consummation of such Limited Condition Transaction, any financial ratios or tests, thresholds
and availability shall be determined assuming such Limited Condition Transaction (including any related actions and
transactions) had been consummated.
(b) For
purposes of determining the permissibility of any action, change, transaction or event or compliance with any term that
requires a calculation of any financial ratio or test (including, without limitation, Sections 2.22 and 2.23,
any First Lien Leverage Ratio, any Secured Leverage Ratio, any Total Leverage Ratio, any Net Interest Coverage Ratio and/or
the amount or percentage of Consolidated Adjusted EBITDA or Consolidated Total Assets (including any component definitions of
the foregoing and for the avoidance of doubt, notwithstanding clause (k) of the definition of “Consolidated Net
Income”, which shall be disregarded)), (i) Specified Transactions that have been made during the applicable Test Period
(or, except as provided in Section 1.10(c), subsequent to such Test Period and prior to or simultaneously with the
event for which the calculation of any such ratio is made) and any Limited Condition Transaction (including any related
actions and transactions) shall be calculated on a Pro Forma Basis and be given pro forma effect assuming that all
such Specified Transactions and Limited Condition Transactions had occurred on the first day of the applicable Test Period
(or, in the case of Consolidated Total Assets and Consolidated Total Debt, on the last date of the applicable Test Period) in
good faith by a Responsible Officer of the Borrower and include, for the avoidance of doubt, the amount of
“run-rate” cost savings (including sourcing), operating expense reductions, operating improvements and synergies
projected by the Borrower in good faith in a manner consistent with, and without duplication of, clause (b)(xi) of the
definition of “Consolidated Adjusted EBITDA” (calculated on a Pro Forma Basis and given pro forma effect
as though such cost savings (including sourcing), operating expense reductions, operating improvements and synergies had been
realized on the first day of such period for the entirety of such period), and any such adjustments shall be included in the
initial pro forma calculations of such financial ratios or tests and during any subsequent Test Period in a manner
consistent with, and without duplication of, clause (b)(xi) of the definition of “Consolidated Adjusted
EBITDA”, whether through a pro forma adjustment or otherwise, and (ii) any borrowings under any revolving credit
facilities incurred substantially concurrently with the applicable Specified Transaction shall be disregarded and excluded
from such pro forma calculation.
(c) The calculation of any financial ratio or test (including, without limitation, Sections 2.22 and 2.23, any
First Lien Leverage Ratio, any Secured Leverage Ratio, any Total Leverage Ratio, any Net Interest Coverage Ratio and/or the amount
or percentage of Consolidated Adjusted EBITDA or Consolidated Total Assets (including any component definitions of the foregoing
and for the avoidance of doubt, notwithstanding clause (k) of the definition of “Consolidated Net Income”, which
shall be disregarded)) shall be based on the most recently ended Test Period for which internal financial statements are available
(as determined in good faith by the Borrower); provided, that, for purposes of the definition of “Applicable Rate”,
(i) to the extent any Specified Transactions were made subsequent to the end of the applicable Test Period, such Specified Transactions
shall not be given pro forma effect or be calculated on a Pro Forma Basis, and (ii) such financial ratio or test shall be
based on the most recently ended Test Period for which financial statements have been delivered pursuant to Section 5.01(a)
or (b) or referred to in Section 4.01(c), as applicable.
(d) The principal amount of any non-interest bearing Indebtedness or other discount security constituting Indebtedness at any
date shall be the principal amount thereof that would be shown on a balance sheet of the Borrower dated such date prepared in accordance
with GAAP. If any Indebtedness bears a floating rate of interest and is being calculated on a Pro Forma Basis or being given pro
forma effect, the interest on such Indebtedness attributable to any period subsequent to such Test Period and prior to or simultaneously
with the event for which the calculation of any such ratio is made shall be calculated for as if the rate in effect on the date
of the event for which the calculation is made had been the applicable rate for the entire period (taking into account any hedging
obligations applicable to such Indebtedness). Interest on a Capital Lease obligation shall be deemed to accrue at an interest rate
reasonably determined by a Responsible Officer of the Borrower to be the rate of interest implicit in such Capital Lease obligation
in accordance with GAAP. Any calculation of the Net Interest Coverage Ratio on a Pro Forma Basis will be calculated using an assumed
interest rate in determining Consolidated Interest Expense based on the indicative interest margin contained in any financing commitment
documentation with respect to such Indebtedness or, if no such indicative interest margin exists, as reasonably determined by the
Borrower in good faith.
(e) The increase in amounts secured by Liens by virtue of accrual of interest, the accretion of accreted value, the payment
of interest or dividends in the form of additional Indebtedness, amortization of original issue discount and increases in the amount
of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies will not be deemed to be an incurrence
of Liens for purposes of Section 6.02.
(f) For
purposes of determining compliance at any time with the provisions of this Agreement, in the event that any Indebtedness
(including any Incremental Facility and Incremental Equivalent Debt), Lien, Restricted Payment, Restricted Debt Payment,
Investment, Disposition or Affiliate transaction or other transaction, as applicable, meets the criteria of more than one
category of exceptions, thresholds, baskets, or other provisions of transactions or items permitted pursuant to any clause of Article
VI, any component in the definition of “Incremental Cap” or any other provision of this Agreement, the
Borrower, in its sole discretion, may, at any time, classify or reclassify (on one or more occasions) and/or divide or
re-divide (on one or more occasions) such transaction or item (or portion thereof) among one or more such categories of
exceptions, thresholds, baskets or provisions, as elected by the Borrower in its sole discretion (other than the Initial Term
Loans, the “Revolving Loans” (as defined in the ABL Credit Agreement) and the “Loans” (as defined in
the Second Lien Credit Agreement) outstanding on the Closing Date and any refinancing indebtedness in respect thereof which
may not be reclassified). It is understood and agreed that any Indebtedness (including any Incremental Facility and
Incremental Equivalent Debt), Lien, Restricted Payment, Restricted Debt Payment, Investment, Disposition or Affiliate
transaction or other transaction need not be permitted solely by reference to one category of exceptions, thresholds, baskets
or provisions permitting such Indebtedness, Lien, Restricted Payment, Restricted Debt Payment, Investment, Disposition and/or
Affiliate transaction under Article VI (other than Sections 6.01(a), (x) and (y)), any component in the definition of
“Incremental Cap” or any other provision of this Agreement, but may instead be permitted in part under any
combination thereof. Upon delivery of financial statements following any initial classification and division (or any
subsequent reclassification and re-division), if any applicable financial ratios for any Incurrence-Based Baskets would then
be satisfied for the incurrence of such Indebtedness (including any Incremental Facility and Incremental Equivalent Debt),
Lien, Restricted Debt Payment, Investment, Disposition or Affiliate transaction, any amount thereof under any Fixed Basket
shall automatically be deemed reclassified and re-divided as incurred under any available Incurrence-Based Baskets to the
extent not previously elected by the Borrower and will be deemed to have been incurred, issued, made or taken first, to the
extent available, pursuant to any available Incurrence-Based Baskets as set forth above without utilization of any Fixed
Basket.
(g) With respect to any amounts incurred or transactions entered into or consummated (including any Indebtedness (including
any Incremental Facility and Incremental Equivalent Debt), Lien, Restricted Payment, Restricted Debt Payment, Investment, Disposition
or Affiliate transaction or other transaction), in reliance on a combination of Fixed Baskets and Incurrence-Based Baskets, it
is understood and agreed that (i) the Incurrence-Based Baskets shall first be calculated without giving effect to any Fixed Baskets
being relied upon for any portion of such incurrence or transactions (i.e., Fixed Baskets shall be disregarded in the calculation
of the financial ratio applicable to the Incurrence-Based Baskets, but full pro forma effect shall be given thereto and
to all other applicable and related transactions (including, in the case of Indebtedness, the intended use of the aggregate proceeds
of Indebtedness being incurred in reliance on a combination of Fixed Baskets and Incurrence-Based Baskets, but without “netting”
the Cash proceeds of such Indebtedness) and all other permitted pro forma adjustments (except that the incurrence of any
borrowings under any Additional Revolving Facility incurred substantially concurrently with the applicable transaction shall be
disregarded) and (ii) thereafter, the incurrence of the portion of such amounts or other applicable transaction to be entered into
in reliance on any Fixed Baskets shall be calculated (and may subsequently be reclassified into Incurrence-Based Baskets in accordance
with Section 1.10(f)). For example, in calculating the maximum amount of Indebtedness permitted to be incurred under Fixed
Baskets and Incurrence-Based Baskets in Section 6.01 in connection with an acquisition, only the portion of such Indebtedness
intended to be incurred under Incurrence-Based Baskets shall be included in the calculation of financial ratios (and the portion
of such Indebtedness intended to be incurred under Fixed Baskets shall be deemed to not have been incurred in calculating such
financial ratios), but pro forma effect shall be given to the use of proceeds from the entire amount of Indebtedness intended
to be incurred under both the Fixed Baskets and Incurrence-Based Baskets, the consummation of the acquisitions and any related
repayments of Indebtedness.
Section 1.11. Rounding. Any financial ratios required to be maintained
by the Borrower pursuant to this Agreement (or required to be satisfied in order for a specific action to be permitted under this
Agreement) shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more
than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with
a rounding-up for five).
ARTICLE
II
THE CREDITS
Section 2.01. Commitments.
(a) Subject to the terms and conditions set forth herein, each Initial Term Lender severally, and not jointly, agrees to make
Initial Term Loans to the Borrower on the Closing Date in Dollars in a principal amount not to exceed its Initial Term Loan Commitment.
(b) Subject to the terms and conditions of this Agreement, each Lender and each Additional Lender with an Additional Term Commitment
for a given Class of Incremental Term Loans severally, and not jointly, agrees to make Additional Term Loans of such Class to the
Borrower, which Additional Term Loans shall not exceed for any such Lender or Additional Lender at the time of any incurrence thereof,
the Additional Term Commitment of such Lender or Additional Lender for such Class on the date of borrowing of such Additional Term
Loans. Amounts repaid or prepaid in respect of such Additional Term Loans may not be reborrowed.
Section 2.02. Loans and Borrowings.
(a) Each Loan shall be made as part of a Borrowing consisting of Loans of the same Class and Type made by the Lenders ratably
in accordance with their respective Commitments of the applicable Class.
(b) Subject to Section 2.01 and Section 2.14, each Borrowing shall be comprised entirely of ABR Loans or LIBO
Rate Loans as the Borrower may request in accordance herewith. Each Lender at its option may make any LIBO Rate Loan by causing
any domestic or foreign branch or Affiliate of such Lender to make such Loan; provided that (i) any exercise of such option
shall not affect the obligation of the Borrower to repay such Loan in accordance with the terms of this Agreement, (ii) such LIBO
Rate Loan shall be deemed to have been made and held by such Lender, and the obligation of the Borrower to repay such LIBO Rate
Loan shall nevertheless be to such Lender for the account of such domestic or foreign branch or Affiliate of such Lender and (iii)
in exercising such option, such Lender shall use reasonable efforts to minimize increased costs to the Borrower resulting therefrom
(which obligation of such Lender shall not require it to take, or refrain from taking, actions that it determines would result
in increased costs for which it will not be compensated hereunder or that it otherwise determines would be disadvantageous to it
and in the event of such request for costs for which compensation is provided under this Agreement, the provisions of Section
2.15 shall apply); provided further that any such domestic or foreign branch or Affiliate of such Lender shall not be
entitled to any greater indemnification under Section 2.17 with respect to such LIBO Rate Loan than that to which the applicable
Lender was entitled on the date on which such Loan was made (except in connection with any indemnification entitlement arising
as a result of a Change in Law after the date on which such Loan was made).
(c) Borrowings of more than one Type and Class may be outstanding at the same time; provided that there shall not at
any time be more than a total of fifteen (15) different Interest Periods in effect for LIBO Rate Borrowings at any time outstanding
(or such greater number of different Interest Periods as the Administrative Agent may agree from time to time).
(d) Notwithstanding any other provision of this Agreement, the Borrower shall not, nor shall it be entitled to, request, or
to elect to convert or continue, any Borrowing if the Interest Period requested with respect thereto would end after the Maturity
Date applicable to such Loans.
Section 2.03. Requests for Borrowings. Each Borrowing in respect of the Term Facility, each Borrowing in respect of any Additional Revolving
Facility, each conversion of Term Loans or Revolving Loans from one Type to the other, and each continuation of LIBO Rate Loans
shall be made upon irrevocable notice by the Borrower to the Administrative Agent (provided that notices in respect of
Term Loan Borrowings and/or Additional Revolving Loan Borrowing (x) to be made on the Closing Date may be conditioned on the closing
of the Acquisition and (y) to be made in connection with any permitted acquisition, investment or irrevocable repayment or redemption
of Indebtedness may be conditioned on the closing of such acquisition, investment or repayment or redemption of Indebtedness).
Each such notice must be in writing or by telephone (and promptly confirmed in writing) and must be received by the Administrative
Agent (by hand delivery, fax or other electronic transmission (including “.pdf” or “.tiff”)) not later
than (i) 2:00 p.m. three (3) Business Days prior to the requested day of any Borrowing, conversion or continuation of LIBO Rate
Loans (or two Business Days in the case of any Borrowing of LIBO Rate Loans to be made on the Closing Date) or (ii) by 12:00 p.m.
(Noon) on the requested date of any Borrowing of ABR Loans (or, in each case, such later time as shall be acceptable to the Administrative
Agent); provided, however, that if the Borrower wishes to request LIBO Rate Loans having an Interest Period of other
than one, two, three or six months in duration as provided in the definition of “Interest Period,” (A) the applicable
notice from the Borrower must be received by the Administrative Agent not later than 2:00 p.m. four (4) Business Days prior to
the requested date of such Borrowing (or such later time as shall be reasonably acceptable to the Administrative Agent), conversion
or continuation, whereupon the Administrative Agent shall give prompt notice to the appropriate Lenders of such request and determine
whether the requested Interest Period is acceptable to them and (B) not later than 12:00 p.m. (Noon) three (3) Business Days before
the requested date of such Borrowing, conversion or continuation, the Administrative Agent shall notify the Borrower whether or
not the requested Interest Period is available to the appropriate Lenders. Each written notice (or confirmation of telephonic
notice) with respect to a Borrowing by the Borrower pursuant to this Section 2.03 shall be delivered to the Administrative
Agent in the form of a written Borrowing Request or such other form as may be approved by the Administrative Agent (including
any form on an electronic platform or electronic transmission system as shall be approved by the Administrative Agent), appropriately
completed and signed by a Responsible Officer of the Borrower. Each such telephonic and written Borrowing Request shall specify
the following information in compliance with Section 2.02:
(a) the Class of such Borrowing;
(b) the aggregate amount of the requested Borrowing;
(c) the date of such Borrowing, which shall be a Business Day;
(d) whether such Borrowing is to be an ABR Borrowing or a LIBO Rate Borrowing;
(e) in the case of a LIBO Rate Borrowing, the initial Interest Period to be applicable thereto, which shall be a period contemplated
by the definition of the term “Interest Period”; and
(f) the location and number of the Borrower’s account or any other designated account(s) to which funds are to be disbursed
(the “Funding Account”).
If no election as to the Type of
Borrowing is specified, then the requested Borrowing shall be an ABR Borrowing. If no Interest Period is specified with
respect to any requested LIBO Rate Borrowing, then the Borrower shall be deemed to have selected an Interest Period of one
month’s duration. The Administrative Agent shall advise each Lender of the details thereof and of the amount of the
Loan to be made as part of the requested Borrowing (x) in the case of any ABR Borrowing, on the same Business Day of receipt
of a Borrowing Request in accordance with this Section 2.03 or (y) in the case of any LIBO Rate Borrowing, no later
than one Business Day following receipt of a Borrowing Request in accordance with this Section 2.03.
Section 2.04. [Reserved].
Section 2.05. [Reserved].
Section 2.06. [Reserved].
Section 2.07. Funding of Borrowings.
(a) Each Lender shall make each Loan of any Class to be made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds by 2:00 p.m. to the account of the Administrative Agent most recently designated by it for such purpose
by notice to the Lenders of such Class in an amount equal to such Lender’s respective Applicable Percentage for such Class.
The Administrative Agent will make such Loans available to the Borrower by promptly crediting the amounts so received, in like
funds, to the Funding Account or as otherwise directed by the Borrower.
(b) Unless the Administrative Agent has received notice from any Lender prior to the proposed date of any Borrowing that such
Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent
may assume that such Lender has made such share available on such date in accordance with paragraph (a) of this Section
2.07 and may, in reliance upon such assumption, make available to the Borrower a corresponding amount. In such event, if any
Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender
and the Borrower severally agree to pay to the Administrative Agent forthwith on demand (without duplication) such corresponding
amount with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding
the date of payment to the Administrative Agent, at (i) in the case of such Lender, the greater of the Federal Funds Effective
Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation or (ii)
in the case of the Borrower, the interest rate applicable to Loans comprising such Borrowing at such time. If such Lender pays
such amount to the Administrative Agent, then such amount shall constitute such Lender’s Loan included in such Borrowing
and the Borrower’s obligation to repay the Administrative Agent such corresponding amount pursuant to this Section 2.07(b)
shall cease. If the Borrower pays such amount to the Administrative Agent, the amount so paid shall constitute a repayment of such
Borrowing by such amount. Nothing herein shall be deemed to relieve any Lender from its obligation to fulfill its Commitment or
to prejudice any rights which the Administrative Agent or the Borrower or any other Loan Party may have against any Lender as a
result of any default by such Lender hereunder.
Section 2.08. Type; Interest Elections.
(a) Each Borrowing initially shall be of the Type specified in the applicable Borrowing Request and, in the case of a LIBO Rate
Borrowing, shall have an initial Interest Period as specified in such Borrowing Request. Thereafter, the Borrower may elect to
convert any Borrowing to a Borrowing of a different Type or to continue such Borrowing and, in the case of a LIBO Rate Borrowing,
may elect Interest Periods therefor, all as provided in this Section 2.08. The Borrower may elect different options with
respect to different portions of the affected Borrowing, in which case each such portion shall be allocated ratably among the Lenders
for the relevant Class based upon their Applicable Percentages for such Class and the Loans of such Class comprising each such
portion shall be considered a separate Borrowing.
(b) To
make an election pursuant to this Section 2.08, the Borrower shall notify the Administrative Agent of such election either
in writing (by hand delivery, fax or other electronic transmission (including “.pdf” or “.tiff”)) or by
telephone by the time that a Borrowing Request would be required under Section 2.03 if the Borrower were requesting
a Borrowing of the Type resulting from such election to be made on the effective date of such election. Each such telephonic Interest
Election Request shall be irrevocable and shall be confirmed promptly by hand delivery, fax or other electronic transmission (including
“.pdf” or “.tiff”) to the Administrative Agent of a written Interest Election Request signed by a Responsible
Officer of the Borrower.
(c) Each telephonic and written Interest Election Request shall specify the following information in compliance with Section 2.02:
(i) the Borrowing to which such Interest Election Request applies and, if different options are being elected with respect to
different portions thereof, the portions thereof to be allocated to each resulting Borrowing (in which case the information to
be specified pursuant to clauses (iii) and (iv) below shall be specified for each resulting Borrowing);
(ii) the effective date of the election made pursuant to such Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR Borrowing or a LIBO Rate Borrowing; and
(iv) if the resulting Borrowing is a LIBO Rate Borrowing, the Interest Period to be applicable thereto after giving effect to
such election, which shall be a period contemplated by the definition of the term “Interest Period”.
If any such Interest Election Request requests
a LIBO Rate Borrowing but does not specify an Interest Period, then the Borrower shall be deemed to have selected an Interest Period
of one month’s duration.
(d) Promptly following receipt of an Interest Election Request, the Administrative Agent shall advise each applicable Lender
of the details thereof and of such Lender’s portion of each resulting Borrowing.
(e) If the Borrower fails to deliver a timely Interest Election Request with respect to a LIBO Rate Borrowing prior to the end
of the Interest Period applicable thereto, then, unless such Borrowing is repaid as provided herein, such Borrowing shall be converted
at the end of such Interest Period to a LIBO Rate Borrowing with an Interest Period of one month. Notwithstanding any contrary
provision hereof, if an Event of Default exists and the Administrative Agent, at the request of the Required Lenders, so notifies
the Borrower, then, so long as such Event of Default exists (i) no outstanding Borrowing may be converted to or continued as a
LIBO Rate Borrowing and (ii) unless repaid, each LIBO Rate Borrowing shall be converted to an ABR Borrowing at the end of the then-current
Interest Period applicable thereto.
Section 2.09. Termination and Reduction of Commitments. Unless
previously terminated, the Initial Term Loan Commitments shall automatically terminate upon the making of the Initial Term Loans
on the Closing Date.
Section 2.10. Repayment
of Loans; Evidence of Debt.
(a) The
Borrower hereby unconditionally promises to repay Initial Term Loans to the Administrative Agent for the account of each Term
Lender (i) commencing December 31, 2017, on the last Business Day of each March, June, September and December prior to the
Initial Term Loan Maturity Date (each such date being referred to as a “Loan Installment Date”), in each
case in an amount equal to 0.25% of the original principal amount of the Initial Term Loans (as such payments may be reduced
from time to time as a result of the application of prepayments in accordance with Section 2.11 and repurchases in
accordance with Section 9.05(h) or increased as a result of any increase in the amount of such Initial Term Loans
pursuant to Section 2.22(a)), and (ii) on the Initial Term Loan Maturity Date, in an amount equal to the
remainder of the principal amount of the Initial Term Loans, outstanding on such date, together in each case with accrued and
unpaid interest on the principal amount to be paid to but excluding the date of such payment.
(b) The Borrower hereby unconditionally promises to pay to the Administrative Agent for the account of each Additional Lender,
the then-unpaid principal amount of each Additional Revolving Loan of such Additional Lender on the Maturity Date applicable thereto.
(c) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the
Borrower to such Lender resulting from each Loan made by such Lender, including the amounts of principal and interest payable and
paid to such Lender from time to time hereunder.
(d) The Administrative Agent shall maintain accounts (which shall be part of the Register) in which it shall record (i) the
amount of each Loan made hereunder, the Class and Type thereof and the Interest Period (if any) applicable thereto, (ii) the amount
of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder and (iii)
the amount of any sum received by the Administrative Agent hereunder for the account of the Lenders and each Lender’s share
thereof.
(e) The entries made in the accounts maintained in the Register shall be prima facie evidence of the existence and amounts of
the obligations recorded therein (absent manifest error); provided that the failure of any Lender or the Administrative
Agent to maintain accounts pursuant to Sections 2.10(c) and 2.10(d) or any manifest error therein shall not in any manner affect
the obligation of the Borrower to repay the Loans in accordance with the terms of this Agreement; provided, further,
that in the event of any inconsistency between the Register and any Lender’s records, the Register shall govern.
(f) Any Lender may request that Loans made by it be evidenced by a Promissory Note. In such event, the Borrower shall prepare,
execute and deliver to such Lender a Promissory Note payable to such Lender and its registered assigns; it being understood and
agreed that such Lender (and/or its applicable assign) shall be required to return such Promissory Note to the Borrower in accordance
with Section 9.05(b)(iii) and upon the occurrence of the Termination Date (or as promptly thereafter as practicable).
Section 2.11. Prepayment of Loans.
(a) Optional Prepayments.
(i) Upon prior notice in accordance with paragraph (a)(iii) of this Section 2.11, the Borrower shall have the
right at any time and from time to time to prepay any Borrowing of Term Loans of one or more Classes (such Class or Classes to
be selected by the Borrower in its sole discretion) in whole or in part without premium or penalty except as provided in Sections 2.12(c)
and 2.16. Each such prepayment shall be paid to the Lenders in accordance with their respective Applicable Percentages of
the relevant Class.
(ii) Upon
prior notice in accordance with paragraph (a)(iii) of this Section 2.11, the Borrower shall have the right at any
time and from time to time to prepay any Borrowing of Additional Revolving Loans of any Class, in whole or in part without premium
or penalty (but subject to Section 2.16); provided that after the establishment of any Additional Revolving Facility,
any such prepayment of any Borrowing of Additional Revolving Loans of any Class shall be subject to the provisions set forth in
Section 2.22, 2.23 and/or 9.02, as applicable. Each such prepayment shall be paid to the Revolving Lenders
in accordance with their respective Applicable Percentages of the relevant Class.
(iii) The Borrower shall notify the Administrative Agent by telephone (promptly confirmed in writing) of any prepayment under
this Section 2.11(a) (A) in the case of a prepayment of a LIBO Rate Borrowing, not later than 1:00 p.m. three Business Days
before the date of prepayment or (B) in the case of a prepayment of an ABR Borrowing, not later than 12:00 p.m. (Noon) on the day
of prepayment. Each such notice shall be irrevocable (except as set forth in the proviso to this sentence) and shall specify the
prepayment date and the principal amount of each Borrowing or portion or each relevant Class to be prepaid; provided that
a notice of prepayment delivered by the Borrower may state that such notice is conditioned upon the effectiveness of other transactions,
in which case such notice may be revoked by the Borrower (by notice to the Administrative Agent on or prior to the specified effective
date) if such condition is not satisfied. Promptly following receipt of any such notice relating to any Borrowing, the Administrative
Agent shall advise the relevant Lenders of the contents thereof. Each partial prepayment of any Borrowing shall be in an amount
at least equal to the amount that would be permitted in the case of an advance of a Borrowing of the same Type and Class as provided
in Section 2.02(c), or such lesser amount that is then outstanding with respect to such Borrowing being repaid. Each prepayment
of Term Loans made pursuant to this Section 2.11(a) shall be applied against the remaining scheduled installments of principal
due in respect of the Term Loans of such Class (or one or more of such other facility, class or tranche of Term Loans, as determined
by the Borrower in its sole discretion) in the manner specified by the Borrower or, if not so specified on or prior to the date
of such optional prepayment, in direct order of maturity.
(b) Mandatory Prepayments.
(i) No
later than the fifth Business Day after the date on which the financial statements with respect to each Fiscal Year of the
Borrower are required to be delivered pursuant to Section 5.01(b), commencing with the Fiscal Year ending December 31,
2018, the Borrower shall prepay the outstanding principal amount of Subject Loans in accordance with clause (vi)
of this Section 2.11(b) below in an aggregate principal amount (the “ECF Prepayment Amount”) equal
to (A) the Required Excess Cash Flow Percentage of Excess Cash Flow of the Borrower and its Restricted Subsidiaries for the
Calculation Period then ended, minus (B) unless otherwise elected by the Borrower, the aggregate principal amount
optionally or voluntarily prepaid, repurchased, redeemed or otherwise retired (to the extent permitted under this Agreement
and without duplication of the amount thereof applied to reduce the ECF Prepayment Amount in the prior Fiscal Year) prior to
such date of (w) any Initial Term Loans, any other Term Loans, Incremental Equivalent Debt or any Additional Revolving
Loans prepaid pursuant to Section 2.11(a), any ABL Loans and any Permitted Senior Secured Debt, (x) any Indebtedness
under the Second Lien Facility (and any Incremental Equivalent Debt (as defined in the equivalent term in any document
governing any Second Lien Facility)), (y) any Replacement Notes and Replacement Notes (as defined in the Second Lien Credit
Agreement or the equivalent term in any other document governing any Second Lien Facility), and (z)(1) any reduction in the
outstanding amount of any Initial Term Loans or any other Term Loans resulting from any assignment (or purchases) made in
accordance with Section 9.05(h) of this Agreement (including in connection with any Dutch Auction, and in the case of
Affiliates that are not Restricted Subsidiaries of the Borrower, to the extent contributed or transferred to the Borrower)
and/or (2) to the extent permitted by the terms of this Agreement, the amount of any reduction in the outstanding amount of
any Indebtedness under the Second Lien Facility (including any Incremental Loans or Incremental Equivalent Debt (as each is
defined in the Second Lien Credit Agreement or the equivalent term in any other document governing any Second Lien Facility))
resulting from any assignment (or purchases, including in connection with any Dutch Auction (as defined in the Second Lien
Credit Agreement or the equivalent term in any other document governing any Second Lien Facility) and in the case of
Affiliates that are not Restricted Subsidiaries of the Borrower, to the extent contributed or transferred to the Borrower),
in each case under this clause (z), based upon the actual amount of cash paid in connection with the relevant
assignment or purchase; provided, that, in each case, with respect to the ABL Facility, any Incremental Revolving
Facility and any Replacement Revolving Facilities, to the extent accompanied by a permanent reduction in the relevant
commitment, and in the case of all such prepayments, repurchases, redemptions or other retirements, to the extent were not
financed with the proceeds of Long-Term Funded Indebtedness provided, further, that that (I) if at the time
that any such prepayment would be required, the Borrower (or any Restricted Subsidiary of the Borrower) is also required to
prepay any Indebtedness that is secured on a pari passu basis with the First Priority Secured Obligations pursuant to
the terms of the documentation governing such Indebtedness (such Indebtedness required to be so prepaid or offered to be so
repurchased, “Other Applicable Indebtedness”) with any portion of the ECF Prepayment Amount, then the
Borrower may apply such portion of the ECF Prepayment Amount on a pro rata basis (determined on the basis of the
aggregate outstanding principal amount of the Loans and Other Applicable Indebtedness at such time), and the amount of
prepayment of the Term Loans that would have otherwise been required pursuant to this Section 2.11(b)(i) shall be
reduced accordingly; provided, further, that the portion of such ECF Prepayment Amount allocated to the Other
Applicable Indebtedness shall not exceed the amount of such ECF Prepayment Amount required to be allocated to the Other
Applicable Indebtedness pursuant to the terms thereof, and the remaining amount, if any, of such ECF Prepayment Amount shall
be allocated to the Term Loans in accordance with the terms hereof, (II) to the extent the holders of Other Applicable
Indebtedness decline to have such Other Applicable Indebtedness prepaid, the declined amount shall promptly (and in any event
within ten (10) Business Days after the date of such rejection) be applied to prepay the Term Loans in accordance with the
terms hereof (unless such other application is otherwise permitted hereunder) and (III) no prepayment under this Section
2.11(b)(i) shall be required if the amount thereof would not exceed $7,500,000.
(ii) No
later than the fifth Business Day following the receipt of Net Proceeds in respect of any Prepayment Asset Sale or Net
Insurance/Condemnation Proceeds, in each case, in excess of $7,500,000 with respect to any single event or transaction (or
series of related events or transactions) and $17,500,000 in the aggregate in any Fiscal Year, the Borrower shall apply an
amount equal to 100% of the Net Proceeds or Net Insurance/Condemnation Proceeds received with respect thereto in excess of
such thresholds (the “Subject Proceeds”) to prepay the outstanding principal amount of Subject Loans in
accordance with clause (vi) below; provided, that if, prior to the date any such prepayment is required to be
made, the Borrower notifies the Administrative Agent of its intention to reinvest the Subject Proceeds in assets used or
useful in the business (other than Cash or Cash Equivalents) of the Borrower or any of its subsidiaries, then so long as no
Event of Default then exists, the Borrower shall not be required to make a mandatory prepayment under this clause (ii)
in respect of the Subject Proceeds to the extent (A) the Subject Proceeds are so reinvested within fifteen (15) months
following receipt thereof or (B) the Borrower or any of its subsidiaries has committed to so reinvest the Subject Proceeds
during such 15-month period and the Subject Proceeds are so reinvested within six (6) months after the expiration of such
15-month period; provided, however, that if the Subject Proceeds have not been so reinvested prior to the
expiration of the applicable period, the Borrower shall promptly prepay the outstanding principal amount of Subject Loans
with the Subject Proceeds not so reinvested as set forth above (without regard to the immediately preceding proviso); provided, further,
that (x) if, at the time that any such prepayment would be required hereunder, the Borrower or any of its Restricted
Subsidiaries is required to repay or repurchase (or offer to repay or repurchase) any Other Applicable Indebtedness, then the
relevant Person may apply the Subject Proceeds on a pro rata basis to the prepayment of the Subject Loans and to the
repurchase or repayment of the Other Applicable Indebtedness (determined on the basis of the aggregate outstanding principal
amount of the Subject Loans and Other Applicable Indebtedness (or accreted amount if such Other Applicable Indebtedness is
issued with original issue discount); provided, further, that the portion of the Subject Proceeds allocated to
the Other Applicable Indebtedness shall not exceed the amount of the Subject Proceeds required to be allocated to the Other
Applicable Indebtedness pursuant to the terms thereof, and the remaining amount, if any, of the Subject Proceeds shall be
allocated to the Term Loans in accordance with the terms hereof, and (y) to the extent the holders of the Other Applicable
Indebtedness decline to have such Other Applicable Indebtedness prepaid or repurchased, the declined amount shall promptly
(and in any event within ten Business Days after the date of such rejection) be applied to prepay the Subject Loans in
accordance with the terms hereof. Notwithstanding anything to the contrary herein or in any other Loan Document, the Net
Proceeds of any Disposition of any ABL US Priority Collateral shall not be required to be applied to the prepayment of the
Initial Term Loans hereunder.
(iii) In the event that the Borrower or any of its Restricted Subsidiaries receives Net Proceeds from the issuance or incurrence
of Indebtedness by the Borrower or any of its Restricted Subsidiaries (other than with respect to Indebtedness permitted under
Section 6.01, except to the extent the relevant Indebtedness constitutes (A) Replacement Term Loans, Replacement Revolving
Facility or Replacement Notes incurred to refinance all or a portion of any Class or Classes of Term Loans (as determined by the
Borrower) in accordance with the requirements of Section 9.02(c)), or (B) Incremental Loans or Incremental Equivalent
Debt incurred to refinance all or a portion of any Class or Classes of Term Loans to the extent required by the terms thereof to
prepay or offer to prepay such Term Loans and such Incremental Loans or Incremental Equivalent Debt do not constitute utilization
of the Incremental Cap pursuant to Section 2.22), the Borrower shall, promptly upon (and in any event not later than the
next succeeding Business Day) the receipt of such Net Proceeds by the Borrower or its applicable Restricted Subsidiary, apply an
amount equal to 100% of such Net Proceeds to prepay the outstanding principal amount of the relevant Class or Classes of Term Loans
in accordance with clause (vi) below.
(iv) Notwithstanding anything in this Section 2.11(b) to the contrary,
(A) the
Borrower shall not be required to prepay any amount that would otherwise be required to be paid pursuant to Section 2.11(b)(i) or (ii)
above to the extent that the relevant Excess Cash Flow is generated by any Foreign Subsidiary, the relevant Prepayment Asset
Sale is consummated by any Foreign Subsidiary, the relevant Net Insurance/Condemnation Proceeds are received by any Foreign
Subsidiary, as the case may be, for so long as the repatriation to the Borrower of any such amount would be prohibited under
any Requirement of Law or conflict with the fiduciary duties of such Foreign Subsidiary’s directors, or result in, or
could reasonably be expected to result in, a material risk of personal or criminal liability for any officer, director,
employee, manager, member of management or consultant of such Foreign Subsidiary (it being agreed that, solely during the
period within one (1) year following the date such prepayments are required to be made, the Borrower shall, and shall cause
the applicable Foreign Subsidiary to, promptly use commercially reasonable efforts to take all actions required by applicable
Requirements of Law to permit such repatriation) and if after taking such actions, the affected Subject Proceeds or Excess
Cash Flow, as the case may be, is permitted under the applicable Requirement of Law and, to the extent applicable, would no
longer conflict with the fiduciary duties of such director, or result in, or could reasonably be expected to result in, a
material risk of personal or criminal liability for the Persons described above within one (1) year following the date such
prepayments are required to be made, the relevant Foreign Subsidiary will promptly repatriate the relevant Subject Proceeds
or Excess Cash Flow, as the case may be, and the repatriated Subject Proceeds or Excess Cash Flow, as the case may be, will
be promptly (and in any event not later than two Business Days after such repatriation) applied (net of additional Taxes
payable or reserved against as a result thereof) to the repayment of the Initial Term Loans and other Term Loans required
pursuant to this Section 2.11(b) to the extent required herein (without regard to this clause (iv)(A));
and
(B) if the Borrower
determines in good faith that the repatriation (or other intercompany distribution) to the Borrower of any amounts required to
mandatorily prepay the Initial Term Loans and other Term Loans pursuant to Section 2.11(b)(i) or (ii) above
would result in material tax liabilities (including any material withholding tax) or material adverse tax consequences (such amount,
a “Restricted Amount”), as reasonably determined by the Borrower, the amount the Borrower shall be required
to mandatorily prepay pursuant to Section 2.11(b)(i) or (ii) above, as applicable, shall be reduced by the Restricted
Amount until such time as the Restricted Amount may be repatriated (or otherwise distributed) to the Borrower without the incurrence
of such material tax liability (as determined in good faith by the Borrower); provided, that to the extent that the repatriation
(or other intercompany distribution) of any Subject Proceeds or Excess Cash Flow from the relevant Foreign Subsidiary would no
longer have a material tax liability within one (1) year following the date such prepayments are required to be made, an amount
equal to the Subject Proceeds or Excess Cash Flow, as applicable, not previously applied pursuant to preceding clause (B),
shall be promptly applied to the repayment of the Initial Term Loans and Additional Term Loans pursuant to Section 2.11(b)
as otherwise required above (without regard to this clause (iv)(B));
(v) Each Lender may elect, by notice to the Administrative Agent at or prior to the time and in the manner specified by the
Administrative Agent, prior to any prepayment of Initial Term Loans and Additional Term Loans required to be made by the Borrower
pursuant to this Section 2.11(b), to decline all (but not a portion) of its Applicable Percentage of such prepayment (such
declined amounts, the “Declined Proceeds”), in which case such Declined Proceeds shall be applied to any mandatory
prepayments required under Section 2.11(b) of the Second Lien Credit Agreement (or equivalent provision under any other document
governing any Second Lien Facility) and any mandatory prepayments required with respect to any “Incremental Term Loans”,
“Extended Term Loans” and/or “Replaced Term Loans” (in each case, as defined under the Second Lien Credit
Agreement or any other document governing any Second Lien Facility); provided that (A) to the extent that any such prepayment
is declined, the remaining amount thereof may be retained by the Borrower and (B) for the avoidance of doubt, no Lender may reject
any prepayment made under Section 2.11(b)(iii) above to the extent that such prepayment is made with Indebtedness described
in clauses (A) or (B) of Section 2.11(b)(iii) above. If any Lender fails to deliver a notice to the Administrative
Agent of its election to decline receipt of its Applicable Percentage of any mandatory prepayment within the time frame specified
by the Administrative Agent, such failure will be deemed to constitute an acceptance of such Lender’s Applicable Percentage
of the total amount of such mandatory prepayment of Initial Term Loans and Additional Term Loans.
(vi) Except
as may otherwise be set forth in any amendment to this Agreement in connection with any Additional Term Loan, (A) each prepayment
of Initial Term Loans and other Term Loans required pursuant to this Section 2.11(b) shall be applied ratably to each Class
of Term Loans (based upon the then outstanding principal amounts of the respective Classes of Term Loans) (provided that
any prepayment of Initial Term Loans or Additional Term Loans constituting Refinancing Indebtedness incurred to refinance all
or a portion of the Initial Term Loans or Additional Term Loans pursuant to Section 6.01(p) or Replacement Term Loans incurred
to refinance Initial Term Loans or Additional Term Loans in accordance with the requirements of Section 9.02(c) shall be
applied solely to each applicable Class of refinanced or replaced Term Loans), (B) with respect to each Class of Initial Term
Loans and Additional Term Loans, all accepted prepayments under Section 2.11(b)(i), (ii) or (iii) shall be
applied against the remaining scheduled installments of principal due in respect of the Initial Term Loans and Additional Term
Loans as directed by the Borrower (or, in the absence of direction from the Borrower, to the remaining scheduled amortization
payments in respect of the Initial Term Loans and Additional Term Loans in direct order of maturity), and (C) each such prepayment
shall be paid to the Term Lenders in accordance with their respective Applicable Percentages of the applicable Class. The amount
of such mandatory prepayments shall be applied on a pro rata basis to the then outstanding Initial Term Loans and other
Term Loans being prepaid irrespective of whether such outstanding Loans are ABR Loans or LIBO Rate Loans; provided that
the amount thereof shall be applied first to ABR Loans to the full extent thereof before application to the LIBO Rate Loans in
a manner that minimizes the amount of any payments required to be made by the Borrower pursuant to Section 2.16. Any prepayment
of Initial Term Loans made on or prior to the date that is six months after the Closing Date pursuant to Section 2.11(b)(iii)
as part of a Repricing Transaction shall be accompanied by the fee set forth in Section 2.12(c).
(vii) [Reserved].
(viii) At the time of each prepayment required under Section 2.11(b)(i), (ii) or (iii), the Borrower
shall deliver to the Administrative Agent a certificate signed by a Responsible Officer of the Borrower setting forth in reasonable
detail the calculation of the amount of such prepayment. Each such certificate shall specify the Borrowings being prepaid and the
principal amount of each Borrowing (or portion thereof) to be prepaid. Prepayments shall be accompanied by accrued interest as
required by Section 2.13. All prepayments of Borrowings under this Section 2.11(b) shall be subject to Section
2.16 and, in the case of prepayments under clause (iii) above as part of a Repricing Transaction, Section 2.12(c),
but shall otherwise be without premium or penalty.
(ix) Notwithstanding anything to the contrary herein, it is intended that the Loans will not be treated as “applicable
high yield discount obligations” (“AHYDO”) within the meaning of Section 163(i)(1) of the Code and the
provisions contained herein shall be construed so that the Loans are not treated as AHYDO. Accordingly, starting on the fifth anniversary
of the Closing Date and prior to the end of each accrual period (as defined in Section 1272(a)(5)) thereafter, the Borrower shall
pay such amounts of accrued and unpaid interest or original issue discount (as determined for U.S. federal income tax purposes)
on the Loans as necessary to ensure that the Loans are not treated as having “significant original issue discount”
within the meaning of Section 163(i)(1) of the Code. The computations and determinations made by the Borrower under this provision
shall be binding upon each Lender.
Section 2.12. Fees.
(a) The
Borrower agrees to pay to the Administrative Agent, for its own account, the fees in the amounts and at the times separately agreed
upon by the Borrower and the Administrative Agent in writing.
(b) All fees payable hereunder shall be paid on the dates due, in Dollars and in immediately available funds, to the Administrative
Agent for distribution, in the case of commitment fees and participation fees, to the Revolving Lenders. Fees paid shall not be
refundable under any circumstances except as otherwise provided in the Fee Letter.
(c) In the event that, on or prior to the date that is six months after the Closing Date, the Borrower (x) prepays, repays,
refinances, substitutes or replaces any Initial Term Loans in connection with a Repricing Transaction (including, for the avoidance
of doubt, any prepayment made pursuant to Section 2.11(b)(iii) that constitutes a Repricing Transaction), or (y) effects
any amendment, modification or waiver of, or consent under, this Agreement resulting in a Repricing Transaction, the Borrower shall
pay to the Administrative Agent, for the ratable account of each of the applicable Initial Term Lenders, (I) in the case of clause
(x), a premium of 1.00% of the aggregate principal amount of the Initial Term Loans so prepaid, repaid, refinanced, substituted
or replaced and (II) in the case of clause (y), a fee equal to 1.00% of the aggregate principal amount of the Initial Term
Loans that are the subject of such Repricing Transaction outstanding immediately prior to such amendment. If, on or prior to the
date that is six months after the Closing Date, all or any portion of the Initial Term Loans held by any Term Lender are prepaid,
repaid, refinanced, substituted or replaced pursuant to Section 2.19(b)(iv) as a result of, or in connection with, such
Term Lender not agreeing or otherwise consenting to any waiver, consent, modification or amendment referred to in clause (y)
above (or otherwise in connection with a Repricing Transaction), such prepayment, repayment, refinancing, substitution or replacement
will be made at 101% of the principal amount so prepaid, repaid, refinanced, substituted or replaced. All such amounts shall be
due and payable on the date of effectiveness of such Repricing Transaction.
(d) Unless otherwise indicated herein, all computations of fees shall be made on the basis of a 360-day year and shall be payable
for the actual days elapsed (including the first day but excluding the last day). Each determination by the Administrative Agent
of a fee hereunder shall be conclusive and binding for all purposes, absent manifest error.
Section 2.13. Interest.
(a) The Term Loans comprising each ABR Borrowing shall bear interest at the Alternate Base Rate plus the Applicable Rate.
(b) The Term Loans comprising each LIBO Rate Borrowing shall bear interest at the LIBO Rate for the Interest Period in effect
for such Borrowing plus the Applicable Rate.
(c) [Reserved].
(d) Notwithstanding
the foregoing and subject to Section 2.21, if any principal of or interest on any Initial Term Loan or Additional Loan
or any fee payable by Borrower hereunder is not, in each case, paid or reimbursed when due, whether at stated maturity, upon
acceleration or otherwise, the relevant overdue amount shall bear interest, to the fullest extent permitted by law, after as
well as before judgment, at a rate per annum equal to (i) in the case of overdue principal or interest of any Initial Term
Loan or Additional Loan, 2.00% plus the rate otherwise applicable to such Initial Term Loan or Additional Loan as
provided in the preceding paragraphs of this Section 2.13 or in the amendment to this Agreement relating thereto or
(ii) in the case of any other amount, 2.00% plus the rate applicable to Initial Term Loans that are ABR Loans as
provided in paragraph (a) of this Section 2.13; provided that no amount shall accrue pursuant to this Section 2.13(d)
on any overdue amount or other amount payable to a Defaulting Lender so long as such Lender is a Defaulting Lender.
(e) Accrued interest on each Initial Term Loan or Additional Loan shall be payable in arrears on each Interest Payment Date
for such Initial Term Loan, Additional Loan or any other Loan and on the Maturity Date applicable to such Loan or upon the termination
of any Additional Commitments, as applicable and; provided that (i) interest accrued pursuant to paragraph (d)
of this Section 2.13 shall be payable on demand, (ii) in the event of any repayment or prepayment of any Initial Term Loan,
Additional Loan or any other Loan, accrued interest on the principal amount repaid or prepaid shall be payable on the date of such
repayment or prepayment and (iii) in the event of any conversion of any LIBO Rate Loan prior to the end of the current Interest
Period therefor, accrued interest on such Initial Term Loan or Additional Loan shall be payable on the effective date of such conversion.
(f) All interest hereunder shall be computed on the basis of a year of 360 days, except that interest computed for ABR Loans
shall be computed on the basis of a year of 365 days (or 366 days in a leap year), and in each case shall be payable for the actual
number of days elapsed (including the first day but excluding the last day). The applicable Alternate Base Rate or LIBO Rate shall
be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error. Interest shall accrue
on each Loan from, and including, the date on which such Loan is made to, but excluding, the date on which the Loan or such interest
is paid; provided that any Loan that is repaid on the same day on which it is made shall bear interest for one day.
Section 2.14. Alternate Rate of Interest. If at least two Business
Days prior to the commencement of any Interest Period for a LIBO Rate Borrowing:
(a) the
Administrative Agent determines (which determination shall be conclusive absent manifest error) that adequate and reasonable means
do not exist for ascertaining the LIBO Rate for such Interest Period; or
(b) the
Administrative Agent is advised by the Required Lenders that the LIBO Rate for such Interest Period will not adequately and fairly
reflect the cost to such Lenders of making or maintaining their Loans included in such Borrowing for such Interest Period;
then the Administrative Agent shall promptly
give notice thereof to the Borrower and the Lenders by telephone or facsimile as promptly as practicable thereafter and, until
the Administrative Agent notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist,
which the Administrative Agent agrees promptly to do, (i) any Interest Election Request that requests the conversion of any Borrowing
to, or continuation of any Borrowing as, a LIBO Rate Borrowing shall be ineffective and such Borrowing shall be converted to an
ABR Borrowing on the last day of the Interest Period applicable thereto, and (ii) if any Borrowing Request requests a LIBO Rate
Borrowing, such Borrowing shall be made as an ABR Borrowing.
Section 2.15. Increased Costs.
(a) If any Change in Law:
(i) imposes, modifies or deems applicable any reserve, special deposit or similar requirement against assets of, deposits with
or for the account of, or credit extended by, any Lender (except any such reserve requirement reflected in the LIBO Rate), or
(ii) subjects
any Lender to any Taxes (other than Indemnified Taxes, Other Taxes and Excluded Taxes) on its loans, letters of credit, commitments,
or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto, or
(iii) imposes on any Lender or the London interbank market any other condition (other than Taxes) affecting this Agreement or
LIBO Rate Loans made by any Lender,
and the result of any of the foregoing
is to increase the cost to the relevant Lender of making or maintaining any LIBO Rate Loan (or of maintaining its obligation to
make any such Loan) or to reduce the amount of any sum received or receivable by such Lender (whether of principal, interest or
otherwise) in respect of any LIBO Rate Loan in an amount deemed by such Lender to be material, then, within 30 days after the Borrower’s
receipt of the certificate contemplated by paragraph (c) of this Section 2.15, the Borrower will pay to such Lender,
such additional amount or amounts as will compensate such Lender, for such additional costs incurred or reduction suffered; provided
that the Borrower shall not be liable for such compensation if (x) the relevant Change in Law occurs on a date prior to the date
such Lender becomes a party hereto, (y) such Lender invokes Section 2.20 or (z) in the case of requests for reimbursement
under clause (iii) of Section 2.15(a) resulting from a market disruption, (A) the relevant circumstances are not
generally affecting the banking market or (B) the applicable request has not been made by Lenders constituting Required Lenders.
(b) If any Lender determines that any Change in Law regarding liquidity or capital requirements has or would have the effect
of reducing the rate of return on such Lender’s capital or on the capital of such Lender’s holding company, if any,
as a consequence of this Agreement or the Loans made by such Lender to a level below that which such Lender or such Lender’s
holding company could have achieved but for such Change in Law (other than due to Taxes which shall be dealt with exclusively pursuant
to Section 2.17) (taking into consideration such Lender’s policies and the policies of such Lender’s holding
company with respect to capital adequacy), then within 30 days of receipt by the Borrower of the certificate contemplated by paragraph
(c) of this Section 2.15 the Borrower will pay to such Lender, as applicable, such additional amount or amounts as will
compensate such Lender or such Lender’s holding company for any such reduction suffered.
(c) A certificate of a Lender setting forth the amount or amounts necessary to compensate such Lender or its holding company,
as applicable, as specified in paragraph (a) or (b) of this Section 2.15 and setting forth in reasonable detail
the manner in which such amount or amounts were determined and certifying that such Lender is generally charging such amounts to
similarly situated borrowers shall be delivered to the Borrower and shall be conclusive absent manifest error.
(d) Failure or delay on the part of any Lender to demand compensation pursuant to this Section 2.15 shall not constitute
a waiver of such Lender’s right to demand such compensation; provided that the Borrower shall not be required to compensate
a Lender pursuant to this Section 2.15 for any increased costs or reductions incurred more than 180 days prior to the date
that such Lender notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender’s
intention to claim compensation therefor; provided further that if the Change in Law giving rise to such increased costs
or reductions is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive
effect thereof.
Section 2.16. Break
Funding Payments. In the event of (a) the conversion or prepayment of any principal of any LIBO Rate Loan other
than on the last day of an Interest Period applicable thereto (whether voluntary, mandatory, automatic, by reason of
acceleration or otherwise), (b) the failure to borrow, convert, continue or prepay any LIBO Rate Loan on the date or in the
amount specified in any notice delivered pursuant hereto or (c) the assignment of any LIBO Rate Loan of any Lender other than
on the last day of the Interest Period applicable thereto as a result of a request by the Borrower pursuant to Section
2.19, then, in any such event, the Borrower shall compensate each Lender for the loss, cost and expense incurred by such
Lender that is attributable to such event (other than loss of profit). In the case of a LIBO Rate Loan, the loss, cost
or expense of any Lender shall be the amount reasonably determined by such Lender to be the excess, if any, of (i) the amount
of interest which would have accrued on the principal amount of such Loan had such event not occurred, at the LIBO Rate that
would have been applicable to such Loan, for the period from the date of such event to the last day of the then current
Interest Period therefor (or, in the case of a failure to borrow, convert or continue, for the period that would have been
the Interest Period for such Loan), over (ii) the amount of interest which would accrue on such principal amount for such
period at the interest rate which such Lender would bid were it to bid, at the commencement of such period, for deposits in
the applicable currency of a comparable amount and period from other banks in the Eurodollar market; it being understood that
such loss, cost or expense shall in any case exclude any interest rate floor and all administrative, processing or similar
fees. A certificate of any Lender (i) setting forth any amount or amounts that such Lender is entitled to receive
pursuant to this Section 2.16, the basis therefor and, in reasonable detail, the manner in which such amount or
amounts were determined and (ii) certifying that such Lender is generally charging the relevant amounts to similarly situated
borrowers shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay such
Lender the amount shown as due on any such certificate within 30 days after receipt thereof.
Section 2.17. Taxes.
(a) Any and all payments by or on account of any obligation of any Loan Party under any Loan Document shall be made free and
clear of and without deduction for any Taxes, except as required by applicable Requirements of Law. If any applicable Requirements
of Law require the deduction or withholding of any Tax from any such payment, then (i) if such Tax is an Indemnified Tax and/or
Other Tax, the amount payable by the applicable Loan Party shall be increased as necessary so that after all required deductions
and withholdings have been made (including deductions and withholdings applicable to additional sums payable under this Section
2.17), each Lender or, in the case of any payment made to the Administrative Agent for its own account, the Administrative
Agent, receives an amount equal to the sum it would have received had no such deductions or withholdings been made, (ii) the applicable
withholding agent shall make such deductions and (iii) the applicable withholding agent shall timely pay the full amount deducted
to the relevant Governmental Authority in accordance with applicable Requirements of Law.
(b) In addition, and without duplication of other amounts payable by a Loan Party under this Section 2.17, the Loan Parties
shall pay any Other Taxes to the relevant Governmental Authority in accordance with applicable Requirements of Law.
(c) Each
Loan Party shall jointly and severally indemnify the Administrative Agent and each Lender within 30 days after receipt of the
certificate described in the succeeding sentence, for the full amount of any Indemnified Taxes or Other Taxes payable or paid
by the Administrative Agent or such Lender, as applicable (including Indemnified Taxes or Other Taxes imposed or asserted on
or attributable to amounts payable under this Section 2.17) (other than any penalties attributable to the gross
negligence, bad faith or willful misconduct of the Administrative Agent or such Lender), and, in each case, any reasonable
expenses arising therefrom or with respect thereto; provided that if such Loan Party reasonably believes that such
Taxes were not correctly or legally asserted, the Administrative Agent or such Lender, as applicable, will use reasonable
efforts to cooperate with such Loan Party to obtain a refund of such Taxes (which shall be repaid to such Loan Party in
accordance with Section 2.17(h)) so long as such efforts would not, in the sole determination of the Administrative
Agent or such Lender, result in any additional out-of-pocket costs or expenses not reimbursed by such Loan Party or be
otherwise materially disadvantageous to the Administrative Agent or such Lender, as applicable. In connection with any
request for reimbursement under this Section 2.17(c), the relevant Lender or the Administrative Agent, as applicable,
shall deliver a certificate to the Borrower (i) setting forth, in reasonable detail, the basis and calculation of the amount
of the relevant payment or liability and (ii) certifying that it is generally charging the relevant amounts to similarly
situated borrowers, which certificate shall be conclusive absent manifest error. Notwithstanding anything to the contrary
contained in this Section 2.17(c), the Loan Parties shall not be required to indemnify the Administrative Agent or any
Lender pursuant to this Section 2.17 for any Indemnified Taxes or Other Taxes, to the extent the Administrative Agent
or such Lender fails to notify the Borrower of such possible indemnification claim within 180 days after the event; provided
further that, if the event is a 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.
(d) Each Lender shall severally indemnify the Administrative Agent, within 30 days after demand therefor, for (i) any Indemnified
Taxes or Other Taxes imposed on or with respect to any payment under any Loan Document that is attributable to such Lender (but
only to the extent that no Loan Party has already indemnified the Administrative Agent for such Indemnified Taxes or Other Taxes
and without limiting the obligation of the Loan Parties to do so), (ii) any Taxes attributable to such Lender’s failure to
comply with the provisions of Section 9.05(c) relating to the maintenance of a Participant Register and (iii) any Excluded
Taxes attributable to such Lender that are payable or paid by the Administrative Agent in connection with any Loan Document and
any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed
or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any
Lender by the Administrative Agent shall be conclusive absent manifest error. Each Lender hereby authorizes the Administrative
Agent to set off and apply any and all amounts at any time owing to such Lender under any Loan Document or otherwise payable by
the Administrative Agent to any Lender under any Loan Document or otherwise payable by the Administrative Agent to any Lender from
any other source against any amount due to the Administrative Agent under this clause (d).
(e) As soon as practicable after any payment of Indemnified Taxes or Other Taxes by any Loan Party to a Governmental Authority,
such Loan Party shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental
Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment that is reasonably
satisfactory to the Administrative Agent.
(f) Status of Lenders.
(i) Any Lender that is entitled to an exemption from or reduction of any withholding Tax with respect to any payments made under
any Loan Document shall deliver to the Borrower and the Administrative Agent, at the time or times reasonably requested by the
Borrower or the Administrative Agent, such properly completed and executed documentation as the Borrower or the Administrative
Agent may reasonably request to permit such payments to be made without withholding or at a reduced rate of withholding. In addition,
any Lender, if reasonably requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed
by applicable Requirements of Law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower
or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements.
Each Lender hereby authorizes the Administrative Agent to deliver to the Borrower and to any successor Administrative Agent any
documentation provided to the Administrative Agent pursuant to this Section 2.17(f).
(ii) Without limiting the generality of the foregoing:
(A) each
Lender that is not a Foreign Lender shall deliver to the Borrower and the Administrative Agent on or prior to the date on which
such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower
or the Administrative Agent), two executed copies of IRS Form W-9 certifying that such Lender is exempt from U.S. federal backup
withholding tax;
(B) each Foreign Lender, to the extent it is legally entitled to do so, shall deliver to the Borrower and the Administrative
Agent on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter
upon the reasonable request of the Borrower or the Administrative Agent), whichever of the following is applicable:
(1) in the case of any Foreign Lender claiming the benefits of an income tax treaty to which the U.S. is a party, two executed
copies of IRS Form W-8BEN or IRS Form W-8BEN-E establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant
to such tax treaty;
(2) two executed copies of IRS Form W-8ECI;
(3) in the case of any Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 871(h) or
881(c) of the Code, (x) a certificate substantially in the form of Exhibit J-1 to the effect that such Foreign Lender is
not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of the
Borrower within the meaning of Section 871(h)(3)(B) of the Code, or a “controlled foreign corporation” described in
Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and (y) executed copies of IRS Form W-8BEN
or IRS Form W-8BEN-E; or
(4) to the extent any Foreign Lender is not the beneficial owner, two executed copies of IRS Form W-8IMY, accompanied by IRS
Form W-8ECI, IRS Form W-8BEN, IRS Form W-8BEN-E, a U.S. Tax Compliance Certificate substantially in the form of Exhibit J-2
or Exhibit J-3, IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided
that if such Foreign Lender is a partnership and one or more partners of such Foreign Lender are claiming the portfolio interest
exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate substantially in the form of Exhibit J-4 on
behalf of each such partner;
(C) each
Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent on
or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter
upon the reasonable request of the Borrower or the Administrative Agent), two executed copies of any other form prescribed by
applicable Requirements of Law as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax, duly
completed, together with such supplementary documentation as may be prescribed by applicable Requirements of Law to permit
the Borrower or the Administrative Agent to determine the withholding or deduction required to be made; and
(D) if a payment made to any Lender under any Loan Document would be subject to Tax imposed by FATCA if such Lender were to
fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of
the Code, as applicable), such Lender shall deliver to the Borrower and the Administrative Agent at the time or times prescribed
by applicable Requirements of Law and at such time or times reasonably requested by the Borrower or the Administrative Agent such
documentation as is prescribed by applicable Requirements of Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code)
and may be necessary for the Borrower and the Administrative Agent to comply with their obligations under FATCA, to determine whether
such Lender has complied with such Lender’s obligations under FATCA, or to determine the amount, if any, to deduct and withhold
from such payment. Solely for purposes of this clause (D), “FATCA” shall include any amendments made to FATCA after
the date of this Agreement.
Each Lender agrees that if any form or
certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification,
provide such successor form, or promptly notify the Borrower and the Administrative Agent in writing of its legal inability to
do so. Notwithstanding anything to the contrary in this Section 2.17(f), no Lender shall be required to provide any documentation
that such Lender is not legally eligible to deliver.
(g) On or prior to the date on which the Administrative Agent becomes the Administrative Agent under this Agreement (and from
time to time thereafter upon the reasonable request of the Borrower or if any form or certification it previously delivered expires
or becomes obsolete), the Administrative Agent will deliver to the Borrower either (i) an executed copy of IRS Form W-9, or (ii)
(x) with respect to any amounts received on its own account, an executed copy of an applicable IRS Form W-8, and (y) with respect
to any amounts received for or on account of any Lender, an executed copy of IRS Form W-8IMY certifying on Part I, Part II and
Part VI thereof that it is a U.S. branch that has agreed to be treated as a U.S. person for U.S. federal tax purposes with respect
to payments received by it from the Borrower in its capacity as Administrative Agent, as applicable. The Administrative Agent shall
promptly notify the Borrower at any time it determines that it is no longer in a position to provide the certification described
in the prior sentence.
(h) If
the Administrative Agent or any Lender determines, in its sole discretion exercised in good faith, that it has received a
refund of any Indemnified Taxes or Other Taxes as to which it has been indemnified by any Loan Party or with respect to which
such Loan Party has paid additional amounts pursuant to this Section 2.17, it shall pay over such refund to such Loan
Party (but only to the extent of indemnity payments made, or additional amounts paid, by such Loan Party under this Section
2.17 with respect to the Indemnified Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses
of the Administrative Agent or such Lender (including any Taxes imposed with respect to such refund), and without interest
(other than any interest paid by the relevant Governmental Authority with respect to such refund); provided that such
Loan Party, upon the request of the Administrative Agent or such Lender, agrees to repay the amount paid over to such Loan
Party (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the
Administrative Agent or such Lender in the event the Administrative Agent or such Lender is required to repay such refund to
such Governmental Authority. Notwithstanding anything to the contrary in this paragraph (h), in no event shall the
Administrative Agent or any Lender be required to pay any amount to a Loan Party pursuant to this paragraph (h) to the
extent that the payment thereof would place the Administrative Agent or such Lender in a less favorable net after-Tax
position than the position that the Administrative Agent or such Lender would have been in if the Tax subject to
indemnification had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts
giving rise to such refund had never been paid. This Section 2.17 shall not be construed to require the Administrative
Agent or any Lender to make available its Tax returns (or any other information relating to its Taxes which it deems
confidential) to the relevant Loan Party or any other Person.
(i) Survival. Each party’s obligations under this Section 2.17 shall survive the resignation or replacement
of the Administrative Agent or any assignment of rights by, or the replacement of, any Lender, the termination of the Commitments
and the repayment, satisfaction or discharge of all obligations under any Loan Document.
Section 2.18.
Payments Generally; Allocation of Proceeds; Sharing of Payments.
(a) Unless otherwise specified, the Borrower shall make each payment required to be made by it hereunder (whether of principal,
interest or fees or of amounts payable under Section 2.15, 2.16 or 2.17, or otherwise) prior to the time expressed
hereunder or under such Loan Document (or, if no time is expressly required, by 2:00 p.m.) on the date when due, in immediately
available funds, without set-off (except as otherwise provided in Section 2.17) or counterclaim. Any amounts received after
such time on any date may, in the discretion of the Administrative Agent, be deemed to have been received on the next succeeding
Business Day and any applicable interest or fee shall continue to accrue until deemed received. If any payment to be made by any
Borrower shall come due on a day other than a Business Day, payment shall be made on the next following Business Day, and such
extension of time shall be reflected in computing interest or fees, as the case may be. All such payments shall be made to the
Administrative Agent to the applicable account designated to the Borrower by the Administrative Agent, except that payments pursuant
to Sections 2.15, 2.16 or 2.17 and 9.03 shall be made directly to the Persons entitled thereto. The
Administrative Agent shall distribute any such payments received by it for the account of any other Person to the appropriate recipient
promptly following receipt thereof. Each Lender agrees that in computing such Lender’s portion of any Borrowing to be made
hereunder, the Administrative Agent may, in its discretion, round such Lender’s percentage of such Borrowing to the next
higher or lower whole dollar amount. All payments (including accrued interest) hereunder shall be made in Dollars. Any payment
required to be made by the Administrative Agent hereunder shall be deemed to have been made by the time required if the Administrative
Agent shall, at or before such time, have taken the necessary steps to make such payment in accordance with the regulations or
operating procedures of the clearing or settlement system used by the Administrative Agent to make such payment.
(b) Subject
in all respects to the provisions of the Intercreditor Agreements (and any other applicable Acceptable Intercreditor
Agreement), all proceeds of Collateral received by the Administrative Agent at any time when an Event of Default exists and
all or any portion of the Loans have been accelerated hereunder pursuant to Section 7.01 or otherwise received in
connection with any foreclosure on or other exercise of remedies with respect to the Collateral pursuant to the Collateral
Documents shall, upon election by the Administrative Agent or at the direction of the Required Lenders, be applied first,
to the payment of all costs and expenses then due incurred by the Administrative Agent in connection with any collection,
sale or realization on Collateral or otherwise in connection with this Agreement, any other Loan Document or any of the
Secured Obligations, including all court costs and the fees and expenses of agents and legal counsel, the repayment of all
advances made by the Administrative Agent hereunder or under any other Loan Document on behalf of any Loan Party and any
other costs or expenses incurred in connection with the exercise of any right or remedy hereunder or under any other Loan
Document, second, on a pro rata basis, to pay any fees, indemnities or expense reimbursements then due to the
Administrative Agent (other than those covered in clause first above) from the Borrower constituting Secured Obligations, third,
on a pro rata basis in accordance with the amounts of the Secured Obligations (other than any Secured Obligations
incurred after the date hereof that are either junior in right of payment or are secured by a Lien that is junior to the
Liens securing the First Priority Secured Obligations) (other than contingent indemnification obligations for which no claim
has yet been made) owed to the Secured Parties on the date of any such distribution, to the payment in full of such Secured
Obligations, fourth, on a pro rata basis in accordance with the amounts of all other Secured Obligations (other
than contingent indemnification obligations for which no claim has yet been made) owed to the applicable Secured Parties on
the date of any such distribution, to the payment in full of such Secured Obligations and fifth, to, or at the
direction of, the Borrower or as a court of competent jurisdiction may otherwise direct.
(c) If any Lender obtains payment (whether voluntary, involuntary, through the exercise of any right of set-off or otherwise)
in respect of any principal of or interest on any of its Loans of any Class resulting in such Lender receiving payment of a greater
proportion of the aggregate amount of its Loans of such Class and accrued interest thereon than the proportion received by any
other Lender with Loans of such Class, then the Lender receiving such greater proportion shall purchase (for Cash at face value)
participations in the Loans of such Class at such time outstanding to the extent necessary so that the benefit of all such payments
shall be shared by the Lenders of such Class ratably in accordance with the aggregate amount of principal of and accrued interest
on their respective Loans of such Class; provided that (i) if any such participations are purchased and all or any portion
of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the
extent of such recovery, without interest, and (ii) the provisions of this paragraph shall not apply to (x) any payment made
by the Borrower pursuant to and in accordance with the express terms of this Agreement or (y) any payment obtained by any
Lender as consideration for the assignment of or sale of a participation in any of its Loans to any permitted assignee or participant,
including any payment made or deemed made in connection with Sections 2.22, 2.23 and 9.02(c). If any
Lender obtains payment (whether voluntary, involuntary, through exercise of any right of set-off or otherwise) in respect of any
principal of or interest on any of its Loans of any Class that is junior in right of payment to any other Class of Loans that has
not been repaid in full, such Lender shall promptly remit such payment to the Administrative Agent for application is accordance
with clause (b). The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable
law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrower rights
of set-off and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrower
in the amount of such participation. The Administrative Agent will keep records (which shall be conclusive and binding in the absence
of manifest error) of participations purchased under this Section 2.18(c) and will, in each case, notify the Lenders
following any such purchases or repayments. Each Lender that purchases a participation pursuant to this Section 2.18(c)
shall from and after such purchase have the right to give all notices, requests, demands, directions and other communications under
this Agreement with respect to the portion of the Obligations purchased to the same extent as though the purchasing Lender were
the original owner of the Obligations purchased.
(d) Unless the Administrative Agent has received notice from the Borrower prior to the date on which any payment is due to the
Administrative Agent for the account of any Lender hereunder that the Borrower will not make such payment, the Administrative Agent
may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption,
distribute to the applicable Lender the amount due. In such event, if the Borrower has not in fact made such payment, then each
Lender severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender with
interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment
to the Administrative Agent, at the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent
in accordance with banking industry rules on interbank compensation.
(e) If
any Lender fails to make any payment required to be made by it pursuant to Section 2.07(b) or Section 2.18(d), then
the Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof), apply any amounts thereafter
received by the Administrative Agent for the account of such Lender to satisfy such Lender’s obligations under such Sections
until all such unsatisfied obligations are fully paid.
Section 2.19.
Mitigation Obligations; Replacement of Lenders.
(a) If any Lender requests compensation under Section 2.15 or such Lender determines it can no longer make or maintain
LIBO Rate Loans pursuant to Section 2.20, or the Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.17, then such Lender shall use reasonable efforts
to designate a different lending office for funding or booking its Loans hereunder, or to assign its rights and obligations hereunder
to another of its offices, branches or affiliates, if, in the reasonable judgment of such Lender, such designation or assignment
(i) would eliminate or reduce amounts payable pursuant to Section 2.15 or 2.17, as applicable, in the future or mitigate
the impact of Section 2.20, as the case may be, and (ii) would not subject such Lender to any material unreimbursed
out-of-pocket cost or expense and would not otherwise be disadvantageous to such Lender in any material respect. The Borrower hereby
agrees to pay all reasonable out-of-pocket costs and expenses incurred by any Lender in connection with any such designation or
assignment.
(b) If
(i) any Lender requests compensation under Section 2.15 or such Lender determines it can no longer make or maintain
LIBO Rate Loans pursuant to Section 2.20, (ii) the Borrower is required to pay any additional amount to any Lender or
any Governmental Authority for the account of any Lender pursuant to Section 2.17, (iii) any Lender is a
Defaulting Lender or (iv) in connection with any proposed amendment, waiver or consent requiring the consent of
“each Lender” or “each Lender directly affected thereby” (or any other Class or group of Lenders
other than the Required Lenders) with respect to which Required Lender consent (or the consent of Lenders holding loans or
commitments of such Class or lesser group representing more than 50% of the sum of the total loans and unused commitments of
such Class or lesser group at such time) has been obtained, as applicable, any Lender is a non-consenting Lender (each such
Lender described in this clause (iv), a “Non-Consenting Lender”), then the Borrower may, at its
sole expense and effort, upon notice to such Lender and the Administrative Agent, (x) terminate the applicable
Commitments and/or Additional Commitments of such Lender, and repay all Obligations of the Borrower owing to such Lender
relating to the applicable Loans and participations held by such Lender as of such termination date or (y) replace such
Lender by requiring such Lender to assign and delegate (and such Lender shall be obligated to assign and delegate), without
recourse (in accordance with and subject to the restrictions contained in Section 9.05), all of its interests,
rights and obligations under this Agreement to an Eligible Assignee that shall assume such obligations (which Eligible
Assignee may be another Lender, if any Lender accepts such assignment); provided that (A) such Lender shall have
received payment of an amount equal to the outstanding principal amount of its Loans, in each case of such Class of Loans,
Commitments and/or Additional Commitments, accrued interest thereon, accrued fees and all other amounts payable to it under
any Loan Document with respect to such Class of Loans, Commitments and/or Additional Commitments, (B) in the case of any
assignment resulting from a claim for compensation under Section 2.15 or payments required to be made pursuant to Section
2.17, such assignment will result in a reduction in such compensation or payments and (C) such assignment does not
conflict with applicable law. No Lender (other than a Defaulting Lender) shall be required to make any such assignment and
delegation, and the Borrower may not repay the Obligations of such Lender or terminate its Commitments or Additional
Commitments, if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower
to require such assignment and delegation cease to apply. Each Lender agrees that if it is replaced pursuant to this Section
2.19, it shall execute and deliver to the Administrative Agent an Assignment and Assumption to evidence such sale and
purchase and shall deliver to the Administrative Agent any Promissory Note (if the assigning Lender’s Loans are
evidenced by one or more Promissory Notes) subject to such Assignment and Assumption (provided that the failure of any
Lender replaced pursuant to this Section 2.19 to execute an Assignment and Assumption or deliver any such Promissory
Note shall not render such sale and purchase (and the corresponding assignment) invalid), such assignment shall be recorded
in the Register, any such Promissory Note shall be deemed cancelled. Each Lender hereby irrevocably appoints the
Administrative Agent (such appointment being coupled with an interest) as such Lender’s attorney-in-fact, with full
authority in the place and stead of such Lender and in the name of such Lender, from time to time in the Administrative
Agent’s discretion, with prior written notice to such Lender, to take any action and to execute any such Assignment and
Assumption or other instrument that the Administrative Agent may deem reasonably necessary to carry out the provisions of
this clause (b). To the extent that any Lender is replaced pursuant to Section 2.19(b)(iv) in connection with a
Repricing Transaction requiring payment of a fee pursuant to Section 2.12(c), the Borrower shall pay to each Lender
being replaced as a result of such Repricing Transaction the fee set forth in Section 2.12(c).
Section 2.20. Illegality. If any Lender reasonably determines that
any Change in Law has made it unlawful, or that any Governmental Authority has asserted after the Closing Date that it is unlawful,
for such Lender or its applicable lending office to make, maintain or fund Loans whose interest is determined by reference to the
Published LIBO Rate, or to determine or charge interest rates based upon the Published LIBO Rate, or any Governmental Authority
has imposed material restrictions on the authority of such Lender to purchase or sell, or to take deposits of Dollars in the applicable
interbank market, then, on notice thereof by such Lender to the Borrower through the Administrative Agent, (i) any obligation of
such Lender to make or continue LIBO Rate Loans in Dollars or to convert ABR Loans to LIBO Rate Loans shall be suspended and (ii)
if such notice asserts the illegality of such Lender making or maintaining ABR Loans the interest rate on which is determined by
reference to the Published LIBO Rate component of the Alternate Base Rate, the interest rate on which ABR Loans of such Lender,
shall, if necessary to avoid such illegality, be determined by the Administrative Agent without reference to the Published LIBO
Rate component of the Alternate Base Rate, in each case until such Lender notifies the Administrative Agent and the Borrower that
the circumstances giving rise to such determination no longer exist (which notice such Lender agrees to give promptly). Upon
receipt of such notice, (x) the Borrower shall, upon demand from such Lender (with a copy to the Administrative Agent), prepay
or convert all of such Lender’s LIBO Rate Loans to ABR Loans (the interest rate on which ABR Loans of such Lender shall,
if necessary to avoid such illegality, be determined by the Administrative Agent without reference to the Published LIBO Rate component
of the Alternate Base Rate) either on the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain
such LIBO Rate Loans to such day, or immediately, if such Lender may not lawfully continue to maintain such LIBO Rate Loans (in
which case the Borrower shall not be required to make payments pursuant to Section 2.16 in connection with such payment)
and (y) if such notice asserts the illegality of such Lender determining or charging interest rates based upon the Published
LIBO Rate, the Administrative Agent shall during the period of such suspension compute the Alternate Base Rate applicable to such
Lender without reference to the Published LIBO Rate component thereof until the Administrative Agent is advised in writing by such
Lender that it is no longer illegal for such Lender to determine or charge interest rates based upon the Published LIBO Rate.
Upon any such prepayment or conversion, the Borrower shall also pay accrued interest on the amount so prepaid or converted.
Each Lender agrees to designate a different lending office if such designation will avoid the need for such notice and will not,
in the determination of such Lender, otherwise be materially disadvantageous to such Lender.
Section 2.21. Defaulting Lenders. Notwithstanding any provision
of this Agreement to the contrary, if any Lender becomes a Defaulting Lender, then the following provisions shall apply for so
long as such Lender is a Defaulting Lender:
(a) The
Commitments of such Defaulting Lender shall not be included in determining whether all Lenders, each affected Lender, the
Required Lenders or such other number of Lenders as may be required hereby or under any other Loan Document have taken or may
take any action hereunder (including any consent to any waiver, amendment or modification pursuant to Section 9.02); provided
that any waiver, amendment or modification requiring the consent of all Lenders or each affected Lender which affects such
Defaulting Lender disproportionately and adversely relative to other affected Lenders shall require the consent of such
Defaulting Lender.
(b) Any
payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of any Defaulting Lender
(whether voluntary or mandatory, at maturity, pursuant to Section 2.11, Section 2.15, Section 2.16, Section
2.17, Section 2.18, Article 7, Section 9.05 or otherwise, and including any amounts made available
to the Administrative Agent by such Defaulting Lender pursuant to Section 9.09), shall be applied at such time or times
as may be determined by the Administrative Agent and, where relevant, the Borrower, as follows: first, to the payment of
any amounts owing by such Defaulting Lender to the Administrative Agent hereunder; second, so long as no Default or Event
of Default exists as the Borrower may request, to the funding of any Loan in respect of which such Defaulting Lender has failed
to fund its portion thereof as required by this Agreement; third, as the Administrative Agent or the Borrower may elect,
to be held in a deposit account and released in order to satisfy obligations of such Defaulting Lender to fund Loans that such
Defaulting Lender has committed to fund (if any) under this Agreement; fourth, to the payment of any amounts owing to the
non-Defaulting Lenders as a result of any judgment of a court of competent jurisdiction obtained by any non-Defaulting Lender against
such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; fifth,
to the payment of any amounts owing to the Borrower as a result of any judgment of a court of competent jurisdiction obtained by
the Borrower against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this
Agreement; and sixth, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction. Any payments,
prepayments or other amounts paid or payable to any Defaulting Lender that are applied (or held) to pay amounts owed by any Defaulting
Lender or to post Cash collateral pursuant to this Section 2.21(b) shall be deemed paid to and redirected by such Defaulting
Lender, and each Lender irrevocably consents hereto.
Section 2.22. Incremental Credit Extensions.
(a) The Borrower may, at any time, on one or more occasions deliver a written request to the Administrative Agent (whereupon
the Administrative Agent shall promptly deliver a copy of such request to each of the Lenders) to (i) add one or more new
Classes of Term Facilities and/or increase the principal amount of the Term Loans under any Term Facility by requesting new term
loan commitments to be added to such Term Loans (any such new Class or increase, an “Incremental Term Facility”
and any loans made pursuant to an Incremental Term Facility, “Incremental Term Loans”) and/or (ii) add one or
more new Classes of incremental revolving “cash-flow” facilities and/or increase the aggregate amount of Commitments
of any existing Class of Incremental Revolving Commitments (any such new Class or increase, an “Incremental Revolving
Facility” and, together with any Incremental Term Facility, “Incremental Facilities”; and the loans
thereunder, “Incremental Revolving Loans” and, together with any Incremental Term Loans, “Incremental
Loans”) in an aggregate principal amount not to exceed the Incremental Cap; provided that:
(i) no Incremental Commitment may be less than $5,000,000;
(ii) except as separately agreed from time to time between the Borrower and any Lender, no Lender shall be obligated to provide
any Incremental Commitment, and the determination to provide such commitments shall be within the sole and absolute discretion
of such Lender;
(iii)
no Incremental Facility or Incremental Loan (or the creation, provision or implementation thereof) shall require the approval
of any existing Lender (other than in its capacity, if any, as a Lender providing all or part of any Incremental Commitment or
Incremental Loan), the Administrative Agent (unless its rights and interests are adversely affected in any material respect) or
any other agent or arranger;
(iv)
an Incremental Revolving Facility may have the benefit of a financial maintenance covenant (which shall not be for the benefit
of any Term Facility under this Agreement);
(v)
the interest rate and any fees applicable to any Incremental Facility or Incremental Loans will be determined by the Borrower
and the lenders providing such Incremental Facility or Incremental Loans; provided, that solely with respect to any Incremental
Term Facility or Incremental Term Loans which are pari passu with the Initial Term Loans in right of payment and with respect
to security, the All-In Yield will not be more than 0.50% higher than the corresponding All-In Yield applicable to the Initial
Term Loans unless the All-In Yield with respect to the Initial Term Loans is adjusted to be equal to the All-In Yield with respect
to the relevant Incremental Term Facility or Incremental Term Loans minus 0.50%; provided, that this clause (v) shall
not apply to any Incremental Term Loans that (y) mature at least two (2) years after the Term Loan Maturity Date or (z) does not
exceed an aggregate principal amount, together with all other Incremental Term Facilities then outstanding, of $90,000,000;
(vi)
the final maturity date with respect to any Incremental Term Loans shall be no earlier than the Latest Term Loan Maturity
Date at the time of the incurrence thereof;
(vii)
the Weighted Average Life to Maturity of any Incremental Term Facility shall be no shorter than the remaining Weighted Average
Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayments thereof) except as may be required
to achieve fungibility with any existing Term Facility to the extent intended to be fungible;
(viii)
(A) any Incremental Term Facility may rank pari passu with or junior to any then-existing Class of Term Loans
in right of payment and may be secured by the Collateral pari passu with or junior to any then-existing Class of Term Loans
with respect to security or be unsecured (and to the extent the relevant Incremental Facility is pari passu with or subordinated
to the Term Loans in right of security with respect to the Collateral, shall be subject to the Intercreditor Agreements (and/or
any other applicable Acceptable Intercreditor Agreement), it being understood that any terms of subordination in right of payment
of any Incremental Facility to any Indebtedness may be determined solely by the Borrower in its sole discretion) and (B) no Incremental
Facility may be (x) guaranteed by any Person which is not a Loan Party or (y) secured by any assets other than the Collateral;
(ix) (A)
any prepayment (other than any scheduled amortization payment) of Incremental Term Loans that are pari passu with any
then-existing Term Loans in right of payment and security (1) shall with respect to mandatory prepayments, be made on a pro
rata basis or less than pro rata basis (but not greater than a pro rata basis) with such existing Term
Loans and (2) may, with respect to voluntary prepayments, share on a pro rata basis, greater than pro rata
basis or less than pro rata basis with the Initial Term Loans, as determined by the Borrower, and (B) any Incremental
Term Loans that are subordinated to any then-existing Term Loans in right of payment or security shall not receive any
mandatory prepayments other than Declined Proceeds prior to the repayment in full of the existing Term Loans (and all other
then-existing Loans that are First Priority Secured Obligations requiring ratable prepayment), except, in each case that the
Borrower and the lenders providing the relevant Incremental Term Loans shall be permitted, in their sole discretion, to elect
to prepay or receive, as applicable, any prepayments on a less than pro rata basis (but not on a greater than pro
rata basis);
(x)
except as otherwise agreed by the Lenders providing the relevant Incremental Facility in connection with any acquisition,
investments and repayments, repurchases and redemptions of indebtedness not prohibited by this Agreement, no Event of Default shall
exist immediately prior to or after giving effect to such Incremental Facility;
(xi)
except as otherwise required or permitted in this Section 2.22, all other terms of any Incremental Term Facility,
if not consistent with the terms of the Initial Term Loans, shall be reasonably satisfactory to the Borrower and the Administrative
Agent (it being understood that any terms which are not consistent with the terms of the Initial Term Loans and are applicable
only after the then-existing Latest Term Loan Maturity Date are deemed to be reasonably acceptable to the Administrative Agent);
(xii)
the proceeds of any Incremental Facility may be used for working capital, general corporate purposes and any other purpose
not prohibited by this Agreement;
(xiii)
on the date of the making of any Incremental Term Loans that will be added to any existing Class of Term Loans, and notwithstanding
anything to the contrary set forth in Sections 2.08 or 2.13, such Incremental Term Loans shall be added to (and constitute
a part of) each borrowing of outstanding Term Loans of such Class, as applicable, of the same type with the same Interest Period
of the respective Class on a pro rata basis (based on the relative sizes of the various outstanding Borrowings), so that
each Term Lender providing such Incremental Term Loans will participate proportionately in each then outstanding borrowing of the
applicable Term Loans of the same type with the same Interest Period of the respective Class;
(xiv)
at no time shall there be more than three separate Maturity Dates in effect with respect to Incremental Revolving Facilities
and any other Additional Revolving Facilities at any time;
(xv)
Incremental Facilities shall be permitted regardless of the amount available under the Incremental Cap and shall not constitute
a utilization of any component of the Incremental Cap if any such Incremental Facility serves to effectively replace or extend
the maturity of or replaces any Loans or Commitments under (including as may have been terminated under Section 2.19) any
then existing Credit Facility or any Replacement Notes, in each case, without increasing the principal amount thereof except with
respect to any related premium, penalties, fees and expenses; provided, the amount of any Loans and Commitments so extended
or replaced shall not increase the Incremental Cap; and
(xvi)
the Borrower may select, in its sole discretion, that any Incremental Facility be issued, incurred and/or established under
one or more of any available components of the Incremental Cap (as provided in Section 1.10) and if no selection shall have
been made, such Incremental Facility shall be deemed to have been incurred in reliance on first, clause (c) of the
definition of “Incremental Cap” up to the maximum amount permitted thereunder, second, to the extent applicable,
clause (b) of the definition of “Incremental Cap”, and thereafter, to the Shared Fixed Incremental Amount.
(b) Incremental
Commitments may be provided by any existing Lender, or by any other lender (other than any Disqualified Institution) who
would be permitted to become a Lender (including any required consents) under Section 9.05 (any such other lender
being called an “Additional Lender”); provided that in the case of any Incremental Revolving
Facility, the Administrative Agent and the Borrower shall have consented (such consent not to be unreasonably withheld or
delayed) to the relevant Additional Lender’s provision of Incremental Commitments; provided, further,
that any Additional Lender that is an Affiliated Lender shall be subject to the provisions of Section 9.05(h), mutatis
mutandis, to the same extent as if Incremental Commitments and related Obligations had been obtained by such Lender by
way of assignment.
(c)
Each Lender or Additional Lender providing a portion of any Incremental Commitment shall execute and deliver to the Administrative
Agent and the Borrower all such documentation (including an amendment to this Agreement or any other Loan Document) as may be reasonably
required by the Administrative Agent to evidence and effectuate such Incremental Commitment. On the effective date of such Incremental
Commitment, each Additional Lender shall become a Lender for all purposes in connection with this Agreement.
(d)
As a condition precedent to the effectiveness of any Incremental Facility or the making of any Incremental Loans, (i) upon
its reasonable request, the Administrative Agent shall have received customary written opinions of counsel, as well as such reaffirmation
agreements, supplements and/or amendments as it shall reasonably require, (ii) the Administrative Agent shall have received,
from each Additional Lender, an administrative questionnaire, in the form provided to such Additional Lender by the Administrative
Agent (the “Administrative Questionnaire”) and such other documents as it shall reasonably and customarily require
from such Additional Lender, (iii) the Lenders shall have received all fees required to be paid in respect of such Incremental
Facility or Incremental Loans and (iv) the Administrative Agent shall have received a certificate of the Borrower signed by
a Responsible Officer thereof:
(A)
certifying and attaching a copy of the resolutions adopted by the governing body of the Borrower approving or consenting
to such Incremental Facility or Incremental Loans, and
(B)
to the extent applicable, certifying that the condition set forth in clause (a)(x) above has been satisfied.
(e)
The Lenders hereby irrevocably authorize such amendments to this Agreement and the other Loan Documents as may be necessary
in order to establish new Classes or sub-Classes in respect of Loans or commitments increased or extended pursuant to this Section
2.22 and authorize the Administrative Agent and the Borrower to enter into such technical amendments (and, in the case of any
Incremental Revolving Facility, such amendments to implement and provide for revolving credit facilities under this Agreement,
including incorporating customary terms, conditions and requirements for revolving credit facilities (including letter of credit
and swingline loan mechanics) reasonably satisfactory to the Administrative Agent and the Borrower (including amendments and restatements))
as may be necessary or appropriate in the reasonable opinion of the Administrative Agent and the Borrower in connection with the
establishment of such new Classes or sub-Classes, in each case on terms consistent with this Section 2.22.
(f)
To the extent the provisions of clause (a)(xiii) above require that Term Lenders making new Incremental Term Loans
add such Incremental Term Loans to the then outstanding borrowings of LIBO Rate Loans of the respective Class of Initial Term Loans
or Additional Term Loans, as applicable, it is acknowledged that the effect thereof may result in such new Incremental Term Loans
having short Interest Periods (i.e., an Interest Period that began during an Interest Period then applicable to outstanding LIBO
Rate Loans of the respective Class and which will end on the last day of such Interest Period).
(g)
Notwithstanding anything to the contrary in this Section 2.22 or in any other provision of any Loan Document, if
the proceeds of any Incremental Facility are intended to be applied to finance an acquisition and the Lenders or Additional Lenders
providing such Incremental Facility so agree, the availability thereof shall be subject to customary “SunGard” or “certain
funds” conditionality.
(h)
This Section 2.22 shall supersede any provision in Section 2.18 or 9.02 to the contrary and shall,
to extent applicable, be subject in all respects to Section 1.10.
Section 2.23.
Extensions of Loans and Additional Revolving Commitments.
(a)
Notwithstanding anything to the contrary in this Agreement, pursuant to one or more offers (each, an “Extension
Offer”) made from time to time by the Borrower to all Lenders holding Loans or Commitments of any Class or Classes (as
determined by the Borrower), in each case on a pro rata basis (based on the aggregate outstanding principal amount of the
respective Loans or Commitments with respect to each such Class) and on the same terms to each such Lender, the Borrower is hereby
permitted from time to time to consummate transactions with any individual Lender who accepts the terms contained in any such Extension
Offer to extend the Maturity Date of such Lender’s Loans and/or commitments and otherwise modify the terms of such Loans
and/or commitments pursuant to the terms of the relevant Extension Offer (including by increasing the interest rate or fees payable
in respect of such Loans and/or commitments (and related outstandings) and/or modifying the amortization schedule in respect of
such Loans) (each, an “Extension”; any Extended Term Loans shall constitute a separate Class of Term Loans from
the Class of Term Loans from which they were converted), so long as the following terms are satisfied:
(i)
no Default under Sections 7.01(a), (f) or (g) or Event of Default shall exist at the time the notice
in respect of an Extension Offer is delivered to the applicable Lenders, and no Default under Sections 7.01(a), (f)
or (g) or Event of Default shall exist immediately prior to or after giving effect to the effectiveness of any Extension;
(ii) except
as to (x) interest rates, fees and final maturity (which shall, subject to clause (iv) below, be determined
by the Borrower and any Lender who agrees to an Extension and set forth in the relevant Extension Offer) and (y) any
covenants or other provisions applicable only to periods after the Latest Revolving Loan Maturity Date (in each case, as of
the date of such Extension), the commitment of any Revolving Lender that agrees to an Extension (an “Extended
Revolving Credit Commitment” and the Loans thereunder, “Extended Revolving Loans”), and the
related outstandings, shall be a revolving commitment (or related outstandings, as the case may be) with the same terms (or
terms not less favorable to existing Revolving Lenders) as the original revolving commitments (and related outstandings)
provided hereunder; provided that (x) to the extent any non-extended portion of any Additional Revolving Facility
then exists, (1) the borrowing and repayment (except for (A) payments of interest and fees at different rates on
such revolving facilities (and related outstandings), (B) repayments required upon the Maturity Date of such revolving
facilities and (C) repayments made in connection with any permanent repayment and termination of commitments (subject to clause (3)
below)) of Extended Revolving Loans after the effective date of such Extended Revolving Credit Commitments shall be made on a pro
rata basis with such portion of such relevant Additional Revolving Facility, (2) all swingline loans and letters of
credit made or issued, as applicable, under any Extended Revolving Credit Commitment shall be participated on a pro
rata basis by all Revolving Lenders and (3) the permanent repayment of Loans with respect to, and termination of
commitments under, any such Extended Revolving Credit Commitment after the effective date of such Extended Revolving Credit
Commitments shall be made on a pro rata basis with such portion of any Additional Revolving Facility, except that the
Borrower shall be permitted to permanently repay and terminate commitments of any such revolving facility on a greater than pro
rata basis as compared with any other revolving facility with a later Maturity Date than such revolving facility and (y)
at no time shall there be more than three separate Classes of revolving commitments hereunder (including Incremental
Revolving Commitments, Extended Revolving Credit Commitments and Replacement Revolving Facilities);
(iii)
except as to (x) interest rates, fees, amortization, final maturity date, premiums, required prepayment dates and participation
in prepayments (which shall, subject to immediately succeeding clauses (iv)(x), (v) and (vi), be determined
by the Borrower and any Lender who agrees to an Extension and set forth in the relevant Extension Offer) and (y) any covenants
or other provisions applicable only to periods after the Latest Term Loan Maturity Date (in each case, as of the date of such Extension),
the Term Loans of any Lender extended pursuant to any Extension (any such extended Term Loans, the “Extended Term Loans”)
shall have the same terms as the Class of Term Loans subject to the relevant Extension Offer; provided, however,
that with respect to representations and warranties, affirmative and negative covenants and events of default that are applicable
to any such Class of Extended Term Loans, such provisions may be more favorable to the lenders of the applicable Class of Extended
Term Loans than those originally applicable to the Class of Term Loans subject to the relevant Extension Offer, so long as (and
only so long as) such provisions also expressly apply to (and for the benefit of) the Class of Term Loans subject to the relevant
Extension Offer and each other Class of Term Loans hereunder;
(iv)
(x) the final maturity date of any Extended Term Loans shall be no earlier than the then applicable Latest Term Loan Maturity
Date at the time of extension and (y) no Extended Revolving Credit Commitments or Extended Revolving Loans shall have a final maturity
date earlier than (or require commitment reductions prior to) the then applicable Latest Revolving Loan Maturity Date;
(v)
the Weighted Average Life to Maturity of any Extended Term Loans shall be no shorter than the remaining Weighted Average
Life to Maturity of the Term Loans or any other Extended Term Loans extended thereby;
(vi)
any Extended Term Loans may participate, with respect to mandatory prepayments or repayments (but, for purposes of clarity,
not scheduled amortization payments) on a pro rata basis or a less than pro rata basis (but not greater than a pro
rata basis) and with respect to voluntary prepayments or repayments on a pro rata basis, a less than pro rata
basis or a greater than a pro rata basis in respect of the Initial Term Loans (and any Additional Term Loans then subject
to ratable repayment requirements), in each case as specified in the respective Extension Offer;
(vii)
if the aggregate principal amount of Loans or commitments, as the case may be, in respect of which Lenders shall have accepted
the relevant Extension Offer exceeds the maximum aggregate principal amount of Loans or commitments, as the case may be, offered
to be extended by the Borrower pursuant to such Extension Offer, then the Loans or commitments, as the case may be, of such Lenders
shall be extended ratably up to such maximum amount based on the respective principal amounts (but not to exceed actual holdings
of record) with respect to which such Lenders have accepted such Extension Offer;
(viii)
each Extension shall be in a minimum amount of $5,000,000;
(ix)
any applicable Minimum Extension Condition shall be satisfied or waived by the Borrower;
(x)
all documentation in respect of such Extension shall be consistent with the foregoing; and
(xi)
no Extension of any Additional Revolving Facility shall be effective as to the obligations of any swingline lender to make
any swingline loans or any letter of credit issuer with respect to letters of credit without the consent of such swingline lender
or such letter of credit issuer (such consents not to be unreasonably withheld or delayed).
(b)
With respect to any Extension consummated pursuant to this Section 2.23, (i) no such Extension shall constitute
a voluntary or mandatory prepayment for purposes of Section 2.11, (ii) the scheduled amortization payments (in
so far as such schedule affects payments due to Lenders participating in the relevant Class) set forth in Section 2.10
shall be adjusted to give effect to such Extension of the relevant Class and (iii) except as set forth in clause (a)(viii)
above, no Extension Offer is required to be in any minimum amount or any minimum increment; provided that the Borrower may,
at its election, specify as a condition (a “Minimum Extension Condition”) to consummating such Extension that
a minimum amount (to be determined and specified in the relevant Extension Offer in the Borrower’s sole discretion and which
may be waived by the Borrower) of Loans or commitments (as applicable) of any or all applicable Classes be tendered. The Administrative
Agent and the Lenders hereby consent to the transactions contemplated by this Section 2.23 (including, for the avoidance
of doubt, any payment of any interest, fees or premium in respect of any Class of Extended Term Loans and/or Extended Revolving
Credit Commitments on such terms as may be set forth in the relevant Extension Offer) and hereby waive the requirements of any
provision of this Agreement (including Section 2.10, 2.11 or 2.18) or any other Loan Document that may
otherwise prohibit any Extension or any other transaction contemplated by this Section 2.23.
(c)
No consent of any Lender or the Administrative Agent shall be required to effectuate any Extension, other than (A) the consent
of each Lender agreeing to such Extension with respect to one or more of its Loans and/or commitments under any Class (or a portion
thereof), and (B) with respect to any Extension of any Additional Revolving Facility, the consent of each applicable letter of
credit issuer to the extent the commitment to provide letters of credit is to be extended. All Extended Term Loans and Extended
Revolving Credit Commitments and all obligations in respect thereof shall constitute Secured Obligations under this Agreement and
the other Loan Documents that are secured by the Collateral and guaranteed on a pari passu basis with all other applicable
Secured Obligations under this Agreement and the other Loan Documents. The Lenders hereby irrevocably authorize the Administrative
Agent to enter into such amendments to this Agreement and the other Loan Documents with the Borrower as may be necessary in order
to establish new Classes or sub-Classes in respect of Loans or commitments so extended and such technical amendments as may be
necessary or appropriate in the reasonable opinion of the Administrative Agent and the Borrower in connection with the establishment
of such new Classes or sub-Classes, in each case on terms consistent with this Section 2.23.
(d)
In connection with any Extension, the Borrower shall provide the Administrative Agent at least ten Business Days’
(or such shorter period as may be agreed by the Administrative Agent) prior written notice thereof, and shall agree to such procedures
(including regarding timing, rounding and other adjustments and to ensure reasonable administrative management of the credit facilities
hereunder after such Extension), if any, as may be established by, or acceptable to, the Administrative Agent, in each case acting
reasonably to accomplish the purposes of this Section 2.23.
ARTICLE
III
REPRESENTATIONS AND WARRANTIES
On the dates and to the
extent required pursuant to Section 4.01, each of (i) in the case of Holdings, solely with respect to Sections 3.01,
3.02, 3.03, 3.07, 3.08, 3.09, 3.13, 3.14, 3.16 and 3.17, and (ii)
the Borrower hereby represent and warrant to the Lenders that:
Section 3.01.
Organization; Powers. Each of the Loan Parties and
each of its Restricted Subsidiaries (a) is (i) duly organized and validly existing and (ii) in good standing (to the extent
such concept exists in the relevant jurisdiction) under the laws of its jurisdiction of organization, (b) has all requisite
organizational power and authority to own its property and assets and to carry on its business as now conducted and (c) is
qualified to do business in, and is in good standing (to the extent such concept exists in the relevant jurisdiction) in, every
jurisdiction where its ownership, lease or operation of properties or conduct of its business requires such qualification; except,
in each case referred to in this Section 3.01 (other than clause (a)(i) with respect to the Borrower and clause (b)
with respect to the Loan Parties) where the failure to do so, individually or in the aggregate, would not reasonably be expected
to result in a Material Adverse Effect.
Section 3.02.
Authorization; Enforceability. The execution, delivery
and performance of each of the Loan Documents are within each applicable Loan Party’s corporate or other organizational power
and have been duly authorized by all necessary corporate or other organizational action of such Loan Party. Each Loan Document
to which any Loan Party is a party has been duly executed and delivered by such Loan Party and is a legal, valid and binding obligation
of such Loan Party, enforceable in accordance with its terms, subject to the Legal Reservations.
Section 3.03.
Governmental Approvals; No Conflicts. The execution
and delivery of the Loan Documents by each Loan Party party thereto and the performance by such Loan Party thereof (a) do
not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except
(i) such as have been obtained or made and are in full force and effect, (ii) in connection with the Perfection Requirements
and (iii) such consents, approvals, registrations, filings, or other actions the failure to obtain or make which would not
be reasonably expected to have a Material Adverse Effect, (b) will not violate any (i) of such Loan Party’s Organizational
Documents or (ii) Requirements of Law applicable to such Loan Party which violation, in the case of this clause (b)(ii),
would reasonably be expected to have a Material Adverse Effect and (c) will not violate or result in a default under (i) the
ABL Credit Agreement, (ii) the Second Lien Credit Agreement or (iii) any other material Contractual Obligation to which such Loan
Party is a party which violation, in the case of this clause (c), would reasonably be expected to result in a Material Adverse
Effect.
Section 3.04.
Financial Condition; No Material Adverse Effect.
(a)
The financial statements most recently provided pursuant to Section 5.01(a) or (b), as applicable, present
fairly, in all material respects, the financial position and results of operations and cash flows of the Borrower on a consolidated
basis as of such dates and for such periods in accordance with GAAP, (x) except as otherwise expressly noted therein, (y) subject,
in the case of financial statements provided pursuant to Section 5.01(a), to the absence of footnotes and normal year-end
adjustments and (z) except as may be necessary to reflect any differing entities and organizational structure prior to giving effect
to the Transactions.
(b)
Since the Closing Date, there have been no events, developments or circumstances that have had, or could reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.
Section 3.05.
Properties.
(a) As
of the Closing Date, Schedule 3.05 sets forth the address of each Real Estate Asset (or each set of such assets that
collectively comprise one operating property) that is owned in fee simple by any Loan Party.
(b)
The Borrower and each of its Restricted Subsidiaries have good and valid fee simple title to or rights to purchase, or valid
leasehold interests in, or easements or other limited property interests in, all of their respective Real Estate Assets and have
good title to their personal property and assets, in each case, except (i) for defects in title that do not materially interfere
with their ability to conduct their business as currently conducted or to utilize such properties and assets for their intended
purposes or (ii) where the failure to have such title would not reasonably be expected to have a Material Adverse Effect.
All such properties and assets are free and clear of Liens, other than Permitted Liens.
(c)
The Borrower and its Restricted Subsidiaries own or otherwise have a license or right to use all rights in Patents, Trademarks,
Copyrights and other rights in works of authorship (including all copyrights embodied in software) and all other intellectual property
rights (“IP Rights”) used to conduct the businesses of the Borrower and its Restricted Subsidiaries as presently
conducted without, to the knowledge of the Borrower, any infringement, dilution, or misappropriation or other violation of the
IP Rights of third parties, except to the extent such failure to own or license or have rights to use would not, or where such
infringement, misappropriation or violation would not reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.
Section 3.06.
Litigation and Environmental Matters.
(a)
There are no actions, suits or proceedings by or before any arbitrator or Governmental Authority pending against or, to
the knowledge of the Borrower, threatened in writing against or affecting the Loan Parties or any of their Restricted Subsidiaries
which would reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect.
(b)
Except for any matters that, individually or in the aggregate, would not reasonably be expected to result in a Material
Adverse Effect, (i) no Loan Party nor any of its Restricted Subsidiaries is subject to or has received notice of any Environmental
Claim or any Environmental Liability and knows of no basis for such Environmental Claim or Environmental Liability, and (ii) no
Loan Party nor any of its Restricted Subsidiaries has failed to comply with any Environmental Law or to obtain, maintain or comply
with any permit, license or other approval required under any Environmental Law.
(c)
Neither any Loan Party nor any of its Restricted Subsidiaries has treated, stored, transported or Released any Hazardous
Materials on, at or from any currently or formerly operated real estate or facility and no Hazardous Materials are otherwise present
at any currently owned or operated real estate or facility, in either case, in a manner that would reasonably be expected to have
a Material Adverse Effect.
Section 3.07. Compliance
with Laws. Each of Holdings, the Borrower and each of its Restricted Subsidiaries is in compliance with all
Requirements of Law applicable to it or its property, except, in each case where the failure to do so, individually or in the
aggregate, would not reasonably be expected to result in a Material Adverse Effect, it being understood and agreed that this Section
3.07 shall not apply to the Requirements of Law covered by Section 3.17.
Section 3.08.
Investment Company Status. No Loan Party is an “investment
company” as defined in, or is required to be registered under, the Investment Company Act of 1940.
Section 3.09.
Taxes. Each of Holdings, the Borrower and each of
its Restricted Subsidiaries has timely filed or caused to be filed all Tax returns and reports required to have been filed and
has paid or caused to be paid all Taxes required to have been paid by it that are due and payable, including in its capacity as
a withholding agent, except (a) Taxes (or any requirement to file Tax returns with respect thereto) that are being contested in
good faith by appropriate proceedings and for which Holdings, the Borrower or such Restricted Subsidiary, as applicable, has set
aside on its books adequate reserves in accordance with GAAP or (b) to the extent that the failure to file or pay, individually
or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect.
Section 3.10.
ERISA.
(a)
Each Plan is in compliance in form and operation with its terms and with ERISA and the Code and all other applicable laws
and regulations, except where any failure to comply would not reasonably be expected to result in a Material Adverse Effect.
(b)
No ERISA Event has occurred and is continuing or is reasonably expected to occur that, when taken together with all other
such ERISA Events for which liability is reasonably expected to occur, would reasonably be expected to result in a Material Adverse
Effect.
Section 3.11.
Disclosure.
(a)
As of the Closing Date, and with respect to information relating to the Company and its subsidiaries, to the knowledge of
the Initial Borrower, all written information (other than the Projections, other forward-looking information and information of
a general economic or industry-specific nature) concerning Holdings, the Borrower and its Restricted Subsidiaries and the Transactions
and that was prepared by or on behalf of Holdings or its subsidiaries or their respective representatives and made available to
any Lender or the Administrative Agent in connection with the Transactions on or before the Closing Date (the “Information”),
when taken as a whole, did not, when furnished, contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements contained therein not materially misleading in light of the circumstances under which
such statements are made (after giving effect to all supplements and updates thereto from time to time).
(b)
The Projections have been prepared in good faith based upon assumptions believed by the Borrower to be reasonable at the
time furnished (it being recognized that such Projections are not to be viewed as facts and are subject to significant uncertainties
and contingencies many of which are beyond the Borrower’s control, that no assurance can be given that any particular financial
projections (including the Projections) will be realized, that actual results may differ from projected results and that such differences
may be material).
Section 3.12. Solvency.
As of the Closing Date, immediately after the consummation of the Transactions to occur on the Closing Date and the
incurrence of Indebtedness and obligations on the Closing Date in connection with this Agreement, the Second Lien Credit
Agreement and the ABL Credit Agreement, (i) the sum of the debt (including contingent liabilities) of the Borrower and its
Restricted Subsidiaries, taken as a whole, does not exceed the fair value of the assets of the Borrower and its Restricted
Subsidiaries, taken as a whole; (ii) the present fair saleable value of the assets of the Borrower and its Restricted
Subsidiaries, taken as a whole, is not less than the amount that will be required to pay the probable liabilities of the
Borrower and its Restricted Subsidiaries, taken as a whole, on their debts as they become absolute and matured; (iii) the
capital of the Borrower and its Restricted Subsidiaries, taken as a whole, is not unreasonably small in relation to the
business of the Borrower and its Restricted Subsidiaries, taken as a whole, contemplated as of the Closing Date; and (iv) the
Borrower and its Restricted Subsidiaries, taken as a whole, do not intend to incur, or believe that they will incur, debts
(including current obligations and contingent liabilities) beyond their ability to pay such debts as they mature in the
ordinary course of business. For the purposes hereof, 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 liability meets the
criteria for accrual under Statement of Financial Accounting Standards No. 5).
Section 3.13.
Capitalization and Subsidiaries. Schedule 3.13
sets forth, in each case as of the Closing Date, (a) a correct and complete list of the name of each subsidiary of Holdings and
the ownership interest therein held by Holdings or its applicable subsidiary, and (b) the type of entity of each Loan Party and
each subsidiary of Holdings with respect to which a portion of such subsidiary’s equity is pledged by a Loan Party as Collateral.
Section 3.14.
Security Interest in Collateral. Subject to the terms
of the last paragraph of Section 4.01 and any limitations and exceptions set forth in any Loan Document, the Legal Reservations,
the Perfection Requirements, the provisions of this Agreement and the other relevant Loan Documents (including the Intercreditor
Agreements (and any other applicable Acceptable Intercreditor Agreement)) and/or any other applicable intercreditor arrangement,
the Collateral Documents create legal, valid and enforceable Liens on all of the Collateral in favor of the Administrative Agent,
for the benefit of itself and the other Secured Parties, and upon the satisfaction of the Perfection Requirements, such Liens constitute
perfected Liens (with the priority that such Liens are expressed to have under the relevant Collateral Documents, unless otherwise
permitted hereunder or under any Collateral Document) on the Collateral (to the extent such Liens are required to be perfected
under the terms of the Loan Documents) securing the Secured Obligations, in each case as and to the extent set forth therein.
Section 3.15.
Labor Disputes. Except as individually or in the
aggregate would not reasonably be expected to have a Material Adverse Effect or to the extent otherwise disclosed on Schedule
3.15 hereto: (a) there are no strikes, lockouts or slowdowns against the Borrower or any of its Restricted Subsidiaries
pending or, to the knowledge of the Borrower or any of its Restricted Subsidiaries, threatened by any union or labor organization
purporting to act as exclusive bargaining representative and (b) the hours worked by and payments made to employees of the
Borrower and its Restricted Subsidiaries have not been in violation of the Fair Labor Standards Act or any other applicable Federal,
state, local or foreign law dealing with such matters.
Section 3.16.
Federal Reserve Regulations. No part of the proceeds
of any Loan will be used, whether directly or indirectly, and whether immediately, incidentally or ultimately, for any purpose
that results in a violation of the provisions of Regulation T, U or X.
Section 3.17.
Economic and Trade Sanctions and Anti-Corruption Laws.
(a) (i) None
of Holdings, the Borrower nor any of its Restricted Subsidiaries nor, to the knowledge of the Borrower, any director,
officer, agent, employee or Affiliate of any of the foregoing is (A) a person on the list of “Specially Designated
Nationals and Blocked Persons” or (B) currently the subject of any U.S. sanctions administered by the Office of
Foreign Assets Control of the U.S. Treasury Department (“OFAC”) or the U.S. State Department
(collectively, “Sanctions”); and (ii) the Borrower will not directly or, to its knowledge,
indirectly, use the proceeds of the Loans or otherwise make available such proceeds to any Person, for the purpose of
financing activities of or with any Person or in any country or territory that, at the time of such financing, is the subject
of any Sanctions, except to the extent permissible for a Person required to comply with Sanctions.
(b)
To the extent applicable, each Loan Party is in compliance in all material respects with (i) each of the foreign assets
control regulations of the U.S. Treasury Department (31 CFR, Subtitle B, Chapter V), and any other enabling legislation
or executive order relating thereto, (ii) the USA PATRIOT Act and, to its knowledge, other anti-terrorism and anti-money laundering
laws, and (iii) the U.S. Foreign Corrupt Practices Act of 1977 (the “FCPA”).
(c)
No part of the proceeds of any Loan will be used, directly or, to the knowledge of the Borrower, indirectly, for any payments
to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone
else acting in an official capacity, in order to improperly obtain, retain or direct business or obtain any improper advantage,
in violation of the FCPA.
ARTICLE
IV
CONDITIONS
Section 4.01.
Closing Date. The obligations of any Lender to make
Loans shall not become effective until the date on which each of the following conditions is satisfied (or waived in accordance
with Section 9.02), subject in all respects to the last paragraph of this Section 4.01:
(a)
Credit Agreement and Loan Documents. The Administrative Agent (or its counsel) shall have received from the Borrower,
Holdings and each other Loan Party party thereto on the Closing Date: (i) a counterpart signed by each such Loan Party (or written
evidence reasonably satisfactory to the Administrative Agent (which may include a copy transmitted by facsimile or other electronic
method) that such party has signed a counterpart and, in the case of any Subsidiary Guarantors, may be delivered in escrow pending
the consummation of the Acquisition) of (A) this Agreement, (B) the Security Agreement, (C) any Intellectual Property Security
Agreement, (D) the Loan Guaranty, (E) the Intercreditor Agreements, and (F) any Promissory Note requested by a Lender at least
three Business Days prior to the Closing Date and (ii) a Borrowing Request pursuant to Section 2.03.
(b)
Legal Opinions. The Administrative Agent (or its counsel) shall have received a favorable customary written opinion
of (i) Ropes & Gray LLP, in its capacity as special counsel for Holdings and (ii) Lowenstein Sandler LLP, as local New Jersey
counsel for the Loan Parties organized under the laws of New Jersey, in each case, dated the Closing Date, addressed to the Administrative
Agent and the Lenders.
(c)
Financial Statements and Pro Forma Financial Statements. The Administrative Agent shall have received (i) (A) the
audited consolidated balance sheets of Company and its subsidiaries and the related audited consolidated statements of income and
retained earnings, shareholders’ equity and cash flows as of, and for each of the fiscal years ended, December 31, 2014,
December 31, 2015 and December 31, 2016 and (B) the unaudited consolidated quarterly balance sheets of the Company and its subsidiaries
and the related unaudited consolidated statements of income and retained earnings of the Company for each Fiscal Quarter ended
at least 60 days prior to the Closing Date and (ii) the unaudited pro forma consolidated balance sheet as of and for the
most recently ended fiscal period pursuant to clause (i)(A) or (i)(B) above, which need not be prepared in compliance
with Regulation S-X of the Securities Act of 1933, as amended, or include adjustments for purchase accounting.
(d)
Closing Certificates; Certified Charters; Good Standing Certificates. The Administrative Agent (or its counsel)
shall have received (i) a certificate of each Loan Party, dated the Closing Date and executed by a secretary, assistant secretary
or other Responsible Officer (as the case may be) thereof, which shall (A) certify that attached thereto is a true and complete
copy of the resolutions or written consents of its shareholders, board of directors, board of managers, members or other governing
body authorizing the execution, delivery and performance of the Loan Documents to which it is a party and, in the case of the Borrower,
the borrowings hereunder, and that such resolutions or written consents have not been modified, rescinded or amended (other than
as attached thereto) and are in full force and effect, (B) identify by name and title and bear the signatures of the officers,
managers, directors or authorized signatories of such Loan Party authorized to sign the Loan Documents to which it is a party on
the Closing Date and (C) certify (x) that attached thereto is a true and complete copy of the certificate or articles of incorporation
or organization (or memorandum of association or other equivalent thereof) of such Loan Party certified by the relevant authority
of the jurisdiction of organization of such Loan Party and a true and correct copy of its by-laws or operating, management, partnership
or similar agreement and (y) that such documents or agreements have not been amended (except as otherwise attached to such certificate
and certified therein as being the only amendments thereto as of such date) and (ii) a good standing (or equivalent) certificate
as of a recent date for such Loan Party from its jurisdiction of organization, to the extent available.
(e)
Representations and Warranties. The (i) Specified Merger Agreement Representations shall be true and correct solely
to the extent required by the terms of the definition thereof and (ii) the Specified Representations shall be true and correct
in all material respects on and as of the Closing Date; provided that (A) in the case of any Specified Representation which
expressly relates to a specific date or period, such representation and warranty shall be true and correct in all material respects
as of the respective date or for the respective period, as the case may be and (B) if any Specified Representation is qualified
by or subject to a “material adverse effect”, “material adverse change” or similar term or qualification,
the definition thereof shall be the definition of “Closing Date Material Adverse Effect” for purposes of the making
or deemed making of such Specified Representation on, or as of, the Closing Date (or any date prior thereto).
(f)
Fees. Prior to or substantially concurrently with the funding of the Initial Term Loans hereunder, the Administrative
Agent shall have received (i) all fees required to be paid by the Borrower on the Closing Date pursuant to the Fee Letter and (ii)
all expenses required to be paid by the Borrower for which invoices have been presented at least three Business Days prior to the
Closing Date or such later date to which the Borrower may agree (including the reasonable fees and expenses of legal counsel),
in each case on or before the Closing Date, which amounts may be offset against the proceeds of the Loans.
(g)
Equity Contribution. Prior to or substantially concurrently with the initial funding of the Loans hereunder, the
Borrower shall have received the Equity Contribution (to the extent not otherwise applied to the Transactions).
(h)
Solvency. The Administrative Agent (or its counsel) shall have received a certificate dated as of the Closing Date
in substantially the form of Exhibit K from the chief financial officer (or other officer with reasonably equivalent
responsibilities) of the Borrower certifying as to the matters set forth therein.
(i)
Perfection Certificate. The Administrative Agent (or its counsel) shall have received a completed Perfection Certificate
dated the Closing Date and signed by a Responsible Officer of each Loan Party, together with all attachments contemplated thereby.
(j)
Pledged Stock; Stock Powers; Pledged Notes. Subject to the terms of the Intercreditor Agreements, the Administrative
Agent (or its counsel) shall have received (i) the certificates representing the Capital Stock required to be pledged pursuant
to the Security Agreement, together with an undated stock or similar power for each such certificate executed in blank by a duly
authorized officer of the pledgor thereof, and (ii) each Material Debt Instrument (if any) endorsed (without recourse) in blank
(or accompanied by an executed transfer form in blank) by the pledgor thereof.
(k)
Filings Registrations and Recordings. Each document (including any UCC (or similar) financing statement) required
by any Collateral Document or under law to be filed, registered or recorded in order to create in favor of the Administrative Agent,
for the benefit of the Secured Parties, a perfected Lien on the Collateral required to be delivered pursuant to such Collateral
Document, prior and superior in right of security to any other Person (subject to the terms of the Intercreditor Agreements and
other than with respect to Permitted Liens), shall have been received by the Administrative Agent and be in proper form for filing,
registration or recordation.
(l)
Transactions. Substantially concurrently with the initial funding of the Loans hereunder, the Acquisition shall be
consummated in accordance with the terms of the Merger Agreement, but without giving effect to any amendments, waivers or consents
by Holdings or the Borrower that are materially adverse to the interests of the Initial Committed Lenders on the Closing Date without
the consent of the Arrangers, such consent not to be unreasonably withheld, delayed or conditioned.
(m)
Closing Date Material Adverse Effect. Since April 1, 2017, there shall not have been any Closing Date Material Adverse
Effect.
(n)
USA PATRIOT Act. No later than three (3) Business Days in advance of the Closing Date, the Administrative Agent shall
have received all documentation and other information required pursuant to applicable “know your customer” and anti-money
laundering rules and regulations, including the USA PATRIOT Act with respect to any Loan Party to the extent reasonably requested
by any Initial Committed Lender in writing at least ten (10) Business Days in advance of the Closing Date.
(o)
Officer’s Certificate. The Administrative Agent shall have received a certificate signed by a Responsible Officer
of the Borrower certifying as of the Closing Date to the matters set forth in Section 4.01(e) and Section 4.01(m).
(p)
Refinancing. Prior to or substantially concurrently with the initial funding of the Loans hereunder, all Indebtedness
for borrowed money of the Company and its subsidiaries under that certain Second Amended and Restated Credit Agreement, dated as
of November 9, 2012, among the Company, certain subsidiaries of the Company, the lenders party thereto and Bank of America, N.A.,
as administrative agent, will be repaid, redeemed, defeased, discharged, refinanced or terminated, and all related commitments,
guaranties and security interests will be terminated and released or arrangements therefor to the reasonable satisfaction of the
Administrative Agent shall have been made (the actions described in this Section 4.01(p), the “Refinancing”).
For purposes of determining
whether the conditions specified in this Section 4.01 have been satisfied on the Closing Date, by funding the Loans hereunder,
the Administrative Agent and each Lender that has executed this Agreement (or an Assignment and Assumption on the Closing Date)
shall be deemed to have consented to, approved or accepted, or to be satisfied with, each document or other matter required hereunder
to be consented to or approved by or acceptable or satisfactory to the Administrative Agent or such Lender, as the case may be.
Notwithstanding the foregoing,
to the extent the Lien on any Collateral (including the granting or perfection of any security interest) or Guarantee is not or
cannot be provided on the Closing Date (other than (i) a pledge of the Capital Stock of the Borrower to the extent such pledge
may be perfected on the Closing Date by the delivery of a stock or equivalent certificate representing such Capital Stock (together
with a stock power or similar instrument endorsed in blank for the relevant certificate), (ii) the granting of liens in the Collateral
owned by Holdings, the Borrower and each Subsidiary Guarantor pursuant to a New York law security agreement (and the perfection
thereof solely to the extent such liens may be perfected by the filing of a UCC-1 financing statement), (iii) a pledge of the Capital
Stock of each Subsidiary Guarantor to the extent such pledge may be perfected on the Closing Date by the delivery of a stock or
equivalent certificate representing such Capital Stock (together with a stock power or similar instrument endorsed in blank for
the relevant certificate), but solely to the extent such stock or equivalent certificates have been delivered to the Initial Borrower
prior to or substantially concurrently with the consummation of the Transactions on the Closing Date after use of commercially
reasonable efforts by the Initial Borrower to procure delivery thereof without undue burden or expense, and (iv) the Guarantee
by Holdings and each Subsidiary Guarantor that is a material Domestic Subsidiary), then the provision (and/or perfection) of such
Collateral and/or Guarantee shall not constitute a condition precedent to the availability or initial funding of the Credit Facilities
on the Closing Date but may instead be provided (and/or perfected) within ninety (90) days after the Closing Date or such later
date as the Administrative Agent may reasonably agree. For the avoidance of doubt, no Guarantees or Collateral by or of any Foreign
Subsidiaries that are Loan Parties shall be required to be delivered, granted opt perfected on the Closing Date.
ARTICLE
V
AFFIRMATIVE COVENANTS
From the Closing Date
until the Termination Date, (i) in the case of Holdings, solely with respect to Sections 5.01, 5.02, 5.03,
5.08, and 5.12, and (ii) the Borrower hereby covenant and agree with the Lenders that:
Section 5.01.
Financial Statements and Other Reports. The Borrower
will deliver to the Administrative Agent for delivery to each Lender:
(a)
Quarterly Financial Statements. Within 45 days (or 60 days in the case of the Fiscal Quarters ending on or around
June 30, 2017, September 30, 2017, March 31, 2018 and June 30, 2018) after the end of each of the first three Fiscal Quarters of
each Fiscal Year, commencing with the Fiscal Quarter ending June 30, 2017, the consolidated balance sheet of the Borrower as at
the end of such Fiscal Quarter and the related consolidated statements of income and cash flows of the Borrower for such Fiscal
Quarter and for the period from the beginning of the then current Fiscal Year to the end of such Fiscal Quarter, and setting forth
(commencing with the Fiscal Quarter ending on or around March 31, 2019), in reasonable detail, in comparative form the corresponding
figures for the corresponding periods of the previous Fiscal Year, all in reasonable detail, together with a Responsible Officer
Certification (which may be included in the applicable Compliance Certificate) with respect thereto and, at the option of the Borrower,
either (i) a Narrative Report with respect thereto or (ii) a conference call with the Lenders, hosted by the Administrative Agent,
which call shall be held after delivery of the applicable financial statements, during normal business hours and otherwise at a
time mutually agreed between the Borrower and the Administrative Agent for the applicable Fiscal Quarter (it being agreed that
at least one such conference call with the Lenders shall be held in each calendar year, commencing with 2018);
(b) Annual
Financial Statements. Within 120 days after the end of the first Fiscal Year following the Closing Date and within 90
days after the end of each Fiscal Year thereafter, (i) the consolidated balance sheet of the Borrower as at the end of such
Fiscal Year and the related consolidated statements of income, shareholders’ equity and cash flows of the Borrower for
such Fiscal Year and setting forth (commencing with the Fiscal Year ending on or around December 31, 2018), in reasonable
detail, in comparative form the corresponding figures for the previous Fiscal Year (which, for comparison against the figures
for the Fiscal Year ending on or around December 31, 2017, may be based on figures derived from a combined or other pro
forma presentation of any predecessor and successor periods as reasonably determined by the Borrower) and (ii) with
respect to such consolidated financial statements, (A) a report thereon from the Company’s certified public
accountant commencing with the Fiscal Year ending on or around December 31, 2017, or any nationally recognized independent
certified public accountant of recognized national standing (which report shall be unqualified as to “going
concern” (other than resulting from the impending maturity of any Indebtedness or any actual or prospective breach of
any financial covenant) and scope of audit, and shall state that such consolidated financial statements fairly present, in
all material respects, the consolidated financial position of the Borrower as at the dates indicated and its income and cash
flows for the periods indicated in conformity with GAAP and (B) at the option of the Borrower, either (i) a Narrative
Report with respect to such Fiscal Year, or (ii) a conference call with the Lenders, hosted by the Administrative Agent,
which call shall be held after delivery of the applicable financial statements, during normal business hours and otherwise at
a time mutually agreed between the Borrower and the Administrative Agent for the applicable Fiscal Year (it being agreed that
at least one such conference call with the Lenders shall be held in each calendar year, commencing with 2018);
(c)
Compliance Certificate. Together with each delivery of financial statements of the Borrower pursuant to Sections 5.01(a)
and 5.01(b), (i) a duly executed and completed Compliance Certificate (A) certifying that no Default or Event of Default
exists (or if a Default or Event of Default exists, describing in reasonable detail such Default or Event of Default and the steps
being taken to cure, remedy or waive the same) and (B) in the case of financial statements delivered pursuant to Section
5.01(b), setting forth reasonably detailed calculations of Excess Cash Flow of the Borrower and its Restricted Subsidiaries
for each Fiscal Year beginning with the financial statements for the Fiscal Year ending December 31, 2018, (ii) (A) a
summary of pro forma or consolidating adjustments necessary to eliminate the accounts of Unrestricted Subsidiaries (if any)
from such financial statements and (B) a list identifying each subsidiary of the Borrower as a Restricted Subsidiary or an
Unrestricted Subsidiary as of the date of delivery of such Compliance Certificate or confirming that there is no change in such
information since the later of the Closing Date and the date of the last such list, and (iii) a Perfection Certificate Supplement;
(d)
[Reserved];
(e)
Notice of Default. Promptly upon, and in any event within five (5) Business Days after, any Responsible Officer of
the Borrower obtaining knowledge of (i) the occurrence of any Default or Event of Default or (ii) the occurrence of any event or
change that has caused or evidences or would reasonably be expected to cause or evidence, either individually or in the aggregate,
a Material Adverse Effect, a reasonably-detailed notice specifying the nature and period of existence of such condition, event
or change and what action the Borrower has taken, is taking and proposes to take with respect;
(f)
Notice of Litigation. Promptly upon, and in any event within five (5) Business Days after, any Responsible Officer
of the Borrower obtaining knowledge of (i) the institution of, or threat of, any Adverse Proceeding not previously disclosed in
writing by the Borrower to the Administrative Agent, or (ii) any material development in any Adverse Proceeding that, in the case
of either of clause (i) or (ii), would reasonably be expected to have a Material Adverse Effect, written notice
thereof from the Borrower together with such other non-privileged information as may be reasonably available to the Loan Parties
to enable the Lenders to evaluate such matters;
(g)
ERISA. Promptly upon, and in any event within five (5) Business Days after, any Responsible Officer of the Borrower
becoming aware of the occurrence of any ERISA Event that could reasonably be expected to have a Material Adverse Effect, a written
notice specifying the nature thereof;
(h)
Financial Plan. As soon as available and in any event no later than 90 days after the beginning of each Fiscal Year,
commencing in respect of the Fiscal Year ending December 31, 2017, a consolidated plan and financial forecast for each Fiscal Quarter
of such Fiscal Year, including a forecasted consolidated statement of the Borrower’s financial position and forecasted consolidated
statements of income and cash flows of the Borrower for such Fiscal Year, prepared in reasonable detail setting forth, with appropriate
discussion, the principal assumptions on which the financial plan is based;
(i)
Information Regarding Collateral. Prompt (and in any event, within 30 days of the relevant change) written notice
of any change (i) in any Loan Party’s legal name, (ii) in any Loan Party’s type of organization, (iii) in any Loan
Party’s jurisdiction of organization or (iv) in any Loan Party’s organizational identification number (if any), in
each case, to the extent such information is necessary to enable the Administrative Agent to perfect or maintain the perfection
and priority of its security interest in the Collateral of the relevant Loan Party, together with a certified copy of the applicable
Organizational Document reflecting the relevant change;
(j)
Environmental Matters. Prompt (and in any event within five (5) Business Days after any Responsible Officer of the
Borrower obtaining knowledge thereof) written notice of any Release or other Hazardous Material Activity that would reasonably
be expected to have a Material Adverse Effect;
(k)
Certain Reports. Promptly upon their becoming available and without duplication of any obligations with respect to
any such information that is otherwise required to be delivered under the provisions of any Loan Document, copies of (i) following
an initial public offering, all financial statements, reports, notices and proxy statements sent or made available generally by
Holdings or its applicable Parent Company to its security holders acting in such capacity and (ii) all regular and periodic reports
and all registration statements (other than on Form S-8 or a similar form) and prospectuses, if any, filed by Holdings or its applicable
Parent Company with any securities exchange or with the SEC or any analogous governmental or private regulatory authority with
jurisdiction over matters relating to securities;
(l)
[Reserved]; and
(m)
Other Information. Such other certificates, reports and information (financial or otherwise) as the Administrative
Agent may reasonably request from time to time in connection with the financial condition or business of Holdings and its Restricted
Subsidiaries; provided, however, that none of Holdings, the Borrower nor any Restricted Subsidiary shall be required
to disclose or provide any information (i) that constitutes non-financial trade secrets or non-financial proprietary information
of Holdings, the Borrower and/or any of their respective subsidiaries, customers and/or suppliers, (ii) in respect of which disclosure
to the Administrative Agent or any Lender (or any of their respective representatives or contractors) is prohibited by applicable
Requirements of Law, (iii) that is subject to attorney-client or similar privilege or constitutes attorney work product or (iv)
in respect of which Holdings, the Borrower or any Restricted Subsidiary owes confidentiality obligations to any third party; provided
that, with respect to this clause (iv), the Borrower shall (A) make the Administrative Agent aware of such confidentiality obligations
(to the extent permitted under the applicable confidentiality obligation) and (B) use commercially reasonable efforts to communicate
the relevant information in a way that does not violate such confidentiality obligations.
Documents required
to be delivered pursuant to this Section 5.01 may be delivered electronically and if so delivered, shall be
deemed to have been delivered on the date (i) on which the Borrower (or a representative thereof) (x) posts such documents or
(y) provides a link thereto on the website of the Borrower on the Internet at the website address listed on Schedule 9.01; provided that,
other than with respect to items required to be delivered pursuant to Section 5.01(k), the Borrower shall promptly
notify (which may be by facsimile or electronic mail) the Administrative Agent of the posting of any such documents on the
website of the Borrower (or its applicable subsidiary) and provide to the Administrative Agent by electronic mail electronic
versions (i.e., soft copies) of such documents; (ii) on which such documents are delivered by the Borrower to the
Administrative Agent for posting on behalf of the Borrower on SyndTrak or another relevant website, if any, to which each
Lender and the Administrative Agent have access (whether a commercial, third-party website or whether sponsored by the
Administrative Agent); (iii) on which executed certificates or other documents are faxed to the Administrative Agent (or
electronically mailed to an address provided by the Administrative Agent); or (iv) in respect of the items required to
be delivered pursuant to Section 5.01(k) in respect of information filed by Holdings or its applicable Parent
Company with any securities exchange or with the SEC or any analogous governmental or private regulatory authority with
jurisdiction over matters relating to securities (other than Form 10-Q reports and Form 10-K reports described in Sections 5.01(a)
and (b), respectively), on which such items have been made available on the SEC website or the website of the relevant
analogous governmental or private regulatory authority or securities exchange.
Notwithstanding the foregoing,
the obligations in paragraphs (a), (b) and (h) of this Section 5.01 may be satisfied with respect to
any financial statements of the Borrower by furnishing (A) the applicable financial statements of Holdings (or any other Parent
Company) or (B) Holdings’ (or any other Parent Company’s), as applicable, Form 10-K or 10-Q, as applicable, filed with
the SEC or any securities exchange, in each case, within the time periods specified in such paragraphs; provided that, with
respect to each of clauses (A) and (B), (i) to the extent such financial statements relate to any Parent Company,
such financial statements shall be accompanied by consolidating information that summarizes in reasonable detail the differences
between the information relating to such Parent Company, on the one hand, and the information relating to the Borrower and its
consolidated subsidiaries on a standalone basis, on the other hand, which consolidating information shall be certified by a Responsible
Officer of the Borrower as having been fairly presented in all material respects and (ii) to the extent such statements are in
lieu of statements required to be provided under Section 5.01(b), such statements shall be accompanied by a report and opinion
of an independent registered public accounting firm of nationally recognized standing, which report and opinion shall satisfy the
applicable requirements set forth in Section 5.01(b).
Any financial statement
required to be delivered pursuant to Section 5.01(a) or (b) shall not be required to include acquisition accounting
adjustments relating to the Transactions or any Permitted Acquisition to the extent it is not practicable to include any such adjustments
in such financial statement.
Section 5.02.
Existence. Except as otherwise permitted under Section 6.07,
Holdings and the Borrower will, and the Borrower will cause each of its Restricted Subsidiaries to, at all times preserve and keep
in full force and effect its existence and all rights, franchises, licenses and permits material to its business except, other
than with respect to the preservation of the existence of the Borrower, to the extent that the failure to do so could not reasonably
be expected to result in a Material Adverse Effect; provided that neither Holdings nor the Borrower nor any of the Borrower’s
Restricted Subsidiaries shall be required to preserve any such existence (other than with respect to the preservation of existence
of the Borrower), right, franchise, license or permit if a Responsible Officer of such Person or such Person’s board of directors
(or similar governing body) determines that the preservation thereof is no longer desirable in the conduct of the business of such
Person, and that the loss thereof is not disadvantageous in any material respect to such Person or to the Lenders.
Section 5.03. Payment
of Taxes. Holdings and the Borrower will, and the Borrower will cause each of its Restricted Subsidiaries to, pay
all Taxes imposed upon it or any of its properties or assets or in respect of any of its income or businesses or franchises
before any penalty or fine accrues thereon; provided that no such Tax need be paid if (a) it is being contested in
good faith by appropriate proceedings promptly instituted and diligently conducted, so long as (i) adequate reserves or other
appropriate provisions, as are required in conformity with GAAP, have been made therefor, and (ii) in the case of a Tax which
has or may become a Lien against any of the Collateral, such contest proceedings conclusively operate to stay the sale of any
portion of the Collateral to satisfy such Tax or (b) the failure to pay or discharge the same could not reasonably be
expected to result in a Material Adverse Effect.
Section 5.04.
Maintenance of Properties. The Borrower will, and
will cause each of its Restricted Subsidiaries to, maintain or cause to be maintained in good repair, working order and condition,
ordinary wear and tear and casualty and condemnation excepted, all property reasonably necessary to the normal conduct of business
of the Borrower and its Restricted Subsidiaries and from time to time will make or cause to be made all needed and appropriate
repairs, renewals and replacements thereof except as expressly permitted by this Agreement or where the failure to maintain such
properties or make such repairs, renewals or replacements could not reasonably be expected to have a Material Adverse Effect.
Section 5.05.
Insurance. Except where the failure to do so would
not reasonably be expected to have a Material Adverse Effect, the Borrower will maintain or cause to be maintained, with financially
sound and reputable insurers, such insurance coverage with respect to liabilities, losses or damage in respect of the assets, properties
and businesses of the Borrower and its Restricted Subsidiaries as may customarily be carried or maintained under similar circumstances
by Persons of established reputation engaged in similar businesses, in each case in such amounts (giving effect to self-insurance),
with such deductibles, covering such risks and otherwise on such terms and conditions as shall be customary for such Persons. Each
such policy of insurance shall (i) name the Administrative Agent on behalf of the Lenders as an additional insured thereunder as
its interests may appear and (ii) to the extent available from the relevant insurance carrier, in the case of each casualty
insurance policy (excluding any business interruption insurance policy), contain a loss payable clause or endorsement that names
the Administrative Agent, on behalf of the Lenders as the lender loss payee thereunder and, to the extent available, provide for
at least 30 days’ prior written notice to the Administrative Agent of any modification or cancellation of such policy (or
10 days’ prior written notice in the case of the failure to pay any premiums thereunder).
Section 5.06. Inspections.
The Borrower will, and will cause each of its Restricted Subsidiaries to, permit any authorized representative designated by
the Administrative Agent to visit and inspect any of the properties of the Borrower and any of its Restricted Subsidiaries at
which the principal financial records and executive officers of the applicable Person are located, to inspect, copy and take
extracts from its and their respective financial and accounting records, and to discuss its and their respective affairs,
finances and accounts with its and their Responsible Officers and independent public accountants (provided that the
Borrower (or any of its subsidiaries) may, if it so chooses, be present at or participate in any such discussion), all upon
reasonable notice and at reasonable times during normal business hours; provided that, (x) only the
Administrative Agent (or a representative designated by the Administrative Agent) on behalf of the Lenders may exercise the
rights of the Administrative Agent and the Lenders under this Section 5.06, (y) subject to the immediately
succeeding proviso, the Administrative Agent shall not exercise such rights more often than one time during any calendar year
and (z) subject to the immediately succeeding proviso, only one such time per calendar year shall be at the expense of
the Borrower; provided further that when an Event of Default exists, the Administrative Agent (or any of its
representatives or independent contractors) may do any of the foregoing at the expense of the Borrower at any time during
normal business hours and upon reasonable advance notice; provided further that, notwithstanding anything to the
contrary herein, neither the Borrower nor any Restricted Subsidiary shall be required to disclose, permit the inspection,
examination or making of copies of or taking abstracts from, or discuss any document, information, or other matter (i) that
constitutes non-financial trade secrets or non-financial proprietary information of the Borrower and its subsidiaries and/or
any of its customers and/or suppliers, (ii) in respect of which disclosure to the Administrative Agent or any Lender (or any
of their respective representatives or contractors) is prohibited by applicable law, (iii) that is subject to attorney-client
or similar privilege or constitutes attorney work product or (iv) in respect of which Holdings, the Borrower or any
Restricted Subsidiary owes confidentiality obligations to any third party; provided that, with respect to this clause
(iv), the Borrower shall (A) make the Administrative Agent aware of such confidentiality obligations (to the extent permitted
under the applicable confidentiality obligation) and (B) use commercially reasonable efforts to communicate the relevant
information in a way that does not violate such confidentiality obligations.
Section 5.07.
Maintenance of Books and Records. The Borrower will,
and will cause its Restricted Subsidiaries to, maintain proper books of record and account containing entries of all material financial
transactions and matters involving the assets and business of the Borrower and its Restricted Subsidiaries that are full, true
and correct in all material respects and permit the preparation of consolidated financial statements in accordance with GAAP.
Section 5.08.
Compliance with Laws.
(a)
Holdings and the Borrower will, and will cause each of their Restricted Subsidiaries to (i) materially comply with the applicable
requirements of Sanctions and the FCPA and (ii) comply with the requirements of all other applicable laws, rules, regulations and
orders of any Governmental Authority (including ERISA, the USA PATRIOT Act and, to its knowledge, anti-money laundering and anti-terrorism
laws), except, in the case of clause (ii), to the extent the failure to so comply would not reasonably be expected to have a Material
Adverse Effect.
(b)
The Borrower will not directly or, to its knowledge, indirectly, use the proceeds of the Loans or otherwise make available
such proceeds to any Person, (i) for the purpose of financing the activities of any Person or in any country or territory that,
at the time of such financing, is the subject of Sanctions, except to the extent permissible for a Person required to comply with
Sanctions; or (ii) in a manner that violates any applicable requirements under the FCPA.
Section 5.09.
Compliance with Environmental Laws. Except, in each
case, to the extent that the failure to do so would not reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect, (a) comply, and take all commercially reasonable actions to cause any lessees and other Persons operating or occupying
its properties to comply, with all applicable Environmental Laws and environmental permits (including any investigation, notification,
cleanup, removal or remedial obligations with respect to or arising out of any Hazardous Materials Activity), (b) obtain and renew
all environmental permits required to conduct its operations or in connection with its properties and (c) respond timely to any
Environmental Claim against the Borrower or any of its Restricted Subsidiaries and discharge or duly contest any obligations it
may have to any Person thereunder.
Section 5.10. Designation
of Subsidiaries. The board of directors (or equivalent governing body) of the Borrower may at any time after the
Closing Date designate (or redesignate) any subsidiary as an Unrestricted Subsidiary or any Unrestricted Subsidiary as a
Restricted Subsidiary; provided that (i) immediately before and after such designation or redesignation, no
Default or Event of Default exists (including after giving effect to the reclassification of Investments in, Indebtedness of
and Liens on the assets of, the applicable Restricted Subsidiary or Unrestricted Subsidiary), (ii) in the case of
designating a Restricted Subsidiary to be an Unrestricted Subsidiary or redesignating an Unrestricted Subsidiary to be a
Restricted Subsidiary, the applicable Investment is permitted under one or more clauses in Section 6.06 (as selected
by the Borrower in its sole discretion), (iii) on a Pro Forma Basis, the Total Leverage Ratio as of the last day of the most
recently ended Test Period does not exceed 6.75:1.00, (iv) no subsidiary may be designated as an Unrestricted Subsidiary
if it is a “Restricted Subsidiary” for purposes of the Second Lien Credit Agreement unless also being designated
as an Unrestricted Subsidiary thereunder, and (v) as of the date of the designation or redesignation thereof, no Unrestricted
Subsidiary shall own any Capital Stock in any Restricted Subsidiary of the Borrower (unless such Restricted Subsidiary is
also designated as an Unrestricted Subsidiary) or hold any Indebtedness of or any Lien on any property of the Borrower or its
Restricted Subsidiaries (unless the Borrower or such Restricted Subsidiary is permitted to incur such Indebtedness or Liens
in favor of such Unrestricted Subsidiary pursuant to Sections 6.01 and 6.02). The designation of any subsidiary
as an Unrestricted Subsidiary shall constitute an Investment by the Borrower (or its applicable Restricted Subsidiary)
therein at the date of designation in an amount equal to the portion of the Fair Market Value of the net assets of such
Restricted Subsidiary attributable to the Borrower’s (or its applicable Restricted Subsidiary’s) equity interest
therein as reasonably estimated by the Borrower (and such designation shall only be permitted to the extent such Investment
is permitted under Section 6.06). The designation of any Unrestricted Subsidiary as a Restricted Subsidiary shall
constitute the incurrence or making, as applicable, at the time of designation of any then-existing Investment, Indebtedness
or Lien of such Restricted Subsidiary, as applicable; provided that upon a redesignation of any Unrestricted
Subsidiary as a Restricted Subsidiary, the Borrower shall be deemed to continue to have an Investment in the resulting
Restricted Subsidiary in an amount (if positive) equal to (a) the Borrower’s “Investment” in such
Restricted Subsidiary at the time of such redesignation, less (b) the portion of the Fair Market Value of the net
assets of such Restricted Subsidiary attributable to the Borrower’s equity therein at the time of such redesignation.
As of the Closing Date, the subsidiaries listed on Schedule 5.10 have been designated as Unrestricted
Subsidiaries.
Section 5.11.
Use of Proceeds. The Borrower shall use the proceeds
of the Initial Term Loans solely to finance a portion of the Transactions (including working capital and/or purchase price adjustments
and the payment of Transaction Costs). No part of the proceeds of any Loan will be used, whether directly or indirectly, for any
purpose that would violate Regulation T, U or X.
Section 5.12.
Covenant to Guarantee Obligations and Give Security.
Upon (i) the formation or acquisition after the Closing Date of any Restricted Subsidiary that is a Domestic Subsidiary, (ii) the
designation of any Unrestricted Subsidiary that is a Domestic Subsidiary as a Restricted Subsidiary, (iii) any Restricted Subsidiary
that is a Domestic Subsidiary ceasing to be an Immaterial Subsidiary or (iv) any Restricted Subsidiary that was an Excluded Subsidiary
ceasing to be an Excluded Subsidiary, on or before the date that is 60 days after the end of such Fiscal Quarter in which such
transaction or designation occurred (or such longer period as the Administrative Agent may reasonably agree), the Borrower shall
(A) cause such Restricted Subsidiary (other than any Excluded Subsidiary) to comply with the requirements set forth in the definition
of “Collateral and Guarantee Requirement” and (B) upon the reasonable request of the Administrative Agent, cause the
relevant Restricted Subsidiary to deliver to the Administrative Agent a signed copy of a customary opinion of counsel for such
Restricted Subsidiary, addressed to the Administrative Agent and the other relevant Secured Parties.
Notwithstanding
anything to the contrary herein or in any other Loan Document, (i) the Administrative Agent may grant extensions of time or
any period in this Agreement or in any other Loan Document (at any time, including, in each case, after the expiration of any
relevant time or period, which will be retroactive) for the creation and perfection of security interests in, or obtaining of
title insurance, legal opinions, surveys or other deliverables with respect to, particular assets or the provision of any
Loan Guaranty by any Restricted Subsidiary (in connection with assets acquired, or Restricted Subsidiaries formed or
acquired, after the Closing Date) where it reasonably determines, in consultation with the Borrower, that such action cannot
be accomplished without undue effort or expense by the time or times at which it would otherwise be required to be
accomplished by this Agreement or the Collateral Documents, and each Lender hereby consents to any such extension of time,
(ii) any Lien required to be granted from time to time pursuant to the Collateral and Guarantee Requirement shall be subject
to the exceptions and limitations set forth therein and in the Collateral Documents, (iii) no Loan Party shall be
required to seek any landlord lien waiver, bailee letter, estoppel, warehouseman waiver or other collateral access or similar
letter or agreement, (iv) no Loan Party will be required to take any action that is limited or restricted by the Collateral
and Guarantee Requirement and any other Loan Document, (v) in no event will the Collateral include any Excluded Assets,
(vi) no action shall be required to perfect a Lien in any asset in respect of which the perfection of a security
interest therein would (1) violate the terms of any contract relating to such asset that is permitted or otherwise not
prohibited by the terms of this Agreement and is binding on such asset on the Closing Date or at the time of its acquisition
and not incurred in contemplation thereof (other than in the case of capital leases, purchase money and similar financings),
in each case, after giving effect to the applicable anti-assignment provisions of the UCC or other applicable law or (2)
trigger termination of any contract relating to such asset that is permitted or otherwise not prohibited by the terms of this
Agreement and is binding on such asset on the Closing Date or at the time of its acquisition and not incurred in
contemplation thereof (other than in the case of capital leases, purchase money and similar financings) pursuant to any
“change of control” or similar provision; it being understood that the Collateral shall include any proceeds
and/or receivables arising out of any contract described in this clause to the extent the assignment of such proceeds or
receivables is expressly deemed effective under the UCC or other applicable law notwithstanding the relevant prohibition,
violation or termination right; and (vii) any joinder or supplement to any Loan Guaranty, any Collateral Document and/or any
other Loan Document executed by any Restricted Subsidiary that is required to become a Loan Party pursuant to Section
5.12 above may, with the consent of the Administrative Agent, include such schedules (or updates to schedules) as may be
necessary to qualify any representation or warranty set forth in any Loan Document to the extent necessary to ensure that
such representation or warranty is true and correct to the extent required thereby or by the terms of any other Loan
Document.
Section 5.13.
[Reserved].
Section 5.14.
Further Assurances. Promptly upon request of the
Administrative Agent and subject to the limitations described in Section 5.12:
(a)
Holdings and the Borrower will, and will cause each other Loan Party to, execute any and all further documents, financing
statements, agreements, instruments, certificates, notices and acknowledgments and take all such further actions (including the
filing and recordation of financing statements and/or amendments thereto and other documents), that may be required under any applicable
law and which the Administrative Agent may reasonably request to ensure the creation, perfection and priority of the Liens created
or intended to be created under the Collateral Documents, all at the expense of the relevant Loan Parties.
(b)
Holdings and the Borrower will, and will cause each other Loan Party to, (i) correct any material defect or error that may
be discovered in the execution, acknowledgment, filing or recordation of any Collateral Document or other document or instrument
relating to any Collateral and (ii) do, execute, acknowledge, deliver, record, re-record, file, re-file, register and re-register
any and all such further acts (including notices to third parties), deeds, certificates, assurances and other instruments as the
Administrative Agent may reasonably request from time to time in order to carry out more effectively the purposes of the Collateral
Documents.
ARTICLE
VI
NEGATIVE COVENANTS
From the Closing Date
until the Termination Date, (i) in the case of Holdings, solely with respect to Sections 6.04(b) and 6.14 and (ii)
the Borrower covenant and agree with the Lenders that:
Section 6.01.
Indebtedness. The Borrower shall not, nor shall it permit any of its Restricted Subsidiaries to, directly or indirectly, create,
incur, assume or otherwise become or remain liable with respect to any Indebtedness, except:
(a)
the Secured Obligations (including any Loans and/or Commitments);
(b)
Indebtedness of the Borrower to any Restricted Subsidiary and/or of any Restricted Subsidiary to the Borrower or any other
Restricted Subsidiary; provided that in the case of any Indebtedness of any Restricted Subsidiary that is not a Loan Party
owing to a Loan Party, such Indebtedness shall be permitted as an Investment by Section 6.06; provided further that
any Indebtedness of any Loan Party to any Restricted Subsidiary that is not a Loan Party must be expressly subordinated to the
Obligations of such Loan Party;
(c)
[reserved];
(d)
(i) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations
(including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted
hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock; and (ii) Indebtedness arising
from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance
of the Borrower or any such Restricted Subsidiary pursuant to any such agreement;
(e)
Indebtedness of the Borrower and/or any Restricted Subsidiary (i) pursuant to tenders, statutory obligations, bids, leases,
governmental contracts, trade contracts, surety, stay, customs, appeal, performance and/or return of money bonds or other similar
obligations incurred in the ordinary course of business, (ii) in respect of letters of credit, bank guaranties, surety bonds, performance
bonds or similar instruments to support any of the foregoing items and (iii) in respect of commercial and trade letters of credit;
(f)
Indebtedness of the Borrower and/or any Restricted Subsidiary in respect of commercial credit cards, stored value cards,
purchasing cards, treasury management services, netting services, overdraft protections, check drawing services, automated payment
services (including depository, overdraft, controlled disbursement, ACH transactions, return items and interstate depository network
services), employee credit card programs, cash pooling services and any arrangements or services similar to any of the foregoing
and/or otherwise in connection with Cash management and Deposit Accounts, including Banking Services Obligations and dealer incentive,
supplier finance or similar programs;
(g)
(i) guaranties by the Borrower and/or any Restricted Subsidiary of the obligations of suppliers, customers and licensees
in the ordinary course of business, (ii) Indebtedness incurred in the ordinary course of business in respect of obligations of
the Borrower and/or any Restricted Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection
with such goods and services and (iii) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties
or similar instruments supporting trade payables, warehouse receipts or similar facilities entered into in the ordinary course
of business;
(h)
Guarantees by the Borrower and/or any Restricted Subsidiary of Indebtedness or other obligations of the Borrower and/or
any Restricted Subsidiary with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01
or other obligations not prohibited by this Agreement; provided that in the case of any Guarantee by any Loan Party of the
obligations of any Person that is not a Loan Party, the related Investment is permitted under Section 6.06;
(i)
Indebtedness of the Borrower and/or any Restricted Subsidiary existing, or pursuant to commitments existing, on the Closing
Date and described on Schedule 6.01;
(j)
Indebtedness of Restricted Subsidiaries that are not Loan Parties in an aggregate outstanding principal amount of such Indebtedness
not to exceed the greater of $75,000,000 and 45.0% of Consolidated Adjusted EBITDA, provided that the outstanding principal
amount of Indebtedness incurred by Canadian Restricted Subsidiaries shall not exceed the greater of $50,000,000 and 30.0% of Consolidated
Adjusted EBITDA;
(k)
Indebtedness of the Borrower and/or any Restricted Subsidiary consisting of obligations owing under incentive, supply, license
or similar agreements entered into in the ordinary course of business;
(l)
Indebtedness of the Borrower and/or any Restricted Subsidiary consisting of (i) the financing of insurance premiums, (ii)
take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations
to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of business;
(m)
Indebtedness of the Borrower and/or any Restricted Subsidiary with respect to Capital Leases and purchase money Indebtedness
incurred prior to or within 270 days of the acquisition, lease, completion of construction, repair of, replacement, improvement
to or installation of assets in an aggregate outstanding principal amount not to exceed the greater of $50,000,000 and 30.0% of
Consolidated Adjusted EBITDA;
(n)
Indebtedness of any Person that becomes a Restricted Subsidiary or Indebtedness assumed, in each case, in connection with
an acquisition permitted hereunder after the Closing Date; provided that (i) such Indebtedness (A) existed at
the time such Person became a Restricted Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not
created or incurred in anticipation thereof, (ii) no Event of Default exists or would result after giving pro forma effect
to such acquisition and (iii) the Total Leverage Ratio does not exceed 6.75:1.00, calculated on a Pro Forma Basis;
(o)
Indebtedness consisting of promissory notes issued by the Borrower or any Restricted Subsidiary to any stockholder of any
Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent
Company, the Borrower or any subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of
Capital Stock of any Parent Company permitted by Section 6.04(a);
(p)
the Borrower and its Restricted Subsidiaries may become and remain liable for any Indebtedness refinancing, refunding or
replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q),
(r), (u), (w), (x), (y), (z), (aa) and (jj) and this clause (p) of this Section 6.01
(in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”)
and any subsequent Refinancing Indebtedness in respect of existing Refinancing Indebtedness under this clause (p); provided,
that:
(i) the
principal amount of such Indebtedness does not exceed the principal amount of the Indebtedness being refinanced, refunded or
replaced, except by (A) an amount equal to unpaid accrued interest, penalties and premiums (including tender premiums)
thereon plus commitment, underwriting, arrangement and similar fees, other reasonable and customary fees, commissions
and expenses (including upfront fees, original issue discount or initial yield payments) incurred in connection with the
relevant refinancing, refunding or replacement, (B) an amount equal to any existing commitments unutilized thereunder
and (C) additional amounts permitted to be incurred pursuant to this Section 6.01 (provided that
(1) any additional Indebtedness referenced in this clause (C) satisfies the other applicable requirements of
this Section 6.01 (with additional amounts incurred in reliance on this clause (C) constituting a
utilization of the relevant basket or exception pursuant to which such additional amount is permitted) and (2) if such
additional Indebtedness is secured, the Lien securing such Indebtedness satisfies the applicable requirements of Section 6.02);
(ii)
(x) other than in the case of Refinancing Indebtedness with respect to clauses (a), (i), (m),
(n) and (z) of this Section 6.01 (and other than customary bridge loans with a maturity date of not longer
than one year which are converted into, exchanged for, extended to or otherwise refinanced with Indebtedness subject to the requirements
of this clause (ii)), (A) such Indebtedness has a final maturity on or later than (and, in the case of revolving Indebtedness,
does not require mandatory commitment reductions, if any, prior to) the final maturity of the Indebtedness being refinanced, refunded
or replaced and (B) other than with respect to revolving Indebtedness, a Weighted Average Life to Maturity equal to or greater
than the Weighted Average Life to Maturity of the Indebtedness being refinanced, refunded or replaced and (y) in the case of Refinancing
Indebtedness incurred with respect to Indebtedness permitted under clause (a) of this Section 6.01, such Indebtedness
shall satisfy the requirements of Section 9.02(c)(i)(B) or Section 9.02(c)(ii)(B), as applicable;
(iii)
in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (j), (m)
and (u) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding
in reliance on the relevant clause and after the incurrence thereof, shall constitute amounts outstanding under such clause;
(iv)
except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a)
of this Section 6.01 (it being understood that Holdings may not be the primary obligor of the applicable Refinancing
Indebtedness if Holdings was not the primary obligor on the relevant refinanced Indebtedness), (A) such Indebtedness, if secured,
is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured
Indebtedness may be refinanced with unsecured Indebtedness), (B) such Indebtedness is incurred by the obligor or obligors in respect
of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to Section 6.01,
and (C) if the Indebtedness being refinanced, refunded or replaced was originally contractually subordinated to the Obligations
in right of payment (or the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral
securing the Secured Obligations), such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment
(or the Refinancing Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Secured Obligations
and subject to an Acceptable Intercreditor Agreement), except to the extent the refinancing, refunding or replacement thereof constitutes
a Restricted Debt Payment permitted under Section 6.04(b) (other than Section 6.04(b)(i)) or does not constitute
a Restricted Debt Payment;
(v)
no Event of Default exists or would result therefrom;
(vi) in
the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01,
(A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu
or junior basis with respect to the remaining Obligations hereunder and shall be subject to an Acceptable Intercreditor
Agreement, or is unsecured, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by
any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it
shall not be Guaranteed by any Person other than a Loan Party and (D) such Indebtedness shall satisfy the requirements of Section
9.02(c)(i)(I) or Section 9.02(c)(ii)(I), as applicable; and
(vii)
any such Refinancing Indebtedness that is pari passu with the First Priority Secured Obligations hereunder in right
of payment and secured by the Collateral on a pari passu basis with respect to the First Priority Secured Obligations may
participate, with respect to voluntary prepayments on a pro rata basis, a less than pro rata basis or greater than
pro rata basis, and with respect to mandatory prepayments, on a pro rata basis or a less than pro rata basis
(but not greater than a pro rata basis), in each case, in respect of the Initial Term Loans (and any other Term Loans then
subject to ratable repayment requirements), in each case as the Borrower and the relevant lender may agree;
(q)
Indebtedness incurred to finance, or assumed in connection with, any acquisition permitted hereunder after the Closing Date;
provided, that (i) before and after giving effect to such acquisition on a Pro Forma Basis, no Event of Default exists
or would result therefrom, (ii) after giving effect to such acquisition on a Pro Forma Basis (without “netting” the
Cash proceeds of such Indebtedness), (A) if such Indebtedness is secured by a Lien on the Collateral that is pari passu
with the Lien securing the First Priority Secured Obligations and pari passu in right of payment with the Obligations, (1)
such Indebtedness shall be subject to an Acceptable Intercreditor Agreement, (2) the First Lien Leverage Ratio does not exceed
the greater of 5.00:1.00 and the First Lien Leverage Ratio as of the last day of the most recently ended Test Period, and (3) any
such Indebtedness consisting of syndicated first lien term loans (other than “bridge loans”) shall be subject to clause
(v) of the proviso to Section 2.22(a) (including with respect to exceptions thereunder), (B) if such Indebtedness is
secured by a Lien on the Collateral that is junior to the Lien securing the First Priority Secured Obligations, (1) such Indebtedness
shall be subject to an Acceptable Intercreditor Agreement, and (2) the Secured Leverage Ratio would not exceed the greater of 6.75:1.00
and the Secured Leverage Ratio as of the last day of the most recently ended Test Period, and (C) if such Indebtedness is not secured
by a Lien on the Collateral (including all Indebtedness of any Non-Guarantor Subsidiary), either (1) the Total Leverage Ratio does
not exceed the greater of 6.75:1.00 and the Total Leverage Ratio as of the last day of the most recently ended Test Period or (2)
the Net Interest Coverage Ratio is not less than 1.75:1.00, (iii) such Indebtedness does not mature prior to the date which
is 91 days after the Latest Maturity Date as of the date of incurrence thereof, (iv) the aggregate outstanding principal amount
of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall not exceed the sum of (x) the greater of $75,000,000
and 45.0% of Consolidated Adjusted EBITDA and (y) any other Indebtedness permitted to be incurred by such Restricted Subsidiaries
that are not Loan Parties under this Section 6.01, (v) no such Indebtedness that is secured by a Lien on the Collateral
shall be guaranteed by any Person that is not a Loan Party or secured by any assets other than the Collateral and (vi) the Weighted
Average Life to Maturity of any such Indebtedness shall be no shorter than the remaining Weighted Average Life to Maturity of any
then-existing Class of Term Loans (without giving effect to any prepayment thereof);
(r)
Indebtedness of the Borrower and/or any Restricted Subsidiary in an aggregate outstanding principal amount not to exceed
100% of the amount of Net Proceeds received by the Borrower (“Contribution Indebtedness”) from (i) the issuance
or sale of Qualified Capital Stock or (ii) any cash contribution to its Capital Stock, in each case, (A) other than any Net Proceeds
received from the sale of Capital Stock to, or contributions from, the Borrower or any of its Restricted Subsidiaries, (B) to the
extent the relevant Net Proceeds have not otherwise been applied to make Investments, Restricted Payments or Restricted Debt Payments
hereunder and (C) other than “Cure Amounts” under (and as defined in) the ABL Credit Agreement;
(s)
Indebtedness of the Borrower and/or any Restricted Subsidiary under any Derivative Transaction not entered into for speculative
purposes;
(t)
[reserved];
(u)
Indebtedness of the Borrower and/or any Subsidiary Guarantor in an aggregate outstanding principal amount not to exceed
the sum of (i) the greater of $75,000,000 and 45.0% of Consolidated Adjusted EBITDA and (ii) any amounts reallocated to this Section
6.01(u) from Section 6.04(a)(xi);
(v)
[reserved];
(w)
Indebtedness of the Borrower and/or any Restricted Subsidiary so long as, no Event of Default exists or would result therefrom
and on a Pro Forma Basis (without “netting” the Cash proceeds of such Indebtedness), (i) if such Indebtedness is secured
by a Lien on the Collateral that is pari passu with the Lien securing the First Priority Secured Obligations and pari
passu in right of payment with the Obligations, (A) such Indebtedness shall be subject to an Acceptable Intercreditor Agreement,
(B) the First Lien Leverage Ratio would not exceed 5.00:1.00 and (C) any such Indebtedness consisting of syndicated first lien
term loans (other than “bridge loans”) shall be subject to clause (v) of the proviso to Section 2.22(a)
(including with respect to exceptions thereunder), (ii) if such Indebtedness is secured by a Lien on the Collateral that is junior
to the Lien securing the First Priority Secured Obligations, (A) such Indebtedness shall be subject to an Acceptable Intercreditor
Agreement, and (B) the Secured Leverage Ratio would not exceed 6.75:1.00, and (iii) if such Indebtedness is not secured by the
Collateral (including all Indebtedness of any Non-Guarantor Subsidiary), either (A) the Total Leverage Ratio would not exceed 6.75:1.00
or (B) the pro forma Net Interest Coverage Ratio would not be less than 2.00:1.00; provided, that (1) the aggregate
outstanding principal amount of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall not exceed the sum
of (x) the greater of $75,000,000 and 45.0% of Consolidated Adjusted EBITDA, at any time outstanding and (y) any other Indebtedness
permitted to be incurred by such Restricted Subsidiaries that are not Loan Parties under this Section 6.01, (2) no such
Indebtedness that is secured by a Lien on the Collateral shall be guaranteed by any Person that is not a Loan Party or secured
by any assets other than the Collateral, (3) such Indebtedness does not mature prior to the date which is 91 days after the Latest
Maturity Date as of the date of incurrence thereof and (4) the Weighted Average Life to Maturity of any such Indebtedness shall
be no shorter than the remaining Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect
to any prepayment thereof);
(x)
Indebtedness of the Borrower under the Second Lien Facility (including any “Incremental Loans” and “Refinancing
Indebtedness” (each as defined in the Second Lien Credit Agreement)) and any Indebtedness constituting “Incremental
Equivalent Debt” (as defined in the Second Lien Credit Agreement or any equivalent term under the documentation governing
the Second Lien Facility) in an aggregate principal amount that does not exceed at any time the sum of (A) $350,000,000 plus
(B) the aggregate outstanding principal amount of “Incremental Loans” and “Incremental Equivalent Debt”
(each as defined in the Second Lien Credit Agreement or any equivalent term under the documentation governing the Second Lien Facility)
permitted under the Second Lien Credit Agreement as in effect on the Closing Date (as amended, restated, modified, replaced or
substituted after the Closing Date to conform to any amendment, restatement, modification, replacement or substitution of this
Agreement relating to the Incremental Cap);
(y)
Indebtedness of the Borrower under the ABL Facility in an aggregate principal amount that does not exceed at any time the
sum of (A) $250,000,000 plus (B) the aggregate outstanding principal amount of “Incremental Loans” (as defined
in the ABL Credit Agreement) permitted under the ABL Credit Agreement as in effect on the Closing Date;
(z)
Indebtedness of the Borrower and/or any Restricted Subsidiary comprised of Capital Lease obligations or rental payments
in respect of any property Disposed of pursuant to any Sale and Lease-Back Transactions permitted pursuant to Section 6.08;
(aa)
Indebtedness (and/or commitments in respect thereof) issued or incurred by the Borrower or any Guarantors in lieu of any
Incremental Facility (such Indebtedness, “Incremental Equivalent Debt”); provided that (i) the aggregate
outstanding principal amount (or committed amount, if applicable) of all Incremental Equivalent Debt, together with the aggregate
outstanding principal amount (or committed amount, if applicable) of all Incremental Facilities shall not exceed the Incremental
Cap to the extent constituting a utilization thereof as provided pursuant to Section 2.22, (ii) any Incremental Equivalent
Debt incurred in the form of syndicated term loans secured by a Lien on the Collateral on a senior basis pari passu with
the First Priority Secured Obligations and pari passu in right of payment with the Obligations shall be subject to clause
(v) of the proviso to Section 2.22(a), and (iii) Incremental Equivalent Debt shall be subject to clauses (vi),
(vii), (viii), (ix) and (x) (except, in the case of clause (x), as otherwise agreed by the Persons
providing such Incremental Equivalent Debt) of the proviso to Section 2.22(a);
(bb)
Indebtedness (including obligations in respect of letters of credit, bank guaranties, surety bonds, performance bonds or
similar instruments with respect to such Indebtedness) incurred by the Borrower and/or any Restricted Subsidiary in respect of
workers compensation claims, unemployment insurance (including premiums related thereto), other types of social security, pension
obligations, vacation pay, health, disability or other employee benefits;
(cc)
Indebtedness of the Borrower and/or any Restricted Subsidiary representing (i) deferred compensation to directors, officers,
employees, members of management, managers, and consultants of any Parent Company, the Borrower and/or any Restricted Subsidiary
in the ordinary course of business and (ii) deferred compensation or other similar arrangements in connection with the Transactions,
any Permitted Acquisition or any other Investment permitted hereby;
(dd)
Indebtedness of the Borrower and/or any Restricted Subsidiary in respect of any letter of credit or bank guarantee issued
in favor of any issuing lender under the ABL Facility to support any defaulting lender’s participation in letters of credit
made under the ABL Facility;
(ee)
Indebtedness of the Borrower and/or any Restricted Subsidiary supported by any letter of credit otherwise permitted to be
incurred hereunder;
(ff)
unfunded pension fund and other employee benefit plan obligations and liabilities incurred by the Borrower and/or any Restricted
Subsidiary in the ordinary course of business to the extent that the unfunded amounts would not otherwise cause an Event of Default
to exist under Section 7.01(i);
(gg)
without duplication of any other Indebtedness, all premiums (if any), interest (including post-petition interest and payment
in kind interest), accretion or amortization of original issue discount, fees, expenses and charges with respect to Indebtedness
of the Borrower and/or any Restricted Subsidiary hereunder;
(hh)
to the extent constituting Indebtedness, obligations under the Merger Agreement;
(ii)
customer deposits and advance payments received in the ordinary course of business from customers for goods and services
purchased in the ordinary course of business; and
(jj)
Indebtedness of the Borrower and/or any Restricted Subsidiary relating to any factoring or similar arrangements entered
into in the ordinary course of business.
Section 6.02.
Liens. The Borrower shall not, nor shall it permit
any of its Restricted Subsidiaries to, create, incur, assume or permit or suffer to exist any Lien on or with respect to any property
of any kind owned by it, whether now owned or hereafter acquired, or any income or profits therefrom, except:
(a)
Liens securing the Secured Obligations created pursuant to the Loan Documents;
(b)
Liens for Taxes which are (i) for amounts not yet overdue by more than 30 days or (ii) which are not required to be paid
pursuant to Section 5.03;
(c)
statutory Liens (and rights of set-off) of landlords, banks, carriers, warehousemen, mechanics, repairmen, workmen and materialmen,
and other Liens imposed by law, in each case incurred in the ordinary course of business (i) for amounts not yet overdue by
more than 30 days or (ii) for amounts that are overdue by more than 30 days and that are being contested in good faith by
appropriate proceedings, so long as adequate reserves or other appropriate provisions required by GAAP shall have been made for
any such contested amounts;
(d)
Liens incurred (i) in the ordinary course of business in connection with workers’ compensation, unemployment insurance
and other types of social security laws and regulations, (ii) in the ordinary course of business to secure the performance of tenders,
statutory obligations, surety, stay, customs and appeal bonds, bids, leases, government contracts, trade contracts, performance
and return-of-money bonds and other similar obligations (exclusive of obligations for the payment of borrowed money), (iii) pursuant
to pledges and deposits of Cash or Cash Equivalents in the ordinary course of business securing (x) any liability for reimbursement
or indemnification obligations of insurance carriers providing property, casualty, liability or other insurance to Holdings and
its subsidiaries or (y) leases or licenses of property otherwise permitted by this Agreement and (iv) to secure obligations in
respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments posted with respect to the
items described in clauses (i) through (iii) above;
(e)
Liens consisting of easements, rights-of-way, restrictions, encroachments, protrusions and other similar encumbrances and
other minor defects or irregularities affecting any Real Estate Assets, in each case which do not, in the aggregate, materially
interfere with the ordinary conduct of the business of the Borrower and/or its Restricted Subsidiaries, taken as a whole, or the
use of the affected property for its intended purpose;
(f)
Liens consisting of any (i) interest or title of a lessor or sub-lessor under any lease of real estate not prohibited hereunder,
(ii) landlord lien permitted by the terms of any lease, (iii) restriction or encumbrance to which the interest or title of such
lessor or sub-lessor may be subject or (iv) subordination of the interest of the lessee or sub-lessee under such lease to any restriction
or encumbrance referred to in the preceding clause (iii);
(g)
Liens (i) solely on any Cash earnest money deposits made by the Borrower and/or any of its Restricted Subsidiaries in connection
with any letter of intent or purchase agreement with respect to any Investment permitted hereunder or (ii) consisting of an agreement
to Dispose or any property in a Disposition permitted under Section 6.07;
(h)
purported Liens evidenced by the filing of precautionary UCC financing statements relating solely to operating leases or
consignment or bailee arrangements entered into in the ordinary course of business;
(i)
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;
(j)
Liens in connection with any zoning, building or similar law or right reserved to or vested in any Governmental Authority
to control or regulate the use of any or dimensions of real property or the structure thereon, including Liens in connection with
any condemnation or eminent domain proceeding or compulsory purchase order;
(k)
Liens securing Refinancing Indebtedness permitted pursuant to Section 6.01(p), subject, to the extent required thereby,
to an Acceptable Intercreditor Agreement; provided that no such Lien extends to any asset not covered by the Lien securing
the Indebtedness that is being refinanced (unless (except in the case of Sections 6.01(a), (x), (y), (z)
and (aa) which shall be limited to the Collateral and in the case of Section 6.01(y), ABL Canadian Collateral and other
current assets of Canadian Restricted Subsidiaries), such Lien is a Permitted Lien, except as otherwise provided in Section
6.01(p));
(l)
Liens existing on the Closing Date securing obligations not exceeding $2,500,000 in the aggregate and Liens described on
Schedule 6.02 and, in each case, together with any modification, replacement, refinancing, renewal or extension thereof;
provided that (i) no such Lien extends to any additional property other than (A) after-acquired property that is affixed
or incorporated into the property covered by such Lien or financed by Indebtedness permitted under Section 6.01, and
(B) proceeds and products thereof, accessions, replacements or additions thereto and improvements thereon (it being understood
that individual financings of the type permitted under Section 6.01(m) provided by any lender may be cross-collateralized
to other financings of such type provided by such lender or its affiliates), and (ii) such modification, replacement, refinancing,
renewal or extension of the obligations secured or benefited by such Liens, if constituting Indebtedness, is permitted by Section 6.01;
(m)
Liens arising out of Sale and Lease-Back Transactions permitted under Section 6.08 and securing Indebtedness
permitted pursuant to Section 6.01(z);
(n)
Liens securing Indebtedness permitted pursuant to Section 6.01(m); provided that any such Lien shall encumber
only the asset acquired with the proceeds of such Indebtedness and proceeds and products thereof, accessions, replacements or additions
thereto and improvements thereon (it being understood that individual financings of the type permitted under Section 6.01(m)
provided by any lender may be cross-collateralized to other financings of such type provided by such lender or its affiliates);
(o)
(i) Liens securing Indebtedness permitted pursuant to Section 6.01(n) on the relevant acquired assets or on
the Capital Stock and assets of the relevant newly acquired Restricted Subsidiary; provided that no such Lien (x) extends
to or covers any other assets (other than the proceeds or products thereof, accessions, replacements or additions thereto and improvements
thereon) or (y) was created in contemplation of the applicable acquisition of assets or Capital Stock, and (ii) Liens securing
Indebtedness incurred pursuant to clause (ii)(A) or (ii)(B) of the proviso in Section 6.01(q) subject,
to the extent required thereby, to an Acceptable Intercreditor Agreement;
(p) (i)
Liens that are contractual rights of set-off or netting relating to (A) the establishment of depositary relations with banks
not granted in connection with the issuance of Indebtedness, (B) pooled deposit or sweep accounts of the Borrower and/or any
Restricted Subsidiary to permit satisfaction of overdraft or similar obligations incurred in the ordinary course of business
of the Borrower and/or any Restricted Subsidiary, (C) purchase orders and other agreements entered into with customers of the
Borrower and/or any Restricted Subsidiary in the ordinary course of business and (D) commodity trading or other
brokerage accounts incurred in the ordinary course of business, (ii) Liens encumbering reasonable customary initial deposits
and margin deposits, (iii) bankers Liens and rights and remedies as to Deposit Accounts, (iv) Liens of a collection bank
arising under Section 4-208 of the UCC on items in the ordinary course of business, (v) Liens in favor of banking or other
financial institutions arising as a matter of Law or under customary general terms and conditions encumbering deposits or
other funds maintained with a financial institution and that are within the general parameters customary in the banking
industry or arising pursuant to such banking institution’s general terms and conditions, (vi) Liens on the
proceeds of any Indebtedness incurred in connection with any transaction permitted hereunder, which proceeds have been
deposited into an escrow account on customary terms to secure such Indebtedness pending the application of such proceeds to
finance such transaction and (vii) Liens of the type described in the foregoing clauses (i), (ii), (iii), (iv)
and (v) securing obligations under Sections 6.01(f) and/or 6.01(s);
(q)
Liens on assets and Capital Stock of Restricted Subsidiaries that are not Loan Parties (including Capital Stock owned by
such Persons but excluding any Capital Stock that is required to be pledged as Collateral) securing Indebtedness of Restricted
Subsidiaries that are not Loan Parties permitted pursuant to Section 6.01;
(r)
Liens securing obligations (other than obligations representing Indebtedness for borrowed money) under operating, reciprocal
easement or similar agreements entered into in the ordinary course of business of the Borrower and/or its Restricted Subsidiaries;
(s)
Liens securing Indebtedness (and related obligations) incurred pursuant to Section 6.01(y); provided that
such Liens are subject to an ABL Intercreditor Agreement if secured on a Split Collateral Basis or an Acceptable Intercreditor
Agreement of the type described in clause (a) of the definition thereof if secured by the Collateral on a senior pari passu
basis with the First Priority Secured Obligations;
(t)
Liens securing (i) Indebtedness (and related obligations) incurred pursuant to Section 6.01(x); provided that
such Liens are junior to the Lien securing the Initial Term Loans pursuant to an Acceptable Intercreditor Agreement and (ii) Indebtedness
(and related obligations) incurred pursuant to Section 6.01(aa), subject, if applicable, to an Acceptable Intercreditor
Agreement;
(u)
Liens on assets securing Indebtedness or other obligations in an aggregate principal amount at any time outstanding not
to exceed the sum of (i) the greater of $75,000,000 and 45.0% of Consolidated Adjusted EBITDA and (ii) to the extent any amounts
are reallocated from Section 6.04(a)(xi) to Section 6.01(u), an amount equal to such reallocated amount, subject,
to the extent applicable, to an Acceptable Intercreditor Agreement;
(v)
Liens on assets securing judgments, awards, attachments and/or decrees and notices of lis pendens and associated
rights relating to litigation being contested in good faith not constituting an Event of Default under Section 7.01(h);
(w)
leases, licenses, subleases or sublicenses granted to others in the ordinary course of business which do not (i) interfere
in any material respect with the business of the Borrower and its Restricted Subsidiaries (other than any Immaterial Subsidiary)
or (ii) secure any Indebtedness;
(x)
Liens on Securities that are the subject of repurchase agreements constituting Investments permitted under Section 6.06
arising out of such repurchase transaction;
(y)
Liens securing obligations in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar
instruments permitted under Sections 6.01(d), (e), (g), (bb) and (dd);
(z)
Liens arising (i) out of conditional sale, title retention, consignment or similar arrangements for the sale of any assets
or property in the ordinary course of business and permitted by this Agreement or (ii) by operation of law under Article 2 of the
UCC (or similar law of any jurisdiction);
(aa)
Liens (i) in favor of any Loan Party and/or (ii) granted by any non-Loan Party in favor of any Restricted Subsidiary that
is not a Loan Party, in the case of each of clauses (i) and (ii), securing intercompany Indebtedness permitted under
Section 6.01;
(bb)
Liens on insurance policies and the proceeds thereof securing the financing of the premiums with respect thereto;
(cc)
Liens on specific items of inventory or other goods and the proceeds thereof securing the relevant Person’s obligations
in respect of documentary letters of credit or banker’s acceptances issued or created for the account of such Person to facilitate
the purchase, shipment or storage of such inventory or goods;
(dd)
Liens securing (i) obligations under Hedge Agreements in connection with any Derivative Transaction of the type described
in Section 6.01(s) and/or (ii) obligations of the type described in Section 6.01(f);
(ee)
(i) Liens on Capital Stock of joint ventures or Unrestricted Subsidiaries securing capital contributions to, or obligations
of, such Persons and (ii) customary rights of first refusal and tag, drag and similar rights in joint venture agreements and agreements
with respect to non-Wholly-Owned Subsidiaries;
(ff)
Liens on cash or Cash Equivalents arising in connection with the defeasance, discharge or redemption of Indebtedness;
(gg)
Liens evidenced by the filing of UCC financing statements relating to any factoring or similar arrangements entered into
in the ordinary course of business;
(hh)
Liens securing Indebtedness incurred in reliance on Section 6.01(w), so long as the condition described in clause
(i) or clause (ii), as applicable, of Section 6.01(w) has been satisfied and subject, to the extent required
thereby, to an Acceptable Intercreditor Agreement; and
(ii)
Liens on assets of Restricted Subsidiaries that are not Loan Parties securing commercial and trade letters of credit permitted
under Section 6.01(e)(iii).
Section 6.03.
No Further Negative Pledges. The Borrower shall not,
nor shall it permit any of its Restricted Subsidiaries to, enter into any agreement prohibiting the creation or assumption of any
Lien upon any Collateral, whether now owned or hereafter acquired, for the benefit of the Secured Parties with respect to the Obligations,
except with respect to:
(a)
specific property to be sold pursuant to any Disposition permitted by Section 6.07;
(b) restrictions
contained in any agreement with respect to Indebtedness permitted by Section 6.01 that is secured by a Permitted Lien,
but only if such restrictions apply only to the Person or Persons obligated under such Indebtedness and its or their
Restricted Subsidiaries or the property or assets securing such Indebtedness;
(c)
restrictions contained in any ABL Facility, any Second Lien Facility and the documentation governing Indebtedness permitted
by clauses (j), (m), (p), (q), (u), (w), (x), (y) and/or (aa)
of Section 6.01, in each case, to the extent such restriction does not restrict the Secured Obligations from being secured
by assets that constitute Collateral;
(d)
restrictions by reason of customary provisions restricting assignments, subletting or other transfers (including the granting
of any Lien) contained in leases, subleases, licenses, sublicenses and other agreements entered into in the ordinary course of
business (provided that such restrictions are limited to the relevant leases, subleases, licenses, sublicenses or other
agreements and/or the property or assets secured by such Liens or the property or assets subject to such leases, subleases, licenses,
sublicenses or other agreements, as the case may be);
(e)
Permitted Liens and restrictions in the agreements relating thereto that limit the right of the Borrower or any of its Restricted
Subsidiaries to Dispose of, or encumber the assets subject to such Liens;
(f)
provisions limiting the Disposition or distribution of assets or property in joint venture agreements, sale-leaseback agreements,
stock sale agreements and other similar agreements, which limitation is applicable only to the assets that are the subject of such
agreements (or the Persons the Capital Stock of which is the subject of such agreement);
(g)
any encumbrance or restriction assumed in connection with an acquisition of the property or Capital Stock of any Person,
so long as such encumbrance or restriction relates solely to the property so acquired (or to the Person or Persons (and its or
their subsidiaries) bound thereby) and was not created in connection with or in anticipation of such acquisition;
(h)
restrictions imposed by customary provisions in partnership agreements, limited liability company organizational governance
documents, joint venture agreements and other similar agreements that restrict the transfer of the assets of, or ownership interests
in, the relevant partnership, limited liability company, joint venture or any similar Person;
(i)
restrictions on Cash or other deposits imposed by Persons under contracts entered into in the ordinary course of business
or for whose benefit such Cash or other deposits exist;
(j)
restrictions set forth in documents which exist on the Closing Date;
(k)
restrictions set forth in any Loan Document, any Hedge Agreement and/or any agreement relating to any Banking Services Obligation;
(l)
restrictions contained in documents governing Indebtedness permitted hereunder of any Restricted Subsidiary that is not
a Loan Party;
(m)
restrictions on any asset (or all of the assets) of and/or the Capital Stock of the Borrower and/or any Restricted Subsidiary
which is imposed pursuant to an agreement entered into in connection with any Disposition of such asset (or assets) and/or all
or a portion of the Capital Stock of the relevant Person that is permitted or not restricted by this Agreement;
(n)
restrictions set forth in any agreement relating to any Permitted Lien that limits the right of the Borrower or any Restricted
Subsidiary to Dispose of or encumber the assets subject thereto; and
(o)
restrictions or encumbrances imposed by any amendment, modification, restatement, renewal, increase, supplement, refunding,
replacement or refinancing of the contracts, instruments or obligations referred to in clauses (a) through (n) above;
provided that no such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing
is, in the good faith judgment of the Borrower, more restrictive with respect to such encumbrances and other restrictions, taken
as a whole, than those in effect prior to the relevant amendment, modification, restatement, renewal, increase, supplement, refunding,
replacement or refinancing.
Section 6.04.
Restricted Payments; Certain Payments of Indebtedness.
(a)
The Borrower shall not pay or make, directly or indirectly, any Restricted Payment, except that:
(i)
the Borrower may make Restricted Payments to the extent necessary to permit any Parent Company:
(A)
to pay general administrative costs and expenses (including corporate overhead, legal or similar expenses and customary
salary, bonus and other benefits payable to directors, officers, employees, members of management, managers and/or consultants
of any Parent Company) and franchise fees and Taxes and similar fees, Taxes and expenses required to enable such Parent Company
to maintain its organizational existence or qualification to do business, in each case, which are reasonable and customary and
incurred in the ordinary course of business, plus any reasonable and customary indemnification claims made by directors,
officers, members of management, managers, employees or consultants of any Parent Company, in each case, to the extent attributable
to the ownership or operations of any Parent Company and its subsidiaries (but excluding the portion of such amount that is attributable
to the ownership or operations of any subsidiary of any Parent Company other than the Borrower and its subsidiaries);
(B)
to pay scheduled and overdue interest and payments as part of an AHYDO catch-up payment, in each case, in respect of any
Indebtedness of any Parent Company to the extent the Net Proceeds thereof were contributed to the Borrower;
(C)
to pay audit and other accounting and reporting expenses of such Parent Company to the extent attributable to any Parent
Company (but excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or
operations of any subsidiary of any Parent Company other than the Borrower and/or its subsidiaries), the Borrower and its subsidiaries;
(D)
for the payment of insurance premiums to the extent attributable to any Parent Company (but excluding, for the avoidance
of doubt, the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent
Company other than the Borrower and/or its subsidiaries), the Borrower and its subsidiaries;
(E)
pay (x) fees and expenses related to debt or equity offerings by any Parent Company, investments or acquisitions permitted
or not restricted by this Agreement (whether or not consummated) and (y) Public Company Costs;
(F)
to finance any Investment permitted under Section 6.06 (provided that (x) any Restricted Payment under this
clause (a)(i)(F) shall be made substantially concurrently with the closing of such Investment and (y) the relevant Parent
Company shall, promptly following the closing thereof, cause (I) all property acquired to be contributed to the Borrower or one
or more of its Restricted Subsidiaries, or (II) the merger, consolidation or amalgamation of the Person formed or acquired into
the Borrower or one or more of its Restricted Subsidiaries, in order to consummate such Investment in compliance with the applicable
requirements of Section 6.06 as if undertaken as a direct Investment by the Borrower or the relevant Restricted Subsidiary);
and
(G)
to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of
management, managers, employees or consultants of any Parent Company (or any Immediate Family Member of any of the foregoing) to
the extent such salary, bonuses and other benefits are attributable and reasonably allocated to the operations of the Borrower
and/or its subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such
purpose;
(ii)
the Borrower may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption, retirement
or other acquisition or retirement for value of Capital Stock of any Parent Company or any subsidiary held by any future, present
or former employee, director, member of management, officer, manager or consultant (or any Affiliate or Immediate Family Member
thereof) of any Parent Company, the Borrower or any subsidiary:
(A)
in accordance with the terms of promissory notes issued pursuant to Section 6.01(o), so long as the aggregate
amount of all Cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments
made pursuant to sub-clause (D) of this clause (ii) below, does not exceed in any Fiscal Year the greater of $20,000,000
and 12.0% of Consolidated Adjusted EBITDA, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years;
(B)
with the proceeds of any sale or issuance of the Capital Stock of the Borrower or any Parent Company (to the extent such
proceeds are contributed in respect of Qualified Capital Stock to the Borrower or any Restricted Subsidiary);
(C)
with the net proceeds of any key-man life insurance policies; or
(D)
with Cash and Cash Equivalents in an amount not to exceed in any Fiscal Year, together with the aggregate amount of all
cash payments made pursuant to sub-clause (A) of this clause (ii) in respect of promissory notes issued pursuant
to Section 6.01(o), the greater of $20,000,000 and 12.0% of Consolidated Adjusted EBITDA, which, if not used in any Fiscal
Year, may be carried forward to subsequent Fiscal Years;
(iii)
the Borrower may make Restricted Payments in an amount not to exceed the portion, if any, of the Available Amount on such
date that the Borrower elects to apply to this clause (iii);
(iv)
the Borrower may make Restricted Payments (i) to any Parent Company to enable such Parent Company to make Cash payments
in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible
into or exchangeable for Capital Stock of such Parent Company and (ii) consisting of (A) payments made or expected to be made in
respect of withholding or similar Taxes payable by any future, present or former officers, directors, employees, members of management,
managers or consultants of the Borrower, any Restricted Subsidiary or any Parent Company or any of their respective Immediate Family
Members and/or (B) repurchases of Capital Stock in consideration of the payments described in sub-clause (A) above, including
demand repurchases in connection with the exercise of stock options;
(v)
the Borrower may repurchase (or make Restricted Payments to any Parent Company to enable it to repurchase) Capital Stock
upon the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock if such Capital Stock
represents all or a portion of the exercise price of, or tax withholdings with respect to, such warrants, options or other securities
convertible into or exchangeable for Capital Stock as part of a “cashless” exercise;
(vi)
for any taxable period (or portion thereof) that a Parent Company is treated as a corporation for U.S. federal income tax
purposes and for which Borrower and/or any of its subsidiaries are members (or are pass-through entities of such members) of a
consolidated, combined, unitary or similar income Tax group for U.S. federal, state, local or foreign income Tax purposes for which
such Parent Company is the common parent, the Borrower may make Restricted Payments to such Parent Company to pay the portion of
any U.S. federal, state, local or foreign income Taxes (as applicable) of such Parent Company for such taxable period that are
attributable to the income of the Borrower and/or its applicable subsidiaries; provided that the aggregate amount of such
distributions shall not exceed the aggregate Taxes the Borrower and/or its subsidiaries, as applicable, would be required to pay
in respect of such U.S. federal, state, local and foreign Taxes on a stand-alone basis for such taxable period; provided further
that the amount of such distributions with respect to any Unrestricted Subsidiary for any taxable period shall be limited to the
amount actually paid by such Unrestricted Subsidiary for such purpose;
(vii)
the Borrower may make Restricted Payments to consummate the Transactions on the Closing Date and to the extent not paid
on the Closing Date, thereafter to pay working capital and purchase price adjustments and other payment obligations under the Merger
Agreement and Transaction Costs;
(viii)
so long as no Event of Default exists at the time of declaration of such Restricted Payment, following the consummation
of the first Qualifying IPO, the Borrower may (or may make Restricted Payments to any Parent Company to enable it to) make Restricted
Payments with respect to any Capital Stock in an amount of 6% per annum of the net Cash proceeds received by or contributed to
the Borrower from any Qualifying IPO;
(ix) the
Borrower may make Restricted Payments to (i) redeem, repurchase, retire or otherwise acquire any (A) Capital Stock
(“Treasury Capital Stock”) of the Borrower and/or any Restricted Subsidiary or (B) Capital Stock of any
Parent Company, in the case of each of subclauses (A) and (B), in exchange for, or out of the proceeds of the
substantially concurrent sale (other than to the Borrower and/or any Restricted Subsidiary) of, Qualified Capital Stock of
the Borrower or any Parent Company to the extent any such proceeds are contributed to the capital of the Borrower and/or any
Restricted Subsidiary in respect of Qualified Capital Stock (“Refunding Capital Stock”) and (ii) declare
and pay dividends on any Treasury Capital Stock out of the proceeds of the substantially concurrent sale (other than to the
Borrower or a Restricted Subsidiary) of any Refunding Capital Stock;
(x)
to the extent constituting a Restricted Payment, the Borrower may consummate any transaction permitted by Section 6.06
(other than Sections 6.06(j) and (t)), Section 6.07 (other than Section 6.07(g)) and Section 6.09
(other than Section 6.09(d));
(xi)
the Borrower may make Restricted Payments in an aggregate amount not to exceed the greater of $40,000,000 and 25.0% of Consolidated
Adjusted EBITDA minus the sum of (i) any amounts under this Section 6.04(a)(xi) reallocated to make Restricted
Debt Payments pursuant to Section 6.04(b)(iv)(B), (ii) any amounts under this Section 6.04(a)(xi)
reallocated to make Investments pursuant to Section 6.06(q), and (iii) any amounts under this Section 6.04(a)(xi)
reallocated to incur Indebtedness pursuant to Section 6.01(u);
(xii)
the Borrower may pay any dividend or consummate any redemption within 60 days after the date of the declaration thereof
or the provision of a redemption notice with respect thereto, as the case may be, if at the date of such declaration or notice,
the dividend or redemption notice would have complied with the provisions hereof;
(xiii)
the Borrower may make Restricted Payments so long as (A) no Event of Default exists or would result therefrom and (B) the
Total Leverage Ratio, calculated on a Pro Forma Basis at the time of declaration thereof, would not exceed 5.25:1.00;
(xiv)
the Borrower may make Restricted Payments to enable any Parent Company to make Restricted Payments solely in the Qualified
Capital Stock of such Parent Company; and
(xv)
the Borrower may make Restricted Payments to pay amounts permitted under Section 6.09(f) and (g).
(b) Holdings and the Borrower shall not, nor shall they permit any Restricted Subsidiary to, make any payment (whether in Cash,
securities or other property) on or in respect of principal of or interest on (x) any Junior Lien Indebtedness or (y) any Subordinated
Indebtedness, in each cases of clauses (x) and (y), with an individual outstanding principal amount in excess of
the Threshold Amount (such Indebtedness under clauses (x) and (y), in each case, with an individual outstanding
principal amount in excess of the Threshold Amount, the “Restricted Debt”), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Restricted Debt prior
to its scheduled maturity (collectively, “Restricted Debt Payments”), except:
(i)
any purchase, defeasance, redemption, repurchase, repayment or other acquisition or retirement of any Restricted Debt made
by exchange for, or out of the proceeds of, Refinancing Indebtedness permitted by Section 6.01 (except to the extent subject
to clause (iv)(C) of the proviso to Section 6.01(p);
(ii)
payments as part of an AHYDO catch-up payment;
(iii)
payments of regularly scheduled interest as and when due in respect of any Restricted Debt, except for any payments with
respect to any such Subordinated Indebtedness that are prohibited by the subordination provisions thereof;
(iv)
so long as, at the time of delivery of irrevocable notice with respect thereto, no Event of Default exists or would result
therefrom, Restricted Debt Payments in an aggregate amount not to exceed (i) the sum of (A) the greater of $40,000,000 and 25.0%
of Consolidated Adjusted EBITDA and (B) any amounts reallocated to this Section 6.04(b)(iv) from Section 6.04(a)(xi)
and Section 6.06(q), minus (ii) any amounts reallocated from Section 6.04(b)(iv)(A) to make Investments pursuant
to Section 6.06(q);
(v)
(A) Restricted Debt Payments in exchange for, or with proceeds of any issuance of, Qualified Capital Stock of the Borrower
and/or any Restricted Subsidiary and/or any capital contribution in respect of Qualified Capital Stock of the Borrower or any Restricted
Subsidiary, (B) Restricted Debt Payments as a result of the conversion of all or any portion of any Restricted Debt into Qualified
Capital Stock of the Borrower and/or any Restricted Subsidiary and (C) to the extent constituting a Restricted Debt Payment, payment-in-kind
interest with respect to any Restricted Debt that is permitted under Section 6.01;
(vi)
Restricted Debt Payments in an amount not to exceed the portion, if any, of the Available Amount on such date that the Borrower
elects to apply to this clause (vi);
(vii)
Restricted Debt Payments; provided that the Total Leverage Ratio, calculated on a Pro Forma Basis, would not exceed
5.75:1.00; and
(viii)
mandatory prepayments of Restricted Debt (and related payments of interest) made with Declined Proceeds (it being understood
that any Declined Proceeds applied to make Restricted Debt Payments in reliance on this Section 6.04(b)(viii) shall not
increase the amount available under clause (a)(viii) of the definition of “Available Amount” to the extent so
applied).
Section 6.05.
Restrictions on Subsidiary Distributions. Except
as provided herein or in any other Loan Document, the Second Lien Credit Agreement, any document with respect to any “Incremental
Equivalent Debt” (as defined herein and in the Second Lien Credit Agreement or any equivalent term under any Second Lien
Facility) and/or in agreements with respect to refinancings, renewals or replacements of such Indebtedness that are permitted by
Section 6.01, the Borrower shall not, nor shall it permit any of its Restricted Subsidiaries to, enter into or cause to
exist any agreement restricting the ability of (i) any subsidiary of the Borrower to pay dividends or other distributions to the
Borrower or any Subsidiary Guarantor or (ii) any Restricted Subsidiary to make cash loans or advances to the Borrower or any Subsidiary
Guarantor, except:
(a)
in any agreement evidencing (i) Indebtedness of a Restricted Subsidiary that is not a Loan Party permitted by Section 6.01,
(ii) Indebtedness permitted by Section 6.01 that is secured by a Permitted Lien if the relevant restriction applies
only to the Person obligated under such Indebtedness and its Restricted Subsidiaries or the property or assets intended to secure
such Indebtedness and (iii) Indebtedness permitted pursuant to clauses (j), (m), (p), (q), (u),
(w), (x), (y) and/or (aa) of Section 6.01;
(b)
by reason of customary provisions restricting assignments, subletting or other transfers (including the granting of any
Lien) contained in leases, subleases, licenses, sublicenses, joint venture agreements and similar agreements entered into in the
ordinary course of business;
(c)
that are or were created by virtue of any Lien granted upon, transfer of, agreement to transfer or grant of, any option
or right with respect to any property, assets or Capital Stock not otherwise prohibited under this Agreement;
(d)
assumed in connection with any acquisition of property or the Capital Stock of any Person, so long as the relevant encumbrance
or restriction relates solely to the Person and its subsidiaries (including the Capital Stock of the relevant Person or Persons)
and/or property so acquired (or to the Person or Persons (and its or their subsidiaries) bound thereby) and was not created in
connection with or in anticipation of such acquisition;
(e)
in any agreement for any Disposition of any Restricted Subsidiary (or all or substantially all of the property and/or assets
thereof) that restricts the payment of dividends or other distributions or the making of cash loans or advances by such Restricted
Subsidiary pending such Disposition;
(f)
in provisions in agreements or instruments which prohibit the payment of dividends or the making of other distributions
with respect to any class of Capital Stock of a Person other than on a pro rata basis;
(g)
imposed by customary provisions in partnership agreements, limited liability company organizational governance documents,
joint venture agreements, sale-leaseback agreements, stock sale agreements and other similar agreements;
(h)
on Cash, other deposits or net worth or similar restrictions imposed by any Person under any contract entered into in the
ordinary course of business or for whose benefit such Cash, other deposits or net worth or similar restrictions exist;
(i)
set forth in documents which exist on the Closing Date and not created in contemplation thereof;
(j)
those arising pursuant to an agreement or instrument relating to any Indebtedness permitted to be incurred after the Closing
Date if the relevant restrictions, taken as a whole, are not materially less favorable to the Lenders than the restrictions contained
in this Agreement, taken as a whole (as determined in good faith by the Borrower);
(k)
those arising under or as a result of applicable law, rule, regulation or order or the terms of any license, authorization,
concession or permit;
(l)
those arising in any Loan Document and/or any Loan Document (as defined in the Second Lien Credit Agreement), any Hedge
Agreement and/or any agreement relating to any Banking Services Obligation;
(m)
any Indebtedness permitted under Section 6.01; provided that no such restrictions are, in the good faith judgment
of the Borrower, more restrictive with respect to such restrictions, taken as a whole, than those in any Indebtedness existing
on the Closing Date (including under this Agreement and the Second Lien Credit Agreement); and/or
(n) those
imposed by any amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing of
any contract, instrument or obligation referred to in clauses (a) through (m) above; provided that no
such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing is, in the
good faith judgment of the Borrower, more restrictive with respect to such restrictions, taken as a whole, than those in
existence prior to such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or
refinancing.
Section 6.06.
Investments. The Borrower shall not, nor shall it
permit any of its Restricted Subsidiaries to, make or own any Investment in any other Person except:
(a)
Cash or Investments that were Cash Equivalents at the time made;
(b)
(i) Investments existing on the Closing Date in any subsidiary, (ii) Investments made after the Closing Date among
the Borrower and/or one or more Restricted Subsidiaries that are Loan Parties (other than Holdings), (iii) Investments made after
the Closing Date by any Loan Party in any Restricted Subsidiary that is not a Loan Party in an aggregate outstanding amount not
to exceed the sum of (A) the greater of $60,000,000 and 35.0% of Consolidated Adjusted EBITDA and (B) any amounts reallocated to
this Section 6.06(b) from Section 6.06(d), (iv) Investments made by Holdings, the Borrower and/or any Restricted
Subsidiary in the form of any contribution or Disposition of the Capital Stock of any Person that is not a Loan Party, and (v) Investments
made by any Restricted Subsidiary that is not a Loan Party in any Loan Party (other than Holdings) or any other Restricted Subsidiary
of the Borrower;
(c)
Investments (i) constituting deposits, prepayments and/or other credits to suppliers, (ii) made in connection with obtaining,
maintaining or renewing client and customer contracts and/or (iii) in the form of advances made to distributors, suppliers, licensors
and licensees, in each case, in the ordinary course of business or, in the case of clause (iii), to the extent necessary
to maintain the ordinary course of supplies to the Borrower or any Restricted Subsidiary;
(d)
Investments in Unrestricted Subsidiaries or in joint ventures (including in connection with the creation, formation and/or
acquisition of any joint venture, or in any Restricted Subsidiary to enable such Restricted Subsidiary to make an Investment in
joint ventures, including to create, form and/or acquire any joint venture) in an aggregate outstanding amount not to exceed (i)
the greater of $50,000,000 and 30.0% of Consolidated Adjusted EBITDA minus (ii) any amounts reallocated from this Section
6.06(d) to Section 6.06(b)(iii);
(e)
(i) Permitted Acquisitions and (ii) Investments in Restricted Subsidiaries that are not Loan Parties in amounts required
to permit such Restricted Subsidiaries to consummate Permitted Acquisitions (subject to any applicable limitations in clause
(b) of the first proviso in the definition of “Permitted Acquisition”;
(f)
Investments (i) existing on, or contractually committed to or contemplated as of, the Closing Date and described on Schedule 6.06
and (ii) any modification, replacement, renewal or extension of any Investment described in clause (i) above so long as
no such modification, renewal or extension thereof increases the amount of such Investment except by the terms thereof or as otherwise
permitted by this Section 6.06);
(g)
Investments received in lieu of Cash in connection with any Disposition permitted by Section 6.07 or any other
disposition of assets not constituting a Disposition;
(h) loans
or advances to present or former employees, directors, members of management, officers, managers or consultants or
independent contractors (or their respective Immediate Family Members) of any Parent Company, the Borrower and its
subsidiaries and/or any joint venture to the extent permitted by Requirements of Law, in connection with such Person’s
purchase of Capital Stock of any Parent Company, either (i) in an aggregate principal amount not to exceed $7,500,000 at any
one time outstanding or (ii) so long as the proceeds of such loan or advance are substantially contemporaneously contributed
to the Borrower for the purchase of such Capital Stock;
(i)
Investments consisting of extensions of credit in the nature of accounts receivable or notes receivable arising from the
grant of trade credit in the ordinary course of business;
(j)
Investments consisting of Indebtedness permitted under Section 6.01 (other than Indebtedness permitted under
Sections 6.01(b) and (h)), Permitted Liens, Restricted Payments permitted under Section 6.04 (other
than Section 6.04(a)(x)), Restricted Debt Payments permitted by Section 6.04 and mergers, consolidations, amalgamations,
liquidations, windings up, dissolutions or Dispositions permitted by Section 6.07 (other than Section 6.07(a)
(if made in reliance on subclause (ii)(y) of the proviso thereto), Section 6.07(c)(ii) (if made in reliance
on clause (B) therein) and Section 6.07(g)) and affiliate transactions permitted by Section 6.09 (other
than Section 6.09(d));
(k)
Investments in the ordinary course of business consisting of endorsements for collection or deposit and customary trade
arrangements with customers;
(l)
Investments (including debt obligations and Capital Stock) received (i) in connection with the bankruptcy or reorganization
of any Person, (ii) in settlement of delinquent obligations of, or other disputes with, customers, suppliers and other account
debtors arising in the ordinary course of business, (iii) upon foreclosure with respect to any secured Investment or other
transfer of title with respect to any secured Investment and/or (iv) as a result of the settlement, compromise, resolution of litigation,
arbitration or other disputes;
(m)
loans and advances of payroll payments or other compensation to present or former employees, directors, members of management,
officers, managers or consultants of any Parent Company (to the extent such payments or other compensation relate to services provided
to such Parent Company (but excluding, for the avoidance of doubt, the portion of any such amount, if any, attributable to the
ownership or operations of any subsidiary of any Parent Company other than the Borrower and/or its subsidiaries)), the Borrower
and/or any subsidiary in the ordinary course of business;
(n)
Investments to the extent that payment therefor is made solely with Capital Stock of any Parent Company or Capital Stock
(other than Disqualified Capital Stock) of the Borrower or any Restricted Subsidiary, in each case, to the extent not resulting
in a Change of Control;
(o)
(i) Investments of any Restricted Subsidiary acquired after the Closing Date, or of any Person acquired by, or merged into
or consolidated or amalgamated with, the Borrower or any Restricted Subsidiary after the Closing Date, in each case as part of
an Investment otherwise permitted by this Section 6.06 to the extent that such Investments were not made in contemplation
of or in connection with such acquisition, merger, amalgamation or consolidation and were in existence on the date of the relevant
acquisition, merger, amalgamation or consolidation and (ii) any modification, replacement, renewal or extension of any Investment
permitted under clause (i) of this Section 6.06(o) so long as no such modification, replacement, renewal or
extension thereof increases the amount of such Investment except as otherwise permitted by this Section 6.06;
(p)
Investments made in connection with the Transactions;
(q) Investments
made after the Closing Date by the Borrower and/or any of its Restricted Subsidiaries in an aggregate amount not to exceed at
any time outstanding an amount equal to (i) the sum of (A) the greater of $75,000,000 and 45.0% of Consolidated Adjusted
EBITDA, (B) any amounts reallocated to this Section 6.06(q) from Section 6.04(a)(xi) or Section
6.04(b)(iv), and (C) with respect to any Person that becomes a Restricted Subsidiary of the Borrower if the Borrower or
any of its Restricted Subsidiaries made an Investment in such Person after the Closing Date prior to such Person becoming a
Restricted Subsidiary, the Fair Market Value of such Investments as of the date on which such Person becomes a Restricted
Subsidiary, minus (ii) any amounts reallocated from this this Section 6.06(q) to make Restricted Debt Payments
pursuant to Section 6.04(b)(iv);
(r)
Investments made after the Closing Date by the Borrower and/or any of its Restricted Subsidiaries in an amount not to exceed
the portion, if any, of the Available Amount on such date that the Borrower elects to apply to this clause (r);
(s)
(i) Guarantees of leases (other than Capital Leases) or of other obligations not constituting Indebtedness and (ii) Guarantees
of the lease obligations of suppliers, customers, franchisees and licensees of the Borrower and/or its Restricted Subsidiaries,
in each case, in the ordinary course of business;
(t)
Investments in any Parent Company in amounts and for purposes for which Restricted Payments to such Parent Company are permitted
under Section 6.04(a); provided that any Investment made as provided above in lieu of any such Restricted Payment
shall reduce availability under the applicable Restricted Payment basket under Section 6.04(a);
(u)
Investments made by any Restricted Subsidiary that is not a Loan Party with the proceeds received by such Restricted Subsidiary
from an Investment made by any Loan Party in such Restricted Subsidiary pursuant to this Section 6.06 (other than Investments
made pursuant to clause (ii) of Section 6.06(e));
(v)
Investments in subsidiaries and joint ventures in connection with reorganizations and related activities related to tax
planning; provided that, after giving effect to any such reorganization and/or related activity, the security interest of
the Administrative Agent in the Collateral, taken as a whole, is not materially impaired;
(w)
Investments under any Derivative Transaction of the type permitted under Section 6.01(s);
(x)
[Reserved];
(y)
Investments made in joint ventures as required by, or made pursuant to, buy/sell arrangements between the joint venture
parties set forth in joint venture agreements and similar binding arrangements in effect on the Closing Date (other than any modification,
replacement, renewal or extension of such Investments so long as no such modification, renewal or extension thereof increased the
amount of any such Investment except by the terms thereof or as otherwise permitted by this Section 6.06);
(z)
unfunded pension fund and other employee benefit plan obligations and liabilities to the extent that they are permitted
to remain unfunded under applicable law;
(aa)
Investments in the Borrower, any subsidiary and/or any joint venture in connection with intercompany cash management arrangements
and related activities in the ordinary course of business;
(bb)
Investments so long as, after giving effect thereto on a Pro Forma Basis, the Total Leverage Ratio does not exceed 6.25:1.00;
(cc)
Investments consisting of the licensing or contribution of IP Rights pursuant to joint marketing arrangements with other
Persons; and
(dd)
Investments in similar businesses in an aggregate outstanding principal amount not to exceed the greater of $60,000,000
and 35.0% of Consolidated Adjusted EBITDA.
Section 6.07.
Fundamental Changes; Disposition of Assets. The Borrower
shall not, nor shall it permit any of its Restricted Subsidiaries to, enter into any transaction of merger, consolidation or amalgamation,
or liquidate, wind up or dissolve themselves (or suffer any liquidation or dissolution), or make any Disposition of any assets
in a single transaction or in a series of related transactions, except:
(a) any
Restricted Subsidiary may be merged, consolidated or amalgamated with or into the Borrower or any other Restricted Subsidiary;
provided that (i) in the case of any such merger, consolidation or amalgamation with or into the Borrower, (A) the Borrower
shall be the continuing or surviving Person or (B) if the Person formed by or surviving any such merger, consolidation or amalgamation
is not the Borrower (any such Person, the “Successor Borrower”), (x) the Successor Borrower shall be an entity
organized or existing under the law of the U.S., any state thereof or the District of Columbia, (y) the Successor Borrower shall
expressly assume the Obligations of the Borrower in a manner reasonably satisfactory to the Administrative Agent and concurrently
with the consummation of such merger, consolidation or amalgamation, 100% of the Capital Stock of the Successor Borrower shall
be pledged to the Administrative Agent for the benefit of the Secured Parties and (z)(1) except as the Administrative Agent may
otherwise agree, each Guarantor, unless it is the other party to such merger, consolidation or amalgamation, shall have executed
and delivered a reaffirmation agreement with respect to its obligations under the Loan Guaranty and the other Loan Documents and
(2) upon its reasonable request, the Administrative Agent shall have received customary legal opinions; it being understood and
agreed that if the foregoing conditions under clauses (x) through (z) are satisfied, the Successor Borrower will
succeed to, and be substituted for, the Borrower under this Agreement and the other Loan Documents, and (ii) in the case
of any such merger, consolidation or amalgamation with or into any Subsidiary Guarantor, either (x) such Subsidiary Guarantor
shall be the continuing or surviving Person or the continuing or surviving Person shall expressly assume the guarantee obligations
of the Subsidiary Guarantor in a manner reasonably satisfactory to the Administrative Agent or (y) the relevant transaction shall
be treated as an Investment and shall comply with Section 6.06;
(b)
Dispositions (including of Capital Stock) among the Borrower and/or any Restricted Subsidiary (upon voluntary liquidation
or otherwise); provided that any such Disposition by any Loan Party to any Person that is not a Loan Party shall be (i)
for Fair Market Value with at least 75% of the consideration for such Disposition consisting of Cash or Cash Equivalents at the
time of such Disposition or (ii) treated as an Investment and otherwise made in compliance with Section 6.06 (other than
in reliance on clause (j) thereof);
(c) (i)
the liquidation or dissolution of any Restricted Subsidiary if the Borrower determines in good faith that such liquidation or
dissolution is in the best interests of the Borrower, is not materially disadvantageous to the Lenders and the Borrower or
any Restricted Subsidiary receives any assets of the relevant dissolved or liquidated Restricted Subsidiary; provided
that in the case of any liquidation or dissolution of any Loan Party that results in a distribution of assets to any
Restricted Subsidiary that is not a Loan Party, such distribution shall be treated as an Investment and shall comply with Section
6.06 (other than in reliance on clause (j) thereof); (ii) any merger, amalgamation, dissolution, liquidation or
consolidation, the purpose of which is to effect (A) any Disposition otherwise permitted under this Section 6.07
(other than clause (a), clause (b) or this clause (c)) or (B) any Investment permitted under Section
6.06; and (iii) the Borrower or any Restricted Subsidiary may be converted into another form of entity, in each case, so
long as such conversion does not adversely affect the value of the Loan Guaranty or Collateral, if any;
(d)
(x) Dispositions of inventory or equipment in the ordinary course of business (including on an intercompany basis)
and (y) the leasing or subleasing of real property in the ordinary course of business;
(e)
Dispositions of surplus, obsolete, used or worn out property or other property that, in the reasonable judgment of the Borrower,
is (A) no longer useful in its business (or in the business of any Restricted Subsidiary of the Borrower) or (B) otherwise economically
impracticable to maintain;
(f)
Dispositions of Cash Equivalents or other assets that were Cash Equivalents when the relevant original Investment was made;
(g) Dispositions,
mergers, amalgamations, consolidations or conveyances that constitute Investments permitted pursuant to Section 6.06
(other than Section 6.06(j)), Permitted Liens, Restricted Payments permitted by Section 6.04(a) (other than Section 6.04(a)(ix))
and Sale and Lease-back Transactions permitted by Section 6.08;
(h)
Dispositions for Fair Market Value; provided that with respect to any such Disposition with a purchase price in excess
of the greater of $65,000,000 and 40.0% of Consolidated Adjusted EBITDA, at least 75% of the consideration for such Disposition
shall consist of Cash or Cash Equivalents; provided, that for purposes of the 75% Cash consideration requirement, (w) the
amount of any Indebtedness or other liabilities (other than Indebtedness or other liabilities that are subordinated to the Obligations
or that are owed to the Borrower or any Restricted Subsidiary) of the Borrower or any Restricted Subsidiary (as shown on such Person’s
most recent balance sheet or statement of financial position (or in the notes thereto)) that are assumed by the transferee of any
such assets and for which the Borrower and/or its applicable Restricted Subsidiary have been validly released by all relevant creditors
in writing, (x) the amount of any trade-in value applied to the purchase price of any replacement assets acquired in connection
with such Disposition, (y) any Securities received by the Borrower or any Restricted Subsidiary from such transferee that
are converted by such Person into Cash or Cash Equivalents (to the extent of the Cash or Cash Equivalents received) within 180
days following the closing of the applicable Disposition and (z) any Designated Non-Cash Consideration received in respect of such
Disposition having an aggregate fair market value, taken together with all other Designated Non-Cash Consideration received pursuant
to this clause (z) and Section 6.08(B)(1)(z) that is at that time outstanding, not in excess of the greater of $50,000,000
and 30.0% of Consolidated Adjusted EBITDA, in each case, shall be deemed to be Cash; provided, further, that (x) on
the date on which the agreement governing such Disposition is executed, no Event of Default shall exist and (y) the Net Proceeds
of such Disposition shall be applied and/or reinvested as (and to the extent) required by Section 2.11(b)(ii);
(i)
to the extent that (i) the relevant property is exchanged for credit against the purchase price of similar replacement property
or (ii) the proceeds of the relevant Disposition are promptly applied to the purchase price of such replacement property;
(j)
Dispositions of Investments in joint ventures to the extent required by, or made pursuant to, buy/sell arrangements between
joint venture or similar parties set forth in the relevant joint venture arrangements and/or similar binding arrangements;
(k)
Dispositions of accounts receivable in the ordinary course of business (including any discount and/or forgiveness thereof)
and any factoring or similar arrangement or in connection with the collection or compromise of any of the foregoing;
(l)
Dispositions and/or terminations of leases, subleases, licenses or sublicenses (including the provision of software under
any open source license), which (i) do not materially interfere with the business of the Borrower and its Restricted Subsidiaries
or (ii) relate to closed facilities or the discontinuation of any product line;
(m)
(i) any termination of any lease in the ordinary course of business, (ii) any expiration of any option agreement in
respect of real or personal property and (iii) any surrender or waiver of contractual rights or the settlement, release or
surrender of contractual rights or litigation claims (including in tort) in the ordinary course of business;
(n)
Dispositions of property subject to foreclosure, casualty, eminent domain or condemnation proceedings (including in lieu
thereof or any similar proceeding);
(o)
Dispositions or consignments of equipment, inventory or other assets (including leasehold interests in real property) with
respect to facilities that are temporarily not in use, held for sale or closed;
(p)
Dispositions in connection with the Transactions;
(q)
Dispositions of non-core assets acquired in connection with any acquisition permitted hereunder and sales of Real Estate
Assets acquired in any acquisition permitted hereunder; provided that (i) the Net Proceeds received in connection with any
such Disposition shall be applied and/or reinvested as (and to the extent required) by Section 2.11(b)(ii) and (ii) no Event
of Default exists on the date on which the definitive agreement governing the relevant Disposition is executed;
(r)
exchanges or swaps, including transactions covered by Section 1031 of the Code (or any comparable provision of any
foreign jurisdiction), of property or assets so long as any such exchange or swap is made for fair value (as reasonably determined
by the Borrower) for like property or assets; provided that (i) upon the consummation of any such exchange or swap by any
Loan Party, to the extent the property received does not constitute an Excluded Asset, the Administrative Agent has a perfected
Lien with the same priority as the Lien held on the Real Estate Assets so exchanged or swapped and (ii) any Net Proceeds received
as “cash boot” in connection with any such transaction shall be applied and/or reinvested as (and to the extent required)
by Section 2.11(b)(ii);
(s)
Dispositions set forth on Schedule 6.07(s);
(t)
(i) licensing and cross-licensing arrangements involving any technology, intellectual property or IP Rights of the Borrower
or any Restricted Subsidiary in the ordinary course of business and (ii) Dispositions, abandonments, cancellations or lapses
of IP Rights, or issuances or registrations, or applications for issuances or registrations, of IP Rights, which, in the reasonable
good faith determination of the Borrower, are not material to the conduct of the business of the Borrower or its Restricted Subsidiaries,
or are no longer economical to maintain in light of its use;
(u)
terminations or unwinds of Derivative Transactions;
(v)
Dispositions of Capital Stock of, or sales of Indebtedness or other Securities of, Unrestricted Subsidiaries;
(w) Dispositions
of Real Estate Assets and related assets in the ordinary course of business in connection with relocation activities for
directors, officers, employees, members of management, managers or consultants of any Parent Company, the Borrower and/or any
Restricted Subsidiary;
(x)
Dispositions made to comply with any order of any agency of the U.S. Federal government, any state, authority or other regulatory
body or any applicable Requirement of Law;
(y)
any merger, amalgamation, consolidation, Disposition or conveyance the sole purpose of which is to reincorporate or reorganize
(i) any Domestic Subsidiary in another jurisdiction in the U.S. and/or (ii) any Foreign Subsidiary in the U.S. or any other jurisdiction;
(z)
any sale of motor vehicles and information technology equipment purchased at the end of an operating lease and resold thereafter;
and
(aa)
Dispositions involving assets having a Fair Market Value in the aggregate since the Closing Date of not more than the greater
of $60,000,000 and 35.0% of Consolidated Adjusted EBITDA.
To the extent that any Collateral is Disposed
of as expressly permitted by this Section 6.07 to any Person other than a Loan Party, such Collateral shall be sold free
and clear of the Liens created by the Loan Documents, which Liens shall be automatically released upon the consummation of such
Disposition; it being understood and agreed that the Administrative Agent shall be authorized to take, and shall take, any actions
deemed appropriate in order to effect the foregoing in accordance with Article 8.
Section 6.08. Sale
and Lease-Back Transactions. The Borrower shall not, nor shall it permit any of its Restricted Subsidiaries to,
directly or indirectly, become or remain liable as lessee or as a guarantor or other surety with respect to any lease of any
property (whether real, personal or mixed), whether now owned or hereafter acquired, which the Borrower or the relevant
Restricted Subsidiary (a) has sold or transferred or is to sell or to transfer to any other Person (other than the
Borrower or any of its Restricted Subsidiaries) and (b) intends to use for substantially the same purpose as the property
which has been or is to be sold or transferred by the Borrower or such Restricted Subsidiary to any Person (other than the
Borrower or any of its Restricted Subsidiaries) in connection with such lease (such a transaction described herein, a
“Sale and Lease-Back Transaction”); provided that any Sale and Lease-Back Transaction shall be
permitted so long as (i) the Net Proceeds of such Disposition are applied and/or reinvested as (and to the extent) required
by Section 2.11(b)(ii) and the documentation governing any other Credit Facilities and/or (ii) such Sale and
Lease-Back Transaction is (A) permitted by Section 6.01(m) and the documentation governing any other Credit Facilities
and/or (B) (1) made in exchange for not less than 75% cash consideration (provided that for purposes of the foregoing
75% Cash consideration requirement, (w) the amount of any Indebtedness or other liabilities (other than Indebtedness or other
liabilities that are subordinated to the Obligations or that are owed to the Borrower or any Restricted Subsidiary) of the
Borrower or any Restricted Subsidiary (as shown on such Person’s most recent balance sheet or statement of financial
position (or in the notes thereto) that are assumed by the transferee of any such assets and for which the Borrower and/or
its applicable Restricted Subsidiary have been validly released by all relevant creditors in writing, (x) the amount of any
trade-in value applied to the purchase price of any replacement assets acquired in connection with such Sale and Lease-Back
Transaction, (y) any Securities received by the Borrower or any Restricted Subsidiary from such transferee that are converted
by such Person into Cash or Cash Equivalents (to the extent of the Cash or Cash Equivalents received) within 180 days
following the closing of the applicable Sale and Lease-Back Transaction and (z) any Designated Non-Cash Consideration
received in respect of the relevant Sale and Lease-Back Transaction having an aggregate fair market value, taken together
with all other Designated Non-Cash Consideration received pursuant to this clause (z) and Section 6.07(h)(z)
that is at that time outstanding, not in excess of the greater of $50,000,000 and 30.0% of Consolidated Adjusted EBITDA), (2)
the Borrower or its applicable Restricted Subsidiary would otherwise be permitted to enter into, and remain liable under, the
applicable underlying lease and (3) the aggregate Fair Market Value of the assets sold subject to all Sale and Lease-Back
Transactions under this clause (B) shall not exceed the greater of $60,000,000 and 35.0% of Consolidated Adjusted
EBITDA as of the last day of the most recently ended Test Period.
Section 6.09.
Transactions with Affiliates. The Borrower shall
not, nor shall it permit any of its Restricted Subsidiaries to, enter into any transaction (including the purchase, sale, lease
or exchange of any property or the rendering of any service) involving payment in excess of $10,000,000 with any of their respective
Affiliates on terms that are less favorable to the Borrower or such Restricted Subsidiary, as the case may be (as reasonably determined
by the Borrower), than those that might be obtained at the time in a comparable arm’s-length transaction from a Person who
is not an Affiliate; provided that the foregoing restriction shall not apply to:
(a)
any transaction between or among the Borrower and/or one or more Restricted Subsidiaries (or any entity that becomes a Restricted
Subsidiary as a result of such transaction) to the extent not prohibited by this Agreement;
(b)
any issuance, sale or grant of securities or other payments, awards or grants in cash, securities or otherwise pursuant
to, or the funding of employment arrangements, stock options and stock ownership plans approved by the board of directors (or equivalent
governing body) of any Parent Company or of the Borrower or any Restricted Subsidiary;
(c)
(i) any collective bargaining, employment or severance agreement or compensatory (including profit sharing) arrangement
entered into by the Borrower or any of its Restricted Subsidiaries with their respective current or former officers, directors,
members of management, managers, employees, consultants or independent contractors or those of any Parent Company, (ii) any subscription
agreement or similar agreement pertaining to the repurchase of Capital Stock pursuant to put/call rights or similar rights with
current or former officers, directors, members of management, managers, employees, consultants or independent contractors and (iii)
transactions pursuant to any employee compensation, benefit plan, stock option plan or arrangement, any health, disability or similar
insurance plan which covers current or former officers, directors, members of management, managers, employees, consultants or independent
contractors or any employment contract or arrangement;
(d)
(i) transactions permitted by Sections 6.01(b), (d), (h), (o), (cc), (dd), (ff)
and (hh), 6.02 (to the extent securing Indebtedness under any of preceding clauses of Section 6.01),
6.04, 6.06 and 6.07(a), (g), (j) and (y) and (ii) issuances of Capital Stock and
Indebtedness not restricted by this Agreement;
(e)
transactions in existence on the Closing Date or pursuant to any agreements or arrangements in effect on the Closing Date
and any amendment, modification or extension thereof to the extent such amendment, modification or extension, taken as a whole,
is not (i) materially adverse to the Lenders or (ii) more disadvantageous to the Lenders than the relevant transaction in existence
on the Closing Date;
(f)
(i) the payment of management, monitoring, consulting, advisory, Transaction and similar fees to any Investor pursuant
to any management agreement entered into by the Borrower (and/or any Parent Company) on the Closing Date (without giving effect
to any amendment materially increasing such fees) and (ii) the payment or reimbursement of all indemnification obligations and
expenses owed to any Investor and any of their respective directors, officers, members of management, managers, employees and
consultants pursuant to such management agreement or similar agreement, in each case of clauses (i) and (ii)
whether currently due or paid in respect of accruals from prior periods; provided that, so long as an Event of Default
exists under Section 7.01(a) (solely with respect to principal, interest and fees), (f) or (g) (with
respect to the Borrower), the payment of such management, monitoring, consulting, advisory and similar fees in clause (i)
may be restricted, in which case, such fees shall continue to accrue and be payable upon the waiver, termination or cure of the
relevant Event of Default;
(g) the
Transactions, including the payment of Transaction Costs and payments required under the Merger Agreement (as in effect on the
Closing Date);
(h) customary
compensation to Affiliates in connection with financial advisory, financing, underwriting or placement services or in respect
of other investment banking activities and other transaction fees, which payments are approved by the majority of the members
of the board of directors (or similar governing body) or a majority of the disinterested members of the board of directors (or
similar governing body) of the Borrower in good faith;
(i) transactions
and payments required under the definitive agreement for any acquisition or Investment permitted under this Agreement (to the
extent any seller, employee, officer or director of the acquired entities becomes an Affiliate in connection with such transaction);
(j) transactions
among the Loan Parties to the extent permitted under this Article 6;
(k) the
payment of customary fees and reasonable out-of-pocket costs to, and indemnities provided on behalf of, members of the board of
directors (or similar governing body), officers, employees, members of management, managers, consultants and independent contractors
of the Borrower and/or any of its Restricted Subsidiaries in the ordinary course of business and, in the case of payments to such
Person in such capacity on behalf of any Parent Company, to the extent attributable to the operations of the Borrower or its Restricted
Subsidiaries;
(l) transactions
with customers, clients, suppliers, joint ventures, purchasers or sellers of goods or services or providers of employees or other
labor entered into in the ordinary course of business, which are (i) fair to the Borrower and/or its applicable Restricted Subsidiary
in the good faith determination of the board of directors (or similar governing body) of the Borrower or the senior management
thereof or (ii) on terms at least as favorable as might reasonably be obtained from a Person other than an Affiliate;
(m) the
payment of reasonable out-of-pocket costs and expenses related to registration rights and customary indemnities provided to shareholders
under any shareholder agreement;
(n) (i)
any purchase by Holdings of the Capital Stock of (or contribution to the equity capital of) the Borrower and (ii) any intercompany
loans made by Holdings to the Borrower or any Restricted Subsidiary; and
(o) any
transaction in respect of which the Borrower delivers to the Administrative Agent a letter addressed to the board of directors
(or equivalent governing body) of the Borrower from an accounting, appraisal or investment banking firm of nationally recognized
standing stating that such transaction is on terms that are no less favorable to the Borrower or the applicable Restricted Subsidiary
than might be obtained at the time in a comparable arm’s length transaction from a Person who is not an Affiliate.
Section 6.10.
Conduct of Business. From and after the Closing Date,
the Borrower shall not, nor shall it permit any of its Restricted Subsidiaries to, engage in any material line of business other
than (a) the businesses engaged in by the Borrower or any Restricted Subsidiary on the Closing Date and similar, complementary,
ancillary or related businesses and (b) such other lines of business to which the Administrative Agent may consent.
Section 6.11. [Reserved].
Section 6.12.
Amendments of or Waivers with Respect to Restricted Debt.
The Borrower shall not, nor shall it permit any of its Restricted Subsidiaries to, amend or otherwise modify the terms of any Restricted
Debt (or the documentation governing any Restricted Debt) if the effect of such amendment or modification, together with all other
amendments or modifications made, is in the reasonable judgment of the Borrower materially adverse to the interests of the Lenders
(in their capacities as such); provided that, (a) for purposes of clarity, it is understood and agreed that the foregoing
limitation shall not otherwise prohibit any Refinancing Indebtedness or any other replacement, refinancing, amendment, supplement,
modification, extension, renewal, restatement or refunding of any Restricted Debt, in each case, that is permitted under this Agreement
in respect thereof, and (b) at the request of the Borrower, the form of any documentation governing any Restricted Debt shall be
deemed acceptable to the Lenders if posted to the Lenders and not objected to by the Required Lenders within five (5) Business
Days thereafter.
Section 6.13.
Fiscal Year. The Borrower shall not change its Fiscal
Year-end to a date other than December 31 in each calendar year; provided that, the Borrower may, upon written notice to
the Administrative Agent, change the Fiscal Year-end of the Borrower to another date, in which case the Borrower and the Administrative
Agent will, and are hereby authorized to, make any adjustments to this Agreement that are necessary to reflect such change in Fiscal
Year.
Section 6.14.
Permitted Activities of Holdings. Holdings shall
not:
(a) incur
any Indebtedness for borrowed money other than (i) Indebtedness in connection with the Transactions, (ii) Indebtedness of the
type permitted under Sections 6.01(a), (o), (x), (y) and (z) and any Refinancing Indebtedness
in respect thereof (including any Guarantees thereof) and (iii) Indebtedness that is not guaranteed by the Borrower or any Restricted
Subsidiary that are otherwise permitted hereunder;
(b) create
or suffer to exist any Lien on any property or asset now owned or hereafter acquired other than the Liens securing Indebtedness
of the type permitted under Sections 6.01(a), (o), (x), (y) and (z) and any Refinancing Indebtedness
in respect thereof (including any Guarantees thereof), subject, if applicable, to the Intercreditor Agreements (and any other
Acceptable Intercreditor Agreement);
(c) engage
in any business activity or own any material assets other than (i) holding the Capital Stock of the Borrower, as applicable,
and, indirectly, any other subsidiary of the Borrower, (ii) performing its obligations under the Loan Documents, any Second Lien
Facility and other Indebtedness, Liens (including the granting of Liens) and Guarantees permitted to be incurred, granted or made,
as applicable, by it hereunder; (iii) issuing its own Capital Stock (including, for the avoidance of doubt, the making of any
dividend or distribution on account of, or any redemption, retirement, sinking fund or similar payment, purchase or other acquisition
for value of, any shares of any class of Capital Stock); (iv) filing Tax reports and paying Taxes and other customary obligations
in the ordinary course (and contesting any Taxes); (v) preparing reports to Governmental Authorities and to its shareholders;
(vi) holding director and shareholder meetings, preparing organizational records and other organizational activities required
to maintain its separate organizational structure or to comply with applicable Requirements of Law; (vii) effecting any initial
public offering of its Capital Stock; (viii) holding (A) Cash, Cash Equivalents and other assets received in connection with
permitted distributions or dividends received from, or permitted Investments or permitted Dispositions made by, any of its subsidiaries
or permitted contributions to the capital of, or proceeds from the issuance of Capital Stock of, Holdings pending the application
thereof and (B) the proceeds of Indebtedness permitted to be incurred by it hereunder; (ix) providing indemnification for its
officers, directors, members of management, employees and advisors or consultants; (x) participating in tax, accounting and other
administrative matters; (xi) making payments of the type permitted under Section 6.09(f) and the performance of its
obligations under any document, agreement and/or Investment contemplated by the Transactions or otherwise not prohibited under
this Agreement; (xii) complying with applicable Requirements of Law (including with respect to the maintenance of its existence);
(xiii) making and holding intercompany loans to the Borrower and/or the Restricted Subsidiaries of the Borrower, as applicable;
(xiv) making and holding Investments of the type permitted under Section 6.06(h); (xv) making Investments in the Borrower
(and other Investment contemplated by Section 6.04(a) and making any Restricted Payment (assuming for such purpose that
the definition thereof applies to the Capital Stock of Holdings), and (xvi) activities incidental to any of the foregoing;
or
(d)
consolidate or amalgamate with, or merge with or into, or convey, sell or otherwise transfer all or substantially all of
its assets to, any Person; provided that, so long as no Default or Event of Default exists or would result therefrom, (A)
Holdings may consolidate or amalgamate with, or merge with or into, any other Person (other than the Borrower and any of its subsidiaries)
so long as (i) Holdings is the continuing or surviving Person or (ii) if the Person formed by or surviving any such consolidation,
amalgamation or merger is not Holdings, (x) the successor Person expressly assumes all obligations of Holdings under this Agreement
and the other Loan Documents to which Holdings is a party pursuant to a supplement hereto and/or thereto in a form reasonably satisfactory
to the Administrative Agent and (y) the Borrower delivers a certificate of a Responsible Officer with respect to the satisfaction
of the conditions set forth in clause (x) of this clause (A) and (z) upon its reasonable request, the Administrative
Agent shall have received a customary legal opinion, (B) Holdings may convey, sell or otherwise transfer all or substantially all
of its assets (including the Capital Stock of the Borrower) to any other Person so long as (w) no Change of Control results therefrom,
(x)(1) the Person acquiring such assets expressly assumes all of the obligations of Holdings under this Agreement and the
other Loan Documents to which Holdings is a party pursuant to a supplement hereto and/or thereto in a form reasonably satisfactory
to the Administrative Agent and (2) concurrently with the consummation of such transfer, causes 100% of the Capital Stock of the
Borrower to be pledged to the Administrative Agent for the benefit of the Secured Parties and (y) the Borrower delivers a certificate
of a Responsible Officer with respect to the satisfaction of the conditions under clause (w) set forth in this clause (B)
and (z) upon its reasonable request, the Administrative Agent shall have received a customary legal opinion; provided, further,
that if the conditions set forth in the preceding proviso are satisfied, the successor to Holdings will succeed to, and be substituted
for, Holdings under this Agreement and Holdings shall be released from all obligations under the Loan Documents, and (C) Holdings
may convert into another form of entity so long as such conversion does not adversely affect the value of the Loan Guaranty or
the pledge of the Capital Stock in the Borrower.
ARTICLE
VII
EVENTS OF DEFAULT
Section 7.01.
Events of Default. If any of the following events
(each, an “Event of Default”) shall occur:
(a)
Failure To Make Payments When Due. Failure by the Borrower to pay (i) any installment of principal of any Loan
when due, whether at stated maturity, by acceleration, by notice of voluntary prepayment, by mandatory prepayment or otherwise;
or (ii) any interest on any Loan or any fee or any other amount due hereunder within five Business Days after the date due; or
(b) Default
in Other Agreements. (i) Failure by any Loan Party or any of its Restricted Subsidiaries to pay when due any principal of
or interest on or any other amount payable in respect of one or more items of Indebtedness (other than Indebtedness referred
to in clause (a) above) with an aggregate outstanding principal amount exceeding the Threshold Amount, in each case
beyond the grace period, if any, provided therefor; or (ii) breach or event of default by any Loan Party or any of its
Restricted Subsidiaries with respect to any other term of (A) one or more items of Indebtedness with an aggregate outstanding
principal amount exceeding the Threshold Amount or (B) any loan agreement, mortgage, indenture or other agreement
relating to such item(s) of Indebtedness (other than, for the avoidance of doubt, with respect to Indebtedness consisting of
Hedging Obligations, termination events or equivalent events pursuant to the terms of the relevant Hedge Agreement which are
not the result of any default thereunder by any Loan Party or any Restricted Subsidiary), in each case, beyond the grace or
cure period, if any, provided therefor, but solely to the extent the effect of such breach or event of default is to cause,
or to permit the holder or holders of such Indebtedness (or a trustee or agent on behalf of such holder or holders) to cause,
such Indebtedness to become or be declared due and payable (or mandatorily redeemable) prior to its stated maturity or the
stated maturity of any underlying obligation, as the case may be; provided that clause (ii) of this paragraph
(b) shall not apply to secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the
property securing such Indebtedness if such sale or transfer is permitted hereunder; provided, further, that
any failure described under clause (i) or (ii) above is unremedied and is not waived by the holders of
such Indebtedness prior to any termination of the Commitments or acceleration of the Loans pursuant to Article 7; provided, still
further, that notwithstanding the foregoing provisions of this Section 7.01(b), any financial maintenance
covenants in any ABL Facility or any other revolving credit facility shall be solely for the benefit of the lenders under
such ABL Facility or other revolving credit facility, and any breach or violation of any such financial maintenance covenants
(x) may be subject to cure rights and (y) shall not be or constitute a Default or Event of Default with respect to any Term
Facility unless and until the lenders under such ABL Facility or other revolving credit facility have declared all amounts
outstanding thereunder to be immediately due and payable and terminated all outstanding commitments to provide revolving
credit extensions thereunder in accordance with the terms of the documentation governing such ABL Facility or other revolving
credit facility and such declaration has not been rescinded; or
(c)
Breach of Certain Covenants. Failure of any Loan Party, as required by the relevant provision, to perform or comply
with any term or condition contained in Section 5.01(e)(i), Section 5.02 (solely as it applies to the preservation
of the existence of the Borrower), or Article 6; provided, that notwithstanding the foregoing provisions of
this Section 7.01(c), any financial maintenance covenants included in any Incremental Amendments in connection with any
Additional Revolving Facilities shall be solely for the benefit of the Lenders under such Additional Revolving Facilities, and
any breach or violation of any such financial maintenance covenants (x) may be subject to cure rights and (y) shall not be or constitute
a Default or Event of Default with respect to any Term Facility unless and until the Lenders under such Additional Revolving Facilities
have declared all amounts outstanding thereunder to be immediately due and payable and terminated all outstanding commitments to
provide revolving credit extensions thereunder in accordance with the terms of this Agreement and such declaration has not been
rescinded; or
(d)
Breach of Representations, Etc. Any representation, warranty or certification made or deemed made by any Loan Party
in any Loan Document or in any certificate required to be delivered in connection herewith or therewith (including, for the avoidance
of doubt, any Perfection Certificate and any Perfection Certificate Supplement) being untrue in any material respect as of the
date made or deemed made, it being understood and agreed that any breach of representation, warranty or certification resulting
from the failure of the Administrative Agent to file any Uniform Commercial Code continuation statement shall not result in an
Event of Default under this Section 7.01(d) or any other provision of any Loan Document; or
(e) Other
Defaults Under Loan Documents. Default by any Loan Party in the performance of or compliance with any term contained
herein or any of the other Loan Documents, other than any such term referred to in any other Section of this Article
7, which default has not been remedied or waived within 30 days after receipt by the Borrower of written notice thereof
from the Administrative Agent; or
(f)
Involuntary Bankruptcy; Appointment of Receiver, Etc. (i) The entry by a court of competent jurisdiction of a decree
or order for relief in respect of Holdings, the Borrower or any of its Restricted Subsidiaries (other than any Immaterial Subsidiary)
in an involuntary case under any Debtor Relief Law now or hereafter in effect, which decree or order is not stayed; or any other
similar relief shall be granted under any applicable federal, state or local law; or (ii) the commencement of an involuntary case
against Holdings, the Borrower or any of its Restricted Subsidiaries (other than any Immaterial Subsidiary) under any Debtor Relief
Law; the entry by a court having jurisdiction in the premises of a decree or order for the appointment of a receiver, receiver
and manager, (preliminary) insolvency receiver, liquidator, sequestrator, trustee, custodian or other officer having similar powers
over Holdings, the Borrower or any of its Restricted Subsidiaries (other than any Immaterial Subsidiary), or over all or a substantial
part of its property; or the involuntary appointment of an interim receiver, trustee or other custodian of Holdings, the Borrower
or any of its Restricted Subsidiaries (other than any Immaterial Subsidiary) for all or a substantial part of its property, which
remains undismissed, unvacated, unbounded or unstayed pending appeal for 60 consecutive days; or
(g)
Voluntary Bankruptcy; Appointment of Receiver, Etc. (i) The entry against Holdings, the Borrower or any of its Restricted
Subsidiaries (other than any Immaterial Subsidiary) of an order for relief, the commencement by Holdings, the Borrower or any of
its Restricted Subsidiaries (other than any Immaterial Subsidiary) of a voluntary case under any Debtor Relief Law, or the consent
by Holdings, the Borrower or any of its Restricted Subsidiaries (other than any Immaterial Subsidiary) to the entry of an order
for relief in an involuntary case or to the conversion of an involuntary case to a voluntary case, under any Debtor Relief Law,
or the consent by the Borrower or any of its Restricted Subsidiaries (other than any Immaterial Subsidiary) to the appointment
of or taking possession by a receiver, receiver and manager, trustee or other custodian for all or a substantial part of its property;
(ii) the making by Holdings, the Borrower or any of its Restricted Subsidiaries (other than any Immaterial Subsidiary) of a general
assignment for the benefit of creditors; or (iii) the admission by Holdings, the Borrower or any of its Restricted Subsidiaries
(other than any Immaterial Subsidiary) in writing of their inability to pay their respective debts as such debts become due; or
(h)
Judgments and Attachments. The entry or filing of one or more final money judgments, writs or warrants of attachment
or similar process against Holdings, the Borrower or any of its Restricted Subsidiaries or any of their respective assets involving
in the aggregate at any time an amount in excess of the Threshold Amount (in either case to the extent not adequately covered by
indemnity from a third party as to which the relevant indemnitor has been notified and not denied coverage, by self-insurance (if
applicable) or by insurance as to which the relevant third party insurance company has been notified and not denied coverage),
which judgment, writ, warrant or similar process remains unpaid, undischarged, unvacated, unbonded or unstayed pending appeal for
a period of 60 days; or
(i)
Employee Benefit Plans. The occurrence of one or more ERISA Events, which individually or in the aggregate result
in liability of Holdings, the Borrower or any of its Restricted Subsidiaries in an aggregate amount which would reasonably be expected
to result in a Material Adverse Effect; or
(j)
Change of Control. The occurrence of a Change of Control; or
(k) Guaranties,
Collateral Documents and Other Loan Documents. At any time after the execution and delivery thereof (i) any material Loan
Guaranty for any reason ceasing to be in full force and effect (other than in accordance with its terms or as a result of the
occurrence of the Termination Date) or being declared, by a court of competent jurisdiction, to be null and void or the
repudiation in writing by any Loan Party of its obligations thereunder (other than as a result of the discharge of such Loan
Party in accordance with the terms thereof and other than solely as a result of acts or omissions by the Administrative Agent
or any Lender), (ii) this Agreement or any material Collateral Document ceasing to be in full force and effect (other than
solely by reason of (x) the failure of the Administrative Agent to maintain possession of any Collateral actually delivered
to it or the failure of the Administrative Agent to file UCC (or equivalent) continuation statements, (y) a release of
Collateral in accordance with the terms hereof or thereof or (z) the occurrence of the Termination Date or any other
termination of such Collateral Document in accordance with the terms thereof) or being declared null and void or (iii) the
contesting by any Loan Party of the validity or enforceability of any material provision of any Loan Document (or any Lien
purported to be created by the Collateral Documents or Loan Guaranty) in writing or denial by any Loan Party in writing that
it has any further liability (other than by reason of the occurrence of the Termination Date), including with respect to
future advances by the Lenders, under any Loan Document to which it is a party; it being understood and agreed that the
failure of the Administrative Agent to maintain possession of any Collateral actually delivered to it or file any UCC (or
equivalent) continuation statement shall not result in an Event of Default under this clause (k) or any other
provision of any Loan Document; or
(l)
Subordination. (i) The Liens on the Collateral securing the First Priority Secured Obligations ceasing to have senior
“first priority” status with respect to Liens on the Collateral securing any Junior Lien Indebtedness with an aggregate
principal amount outstanding in excess of the Threshold Amount pursuant to any applicable Acceptable Intercreditor Agreement, and
(ii) with respect to the provisions in any Acceptable Intercreditor Agreement subordinating the Liens on the Collateral securing
any Junior Lien Indebtedness with an aggregate principal amount outstanding in excess of the Threshold Amount to the Liens on the
Collateral securing the First Priority Secured Obligations, (A) any Loan Party contests in writing the validity or enforceability
thereof, (B) any court of competent jurisdiction in a final non-appealable order, determines such subordination provisions to be
invalid or unenforceable, or (C) such subordination provisions otherwise cease to be valid, binding and enforceable obligations
of the parties to such Acceptable Intercreditor Agreement;
then, and in every such
event (other than an event with respect to the Borrower described in clause (f) or (g) of this Article) and at any
time thereafter during the continuance of such event, the Administrative Agent may, and at the request of the Required Lenders
shall, by notice to the Borrower, take any of the following actions, at the same or different times: (i) terminate any Additional
Commitments, and thereupon such Additional Commitments shall terminate immediately and (ii) declare the Loans then outstanding
to be due and payable in whole (or in part, in which case any principal not so declared to be due and payable may thereafter be
declared to be due and payable), and thereupon the principal of the Loans so declared to be due and payable, together with accrued
interest thereon and all fees and other obligations of the Borrower accrued hereunder, shall become due and payable immediately,
without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower; provided
that upon the occurrence of an event with respect to the Borrower described in clauses (f) or (g) of this Article,
any such Commitments and/or Additional Commitments shall automatically terminate and the principal of the Loans then outstanding,
together with accrued interest thereon and all fees and other obligations of the Borrower accrued hereunder, shall automatically
become due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the
Borrower. Upon the occurrence and during the continuance of an Event of Default, the Administrative Agent may, and at the request
of the Required Lenders shall, exercise any rights and remedies provided to the Administrative Agent under the Loan Documents or
at law or equity, including all remedies provided under the UCC.
ARTICLE
VIII
THE ADMINISTRATIVE AGENT
Each of the Lenders hereby
irrevocably appoints Bank of America (or any successor appointed pursuant hereto) as Administrative Agent hereunder and under the
other Loan Documents and authorizes the Administrative Agent to take such actions on its behalf, including execution of the other
Loan Documents, and to exercise such powers as are delegated to the Administrative Agent by the terms of the Loan Documents, together
with such actions and powers as are reasonably incidental thereto.
Any Person serving as
Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise
the same as though it were not the Administrative Agent, and the term “Lender” or “Lenders” shall, unless
otherwise expressly indicated, unless the context otherwise requires or unless such Person is in fact not a Lender, include each
Person serving as Administrative Agent hereunder in its individual capacity. Such Person and its Affiliates may accept deposits
from, lend money to, own securities of, act as the financial advisor or in any other advisory capacity for and generally engage
in any kind of business with any Loan Party or any subsidiary of any Loan Party or other Affiliate thereof as if it were not the
Administrative Agent hereunder. The Lenders acknowledge that, pursuant to such activities, the Administrative Agent or its Affiliates
may receive information regarding any Loan Party or any of its Affiliates (including information that may be subject to confidentiality
obligations in favor of such Loan Party or such Affiliate) and acknowledge that the Administrative Agent shall not be under any
obligation to provide such information to them.
The Administrative
Agent shall not have any duties or obligations except those expressly set forth in the Loan Documents and its duties
hereunder shall be administrative in nature. Without limiting the generality of the foregoing, (a) the Administrative Agent
shall not be subject to any fiduciary or other implied duties, regardless of whether a Default or Event of Default exists,
and the use of the term “agent” herein and in the other Loan Documents with reference to the Administrative Agent
is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any
applicable law; it being understood that such term is used merely as a matter of market custom, and is intended to create or
reflect only an administrative relationship between independent contracting parties, (b) the Administrative Agent shall not
have any duty to take any discretionary action or exercise any discretionary power, except discretionary rights and powers
that are expressly contemplated by the Loan Documents and which the Administrative Agent is required to exercise in writing
as directed by the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the
relevant circumstances as provided in Section 9.02); provided that the Administrative Agent shall not be
required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to
liability or that is contrary to any Loan Document or applicable laws including for the avoidance of doubt any action that
may be in violation of the automatic stay under any Debtor Relief Law or that may effect a forfeiture, modification or
termination of property of a Defaulting Lender in violation of any Debtor Relief Law, and (c) except as expressly set forth
in the Loan Documents, the Administrative Agent shall not have any duty to disclose, and shall not be liable for the failure
to disclose, any information relating to the Borrower or any of its Restricted Subsidiaries that is communicated to or
obtained by the Person serving as Administrative Agent or any of its Affiliates in any capacity. The Administrative Agent
shall not be liable to the Lenders or any other Secured Party for any action taken or not taken by it with the consent or at
the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the
Administrative Agent shall believe in good faith shall be necessary, under the relevant circumstances as provided in Section 9.02)
or in the absence of its own gross negligence or willful misconduct, as determined by the final and non-appealable judgment
of a court of competent jurisdiction, in connection with its duties expressly set forth herein. The Administrative Agent
shall not be deemed to have knowledge of the existence of any Default or Event of Default unless and until written notice
thereof is given to the Administrative Agent by the Borrower or any Lender, and the Administrative Agent shall not be
responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in
connection with any Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or in
connection with any Loan Document, (iii) the performance or observance of any covenant, agreement or other term or condition
set forth in any Loan Document or the occurrence of any Default or Event of Default, (iv) the validity, enforceability,
effectiveness or genuineness of any Loan Document or any other agreement, instrument or document, (v) the creation,
perfection or priority of any Lien on the Collateral or the existence, value or sufficiency of the Collateral, (vi) the
satisfaction of any condition set forth in Article 4 or elsewhere in any Loan Document, other than to confirm receipt
of items expressly required to be delivered to the Administrative Agent or (vii) any property, book or record of any Loan
Party or any Affiliate thereof.
If any Lender acquires
knowledge of the existence of a Default or Event of Default, it shall promptly notify the Administrative Agent and the other Lenders
thereof in writing. Each Lender agrees that, except with the written consent of the Administrative Agent, it will not take any
enforcement action hereunder or under any other Loan Document, accelerate the Obligations under any Loan Document, or exercise
any right that it might otherwise have under applicable law or otherwise to credit bid at any foreclosure sale, UCC sale, any sale
under Section 363 of the Bankruptcy Code or other similar Dispositions of Collateral. Notwithstanding the foregoing, however,
a Lender may take action to preserve or enforce its rights against a Loan Party where a deadline or limitation period is applicable
that would, absent such action, bar enforcement of the Obligations held by such Lender, including the filing of a proof of claim
in a case under the Bankruptcy Code.
Notwithstanding anything
to the contrary contained herein or in any of the other Loan Documents, the Borrower, the Administrative Agent and each Secured
Party agree that (i) no Secured Party shall have any right individually to realize upon any of the Collateral or to enforce the
Loan Guaranty; it being understood and agreed that all powers, rights and remedies hereunder may be exercised solely by, the Administrative
Agent, on behalf of the Secured Parties in accordance with the terms hereof and all powers, rights and remedies under the other
Loan Documents may be exercised solely by, the Administrative Agent, and (ii) in the event of a foreclosure by the Administrative
Agent on any of the Collateral pursuant to a public or private sale or in the event of any other Disposition (including pursuant
to Section 363 of the Bankruptcy Code), (A) the Administrative Agent, as agent for and representative of the Secured Parties,
shall be entitled, for the purpose of bidding and making settlement or payment of the purchase price for all or any portion of
the Collateral sold at any such sale, to use and apply any of the Obligations as a credit on account of the purchase price for
any Collateral payable by the Administrative Agent at such Disposition and (B) the Administrative Agent or any Lender may
be the purchaser or licensor of any or all of such Collateral at any such Disposition.
No holder of any Secured
Hedging Obligation or Banking Services Obligation in its respective capacity as such shall have any rights in connection with the
management or release of any Collateral or of the obligations of any Loan Party under this Agreement.
Each of the Lenders hereby
irrevocably authorizes (and by entering into a Hedge Agreement with respect to any Secured Hedging Obligation and/or by entering
into documentation in connection with any Banking Services Obligation, each of the other Secured Parties hereby authorizes and
shall be deemed to authorize) the Administrative Agent, on behalf of all Secured Parties to take any of the following actions upon
the instruction of the Required Lenders:
(a)
consent to the Disposition of all or any portion of the Collateral free and clear of the Liens securing the Secured Obligations
in connection with any Disposition pursuant to the applicable provisions of the Bankruptcy Code, including Section 363 thereof;
(b)
credit bid all or any portion of the Secured Obligations, or purchase all or any portion of the Collateral (in each case,
either directly or through one or more acquisition vehicles), in connection with any Disposition of all or any portion of the Collateral
pursuant to the applicable provisions of the Bankruptcy Code, including under Section 363 thereof;
(c)
credit bid all or any portion of the Secured Obligations, or purchase all or any portion of the Collateral (in each case,
either directly or through one or more acquisition vehicles), in connection with any Disposition of all or any portion of the Collateral
pursuant to the applicable provisions of the UCC, including pursuant to Sections 9-610 or 9-620 of the UCC;
(d)
credit bid all or any portion of the Secured Obligations, or purchase all or any portion of the Collateral (in each case,
either directly or through one or more acquisition vehicles), in connection with any foreclosure or other Disposition conducted
in accordance with applicable law following the occurrence and continuation of an Event of Default, including by power of sale,
judicial action or otherwise; and/or
(e)
estimate the amount of any contingent or unliquidated Secured Obligations of such Lender or other Secured Party;
it being understood that no Lender shall
be required to fund any amount in connection with any purchase of all or any portion of the Collateral by the Administrative Agent
pursuant to the foregoing clause (b), (c) or (d) without its prior written consent.
Each Secured Party agrees
that the Administrative Agent is under no obligation to credit bid any part of the Secured Obligations or to purchase or retain
or acquire any portion of the Collateral; provided that, in connection with any credit bid or purchase described under clause (b),
(c) or (d) of the preceding paragraph, the Secured Obligations owed to all of the Secured Parties (other than with
respect to contingent or unliquidated liabilities as set forth in the next succeeding paragraph) may be, and shall be, credit bid
by the Administrative Agent on a ratable basis.
With respect to each
contingent or unliquidated claim that is a Secured Obligation, the Administrative Agent is hereby authorized, but is not required,
to estimate the amount thereof for purposes of any credit bid or purchase described in the second preceding paragraph so long as
the estimation of the amount or liquidation of such claim would not unduly delay the ability of the Administrative Agent to credit
bid the Secured Obligations or purchase the Collateral in the relevant Disposition. In the event that the Administrative Agent,
in its sole and absolute discretion, elects not to estimate any such contingent or unliquidated claim or any such claim cannot
be estimated without unduly delaying the ability of the Administrative Agent to consummate any credit bid or purchase in accordance
with the second preceding paragraph, then any contingent or unliquidated claims not so estimated shall be disregarded, shall not
be credit bid, and shall not be entitled to any interest in the portion or the entirety of the Collateral purchased by means of
such credit bid.
Each Secured Party whose
Secured Obligations are credit bid under clause (b), (c) or (d) of the third preceding paragraph shall
be entitled to receive interests in the Collateral or any other asset acquired in connection with such credit bid (or in the Capital
Stock of the acquisition vehicle or vehicles that are used to consummate such acquisition) on a ratable basis in accordance with
the percentage obtained by dividing (x) the amount of the Secured Obligations of such Secured Party that were credit bid in such
credit bid or other Disposition, by (y) the aggregate amount of all Secured Obligations that were credit bid in such credit bid
or other Disposition.
In addition, in case
of the pendency of any proceeding under any Debtor Relief Law or any other judicial proceeding relative to any Loan Party, each
Secured Party agrees that the Administrative Agent (irrespective of whether the principal of any Loan is then due and payable as
herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand
on the Borrower) shall be entitled and empowered, by intervention in such proceeding or otherwise:
(i)
to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans and
all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have
the claims of the Lenders and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements
and advances of the Lenders and the Administrative Agent and their respective agents and counsel and all other amounts to the extent
due to the Lenders and the Administrative Agent under Sections 2.12 and 9.03) allowed in such judicial proceeding;
and
(ii)
to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same.
Any custodian, receiver,
assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each
Lender to make such payments to the Administrative Agent and, in the event that the Administrative Agent consents to the making
of such payments directly to the Lenders, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses,
disbursements and advances of the Administrative Agent and its agents and counsel, and any other amount due to the Administrative
Agent under Sections 2.12 and 9.03.
Nothing contained herein
shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender any
plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or to authorize
the Administrative Agent to vote in respect of the claim of any Lender in any such proceeding.
The Administrative Agent
shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other
distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. The Administrative
Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person,
and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of
a Loan, that by its terms must be fulfilled to the satisfaction of a Lender, the Administrative Agent may presume that such condition
is satisfactory to such Lender unless the Administrative Agent has received notice to the contrary from such Lender prior to the
making of such Loan. The Administrative Agent may consult with legal counsel (who may be counsel for the Borrower), independent
accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with
the advice of any such counsel, accountants or experts.
The Administrative
Agent may perform any and all of its duties and exercise its rights and powers by or through any one or more sub-agents
appointed by it; provided, however, that any such sub-agent receiving payments from the Loan Parties shall be a
“U.S. person” and a “financial institution” within the meaning of Treasury Regulations Section
1.1441-1 (or has validly agreed to be treated as a "U.S. person" pursuant to Treasury Regulations Section
1.1441-1(b)(2)(iv)(A)). The Administrative Agent and any such sub-agent may perform any and all of their respective duties
and exercise their respective rights and powers through their respective Related Parties. The exculpatory provisions of this
Article shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent and
shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as
well as activities as the Administrative Agent.
The Administrative Agent
may resign at any time by giving thirty days’ prior written notice to the Lenders and the Borrower. If the Administrative
Agent becomes subject to an insolvency proceeding, either the Required Lenders or the Borrower may, upon thirty days’ notice,
remove the Administrative Agent. Upon receipt of any such notice of resignation or delivery of any such notice of removal, the
Required Lenders shall have the right, with the consent of the Borrower (not to be unreasonably withheld or delayed), to appoint
a successor Administrative Agent which shall be a commercial bank or trust company with offices in the U.S. having combined capital
and surplus in excess of $1,000,000,000 and who shall be a “U.S. person” and a “financial institution”
within the meaning of Treasury Regulations Section 1.1441-1 (or has validly agreed to be treated as a "U.S. person" pursuant
to Treasury Regulations Section 1.1441-1(b)(2)(iv)(A)); provided that during the existence and continuation of an Event
of Default under Section 7.01(a) or, with respect to Holdings or the Borrower, Section 7.01(f) or (g),
no consent of the Borrower shall be required. If no successor shall have been appointed as provided above and accepted such appointment
within thirty days after the retiring Administrative Agent gives notice of its resignation or the Administrative Agent receives
notice of removal, then (a) in the case of a retirement, the retiring Administrative Agent may (but shall not be obligated
to), on behalf of the Lenders, appoint a successor Administrative Agent meeting the qualifications set forth above (including,
for the avoidance of doubt, consent of the Borrower) or (b) in the case of a removal, the Borrower may, after consulting with the
Required Lenders, appoint a successor Administrative Agent meeting the qualifications set forth above; provided that (x) in
the case of a retirement, if the Administrative Agent notifies the Borrower, the Lenders that no qualifying Person has accepted
such appointment or (y) in the case of a removal, the Borrower notifies the Required Lenders that no qualifying Person has accepted
such appointment, then, in each case, such resignation or removal shall nonetheless become effective in accordance with and on
the 30th day following delivery of such notice and (i) the retiring or removed Administrative Agent shall be discharged from its
duties and obligations hereunder and under the other Loan Documents (except that in the case of any collateral security held by
the Administrative Agent in its capacity as collateral agent for the Secured Parties for perfection purposes, the retiring Administrative
Agent shall continue to hold such collateral security until such time as a successor Administrative Agent is appointed) and (ii)
all payments, communications and determinations required to be made by, to or through the Administrative Agent shall instead be
made by or to each Lender directly (and each Lender will cooperate with the Borrower to enable the Borrower to take such actions),
until such time as the Required Lenders or the Borrower, as applicable, appoint a successor Administrative Agent who shall be a
“U.S. person” and a “financial institution” within the meaning of Treasury Regulations Section 1.1441-1
(or has validly agreed to be treated as a "U.S. person" pursuant to Treasury Regulations Section 1.1441-1(b)(2)(iv)(A)),
as provided for above in this Article 8. Upon the acceptance of its appointment as Administrative Agent hereunder as a successor
Administrative Agent, such successor Administrative Agent shall succeed to and become vested with all the rights, powers, privileges
and duties of the retiring or removed Administrative Agent (other than any rights to indemnity payments owed to the retiring Administrative
Agent), and the retiring or removed Administrative Agent shall be discharged from its duties and obligations hereunder (other than
its obligations under Section 9.13). The fees payable by the Borrower to a successor Administrative Agent shall be the same
as those payable to its predecessor unless otherwise agreed between the Borrower and such successor Administrative Agent. After
the Administrative Agent’s resignation or removal hereunder, the provisions of this Article and Section 9.03
shall continue in effect for the benefit of such retiring or removed Administrative Agent, its sub-agents and their respective
Related Parties in respect of any action taken or omitted to be taken by any of them while the relevant Person was acting as Administrative
Agent (including for this purpose holding any collateral security following the retirement or removal of the Administrative Agent).
Notwithstanding anything to the contrary herein, no Disqualified Institution (nor any Affiliate thereof) may be appointed as a
successor Administrative Agent.
Each Lender acknowledges
that it has, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties
and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into
this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or
any other Lender or any of their respective Related Parties and based on such documents and information as it shall from time to
time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any
other Loan Document or related agreement or any document furnished hereunder or thereunder. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the Administrative Agent herein, the Administrative Agent shall
not have any duty or responsibility to provide any Lender with any credit or other information concerning the business, prospects,
operations, property, financial and other condition or creditworthiness of any of the Loan Parties or any of their respective Affiliates
which may come into the possession of the Administrative Agent or any of its Related Parties.
Notwithstanding anything
to the contrary herein, the Arrangers shall not have any right, power, obligation, liability, responsibility or duty under this
Agreement, except in their respective capacities as the Administrative Agent or a Lender hereunder, as applicable.
Each Secured Party irrevocably
authorizes and instructs the Administrative Agent to, and the Administrative Agent,
(a) shall
release any Lien on any property granted to or held by Administrative Agent under any Loan Document (i) upon the occurrence of
the Termination Date, (ii) that is sold or to be sold or transferred as part of or in connection with any Disposition permitted
under the Loan Documents to a Person that is not a Loan Party, (iii) that does not constitute (or ceases to constitute) Collateral
(including as a result of being or becoming an Excluded Asset), (iv) if the property subject to such Lien is owned by a Subsidiary
Guarantor, upon the release of such Subsidiary Guarantor from its Loan Guaranty otherwise in accordance with the Loan Documents,
(v) as required under clause (d) below or (vi) if approved, authorized or ratified in writing by the Required Lenders in
accordance with Section 9.02;
(b) shall
subject to Section 9.22, release any Subsidiary Guarantor from its obligations under the Loan Guaranty if such Person ceases
to be a Restricted Subsidiary (or becomes an Excluded Subsidiary as a result of a single transaction or series of related transactions
permitted hereunder), as certified by a Responsible Officer of the Borrower;
(c) may
subordinate any Lien on any property granted to or held by the Administrative Agent under any Loan Document to the holder of any
Lien on such property that is permitted by Sections 6.02(d), 6.02(e), 6.02(g), 6.02(m), 6.02(n),
6.02(o)(i) (other than any Lien on the Capital Stock of any Subsidiary Guarantor), 6.02(q), 6.02(r), 6.02(x),
6.02(y), 6.02(z)(i), 6.02(bb), 6.02(cc), 6.02(ee) and 6.02(ff) (and any Refinancing Indebtedness
in respect of any thereof to the extent such Refinancing Indebtedness is permitted to be secured under Section 6.02(k));
provided that the subordination of any Lien on any property granted to or held by the Administrative Agent shall only be
required with respect to any Lien on such property that is permitted by Sections 6.02(o)(i), 6.02(q), 6.02(r)
and/or 6.02(bb) to the extent that the Lien of the Administrative Agent with respect to such property is required to be
subordinated to the relevant Permitted Lien in accordance with applicable law or the documentation governing the Indebtedness that
is secured by such Permitted Lien; and
(d) shall
enter into subordination, intercreditor and/or similar agreements with respect to Indebtedness (including any Acceptable
Intercreditor Agreement) that is (i) required or permitted to be subordinated hereunder and/or (ii) secured by Liens, and
with respect to which Indebtedness, this Agreement contemplates an intercreditor, subordination or collateral trust
agreement; provided that, for the avoidance of doubt, the Administrative Agent shall not be required to subordinate
any Lien pursuant to this clause (d)(ii) other than to the extent contemplated by clause (c) of this
paragraph.
Upon the request of the
Administrative Agent at any time, the Required Lenders will confirm in writing the Administrative Agent’s authority to release
or subordinate its interest in particular types or items of property, or to release any Loan Party from its obligations under the
Guarantee or its Lien on any Collateral pursuant to this Article 8. In each case as specified in this Article 8,
the Administrative Agent will (and each Lender hereby authorizes the Administrative Agent to), at the Borrower’s expense,
execute and deliver to the applicable Loan Party such documents as such Loan Party may reasonably request to evidence the release
of such item of Collateral from the assignment and security interest granted under the Collateral Documents or to subordinate its
interest therein, or to release such Loan Party from its obligations under the Loan Guaranty, in each case in accordance with the
terms of the Loan Documents and this Article 8; provided that upon the request of the Administrative Agent, the Borrower
shall deliver a certificate of a Responsible Officer certifying that the relevant transaction has been consummated in compliance
with the terms of this Agreement.
The Administrative Agent
is authorized to enter into any Acceptable Intercreditor Agreement and any other intercreditor, subordination, collateral trust
or similar agreement contemplated hereby with respect to Indebtedness that is (i) required or permitted to be subordinated hereunder
and/or (ii) secured by Liens and which Indebtedness contemplates an intercreditor, subordination or collateral trust agreement
(any such other intercreditor agreement, an “Additional Agreement”), and the parties hereto acknowledge that
each Acceptable Intercreditor Agreement (including any Additional Agreement) is binding upon them. Each Lender (a) hereby consents
to the subordination of the Liens on the Collateral securing the Secured Obligations on the terms set forth in the Intercreditor
Agreements, (b) hereby agrees that it will be bound by, and will not take any action contrary to the provisions of any Acceptable
Intercreditor Agreement (including any Additional Agreement) and (c) hereby authorizes and instructs the Administrative Agent to
enter into any Acceptable Intercreditor Agreement (including any Additional Agreement), as applicable, and to subject the Liens
on the Collateral securing the Secured Obligations to the provisions thereof. The foregoing provisions are intended as an inducement
to the Secured Parties to extend credit to the Borrower, and the Secured Parties are intended third-party beneficiaries of such
provisions and the provisions of any applicable Acceptable Intercreditor Agreement (including any Additional Agreement).
To the extent that the
Administrative Agent (or any Affiliate thereof) is not reimbursed and indemnified by the Borrower, the Lenders will reimburse and
indemnify the Administrative Agent (and any Affiliate thereof) in proportion to their respective Applicable Percentages (determined
as if there were no Defaulting Lenders) for and against any and all liabilities, obligations, losses, damages, penalties, claims,
actions, judgments, costs, expenses or disbursements of whatsoever kind or nature which may be imposed on, asserted against or
incurred by the Administrative Agent (or any Affiliate thereof) in performing its duties hereunder or under any other Loan Document
or in any way relating to or arising out of this Agreement or any other Loan Document; provided that, no Lender shall be
liable for any portion of such liabilities, obligations, losses, damages, penalties, claims, actions, judgments, suits, costs,
expenses or disbursements resulting from the Administrative Agent’s (or such affiliate’s) gross negligence or willful
misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision).
ARTICLE
IX
MISCELLANEOUS
Section 9.01. Notices.
(a) Except in the case of notices and other communications expressly permitted to be given by telephone (and subject to paragraph
(b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or
overnight courier service, mailed by certified or registered mail or sent by facsimile or email, as follows:
(i) if to any Loan Party, to such Loan Party in the care of the Borrower at:
620 Division Street
Elizabeth, New Jersey 07207
Attention: Co-Chairman of the Board
Facsimile: (908) 351-4492
Email: rdavis@hayward.com
with copy to (which shall not constitute notice to any
Loan Party):
CCMP Capital Advisors, LLC
277 Park Avenue, 37th Floor
New York, NY 10172
Attention: Richard Jansen, Esq.
Facsimile: (212) 599-3481
Email: richard.jansen@ccmpcapital.com
and
c/o MSD Partners, L.P.
645 Fifth Avenue, 21st
Floor
New York, New York 10022
Attention: Marcello Liguori
Fax No.: (212) 303-1772
Email: mliguori@msdcapital.com
and
c/o Alberta Investment Management
Corporation
First Canadian Place
100 King Street West
Suite 5120, P.O. Box 51
Toronto, Ontario M5X 1B1, Canada
Attention: Jason Peters
and
c/o Alberta Investment Management
Corporation
1100 – 10830 Jasper Avenue
Edmonton, Alberta T5J 2B3, Canada
Attention: Christina Luison
and
Ropes & Gray LLP
1211 Avenue of the Americas
New York, NY 10036
Attention: Jay Kim
Telephone: (212) 497-3626
Facsimile: (646) 728-1667
Email: Jay.Kim@ropesgray.com
and
Dechert LLP
2929 Arch Street
Philadelphia, Pennsylvania 19104
Attention: Geraldine Sinatra and Eric Siegel
Facsimile: (215) 994-2222
Email: geraldine.sinatra@dechert.com
eric.siegel@dechert.com
and
Torys LLP
The Grace Building
1114 Avenue of the Americas
New York, New York 10036
Attention: Jared Fontaine
Facsimile: (212) 682-0200
Email: jfontaine@torys.com
(ii) if to the Administrative Agent, at:
Administrative Agent’s Office
(for payments, advances, rates and Lender requests):
Bank of America, N.A.
101 N. Tryon Street
Mail Code: NC1-001-05-46
Charlotte, NC 28255
Attention: Robert Garvey
Telephone: 980-387-9468
Telecopier: 617-310-3288
Electronic Mail: Robert.garvey@baml.com
Other Notices as Administrative Agent
(for financials, communications)
Bank of America, N.A. Agency Management
135 S. LaSalle Street
Mail Code: IL4-135-09-61
Chicago, Illinois 60603
Attention: Denise Jones
Telephone: 312.828.1846
Telecopier: 877.206.8413
Electronic Mail: denise.j.jones@baml.com
with a copy to (which shall not constitute
notice to the Administrative Agent):
Davis Polk & Wardwell LLP
Attention: John (JW) Perry
Telephone: (212) 450-4949
Facsimile: (212) 701-5949
Email: john.perry@davispolk.com
(iii) if to any Lender, pursuant to its contact information set forth in its Administrative Questionnaire.
All such notices and other communications
(A) sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when
delivered in person or by courier service and signed for against receipt thereof or three Business Days after dispatch if sent
by certified or registered mail, in each case, delivered, sent or mailed (properly addressed) to the relevant party as provided
in this Section 9.01 or in accordance with the latest unrevoked direction from such party given in accordance with this
Section 9.01 or (B) sent by facsimile shall be deemed to have been given when sent and when receipt has been confirmed by
telephone; provided that received notices and other communications sent by telecopier shall be deemed to have been given
when sent (except that, if not given during normal business hours for the recipient, such notices or other communications shall
be deemed to have been given at the opening of business on the next Business Day for the recipient). Notices and other communications
delivered through electronic communications to the extent provided in clause (b) below shall be effective as provided in
such clause (b).
(b) Notices and other communications to the Lenders hereunder may be delivered or furnished by electronic communications (including
email, FpML messaging and Internet or Intranet websites) pursuant to procedures set forth herein or otherwise approved by the Administrative
Agent. The Administrative Agent or the Borrower (on behalf of any Loan Party) may, in its discretion, agree to accept notices and
other communications to it hereunder by electronic communications pursuant to procedures set forth herein or otherwise approved
by it; provided that approval of such procedures may be limited to particular notices or communications. All such notices
and other communications (i) sent to an email address shall be deemed received upon the sender’s receipt of an acknowledgement
from the intended recipient (such as by the “return receipt requested” function, as available, return email or other
written acknowledgement); provided that if not given during the normal business hours of the recipient, such notice or communication
shall be deemed to have been given at the opening of business on the next Business Day for the recipient, and (ii) posted to an
Internet or Intranet website shall be deemed received upon the deemed receipt by the intended recipient at its email address as
described in the foregoing clause (b)(i) of notification that such notice or communication is available and identifying
the website address therefor.
(c) Any
party hereto may change its address or facsimile number or other notice information hereunder by notice to the other parties hereto.
(d) (i) The Borrower hereby acknowledges that (A) the Administrative Agent will make available to the Lenders materials
and/or information provided by or on behalf of the Borrower hereunder (collectively, “Borrower Materials”) by
posting the Borrower Materials on IntraLinks or another similar electronic system (the “Platform”) and (B) certain
of the Lenders (each, a “Public Lender”) may have personnel who do not wish to receive material non-public information
and who may be engaged in investment and other market-related activities with respect to such Persons’ securities. The Borrower
hereby agrees that (x) by marking Borrower Materials “PUBLIC,” the Borrower shall be deemed to have authorized the
Administrative Agent and the Lenders to treat such Borrower Materials as not containing any material non-public information (although
it may be sensitive and proprietary) subject to the confidentiality provisions of this Agreement (provided, however,
that to the extent such Borrower Materials constitute Confidential Information, they shall be treated as set forth in Section
9.13); (y) all Borrower Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform
designated “Public Side Information”; and (z) the Administrative Agent shall treat any Borrower Materials that are
not marked “PUBLIC” as being suitable only for posting on a portion of the Platform not designated “Public Side
Information”; provided that, for purposes of the foregoing, all information and materials provided pursuant to Section
5.01(a) or (b) shall be deemed to be suitable for posting to Public Lenders.
(ii) Each Public
Lender agrees to cause at least one individual at or on behalf of such Public Lender to at all times have selected the “Private
Side Information” or similar designation on the content declaration screen of the Platform in order to enable such Public
Lender or its delegate, in accordance with such Public Lender’s compliance procedures and applicable law, including United
States Federal and state securities laws, to make reference to communications that are not made available through the “Public
Side Information” portion of the Platform and that may contain material nonpublic information with respect to the Borrower
or its securities for purposes of United States Federal or state securities laws.
(iii) THE PLATFORM
IS PROVIDED “AS IS” AND “AS AVAILABLE.” NEITHER THE ADMINISTRATIVE AGENT NOR ANY OF ITS RELATED
PARTIES WARRANTS THE ACCURACY OR COMPLETENESS OF THE COMMUNICATIONS OR THE ADEQUACY OF THE PLATFORM AND EACH EXPRESSLY DISCLAIMS
LIABILITY FOR ERRORS OR OMISSIONS IN THE COMMUNICATIONS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY
WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD-PARTY RIGHTS OR FREEDOM FROM VIRUSES OR
OTHER CODE DEFECTS IS MADE BY THE ADMINISTRATIVE AGENT OR ANY OF ITS RELATED PARTIES IN CONNECTION WITH THE COMMUNICATIONS OR THE
PLATFORM. IN NO EVENT SHALL THE ADMINISTRATIVE AGENT OR ANY OF ITS RELATED PARTIES HAVE ANY LIABILITY TO ANY LOAN PARTY, ANY LENDER
OR ANY OTHER PERSON FOR DAMAGES OF ANY KIND, WHETHER OR NOT BASED ON STRICT LIABILITY AND INCLUDING DIRECT OR INDIRECT, SPECIAL,
INCIDENTAL OR CONSEQUENTIAL DAMAGES, LOSSES OR EXPENSES (WHETHER IN TORT, CONTRACT OR OTHERWISE) ARISING OUT OF ANY LOAN PARTY’S
OR THE ADMINISTRATIVE AGENT’S TRANSMISSION OF COMMUNICATIONS THROUGH THE INTERNET, EXCEPT TO THE EXTENT THE LIABILITY OF
ANY SUCH PERSON IS FOUND IN A FINAL RULING BY A COURT OF COMPETENT JURISDICTION TO HAVE RESULTED FROM SUCH PERSON’S GROSS
NEGLIGENCE, WILLFUL MISCONDUCT OR MATERIAL BREACH OF ANY LOAN DOCUMENT.
(e) The
Administrative Agent and the Lenders shall be entitled to rely and act upon any notices (including telephonic notices and
Borrowing Requests) purportedly given by or on behalf of any Borrower even if (i) such notices were not made in a manner
specified herein, were incomplete or were not preceded or followed by any other form of notice specified herein, or
(ii) the terms thereof, as understood by the recipient, varied from any confirmation thereof. The Borrower shall
indemnify the Administrative Agent, its Related Parties and each Lender from all losses, costs, expenses and liabilities
resulting from the reliance by such Person on each notice purportedly given by or on behalf of any Borrower in the absence of
gross negligence or willful misconduct as determined by a final and non-appealable judgment by a court of competent
jurisdiction. All telephonic notices to and other telephonic communications with the Administrative Agent may be recorded by
the Administrative Agent, and each of the parties hereto hereby consents to such recording.
Section 9.02. Waivers; Amendments.
(a) No failure or delay by the Administrative Agent or any Lender in exercising any right or power hereunder or under any other
Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment
or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of
any other right or power. The rights and remedies of the Administrative Agent and the Lenders hereunder and under any other Loan
Document are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision
of any Loan Document or consent to any departure by any Loan Party therefrom shall in any event be effective unless the same is
permitted by paragraph (b) of this Section 9.02, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. Without limiting the generality of the foregoing, to the extent permitted by law,
the making of a Loan shall not be construed as a waiver of any existing Default or Event of Default, regardless of whether the
Administrative Agent or any Lender may have had notice or knowledge of the existence of such Default or Event of Default at the
time.
(b) Subject to clauses (A), (B), (C) and (D) of this Section 9.02(b) and Sections 9.02(c)
and (d) below, neither this Agreement nor any other Loan Document nor any provision hereof or thereof may be waived, amended
or modified, except (i) in the case of this Agreement, pursuant to an agreement or agreements in writing entered into by the Borrower
and the Required Lenders (or the Administrative Agent with the consent of the Required Lenders) or (ii) in the case of any other
Loan Document (other than any waiver, amendment or modification to effectuate any modification thereto expressly contemplated by
the terms of such other Loan Documents), pursuant to an agreement or agreements in writing entered into by the Administrative Agent
and each Loan Party that is party thereto, with the consent of the Required Lenders; provided that, notwithstanding the
foregoing:
(A) except with the consent of each Lender directly and adversely affected thereby (but without the consent of the Required
Lenders or any other Lender, the Administrative Agent or agent (except to the extent that the rights and obligations of the Administrative
Agent would be adversely affected thereby)), no such waiver, amendment or modification shall:
(1) increase the Commitment or Additional Commitment of such Lender (other than with respect to any Incremental Facility pursuant
to Section 2.22 in respect of which such Lender has agreed to be an Additional Lender); it being understood that no amendment,
modification or waiver of, or consent to departure from, any condition precedent, representation, warranty, covenant, Default,
Event of Default, mandatory prepayment or mandatory reduction of the Commitments or Additional Commitments shall constitute an
increase of any Commitment or Additional Commitment of such Lender;
(2) reduce
or forgive the principal amount of any Loan or any amount due on any Loan Installment Date;
(3) (x) extend the scheduled final maturity of any Loan or (y) postpone any Loan Installment Date, any Interest Payment
Date or the date of any scheduled payment of any fee payable hereunder (in each case, other than any extension for administrative
reasons agreed by the Administrative Agent);
(4) reduce the rate of interest (other than to waive any existing Default or Event of Default or obligation of the Borrower
to pay interest at the default rate of interest under Section 2.13(d), which shall only require the consent of the Required
Lenders) or the amount of any fee owed to such Lender; it being understood that no change in the definition of “First Lien
Leverage Ratio” or any other ratio used in the calculation of the Applicable Rate, or in the calculation of any other interest
or fee due hereunder (including any component definition thereof) shall constitute a reduction in any rate of interest or fee hereunder;
(5) extend the expiry date of such Lender’s Commitment or Additional Commitment; it being understood that no amendment,
modification or waiver of, or consent to departure from, any condition precedent, representation, warranty, covenant, Default,
Event of Default, mandatory prepayment or mandatory reduction of the Commitments or Additional Commitments shall constitute an
extension of any Commitment or Additional Commitment of any Lender; and
(6) waive, amend or modify the provisions of Sections 2.11(b)(vi), 2.18(b) or 2.18(c) of this Agreement
in a manner that would by its terms alter the pro rata sharing of payments required thereby (except in connection with any
transaction permitted under Sections 2.22, 2.23, 9.02(c), 9.05(g) and/or 9.05(h) or as
otherwise provided in this Section 9.02);
(B) no such waiver, amendment or modification shall:
(1) change any of the provisions of Section 9.02(a) or Section 9.02(b) or the definition of “Required
Lenders” to reduce any voting percentage required to waive, amend or modify any right thereunder or make any determination
or grant any consent thereunder, without the prior written consent of each Lender;
(2) release all or substantially all of the Collateral from the Lien granted pursuant to the Loan Documents (except as otherwise
permitted herein or in the other Loan Documents, including as contemplated or pursuant to Article 8 or Section 9.22),
without the prior written consent of each Lender directly and adversely affected thereby, and it being understood that only the
consent of the Lenders whose Loans are secured by the Collateral shall be required; or
(3) release all or substantially all of the value of the Guarantees under the Loan Guaranty (except as otherwise permitted
herein or in the other Loan Documents, including pursuant to Section 9.22 hereof), without the prior written consent
of each Lender directly and adversely affected thereby,
provided, further, that no
agreement shall amend, modify or otherwise affect the rights or duties of the Administrative Agent hereunder without the prior
written consent of the Administrative Agent. The Administrative Agent may also amend the Commitment Schedule to reflect assignments
entered into pursuant to Section 9.05, incurrences of Additional Commitments or Additional Loans pursuant to Section 2.22,
2.23 or 9.02(c) and reductions or terminations of any such Additional Commitments or Additional Loans. Notwithstanding
anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent
hereunder, except that the Commitment and any Additional Commitment of any Defaulting Lender may not be increased without the consent
of such Defaulting Lender (it being understood that any Commitment, Additional Commitment or Loan held or deemed held by any Defaulting
Lender shall be excluded from any vote hereunder that requires the consent of any Lender, except as expressly provided in Section 2.21(a)).
Notwithstanding the foregoing, this Agreement may be amended (or amended and restated) with the written consent of the Required
Lenders, the Administrative Agent and the Borrower (i) to add one or more additional credit facilities permitted hereunder to this
Agreement and to permit any extension of credit from time to time outstanding thereunder and the accrued interest and fees in respect
thereof to share ratably in the relevant benefits of this Agreement and the other Loan Documents and (ii) to include appropriately
the Lenders holding such credit facilities in any determination of the Required Lenders on substantially the same basis as the
Lenders prior to such inclusion.
(c) Notwithstanding the foregoing, this Agreement may be amended:
(i) with the written consent of the Borrower and the Lenders providing the relevant Replacement Term Loans to permit the refinancing
or replacement of all or any portion of any outstanding Term Loans under one or more Classes, series or tranches, as selected by
the Borrower in its sole discretion (any such Loans being refinanced or replaced, the “Replaced Term Loans”),
with one or more replacement term loans (“Replacement Term Loans”) pursuant to any existing or newly established
term loan facility hereunder pursuant to a Refinancing Amendment; provided that:
(A) the aggregate principal amount of any Replacement Term Loans shall not exceed the aggregate principal amount of the Replaced
Term Loans (plus (1) any additional amounts permitted to be incurred under Section 2.22 or Section 6.01(q),
(u), (w) and/or (aa) and, to the extent any such additional amounts are secured, the related Liens are permitted
under Section 6.02(k) (with respect to Liens securing Indebtedness permitted by Section 6.01(a), or (u)),
(o)(ii), (t)(ii), (u) and/or (hh) and plus (2) the amount of accrued interest, penalties and
premium (including tender premium) thereon, any committed but undrawn amounts, and underwriting discounts, fees (including upfront
fees, original issue discount, commitment fees, underwriting fees, arrangement fees and similar fees), commissions and expenses
associated therewith),
(B) any
Replacement Term Loans must have (1) a final maturity date that is equal to or later than the earlier of (x) the final
maturity date of the Replaced Term Loans and (y) 91 days after the then latest maturity date of any Term Loans that are not
being refinanced or so replaced, and (2) have a Weighted Average Life to Maturity equal to or greater than the Weighted
Average Life to Maturity of, the Replaced Term Loans at the time of the relevant refinancing,
(C) any such Replacement Term Loans must be pari passu with or junior to any such Replaced Term Loans in right of payment
and with respect to the Collateral (provided that such Replacement Term Loans shall be subject to an Acceptable Intercreditor
Agreement and may be, at the option of the Administrative Agent and the Borrower, documented in a separate agreement or agreements),
or be unsecured,
(D) if any Replacement Term Loans are secured, such Replacement Term Loans may not be secured by any assets other than the Collateral,
(E) if any Replacement Term Loans are guaranteed, such Replacement Term Loans may not be guaranteed by any Person other than
one or more Loan Parties,
(F) any Replacement Term Loans that are pari passu in right of payment and pari passu in right of security may
participate (x) on a pro rata basis or a less than pro rata basis (but not greater than a pro rata basis)
in any mandatory repayment in respect of the Initial Term Loans (and any Additional Term Loans then subject to ratable repayment
requirements) and (y) on a pro rata basis, greater than pro rata basis or a less than pro rata basis in any
voluntary prepayment in respect of the Initial Term Loans and any Additional Term Loans, in each case as agreed by the Borrower
and the Lenders providing the relevant Replacement Term Loans,
(G) any Replacement Term Loans shall have pricing (including interest, fees and premiums) and, subject to preceding clause
(F), optional prepayment and redemption terms as the Borrower and the lenders providing such Replacement Term Loans may agree,
(H) no Default under Section 7.01(a), 7.01(f) or 7.01(g) or Event of Default shall exist immediately prior
to or after giving effect to the effectiveness of the relevant Replacement Term Loans, and
(I) either
(i) the other terms and conditions of any Replacement Term Loans, as applicable (excluding pricing, interest, fees, rate
floors, premiums, optional prepayment or redemption terms, security and maturity, subject to preceding clauses (B)
through (G)) shall be substantially identical to, or (taken as a whole) no more favorable (as reasonably determined by
the Borrower) to the lenders providing such Replacement Term Loans than those applicable to the Replaced Term Loans (other
than covenants or other provisions applicable only to periods after the Latest Term Loan Maturity Date (in each case, as of
the date of incurrence of such Replacement Term Loans)) or (ii) such Replacement Term Loans shall reflect market terms
and conditions (taken as a whole) at such time (as determined by the Borrower in good faith); provided, that, if any
more restrictive financial maintenance covenant is added for the benefit of any Replacement Term Loans, such provisions shall
also be applicable to the Credit Facilities (other than covenants or other provisions applicable only to periods after the
Latest Term Loan Maturity Date (in each case, as of the date of incurrence of such Replacement Term Loans)), and
(ii) in the case of any Additional Revolving Facility, with the written consent of the Borrower and the Lenders providing the
relevant Replacement Revolving Facility to permit the refinancing or replacement of all or any portion of any Additional Revolving
Commitments under one or more Classes, series or tranche, as selected by the Borrower in its sole discretion (any such Additional
Revolving Commitments being refinanced or replaced, a “Replaced Revolving Facility”), with a replacement revolving
facility hereunder (a “Replacement Revolving Facility”) pursuant to a Refinancing Amendment; provided
that:
(A) the aggregate principal amount of any Replacement Revolving Facility shall not exceed the aggregate principal amount of
the unutilized commitments under the Replaced Revolving Facility (plus (x) any additional amounts permitted to be incurred
under Section 6.01(a), (q), (u), (w) and/or (aa) and, to the extent any such additional amounts
are secured, the related Liens are permitted under Section 6.02(k) (with respect to Liens securing Indebtedness permitted
by Section 6.01(a), (q), (u), (w) or (aa)), (o)(ii), (u) and/or (ii) and
plus (y) the amount of accrued interest, penalties and premium thereon, any committed but undrawn amounts and underwriting
discounts, fees (including upfront fees, original issue discount or initial yield payments), commissions and expenses associated
therewith),
(B) no such Replacement Revolving Facility may have a final maturity date (or require commitment reductions) prior to the earlier
of (x) the final maturity date of the relevant Replaced Revolving Facility at the time of such refinancing and (y) 91 days after
the then latest maturity date of any Additional Revolving Facility not being refinanced or so replaced,
(C) any such Replacement Revolving Facility must be pari passu with any such Replaced Revolving Facility in right of
payment and with respect to the Collateral (provided that any such Replacement Revolving Facility shall be subject to an
Acceptable Intercreditor Agreement and may be, at the option of the Administrative Agent and the Borrower, documented in a separate
agreement or agreements), or be unsecured,
(D) if any Replacement Revolving Facility are secured, such Replacement Revolving Facility may not be secured by any assets
other than the Collateral,
(E) if any Replacement Revolving Facility are guaranteed, such Replacement Revolving Facility may not be guaranteed by any Person
other than one or more Loan Parties,
(F) any Replacement Revolving Facility shall be subject to the “ratability” provisions applicable to Extended Revolving
Credit Commitments and Extended Revolving Loans set forth in the proviso to clause (ii) of Section 2.23(a), mutatis
mutandis, to the same extent as if fully set forth in this Section 9.02(c)(ii),
(G) any
Replacement Revolving Facility shall have pricing (including interest, fees and premiums) and, subject to preceding clause
(F), optional prepayment and redemption terms as the Borrower and the lenders providing such Replacement Revolving
Facility, may agree,
(H) no Default under Sections 7.01(a), 7.01(f) or 7.01(g) or Event of Default shall exist immediately prior
to or after giving effect to the effectiveness of the relevant Replacement Revolving Facility,
(I) either (i) the other terms and conditions of any Replacement Revolving Facility (excluding pricing, interest, fees, rate
floors, premiums, optional prepayment or redemption terms, security and maturity, subject to preceding clauses (B) through
(G)) shall be substantially identical to, or (taken as a whole) no more favorable (as reasonably determined by the Borrower)
to the lenders providing such Replacement Revolving Facility, than those applicable to the Replaced Revolving Facility (other than
covenants or other provisions applicable only to periods after the Latest Revolving Loan Maturity Date (in each case, as of the
date of incurrence of the relevant Replacement Revolving Facility)) or (ii) such Replacement Revolving Facility shall be provided
on then-current market terms for the applicable type of Indebtedness; and
(J) the commitments in respect of any Replaced Revolving Facility shall be terminated (to the extent being replaced), and all
loans outstanding thereunder and all fees in connection therewith shall be paid in full, in each case on the date such Replacement
Revolving Facility are implemented;
provided, further, that,
in respect of each of clauses (i) and (ii) of this clause (c), any Non-Debt Fund Affiliate and Debt Fund Affiliate
providing any Replacement Term Loans shall be subject to the restrictions applicable to such Persons under Section 9.05
as if such Replacement Term Loans were Term Loans and any Debt Fund Affiliate (but not any Non-Debt Fund Affiliate) may provide
any Replacement Revolving Facility.
Each party hereto hereby
agrees that, upon the effectiveness of any Refinancing Amendment, this Agreement shall be amended by the Borrower, the Administrative
Agent and the lenders providing the relevant Replacement Term Loans or the Replacement Revolving Facility, as applicable, to the
extent (but only to the extent) necessary to reflect the existence and terms of such Replacement Term Loans or Replacement Revolving
Facility, as applicable, incurred or implemented pursuant thereto (including any amendment necessary to treat the loans, notes
and commitments subject thereto as a separate “Class” of Loans and/or commitments hereunder), including any technical
amendments required in connection therewith. It is understood that any Lender approached to provide all or a portion of any Replacement
Term Loans or any Replacement Revolving Facility may elect or decline, in its sole discretion, to provide such Replacement Term
Loans or Replacement Revolving Facility.
(d) Notwithstanding anything to the contrary contained in this Section 9.02 or any other provision of this Agreement
or any provision of any other Loan Document:
(i) the Borrower and the Administrative Agent may, without the input or consent of any Lender, amend, supplement and/or waive
any guaranty, collateral security agreement, pledge agreement and/or related document (if any) executed in connection with
this Agreement to (x) comply with Requirements of Law or the advice of counsel or (y) cause any such guaranty, collateral security
agreement, pledge agreement or other document to be consistent with this Agreement and/or the relevant other Loan Documents;
(ii) the
Borrower and the Administrative Agent may, without the input or consent of any other Lender (other than the relevant Lenders (including
Additional Lenders) providing Loans under such Sections), (1) effect amendments to this Agreement and the other Loan Documents
as may be necessary in the reasonable opinion of the Borrower and the Administrative Agent to effect the provisions of Sections 2.22,
2.23, 5.12, 6.13 or 9.02(c), or any other provision specifying that any waiver, amendment or modification
may be made with the consent or approval of the Administrative Agent and/or (2) to add terms (including representations and warranties,
conditions, prepayments, covenants or events of default), in connection with the addition of any Loan or Commitment hereunder,
that are favorable to the then-existing Lenders, as reasonably determined by the Administrative Agent;
(iii) if the Administrative Agent and the Borrower have jointly identified any ambiguity, mistake, defect, inconsistency, obvious
error or any error or omission of a technical nature or any necessary or desirable technical change, in each case, in any provision
of any Loan Document, then the Administrative Agent and the Borrower shall be permitted to amend such provision solely to address
such matter as reasonably determined by them acting jointly;
(iv) the Administrative Agent and the Borrower may amend, restate, amend and restate or otherwise modify any applicable Acceptable
Intercreditor Agreement as provided therein;
(v) the Administrative Agent may amend the Commitment Schedule to reflect assignments entered into pursuant to Section 9.05,
Commitment reductions or terminations pursuant to Section 2.09, implementations of Additional Commitments or incurrences
of Additional Loans pursuant to Sections 2.22, 2.23 or 9.02(c) and reductions or terminations of any such
Additional Commitments or Additional Loans;
(vi) in the case of any Additional Revolving Facility, solely the consent of the Required Facility Lenders with respect to such
Additional Revolving Facility (but not the consent of the Required Lenders or any other Lender) shall be required for any waiver,
amendment or modification of (A) any conditions precedent to the obligations of the applicable Lenders to make any Additional Revolving
Loan (including any “swingline loans” or the issuance of any letters of credit) and (B) any financial maintenance covenant
solely for the benefit of such Additional Revolving Facility; and
(vii) any amendment, waiver or modification of any term or provision that directly affects Lenders under one or more Classes and
does not directly affect Lenders under one or more other Classes (unless such amendment, waiver or modification benefits the Lenders
under such other Classes) may be effected with solely the consent of the Required Facility Lenders of such directly affected Class
(but not the consent of the Required Lenders or any other Lender).
Section 9.03. Expenses; Indemnity.
(a) The
Borrower shall pay (i) all reasonable and documented out-of-pocket expenses incurred by the Arrangers, the Administrative
Agent and their respective Affiliates (including applicable syndication expenses and travel expenses but limited, in the case
of legal fees and expenses, to the actual reasonable and documented out-of-pocket fees, disbursements and other charges of
one firm of outside counsel to all such Persons taken as a whole and, if reasonably necessary, of one local counsel in any
relevant jurisdiction to all such Persons, taken as a whole) in connection with the syndication and distribution (including
via the Internet or through a service such as SyndTrak) of the Credit Facilities, the preparation, execution, delivery and
administration of the Loan Documents and any related documentation, including in connection with any amendment, modification
or waiver of any provision of any Loan Document (whether or not the transactions contemplated thereby are consummated, but
only to the extent the preparation of any such amendment, modification or waiver was requested by the Borrower and except as
otherwise provided separately in writing between the Borrower, the relevant Arranger and/or the Administrative Agent) and
(ii) all reasonable and documented out-of-pocket expenses incurred by the Administrative Agent, the Arrangers or the Lenders
or any of their respective Affiliates (but limited, in the case of legal fees and expenses, to the actual reasonable and
documented out-of-pocket fees, disbursements and other charges of one firm of outside counsel to all such Persons taken as a
whole and, if reasonably necessary, of one local counsel in any relevant jurisdiction to all such Persons, taken as a whole)
in connection with the enforcement, collection or protection of their respective rights in connection with the Loan
Documents, including their respective rights under this Section 9.03, or in connection with the Loans made hereunder.
Except to the extent required to be paid on the Closing Date (and invoiced three (3) Business Days prior thereto), all
amounts due under this paragraph (a) shall be payable by the Borrower within 30 days of receipt by the Borrower of an
invoice setting forth such expenses in reasonable detail, together with backup documentation supporting the relevant
reimbursement request.
(b) The
Borrower shall indemnify each Arranger, the Administrative Agent, each Lender, and each Related Party of any of the foregoing
Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from,
any and all losses, claims, damages and liabilities (but limited, in the case of legal fees and expenses, to the actual
reasonable and documented out-of-pocket fees, disbursements and other charges of one legal counsel to all Indemnitees taken
as a whole and, if reasonably necessary, one local counsel in any relevant jurisdiction to all Indemnitees, taken as a whole
and solely in the case of an actual or potential conflict of interest, (x) one additional counsel to all affected
Indemnitees, taken as a whole, and (y) one additional local counsel in each relevant jurisdiction to all affected
Indemnitees, taken as a whole), incurred by or asserted against any Indemnitee arising out of, in connection with, or as a
result of (i) the execution or delivery of the Loan Documents or any agreement or instrument contemplated thereby and/or the
enforcement of the Loan Documents, the performance by the parties hereto of their respective obligations thereunder or the
consummation of the Transactions or any other transactions contemplated hereby or thereby, (ii) the use of the proceeds of
the Loans, (iii) any actual or alleged Release or presence of Hazardous Materials on, at, under or from any property
currently or formerly owned or operated by the Borrower, any of its Restricted Subsidiaries or any other Loan Party or any
Environmental Liability related to the Borrower, any of its Restricted Subsidiaries or any other Loan Party and/or (iv) any
actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory and regardless of whether any Indemnitee is a party thereto (and regardless of whether
such matter is initiated by a third party or by the Borrower, any other Loan Party or any of their respective Affiliates); provided
that such indemnity shall not, as to any Indemnitee, be available to the extent that any such loss, claim, damage, or
liability (i) results from the gross negligence, bad faith or willful misconduct or material breach of the Loan Documents by
such Indemnitee, in each case, as determined by a final non-appealable judgment of a court of competent jurisdiction or (ii)
arises out of any claim, litigation, investigation or proceeding brought by such Indemnitee against another Indemnitee (other
than any claim, litigation, investigation or proceeding (x) that is brought by or against the Administrative Agent or any
Arranger, acting in its capacity or fulfilling its role as the Administrative Agent or as an Arranger or similar role or (y)
that involves any act or omission of the Sponsors, Holdings, the Borrower or any of its subsidiaries). Each Indemnitee shall
be obligated to refund or return any and all amounts paid by the Borrower pursuant to this Section 9.03(b) to such
Indemnitee for any fees, expenses, or damages to the extent such Indemnitee is not entitled to payment thereof in accordance
with the terms hereof. All amounts due under this paragraph (b) shall be payable by the Borrower within 30 days (x)
after receipt by the Borrower of a written demand therefor, in the case of any indemnification obligations and (y) in the
case of reimbursement of costs and expenses, after receipt by the Borrower of an invoice, setting forth such costs and
expenses in reasonable detail, together with backup documentation supporting the relevant reimbursement request. This Section
9.03(b) shall not apply to Taxes other than any Taxes that represent losses, claims, damages or liabilities in respect of
a non-Tax claim.
(c) The Borrower shall not be liable for any settlement of any proceeding effected without its written consent (which consent
shall not be unreasonably withheld, delayed or conditioned), but if any proceeding is settled with the Borrower’s written
consent, or if there is a final judgment against any Indemnitee in any such proceeding, the Borrower agrees to indemnify and hold
harmless each Indemnitee to the extent and in the manner set forth above. The Borrower shall not, without the prior written consent
of the affected Indemnitee (which consent shall not be unreasonably withheld, conditioned or delayed), effect any settlement of
any pending or threatened claim, litigation, investigation or proceeding against any Indemnitee in respect of which indemnity could
have been sought hereunder by such Indemnitee unless (i) such settlement includes an unconditional release of such Indemnitee from
all liability or claims that are the subject matter of such proceeding and (ii) such settlement does not include any statement
as to any admission of fault or culpability.
Section 9.04. Waiver of Claim. To the extent permitted by applicable
law, no party to this Agreement shall assert, and each hereby waives, any claim against any other party hereto or any Related Party
thereof, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, this Agreement or any agreement or instrument contemplated hereby, the Transactions,
any Loan or the use of the proceeds thereof, except to the extent such damages would otherwise be subject to indemnification pursuant
to the terms of Section 9.03.
Section 9.05. Successors and Assigns.
(a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns; provided that (i) except as provided under Section 6.07, the Borrower
may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Administrative
Agent and each Lender (and any attempted assignment or transfer by the Borrower without such consent shall be null and void) and
(ii) no Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance with the terms of this
Section 9.05 (any attempted assignment or transfer not complying with the terms of this Section 9.05 shall be subject
to Sections 9.05(f) and (g), as applicable). Nothing in this Agreement, expressed or implied, shall be construed
to confer upon any Person (other than the parties hereto, their respective successors and permitted assigns, Participants (to the
extent provided in paragraph (c) of this Section 9.05) and, to the extent expressly contemplated hereby, the
Related Parties of each of the Arrangers, the Administrative Agent and the Lenders) any legal or equitable right, remedy or claim
under or by reason of this Agreement.
(b) (i) Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may assign to one or more Eligible
Assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of any Loan or Additional
Commitment added pursuant to Section 2.22, 2.23 or 9.02(c) at the time owing to it) with the prior written
consent (not to be unreasonably withheld or delayed) of:
(A) the
Borrower; provided that (1) the Borrower shall be deemed to have consented to any such assignment of any Term Loans
unless it has objected thereto by written notice to the Administrative Agent within fifteen (15) Business Days after
receiving written notice thereof; (2) the consent of the Borrower shall be required for any assignment of Additional
Revolving Loans or Additional Revolving Commitments, (3) no consent of the Borrower shall be required for the assignment of
Term Loans to another Lender, an Affiliate of any Lender or an Approved Fund, (4) no consent of the Borrower shall be
required during the continuation of an Event of Default under Section 7.01(a) or Section 7.01(f) or (g)
(solely with respect to the Borrower); (5) the Borrower may withhold its consent to any assignment to any Person that is not
a Disqualified Institution but is known by the Borrower to be an Affiliate of a Disqualified Institution regardless of
whether such Person is identifiable as an Affiliate of a Disqualified Institution on the basis of such Affiliate’s name
(other than in respect of a Company Competitor, a Debt Fund Affiliate that is not itself a Disqualified Institution), and (6)
the investment objective or history of any prospective Lender or its Affiliates shall be a reasonable basis to withhold the
Borrower’s consent;
(B) the Administrative Agent; provided that no consent of the Administrative Agent shall be required for any assignment
to another Lender, any Affiliate of a Lender or any Approved Fund;
(ii) Assignments shall be subject to the following additional conditions:
(A) except in the case of any assignment to another Lender, any Affiliate of any Lender or any Approved Fund or any assignment
of the entire remaining amount of the relevant assigning Lender’s Loans or commitments of any Class, the principal amount
of Loans or commitments of the assigning Lender subject to the relevant assignment (determined as of the date on which the Assignment
and Assumption with respect to such assignment is delivered to the Administrative Agent and determined on an aggregate basis in
the event of concurrent assignments to Related Funds or by Related Funds) shall not be less than $1,000,000, in the case of Initial
Term Loans, Additional Term Loans, Initial Term Loan Commitments and Additional Term Commitments unless the Borrower and the Administrative
Agent otherwise consent;
(B) any
partial assignment shall be made as an assignment of a proportionate part of all the relevant assigning Lender’s rights
and obligations in respect of any Facility under this Agreement;
(C) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption via an
electronic settlement system acceptable to the Administrative Agent (or, if previously agreed with the Administrative Agent, manually),
and, except in the case of an assignment by an Initial Term Lender or its Affiliate in connection with the syndication of the Initial
Term Loans, shall pay to the Administrative Agent a processing and recordation fee of $3,500 (which fee may be waived or reduced
in the sole discretion of the Administrative Agent); and
(D) the relevant Eligible Assignee, if it is not a Lender, shall deliver on or prior to the effective date of such assignment,
to the Administrative Agent (1) an Administrative Questionnaire and (2) any IRS form required under Section 2.17.
(iii) Subject
to the acceptance and recording thereof pursuant to paragraph (b)(iv) of this Section 9.05, from and after
the effective date specified in any Assignment and Assumption, the Eligible Assignee thereunder shall be a party hereto and,
to the extent of the interest assigned pursuant to such Assignment and Assumption, have the rights and obligations of a
Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease
to be a party hereto but shall continue to be (A) entitled to the benefits of Sections 2.15, 2.16, 2.17
and 9.03 with respect to facts and circumstances occurring on or prior to the effective date of such assignment and
(B) subject to its obligations thereunder and under Section 9.13). If any assignment by any Lender holding any
Promissory Note is made after the issuance of such Promissory Note, the assigning Lender shall, upon the effectiveness of
such assignment or as promptly thereafter as practicable, surrender such Promissory Note to the Administrative Agent for
cancellation, and, following such cancellation, if requested by either the assignee or the assigning Lender, the Borrower
shall issue and deliver a new Promissory Note to such assignee and/or to such assigning Lender, with appropriate insertions,
to reflect the new commitments and/or outstanding Loans of the assignee and/or the assigning Lender.
(iv) The Administrative Agent, acting for this purpose as a non-fiduciary agent of the Borrower, shall maintain at one of its
offices a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses
of the Lenders and their respective successors and assigns, and the commitment of, and principal amount of and interest on the
Loans owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). Failure to make
any such recordation, or any error in such recordation, shall not affect the Borrower’s obligations in respect of such Loans.
The entries in the Register shall be conclusive, absent manifest error, and the Borrower, the Administrative Agent and the Lenders
shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender and the owner of the amounts
owing to it under the Loan Documents as reflected in the Register for all purposes of the Loan Documents, notwithstanding notice
to the contrary. The Register shall be available for inspection by the Borrower and each Lender, at any reasonable time and from
time to time upon reasonable prior notice.
(v)
Upon its receipt of a duly completed Assignment and Assumption executed by an assigning Lender and an Eligible Assignee,
the Eligible Assignee’s completed Administrative Questionnaire and any tax certification required by Section 9.05(b)(ii)(D)(2)
(unless the assignee is already a Lender hereunder), the processing and recordation fee referred to in paragraph (b) of
this Section 9.05, if applicable, and any written consent to the relevant assignment required by paragraph (b) of
this Section 9.05, the Administrative Agent shall promptly accept such Assignment and Assumption and record the information
contained therein in the Register. No assignment shall be effective for purposes of this Agreement unless it has been recorded
in the Register as provided in this paragraph.
(vi) By
executing and delivering an Assignment and Assumption, the assigning Lender and the Eligible Assignee thereunder shall be
deemed to confirm and agree with each other and the other parties hereto as follows: (A) such assigning Lender warrants that
it is the legal and beneficial owner of the interest being assigned thereby free and clear of any adverse claim and that the
amount of its commitments, and the outstanding balances of its Loans, in each case without giving effect to any assignment
thereof which has not become effective, are as set forth in such Assignment and Assumption, (B) except as set forth in clause (A)
above, such assigning Lender makes no representation or warranty and assumes no responsibility with respect to any statement,
warranty or representation made in or in connection with this Agreement, or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement, any other Loan Document or any other instrument or
document furnished pursuant hereto, or the financial condition of the Borrower or any Restricted Subsidiary or the
performance or observance by the Borrower or any Restricted Subsidiary of any of its obligations under this Agreement, any
other Loan Document or any other instrument or document furnished pursuant hereto; (C) such assignee represents and warrants
that it is an Eligible Assignee, legally authorized to enter into such Assignment and Assumption; (D) such assignee confirms
that it has received a copy of this Agreement and the Intercreditor Agreements (and any other applicable Acceptable
Intercreditor Agreement), together with copies of the financial statements referred to in Section 4.01(c) or the
most recent financial statements delivered pursuant to Section 5.01 and such other documents and information as
it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Assumption; (E) such
assignee will independently and without reliance upon the Administrative Agent, the assigning Lender or any other Lender and
based on such documents and information as it deems appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement; (F) such assignee appoints and authorizes the Administrative Agent to take
such action as agent on its behalf and to exercise such powers under this Agreement as are delegated to the Administrative
Agent, by the terms hereof, together with such powers as are reasonably incidental thereto; and (G) such assignee agrees that
it will perform in accordance with their terms all the obligations which by the terms of this Agreement are required to be
performed by it as a Lender.
(c) (i) Any Lender may, without the consent of the Borrower, the Administrative Agent or any other Lender, sell participations
to any bank or other entity (other than to any Disqualified Institution, any natural Person or, other than with respect to any
participation to any Debt Fund Affiliate (any such participations to a Debt Fund Affiliate being subject to the limitation set
forth in the first proviso of the penultimate paragraph set forth in Section 9.05(h), as if the limitation applied to such
participations), the Borrower or any of its Affiliates) (a “Participant”) in all or a portion of such Lender’s
rights and obligations under this Agreement (including all or a portion of its commitments and the Loans owing to it); provided
that (A) such Lender’s obligations under this Agreement shall remain unchanged, (B) such Lender shall remain solely responsible
to the other parties hereto for the performance of such obligations and (C) the Borrower, the Administrative Agent and the other
Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations
under this Agreement. Any agreement or instrument pursuant to which any Lender sells such a participation shall provide that such
Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision
of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent
of the relevant Participant, agree to any amendment, modification or waiver described in (x) clause (A) of the
first proviso to Section 9.02(b) that directly and adversely affects the Loans or commitments in which such Participant
has an interest and (y) clause (B)(1), (2) or (3) of the first proviso to Section 9.02(b).
Subject to paragraph (c)(ii) of this Section 9.05, the Borrower agrees that each Participant shall be entitled
to the benefits of Sections 2.15, 2.16 and 2.17 (subject to the limitations and requirements of such
Sections and Section 2.19) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant
to paragraph (b) of this Section 9.05 (it being understood that the documentation required under Section 2.17(f)
shall be delivered to the participating Lender, and if additional amounts are required to be paid pursuant to Section 2.17(a)
or Section 2.17(c), to the Borrower and the Administrative Agent upon reasonable written request by the Borrower). To the
extent permitted by law, each Participant also shall be entitled to the benefits of Section 9.09 as though it were
a Lender; provided that such Participant agrees to be subject to Section 2.18(c) as though it were a Lender.
(ii) No
Participant shall be entitled to receive any greater payment under Section 2.15, 2.16 or 2.17 than
the participating Lender would have been entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the Borrower’s prior written consent expressly
acknowledging that such Participant’s entitlement to benefits under Sections 2.15, 2.16 and 2.17
is not limited to what the participating Lender would have been entitled to receive absent the participation.
Each Lender that sells
a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it
enters the name and address of each Participant and their respective successors and assigns, and the principal amounts and stated
interest of each Participant’s interest in the Loans or other obligations under the Loan Documents (the “Participant
Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant
Register (including the identity of any Participant or any information relating to a Participant’s interest in any commitments,
loans, letters of credit or its other obligations under any Loan Document) to any Person except to the extent that such disclosure
is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under Section
5f.103-1(c) of the Treasury Regulation or is otherwise required hereunder. The entries in the Participant Register shall be conclusive
absent manifest error, and each Lender shall treat each Person whose name is recorded in the Participant Register as the owner
of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt,
the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.
(d) Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement
(other than to any Disqualified Institution or any natural person) to secure obligations of such Lender, including without limitation
any pledge or assignment to secure obligations to any Federal Reserve Bank or other central bank having jurisdiction over such
Lender, and this Section 9.05 shall not apply to any such pledge or assignment of a security interest; provided that
no such pledge or assignment of a security interest shall release any Lender from any of its obligations hereunder or substitute
any such pledgee or assignee for such Lender as a party hereto.
(e) Notwithstanding
anything to the contrary contained herein, any Lender (a “Granting Lender”) may grant to a special purpose
funding vehicle (an “SPC”), identified as such in writing from time to time by the Granting Lender to the
Administrative Agent and the Borrower, the option to provide to the Borrower all or any part of any Loan that such Granting
Lender would otherwise be obligated to make to the Borrower pursuant to this Agreement; provided that (i) nothing
herein shall constitute a commitment by any SPC to make any Loan and (ii) if an SPC elects not to exercise such option or
otherwise fails to provide all or any part of such Loan, the Granting Lender shall be obligated to make such Loan pursuant to
the terms hereof. The making of any Loan by an SPC hereunder shall utilize the Commitment or Additional Commitment of the
Granting Lender to the same extent, and as if, such Loan were made by such Granting Lender. Each party hereto hereby agrees
that (i) neither the grant to any SPC nor the exercise by any SPC of such option shall increase the costs or expenses or
otherwise increase or change the obligations of the Borrower under this Agreement (including its obligations under Section
2.15, 2.16 or 2.17) and no SPC shall be entitled to any greater amount under Section 2.13, 2.14
or 2.15 or any other provision of this Agreement or any other Loan Document that the Granting Lender would have been
entitled to receive, (ii) no SPC shall be liable for any indemnity or similar payment obligation under this Agreement (all
liability for which shall remain with the Granting Lender) and (iii) the Granting Lender shall for all purposes including
approval of any amendment, waiver or other modification of any provision of the Loan Documents, remain the Lender of record
hereunder. In furtherance of the foregoing, each party hereto hereby agrees (which agreement shall survive the termination of
this Agreement) that, prior to the date that is one year and one day after the payment in full of all outstanding commercial
paper or other senior indebtedness of any SPC, it will not institute against, or join any other Person in instituting
against, such SPC any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings under the laws of the
U.S. or any State thereof; provided that (i) such SPC’s Granting Lender is in compliance in all material
respects with its obligations to the Borrower hereunder and (ii) each Lender designating any SPC hereby agrees to indemnify,
save and hold harmless each other party hereto for any loss, cost, damage or expense arising out of its inability to
institute such a proceeding against such SPC during such period of forbearance. In addition, notwithstanding anything to the
contrary contained in this Section 9.05, any SPC may (i) with notice to, but without the prior written consent
of, the Borrower or the Administrative Agent and without paying any processing fee therefor, assign all or a portion of its
interests in any Loan to the Granting Lender and (ii) disclose on a confidential basis any non-public information relating to
its Loans to any rating agency, commercial paper dealer or provider of any surety, guaranty or credit or liquidity
enhancement to such SPC. If a Granting Lender grants an option to an SPC as described herein and such grant is not reflected
in the Register, the Granting Lender shall maintain a separate register on which it records the name and address of each SPC
and the principal amounts (and related interest) of each SPC’s interest with respect to the Loans, Commitments or other
interests hereunder, which entries shall be conclusive absent manifest error and each Lender shall treat such SPC that is
recorded in the register as the owner of such interests for all purposes of the Loan Documents notwithstanding any notice to
the contrary; provided, further, that no Lender shall have any obligation to disclose any portion of such
register to any Person except to the extent disclosure is necessary to establish that the Loans, Commitments or other
interests hereunder are in registered form for U.S. federal income tax purposes (or as is otherwise required thereunder).
(f) (i) Any assignment or participation by a Lender without the Borrower’s consent, to the extent the Borrower’s
consent is required under this Section 9.05, to any other Person shall, at the Borrower’s election, be treated in
accordance with Section 9.05(g) below or the Borrower shall be entitled to seek specific performance to unwind any such
assignment or participation in addition to injunctive relief or any other remedies available to the Borrower at law or in equity.
Upon the request of any Lender, the Borrower shall make available to such Lender the list of Disqualified Institutions at the relevant
time on a confidential basis and such Lender may provide the list to any potential assignee or participant on a confidential basis
in accordance with Section 9.13 for the purpose of verifying whether such Person is a Disqualified Institution.
(ii) Without limiting the foregoing, the Administrative Agent, in its capacity as such, shall not be responsible or have any
liability for, or have any duty to ascertain, inquire into, monitor or enforce, compliance with the provisions hereof relating
to Disqualified Institutions (other than with respect to updating the list with names of Disqualified Institutions provided in
writing to the Administrative Agent in accordance with the definition of “Disqualified Institution” or providing the
list (with such updates) upon request in accordance with this Section 9.05). Without limiting the generality of the foregoing,
the Administrative Agent, in its capacity as such, shall not (i) be obligated to ascertain, monitor or inquire
as to whether any Lender or Participant or prospective Lender or Participant is a Disqualified Institution
or (ii) have any liability with respect to or arising out of any assignment or participation of Loans, or disclosure of confidential
information, to any Disqualified Institution.
(g) If
any assignment or participation under this Section 9.05 is made to any Person that is a Disqualified Institution or to
any Person that cannot be reasonably identified as a Disqualified Institution pursuant to clause (a)(ii) or (c)(ii) of
the definition thereof as of the date of such assignment or participation and subsequently becomes reasonably identifiable as
a Disqualified Institution, then, notwithstanding any other provision of this Agreement (1) the Borrower may, at the
Borrower’s sole expense and effort, upon notice to such Person and the Administrative Agent, (A) terminate any
Commitment of such Person and repay all obligations of the Borrower owing to such Person, (B) in the case of any outstanding
Term Loans, held by such Person, purchase such Term Loans by paying the lesser of (I) par and (II) the amount that such
Person paid to acquire such Term Loans, plus accrued interest thereon, accrued fees and all other amounts payable to
it hereunder and/or (C) require such Person to assign, without recourse (in accordance with and subject to the restrictions
contained in this Section 9.05), all of its interests, rights and obligations under this Agreement to one or more
Eligible Assignees; provided that in the case of clause (C) above, the relevant assignment shall otherwise
comply with this Section 9.05 (except that no registration and processing fee required under this Section 9.05
shall be required with respect to any assignment pursuant to this paragraph); (ii) the Loans and Commitments held by such
Person shall be deemed not to be outstanding for purposes of any amendment, waiver or consent hereunder, and such Person
shall not be permitted to attend meetings of the Lenders or receive information prepared by the Administrative Agent or any
Lender in connection with this Agreement and will not be permitted to attend or participate in conference calls or meetings
attended solely by the Lenders and the Administrative Agent, (iii) such Person shall be otherwise deemed to be a Defaulting
Lender, and (iv) in no event shall such Person be entitled to receive amounts set forth in Section 2.13(d).
Nothing in this Section 9.05(g) shall be deemed to prejudice any right or remedy that Holdings or the Borrower may
otherwise have at law or equity. Each Lender acknowledges and agrees that Holdings and its subsidiaries will suffer
irreparable harm if such Lender breaches any obligation under this Section 9.05 insofar as such obligation relates to
any assignment, participation or pledge to any Disqualified Institution without the Borrower’s prior written consent
and, therefore, each Lender agrees that Holdings and/or the Borrower may seek to obtain specific performance or other
equitable or injunctive relief to enforce this Section 9.05(g) against such Lender with respect to such breach without
posting a bond or presenting evidence of irreparable harm.
(h) Notwithstanding anything to the contrary contained herein, any Lender may, at any time, assign all or a portion of its rights
and obligations under this Agreement in respect of its Initial Term Loans or Additional Term Loans to an Affiliated Lender on a
non-pro rata basis (A) through Dutch Auctions open to all Lenders holding the relevant Initial Term Loans or such Additional
Term Loans, as applicable, on a pro rata basis or (B) through open market purchases, in each case with respect to clauses
(A) and (B), without the consent of the Administrative Agent; provided that:
(i) any Initial Term Loans or Additional Term Loans acquired by Holdings, the Borrower or any of its subsidiaries shall be retired
and cancelled to the extent permitted by applicable law; provided that upon any such retirement and cancellation, the aggregate
outstanding principal amount of the Initial Term Loans or Additional Term Loans, as applicable, shall be deemed reduced by the
full par value of the aggregate principal amount of the Initial Term Loans or Additional Term Loans so retired and cancelled, and
each principal repayment installment with respect to the Term Loans pursuant to Section 2.10(a) shall be reduced on a pro
rata basis by the full par value of the aggregate principal amount of Term Loans so cancelled;
(ii) any Initial Term Loans or Additional Term Loans acquired by any Non-Debt Fund Affiliate may (but shall not be required to)
be contributed to the Borrower or any of its subsidiaries for purposes of cancelling such Indebtedness (it being understood that
any such Initial Term Loans or Additional Term Loans shall be retired and cancelled immediately upon such contribution to the extent
permitted by applicable law); provided that upon any such cancellation, the aggregate outstanding principal amount of the
Initial Term Loans or Additional Term Loans, as applicable, shall be deemed reduced, as of the date of such contribution, by the
full par value of the aggregate principal amount of the Initial Term Loans or Additional Term Loans so contributed and cancelled,
and each principal repayment installment with respect to the Initial Term Loans pursuant to Section 2.10(a) shall be reduced
pro rata by the full par value of the aggregate principal amount of Initial Term Loans so contributed and cancelled;
(iii) the relevant Affiliated Lender and assigning Lender shall have executed an Affiliated Lender Assignment and Assumption and
the Assignment shall have been recorded in the Register;
(iv) after
giving effect to such assignment and to all other assignments to all Affiliated Lenders, the aggregate principal amount of
all Initial Term Loans and Additional Term Loans then held by all Affiliated Lenders shall not exceed 25% of the aggregate
principal amount of the Initial Term Loans and Additional Term Loans then outstanding (after giving effect to any
substantially simultaneous cancellations thereof) (the “Affiliated Lender Cap”); provided that
(x) each party hereto acknowledges and agrees that the Administrative Agent shall not be liable for any losses, damages,
penalties, claims, demands, actions, judgments, suits, costs, expenses and disbursements of any kind or nature whatsoever
incurred or suffered by any Person in connection with any compliance or non-compliance with this clause (g)(iv)
or any purported assignment exceeding the Affiliated Lender Cap (it being understood and agreed that the Affiliated Lender
Cap is intended to apply to any Loans made available to Affiliated Lenders by means other than formal assignment
(e.g., as a result of an acquisition of another Lender (other than any Debt Fund Affiliate)) by any Affiliated Lender
or the provision of Additional Term Loans by any Affiliated Lender); and (y) that to the extent that any assignment to
any Affiliated Lender would result in the aggregate principal amount of all Initial Term Loans and Additional Term Loans held
by Affiliated Lenders exceeding the Affiliated Lender Cap (after giving effect to any substantially simultaneous
cancellations thereof), the assignment of the relevant excess amount shall be deemed to have been contributed directly or
indirectly to the Borrower and cancelled;
(v) in connection with any assignment effected pursuant to a Dutch Auction and/or open market purchase conducted by Holdings,
the Borrower or any of its subsidiaries, (A) the relevant Person may not use the proceeds of the ABL Facility or any Additional
Revolving Loans to fund such assignment and (B) no Event of Default exists at the time of acceptance of bids for the Dutch
Auction or the confirmation of such open market purchase, as applicable; and
(vi) by its acquisition of Term Loans, each relevant Affiliated Lender shall be deemed to have acknowledged and agreed that:
(A) subject to clause (iv) above, the Term Loans held by such Affiliated Lender shall be disregarded in both the numerator
and denominator in the calculation of any Required Lender or other Lender vote (and the Term Loans held by such Affiliated Lender
shall be deemed to be voted pro rata along with the other Lenders that are not Affiliated Lenders); provided that
(x) such Affiliated Lender shall have the right to vote (and the Term Loans held by such Affiliated Lender shall not be so
disregarded) with respect to any amendment, modification, waiver, consent or other action that requires the vote of all Lenders
or all Lenders directly and adversely affected thereby, as the case may be, and (y) no amendment, modification, waiver, consent
or other action shall (1) disproportionately affect such Affiliated Lender in its capacity as a Lender as compared to other Lenders
of the same Class that are not Affiliated Lenders or (2) deprive any Affiliated Lender of its share of any payments which the Lenders
are entitled to share on a pro rata basis hereunder, in each case without the consent of such Affiliated Lender; and
(B) such
Affiliated Lender, solely in its capacity as an Affiliated Lender, will not be entitled to (i) attend (including by
telephone) or participate in any meeting or discussion (or portion thereof) among the Administrative Agent or any Lender or
among Lenders to which the Loan Parties or their representatives are not invited or (ii) receive any information or material
prepared by the Administrative Agent or any Lender or any communication by or among the Administrative Agent and one or more
Lenders, except to the extent such information or materials have been made available by the Administrative Agent or any
Lender to any Loan Party or its representatives (and in any case, other than the right to receive notices of Borrowings,
prepayments and other administrative notices in respect of its Initial Term Loans or Additional Term Loans required to be
delivered to Lenders pursuant to Article 2); and
(vii) no Affiliated Lender shall be required to represent or warrant that it is not in possession of material non-public information
with respect to Holdings, the Borrower and/or any subsidiary thereof and/or their respective securities in connection with any
assignment permitted by this Section 9.05(h).
Notwithstanding anything to the contrary
contained herein, any Lender may, at any time, assign all or a portion of its rights and obligations under this Agreement in respect
of its Initial Term Loans or Additional Term Loans to any Debt Fund Affiliate, and any Debt Fund Affiliate may, from time to time,
purchase Initial Term Loans or Additional Term Loans (x) on a non-pro rata basis through Dutch Auctions open to all applicable
Lenders or (y) on a non-pro rata basis through open market purchases without the consent of the Administrative Agent, in
each case, notwithstanding the requirements set forth in subclauses (i) through (vii) of this clause (g);
provided that the Initial Term Loans, Additional Term Loans of all Debt Fund Affiliates shall not account for more than
49.9% of the amounts included in determining whether the Required Lenders have (A) consented to any amendment, modification, waiver,
consent or other action with respect to any of the terms of any Loan Document or any departure by any Loan Party therefrom, or
subject to the immediately succeeding paragraph, any plan of reorganization pursuant to the Bankruptcy Code, (B) otherwise acted
on any matter related to any Loan Document or (C) directed or required the Administrative Agent or any Lender to undertake any
action (or refrain from taking any action) with respect to or under any Loan Document. Any Initial Term Loans or Additional Term
Loans acquired by any Debt Fund Affiliate may (but shall not be required to) be contributed to the Borrower or any of its subsidiaries
for purposes of cancelling such Indebtedness (it being understood that any Initial Term Loans or Additional Term Loans so contributed
shall be retired and cancelled immediately to the extent permitted by applicable law); provided that upon any such cancellation,
the aggregate outstanding principal amount of the Initial Term Loans or other Term Loans shall be deemed reduced, as of the date
of such contribution, by the full par value of the aggregate principal amount of the Initial Term Loans or Additional Term Loans
so contributed and cancelled, and each principal repayment installment with respect to the Initial Term Loans pursuant to Section 2.10(a)
shall be reduced pro rata by the full par value of the aggregate principal amount of Loans so contributed and cancelled.
Notwithstanding anything
in this Agreement or any other Loan Document to the contrary, each Affiliated Lender hereby agrees that, if a proceeding under
any Debtor Relief Law is commenced by or against the Borrower or any other Loan Party at a time when such Lender is an Affiliated
Lender, such Affiliated Lender irrevocably authorizes and empowers the Administrative Agent to vote on behalf of such Affiliated
Lender with respect to the Initial Term Loans or Additional Term Loans held by such Affiliated Lender in the same proportion as
the vote of Lenders that are not Affiliated Lenders on the relevant matter; provided that in connection with any matter
that proposes to treat any Obligations held by such Affiliated Lender in a manner that is different than the proposed treatment
of similar Obligations held by Lenders that are not Affiliates, (a) such Affiliated Lender shall be entitled to vote in accordance
with its sole discretion and (b) the Administrative Agent shall not be entitled to vote on behalf of such Affiliated Lender. Each
Affiliated Lender hereby irrevocably appoints the Administrative Agent (such appointment being coupled with an interest) as such
Affiliated Lender’s attorney-in-fact, with full authority in the place and stead of such Affiliated Lender and in the name
of such Affiliated Lender (solely in respect of Initial Term Loans or Additional Term Loans and participations therein and not
in respect of any other claim or status that such Affiliated Lender may otherwise have), from time to time in the Administrative
Agent’s discretion to take any action and to execute any instrument that the Administrative Agent may deem reasonably necessary
to carry out the provisions of (but subject to the limitations set forth in) this paragraph.
Section 9.06. Survival.
All covenants, agreements, representations and warranties made by the Loan Parties in the Loan Documents and in the certificates
or other instruments delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered
to have been relied upon by the other parties hereto and shall survive the execution and delivery of the Loan Documents and the
making of any Loans regardless of any investigation made by any such other party or on its behalf and notwithstanding that the
Administrative Agent may have had notice or knowledge of any existing Default or Event of Default or incorrect representation
or warranty at the time any credit is extended hereunder, and shall continue in full force and effect until the Termination Date.
The provisions of Sections 2.15, 2.16, 2.17, 9.03 and 9.13 and Article 8 shall
survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment
of the Loans, the expiration or termination any Additional Commitment, the occurrence of the Termination Date or the termination
of this Agreement or any provision hereof but in each case, subject to the limitations set forth in this Agreement.
Section 9.07. Counterparts; Integration; Effectiveness; Electronic Execution.
(a) This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which
shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement, the other
Loan Documents, the Intercreditor Agreements (and any other Acceptable Intercreditor Agreement) and the Fee Letter and any separate
letter agreements with respect to fees payable to the Administrative Agent constitute the entire agreement among the parties relating
to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the
subject matter hereof. This Agreement shall become effective when it has been executed by Holdings, the Borrower and the Administrative
Agent and when the Administrative Agent has received counterparts hereof which, when taken together, bear the signatures of each
of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns. Delivery of an executed counterpart of a signature page to this Agreement by facsimile or by
email as a “.pdf” or “.tiff” attachment shall be effective as delivery of a manually executed counterpart
of this Agreement.
(b) The words “execute,”
“execution,” “signed,” “signature,” and words of like import in or related to any document
to be signed in connection with this Agreement and the transactions contemplated hereby (including without limitation Assignment
and Assumptions, amendments or other modifications, Borrowing Requests, waivers and consents) shall be deemed to include electronic
signatures, the electronic matching of assignment terms and contract formations on electronic platforms approved by the Administrative
Agent, or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability
as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided
for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State
Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act; provided
that notwithstanding anything contained herein to the contrary the Administrative Agent is under no obligation to agree to accept
electronic signatures in any form or in any format unless expressly agreed to by the Administrative Agent pursuant to procedures
approved by it.
Section 9.08. Severability. To the extent permitted by law, any
provision of any Loan Document held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability
of the remaining provisions thereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate
such provision in any other jurisdiction.
Section 9.09. Right
of Setoff. At any time when an Event of Default exists, upon the written consent of the Administrative Agent, each
Lender and each of their respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any
time held and other obligations (in any currency) at any time owing by the Administrative Agent or such Lender or Affiliate
(including by branches and agencies of the Administrative Agent or such Lender, wherever located) to or for the credit or the
account of the Borrower or any Loan Party against any of and all the Secured Obligations held by the Administrative Agent or
such Lender or Affiliate, in each case, except to the extent such amounts, deposits, obligations, credit or account
constitute Excluded Assets, irrespective of whether or not the Administrative Agent or such Lender or Affiliate shall have
made any demand under the Loan Documents and although such obligations may be contingent or unmatured or are owed to a branch
or office of such Lender different than the branch or office holding such deposit or obligation on such Indebtedness. Any
applicable Lender or Affiliate shall promptly notify the Borrower and the Administrative Agent of such set-off or
application; provided that any failure to give or any delay in giving such notice shall not affect the validity of any
such set-off or application under this Section 9.09 except to the extent such amounts, deposits, obligations, credit
or account constitute Excluded Assets. The rights of each Lender, the Administrative Agent and each Affiliate under this Section
9.09 are in addition to other rights and remedies (including other rights of setoff) which such Lender, the
Administrative Agent or such Affiliate may have.
Section 9.10. Governing Law; Jurisdiction; Consent to Service of Process.
(a) THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (OTHER THAN AS EXPRESSLY SET FORTH IN OTHER LOAN DOCUMENTS) AND ANY CLAIM, CONTROVERSY
OR DISPUTE ARISING UNDER OR RELATED TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (OTHER THAN AS EXPRESSLY SET FORTH IN THE OTHER
LOAN DOCUMENTS), WHETHER IN TORT, CONTRACT (AT LAW OR IN EQUITY) OR OTHERWISE, SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. Notwithstanding the foregoing or
anything to the contrary in this Agreement, interpretation of the provisions of the Merger Agreement (including with respect to
satisfaction of the conditions contained therein, whether the Acquisition has been consummated as contemplated by the Merger Agreement,
any interpretation of Closing Date Material Adverse Effect, any determination of whether a Closing Date Material Adverse Effect
has occurred or could reasonably be expected to occur, whether the representations and warranties made by the Company and its subsidiaries
in the Merger Agreement (including any Specified Merger Agreement Representations) are accurate and whether as a result of any
inaccuracy thereof any party has the right to terminate its obligations under the Merger Agreement or decline to consummate the
Acquisition) and all issues, claims and disputes concerning the construction, validity, interpretation and enforceability of the
Merger Agreement and the exhibits and schedules thereto shall, in each case, be governed by, and construed in accordance with,
the laws of the State of NEW JERsey (without regard to any jurisdiction’s conflict-of-laws principles).
(b) Each
party hereto hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction
(subject to the last sentence of this clause (b)) of any U.S. Federal or New York State court sitting in the Borough
of Manhattan, in the City of New York (or any appellate court therefrom) over any suit, action or proceeding arising out of
or relating to any Loan Documents and agrees that all claims in respect of any such action or proceeding shall (except as
permitted below) be heard and determined in such New York State or, to the extent permitted by law, federal court; provided
that with respect to any suit, action or proceeding arising out of or relating to the Merger Agreement or the transactions
contemplated thereby which does not involve any claims against the Arrangers, the Lenders or any indemnified person, this
sentence shall not override any jurisdiction provision in the Merger Agreement. Each party hereto agrees that service of any
process, summons, notice or document by registered mail addressed to such person shall be effective service of process
against such Person for any suit, action or proceeding brought in any such court. Each party hereto agrees that a final
judgment in any such action or proceeding may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. Each party hereto agrees that the Administrative Agent and the Secured Parties retain the right to
bring proceedings against any loan party in the courts of any other jurisdiction solely in connection with the exercise of
any rights under any Collateral Document.
(c) Each party hereto hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or
relating to this Agreement or any other Loan Document in any court referred to in paragraph (b) of this Section 9.10.
Each party hereto hereby irrevocably waives, to the fullest extent permitted by law, any claim or defense of an inconvenient forum
to the maintenance of such action, suit or proceeding in any such court.
(d) To the extent permitted by law, each party hereto hereby irrevocably waives personal service of any and all process upon
it and agrees that all such service of process may be made by registered mail (or any substantially similar form of mail) directed
to it at its address for notices as provided for in Section 9.01.
(e) Each party hereto hereby waives any objection to such service of process and further irrevocably waives and agrees not to
plead or claim in any action or proceeding commenced hereunder or under any loan document that service of process was invalid and
ineffective. Nothing in this Agreement or any other Loan Document will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.
Section 9.11. Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY
AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY
SUIT, ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY) DIRECTLY OR INDIRECTLY ARISING OUT
OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY HERETO
(a) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (b) ACKNOWLEDGES THAT IT AND THE
OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS
IN THIS SECTION 9.11.
Section 9.12. Headings. Article and Section headings and the Table
of Contents used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction
of, or be taken into consideration in interpreting, this Agreement.
Section 9.13. Confidentiality.
Each of the Administrative Agent, each Lender and each Arranger agrees (and each Lender agrees to cause its SPC, if any) to
maintain the confidentiality of the Confidential Information (as defined below), except that Confidential Information may be
disclosed (a) to its and its Affiliates’ directors, officers, managers, employees, independent auditors, or other
experts and advisors, including accountants, legal counsel and other advisors (collectively, the
“Representatives”) on a “need to know” basis solely in connection with the transactions
contemplated hereby and who are informed of the confidential nature of the Confidential Information and are or have been
advised of their obligation to keep the Confidential Information of this type confidential; provided that (x) such
Person shall be responsible for its Affiliates’ and their Representatives’ compliance with this paragraph and (y)
unless the Borrower otherwise consents, no such disclosure shall be made by the Administrative Agent, any Arranger, any
Lender or any Affiliate or Representative thereof to any Affiliate or Representative of the Administrative Agent, any
Arranger, or any Lender that is a Disqualified Institution, (b) upon the demand or request of any regulatory or
Governmental Authority (including any self-regulatory body or any Federal Reserve Bank or other central bank acting as
pledgee pursuant to Section 9.05) purporting to have jurisdiction over such Person or its Affiliates (in which case
such Person shall, except with respect to any audit or examination conducted by bank accountants or any Governmental
Authority or regulatory or self-regulatory authority exercising examination or regulatory authority, to the extent
practicable and permitted by law, (i) inform the Borrower promptly in advance thereof and (ii) use commercially reasonable
efforts to ensure that any information so disclosed is accorded confidential treatment), (c) to the extent compelled by legal
process in, or reasonably necessary to, the defense of such legal, judicial or administrative proceeding, in any legal,
judicial or administrative proceeding or otherwise as required by applicable Requirements of Law (in which case such Person
shall (i) to the extent practicable and permitted by law, inform the Borrower promptly in advance thereof and (ii) use
commercially reasonable efforts to ensure that any such information so disclosed is accorded confidential treatment),
(d) to any other party to this Agreement, (e) to any Lender, Participant, counterparty or prospective Lender,
Participant or counterparty, subject to an acknowledgment and agreement by the relevant recipient that the Confidential
Information is being disseminated on a confidential basis (on substantially the terms set forth in this paragraph or as
otherwise reasonably acceptable to the Borrower and the Administrative Agent) in accordance with the standard syndication
process of the Arrangers or market standards for dissemination of the relevant type of information, which shall in any event
require “click through” or other affirmative action on the part of the recipient to access the Confidential
Information and acknowledge its confidentiality obligations in respect thereof, to (i) any Eligible Assignee of or
Participant in, or any prospective Eligible Assignee of or prospective Participant in, any of its rights or obligations under
this Agreement, including any SPC (in each case other than a Disqualified Institution), (ii) any pledgee referred to in Section 9.05,
(iii) any actual or prospective, direct or indirect contractual counterparty (or its advisors) to any Derivative Transaction
(including any credit default swap) or similar derivative product to which any Loan Party is a party, (f) with the prior
written consent of the Borrower and subject to the Borrower’s prior approval of the information to be disclosed (not to
be unreasonably withheld or delayed) to one or more ratings agencies in connection with obtaining ratings (including
“shadow ratings”) of the Borrower or the Loans, (g) to the extent the Confidential Information becomes
publicly available other than as a result of a breach of this Section 9.13 by such Person, its Affiliates or their
respective Representatives, (h) to insurers, any numbering administration or settlement services providers on a “need
to know” basis solely in connection with the transactions contemplated hereby and who are informed of the confidential
nature of the Confidential Information and are or have been advised of their obligation to keep the Confidential Information
of this type confidential; provided that any disclosure made in reliance on this clause (h) is limited to the
general terms of this Agreement and does not include financial or other information relating to Holdings, the Borrower and/or
any of their respective subsidiaries and (i) to the extent required to be so disclosed in any public filings by a Lender with
the SEC. For purposes of this Section 9.13, “Confidential Information” means all information
relating to the Borrower and/or any of its subsidiaries and their respective businesses, the Sponsors or the Transactions
(including any information obtained by the Administrative Agent, any Lender or any Arranger, or any of their respective
Affiliates or Representatives, based on a review of the books and records relating to the Borrower and/or any of its
subsidiaries and their respective Affiliates from time to time, including prior to the date hereof) other than any such
information that is publicly available to the Administrative Agent or any Arranger or Lender on a non-confidential basis
prior to disclosure by the Borrower or any of its subsidiaries. For the avoidance of doubt, in no event shall any disclosure
of any Confidential Information be made to Person that is a Disqualified Institution at the time of disclosure.
Section 9.14.
No Fiduciary Duty. Each of the Administrative Agent,
the Arrangers, each Lender and their respective Affiliates (collectively, solely for purposes of this paragraph, the “Lenders”),
may have economic interests that conflict with those of the Loan Parties, their stockholders and/or their respective affiliates.
Each Loan Party agrees that nothing in the Loan Documents or otherwise will be deemed to create an advisory, fiduciary or agency
relationship or fiduciary or other implied duty between any Lender, on the one hand, and such Loan Party, its respective stockholders
or its respective affiliates, on the other. Each Loan Party acknowledges and agrees that: (i) the transactions contemplated
by the Loan Documents (including the exercise of rights and remedies hereunder and thereunder) are arm’s-length commercial
transactions between the Lenders, on the one hand, and the Loan Parties, on the other, and (ii) in connection therewith and with
the process leading thereto, (x) no Lender has assumed an advisory or fiduciary responsibility in favor of any Loan Party, its
respective stockholders or its respective affiliates with respect to the transactions contemplated hereby (or the exercise of rights
or remedies with respect thereto) or the process leading thereto (irrespective of whether any Lender has advised, is currently
advising or will advise any Loan Party, its respective stockholders or its respective Affiliates on other matters) or any other
obligation to any Loan Party except the obligations expressly set forth in the Loan Documents and (y) each Lender is acting solely
as principal and not as the agent or fiduciary of such Loan Party, its respective management, stockholders, creditors or any other
Person. Each Loan Party acknowledges and agrees that such Loan Party has consulted its own legal, tax and financial advisors to
the extent it deemed appropriate and that it is responsible for making its own independent judgment with respect to such transactions
and the process leading thereto.
Section 9.15.
Several Obligations. The respective obligations of
the Lenders hereunder are several and not joint and the failure of any Lender to make any Loan or perform any of its obligations
hereunder shall not relieve any other Lender from any of its obligations hereunder.
Section 9.16.
USA PATRIOT Act. Each Lender that is subject to the
requirements of the USA PATRIOT Act hereby notifies the Loan Parties that pursuant to the requirements of the USA PATRIOT Act,
it is required to obtain, verify and record information that identifies each Loan Party, which information includes the name and
address of such Loan Party and other information that will allow such Lender to identify such Loan Party in accordance with the
USA PATRIOT Act.
Section 9.17.
Disclosure. Each Loan Party and each Lender hereby
acknowledges and agrees that the Administrative Agent and/or its Affiliates from time to time may hold investments in, make other
loans to or have other relationships with any of the Loan Parties and their respective Affiliates.
Section 9.18.
Appointment for Perfection. Each Lender hereby appoints
each other Lender as its agent for the purpose of perfecting Liens for the benefit of the Administrative Agent and the Lenders,
in Collateral which, in accordance with Article 9 of the UCC or any other applicable law can be perfected only by possession and
such possession is required by the Perfection Requirements. If any Lender (other than the Administrative Agent) obtains possession
of any Collateral, such Lender shall notify the Administrative Agent thereof; and, promptly upon the Administrative Agent’s
request therefor shall deliver such Collateral to the Administrative Agent or otherwise deal with such Collateral in accordance
with the Administrative Agent’s instructions.
Section 9.19. Interest
Rate Limitation. Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to
any Loan, together with all fees, charges and other amounts which are treated as interest on such Loan under applicable law
(collectively the “Charged Amounts”), shall exceed the maximum lawful rate (the “Maximum
Rate”) which may be contracted for, charged, taken, received or reserved by the Lender holding such Loan in
accordance with applicable law, the rate of interest payable in respect of such Loan hereunder, together with all Charged
Amounts payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charged
Amounts that would have been payable in respect of such Loan but were not payable as a result of the operation of this Section
9.19 shall be cumulated and the interest and Charged Amounts payable to such Lender in respect of other Loans or periods
shall be increased (but not above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at
the Federal Funds Effective Rate to the date of repayment, shall have been received by such Lender.
Section 9.20.
Intercreditor Agreement.
REFERENCE IS MADE TO
THE INTERCREDITOR AGREEMENTS AND EACH OTHER APPLICABLE ACCEPTABLE INTERCREDITOR AGREEMENT. EACH LENDER HEREUNDER AGREES THAT IT
WILL BE BOUND BY AND WILL TAKE NO ACTIONS CONTRARY TO THE PROVISIONS OF THE INTERCREDITOR AGREEMENTS OR SUCH OTHER ACCEPTABLE INTERCREDITOR
AGREEMENT AND AUTHORIZES AND INSTRUCTS THE ADMINISTRATIVE AGENT TO ENTER INTO THE INTERCREDITOR AGREEMENTS AND ANY OTHER ACCEPTABLE
INTERCREDITOR AGREEMENT AS “FIRST LIEN AGENT” AND ON BEHALF OF SUCH LENDER. THE PROVISIONS OF THIS SECTION 9.20 ARE
NOT INTENDED TO SUMMARIZE ALL RELEVANT PROVISIONS OF THE INTERCREDITOR AGREEMENTS AND ANY OTHER ACCEPTABLE INTERCREDITOR AGREEMENT.
REFERENCE MUST BE MADE TO ANY INTERCREDITOR AGREEMENT OR ACCEPTABLE INTERCREDITOR AGREEMENT ITSELF TO UNDERSTAND ALL TERMS AND
CONDITIONS THEREOF. EACH LENDER IS RESPONSIBLE FOR MAKING ITS OWN ANALYSIS AND REVIEW OF THE INTERCREDITOR AGREEMENTS (AND ANY
OTHER ACCEPTABLE INTERCREDITOR AGREEMENT) AND THE TERMS AND PROVISIONS THEREOF, AND NEITHER THE ADMINISTRATIVE AGENT NOR ANY OF
ITS AFFILIATES MAKES ANY REPRESENTATION TO ANY LENDER AS TO THE SUFFICIENCY OR ADVISABILITY OF THE PROVISIONS CONTAINED IN THE
INTERCREDITOR AGREEMENTS OR ANY OTHER ACCEPTABLE INTERCREDITOR AGREEMENT. THE FOREGOING PROVISIONS ARE INTENDED AS AN INDUCEMENT
TO THE LENDERS UNDER THE SECOND LIEN CREDIT AGREEMENT TO EXTEND CREDIT THEREUNDER AND SUCH LENDERS ARE INTENDED THIRD PARTY BENEFICIARIES
OF SUCH PROVISIONS AND THE PROVISIONS OF THE INTERCREDITOR AGREEMENTS AND ANY OTHER ACCEPTABLE INTERCREDITOR AGREEMENT.
Section 9.21.
Conflicts. Notwithstanding anything to the contrary
contained herein or in any other Loan Document (but excluding any applicable Acceptable Intercreditor Agreement), in the event
of any conflict or inconsistency between this Agreement and any other Loan Document (excluding any applicable Acceptable Intercreditor
Agreement), the terms of this Agreement shall govern and control; provided that in the case of any conflict or inconsistency
between any applicable Acceptable Intercreditor Agreement and any other Loan Document, the terms of such Acceptable Intercreditor
Agreement shall govern and control.
Section 9.22. Release
of Guarantors. Notwithstanding anything in Section 9.02(b) to the contrary, any Subsidiary Guarantor
shall automatically be released from its obligations hereunder (and its Loan Guaranty shall be automatically released)
(a) upon the consummation of any permitted transaction or series of related transactions if as a result thereof such
Subsidiary Guarantor ceases to be a Restricted Subsidiary (or becomes an Excluded Subsidiary as a result of a single
transaction or series of related transactions permitted hereunder), as certified by the Responsible Officer of the Borrower
and/or (b) upon the occurrence of the Termination Date. In connection with any such release, the Administrative Agent shall
promptly execute and deliver to the relevant Loan Party, at such Loan Party’s expense, all documents that such Loan
Party shall reasonably request to evidence termination or release. Any execution and delivery of documents pursuant to the
preceding sentence of this Section 9.22 shall be without recourse to or warranty by the Administrative Agent
(other than as to the Administrative Agent’s authority to execute and deliver such documents).
Section 9.23.
Acknowledgement and Consent to Bail-In of EEA Financial Institutions.
Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any
such parties, each party hereto acknowledges that any liability of any EEA Financial Institution arising under any Loan Document,
to the extent such liability is unsecured, may be subject to the Write-Down and Conversion Powers of an EEA Resolution Authority
and agrees and consents to, and acknowledges and agrees to be bound by:
(a)
the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder
which may be payable to it by any party hereto that is an EEA Financial Institution; and
(b)
the effects of any Bail-in Action on any such liability, including, if applicable:
(i)
a reduction in full or in part or cancellation of any such liability;
(ii)
a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial
Institution, its parent entity, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares
or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement
or any other Loan Document; or
(iii)
the variation of the terms of such liability in connection with the exercise of the Write-Down and Conversion Powers of
any EEA Resolution Authority.
Section 9.24.
Lender Representation. Each Lender as of the Closing
Date represents and warrants as of the Closing Date to the Administrative Agent and each other Lead Arranger and their respective
Affiliates, and not, for the avoidance of doubt, for the benefit of the Borrower or any other Loan Party, that such Lender is not
and will not be (1) an employee benefit plan subject to Title I of ERISA, (2) a plan or account subject to Section 4975 of the
Code; (3) an entity deemed to hold “plan assets” of any such plans or accounts for purposes of ERISA or the Code; or
(4) a “governmental plan” within the meaning of ERISA.
[Signature
Pages Follow]
IN WITNESS WHEREOF,
the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year
first above written.
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HAYWARD INTERMEDIATE, INC.,
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as Holdings
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By:
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/s/ Andrew Diamond
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Name: Andrew Diamond
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Title: Senior Vice President, Finance and Chief Financial Officer
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HAYWARD ACQUISITION CORP.,
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as Borrower
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By:
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/s/ Mark McFadden
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Name: Mark McFadden
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Title: President
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By:
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/s/ Kevin Brown
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Name: Kevin Brown
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Title: Vice President, Assistant Secretary and Assistant Treasuer
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HAYWARD INDUSTRIES, INC.
as Borrower upon and following the Merger
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By:
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/s/ Andrew Diamond
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Name: Andrew Diamond
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Title: Senior Vice President and Chief Financial Officer
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SIGNATURE PAGE TO FIRST LIEN CREDIT AGREEMENT (FITTINGS 2017)
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BANK OF AMERICA, N.A.
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individually, as Administrative Agent
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By:
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/s/ Denise Jones
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Name: Denise Jones
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Title: Vice President
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BANK oF
AMERICA, N.A.
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as Lender
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By:
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/s/ Denise Jones
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Name: Denise Jones
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Title: Vice President
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SIGNATURE PAGE TO FIRST
LIEN CREDIT AGREEMENT (FITTINGS 2017)
SIGNATURE PAGE TO FIRST LIEN CREDIT AGREEMENT (FITTINGS 2017)
SCHEDULES:
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Schedule 1.01(a)
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Commitment Schedule
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Schedule 3.05
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Fee Owned Real Estate Assets
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Schedule 3.13
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Subsidiaries
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Schedule 5.10
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-
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Unrestricted Subsidiaries
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Schedule 6.01
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-
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Existing Indebtedness
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Schedule 6.02
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-
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Existing Liens
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Schedule 6.06
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-
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Existing Investments
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Schedule 6.07(s)
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-
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Dispositions
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Schedule 9.01
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-
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Borrower’s Website Address for Electronic Delivery
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Schedule 1.01(a)
Commitment Schedule
Initial Term Loan Commitment
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Term Lender
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Initial Term Loan Commitment
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Bank of America, N.A.
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$850,000,000
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Total
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$850,000,000
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Schedule 3.05
Fee Owned Real Estate Assets
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Loan Party
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Address of Owned Real Property
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Hayward Industries, Inc.
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One Hayward Industrial Drive
Clemmons, North Carolina
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Goldline Properties LLC
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61 Whitecap Drive
North Kingstown, Rhode Island
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Hayward Industries, Inc.
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2935 and 2939 Sidco Drive
Nashville, Tennessee
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Hayward Industries, Inc.
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2869 and 2875 Pomona Boulevard (Tract 35501, Lots 16 and 23, respectively)
2870, 2876, 2880 and 2884 Surveyor Street (Tract 35501, Lots 18, 19, 20 and 21, respectively)
159 Voyager Street (Tract 35501, Lot 17)
126 Explorer Street (Tract 35501, Lot 22)
Pomona, California
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Schedule 3.13
Subsidiaries
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Subsidiary
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Type of Entity
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Owner
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% Ownership
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Hayward Acquisition Corp.
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Corporation
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Hayward Intermediate, Inc.
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100%
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Hayward Industries, Inc.
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Corporation
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Hayward Intermediate, Inc.
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100%
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Hayward Industrial Products, Inc.
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Corporation
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Hayward Industries, Inc.
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100%
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Goldline Properties LLC
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Limited Liability Company
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Hayward Industries, Inc.
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100%
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Hayward/Wright-Austin, Inc.
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Corporation
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Hayward Industrial Products, Inc.
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100%
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Webster Pumps, Inc.
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Corporation
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Hayward Industrial Products, Inc.
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100%
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Hayward Pool Products Canada, Inc.
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Corporation
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Hayward Industries, Inc.
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100%
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Hayward Enterprises Europe S.A.
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Société Anonyme
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Hayward Industries, Inc.
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100%
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Hayward Pool Europe S.A.
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Société Anonyme
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Hayward Industries, Inc.
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91%
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Hayward Pool Europe S.A.
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Société Anonyme
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Hayward Enterprises Europe S.A.
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9%
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Hayward Consolidated Pty. Ltd.
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Proprietary Limited Company
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Hayward Industries, Inc.
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100%
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Hayward Pool Products (Australia) Pty. Ltd.
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Proprietary Limited Company
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Hayward Consolidated Pty. Ltd.
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100%
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Hayward Industries (Wuxi) Co. Ltd.
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Chinese Limited Company
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Hayward Industries, Inc.
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100%
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Hayward Pool Products Trading (Shanghai) Co. Ltd.
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Chinese Limited Company
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Hayward Industries, Inc.
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100%
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Hayward Pool Acquisition, S.L.U.
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Sociedad de Responsabilidad Limitada
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Hayward Industries, Inc.
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100%
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Kripsol Gestión, S.L.U.
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Sociedad de Responsabilidad Limitada
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Hayward Pool Acquisition, S.L.U.
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100%
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Kripsol Ibérica, S.L.U.
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Sociedad de Responsabilidad Limitada
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Hayward Pool Acquisition, S.L.U.
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100%
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Kripsol Industrial, S.L.U.
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Sociedad de Responsabilidad Limitada
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Kripsol Gestión, S.L.U.
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100%
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Fiberpool Internacional, S.L.
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Sociedad de Responsabilidad Limitada
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Kripsol Gestión, S.L.U.
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84.73%
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Fiberpool Internacional, S.L.
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Sociedad de Responsabilidad Limitada
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Hayward Pool Acquisition, S.L.U.
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15.27%
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Kripsol Export, S.L.U.
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Sociedad de Responsabilidad Limitada
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Kripsol Gestión, S.L.U.
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100%
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Subsidiary
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Type of Entity
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Owner
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% Ownership
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Ditecpol, S.L.U.
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Sociedad de Responsabilidad Limitada
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Kripsol Gestión, S.L.U.
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100%
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Kripsol Hidráulica, S.L.U.
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Sociedad de Responsabilidad Limitada
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Kripsol Gestión, S.L.U.
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100%
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Kripsol Aragón, S.L.U.
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Sociedad de Responsabilidad Limitada
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Kripsol Hidráulica, S.L.U.
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100%
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Kripsol Piscinas S.A.
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Sociedad Anónima
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Kripsol Ibérica, S.L.U.
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70%
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Kripsol Piscinas S.A.
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Sociedad Anónima
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Kripsol Gestión, S.L.U.
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30%
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Kripsol Intermark Málaga S.L.
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Sociedad de Responsabilidad Limitada
|
Kripsol Ibérica, S.L.U.
|
77.78%
|
|
Kripsol Intermark Málaga S.L.
|
Sociedad de Responsabilidad Limitada
|
Hayward Pool Acquisition, S.L.U.
|
22.22%
|
|
Sugar Valley, S.L.U.
|
Sociedad de Responsabilidad Limitada
|
Hayward Pool Acquisition, S.L.U.
|
100%
|
Schedule 3.15
Labor Disputes
None.
Schedule 5.10
Unrestricted Subsidiaries
None.
Schedule 6.01
Existing Indebtedness
|
|
1.
|
Credit account facility (Póliza de cuenta de crédito interés variable euribor)
dated as of November 17, 2015 between Kripsol Industrial and Caixabank, S.A. in an amount not exceeding €500,000.
|
|
|
2.
|
Credit account facility dated as of November 17, 2015 between Kripsol Industrial and Caixabank,
S.A. in an amount not exceeding €500,000.
|
|
|
3.
|
Credit facility for commercial risks (Póliza de crédito para cobertura de riesgos
comerciales) dated as of November 17, 2015 between Kripsol Industrial and Caixabank, S.A. in an amount not exceeding €500,000.
|
|
|
4.
|
Bank guarantee agreement dated as of November 17, 2015 between Kripsol Industrial and Caixabank,
S.A. in an amount not exceeding €500,000.
|
|
|
5.
|
Bank guarantee dated as of March 15, 2016 issued by Banco Popular Español, S.A. in favor
of Fire-Consult, S.L. in an amount not exceeding €5,000
|
|
|
6.
|
Credit policy in the form of advance commercial documents dated as of November 17, 2015 between
Kripsol Industrial and Banco Santander, S.A. in an amount not exceeding €500,000.
|
|
|
7.
|
Finance agreement (contrato de financiación) dated as of May 11, 2015 between Kripsol Gestión,
S.L. and De Lage Landen International, B.V. in an outstanding amount of €38,341.36.
|
Schedule 6.02
Existing Liens
1. The
following UCC liens:
|
Debtor
|
Secured Party
|
Description of Collateral
|
File No. of Financing Statement/Jurisdiction
|
Hayward Industries, Inc.
Hayward Manufacturing Co., Inc.
|
Regal Beloit America, Inc.
|
Specific equipment (motors).
|
24791076 /Department of Treasury/Commercial Recording, New Jersey
|
|
Hayward Industries, Inc.
|
Konica Minolta Business Solutions Inc
|
Specific equipment.
|
26319681/ Department of Treasury/Commercial Recording, New Jersey
|
|
Hayward Industries, Inc.
|
Toyota Motor Credit Corporation
TOYOTALIFT, INC.
|
Specific equipment.
|
26421995/ Department of Treasury/Commercial Recording, New Jersey
|
|
Hayward Industries, Inc.
|
KMBS Business Solutions U.S.A., INC
|
Specific equipment.
|
26700380/ Department of Treasury/Commercial Recording, New Jersey
|
|
Hayward Industries, Inc.
|
TOYOTALIFT, INC.
TOYOTA INDUSTRIES COMMERCIAL FINANCE, INC.
|
Specific equipment.
|
51407650/ Department of Treasury/Commercial Recording, New Jersey
|
|
Hayward Industries, Inc.
|
KONICA MINOLTA PREMIER FINANCE
|
Specific equipment.
|
51571450/ Department of Treasury/Commercial Recording, New Jersey
|
Schedule 6.06
Existing Investments
|
|
1.
|
Credit account facility (Póliza de cuenta de crédito interés variable euribor)
dated as of November 17, 2015 between Kripsol Industrial and Caixabank, S.A. in an amount not exceeding €500,000.
|
|
|
2.
|
Credit account facility dated as of November 17, 2015 between Kripsol Industrial and Caixabank,
S.A. in an amount not exceeding €500,000.
|
|
|
3.
|
Credit facility for commercial risks (Póliza de crédito para cobertura de riesgos
comerciales) dated as of November 17, 2015 between Kripsol Industrial and Caixabank, S.A. in an amount not exceeding €500,000.
|
|
|
4.
|
Bank guarantee agreement dated as of November 17, 2015 between Kripsol Industrial and Caixabank,
S.A. in an amount not exceeding €500,000.
|
|
|
5.
|
Bank guarantee dated as of March 15, 2016 issued by Banco Popular Español, S.A. in favor
of Fire-Consult, S.L. in an amount not exceeding €5,000.
|
|
|
6.
|
Credit policy in the form of advance commercial documents dated as of November 17, 2015 between
Kripsol Industrial and Banco Santander, S.A. in an amount not exceeding €500,000.
|
|
|
7.
|
Finance agreement (contrato de financiación) dated as of May 11, 2015 between Kripsol Gestión,
S.L. and De Lage Landen International, B.V. in an outstanding amount of €38,341.36.
|
|
|
8.
|
Revolving Credit Facility, dated as of March 18, 2014 between Hayward Industries, Inc. and Hayward
Pool Products (Australia) Pty. Ltd. in an amount not exceeding of €10,000,000.
|
|
|
9.
|
Revolving Credit Facility, dated as of March 18, 2014 between Hayward Industries, Inc. and Hayward
Pool Products Canada, Inc. in an amount not exceeding €10,000,000.
|
|
|
10.
|
Revolving Credit Facility, dated as of March 18, 2014 between Hayward Industries, Inc. and Hayward
Pool Europe S.A. in an amount not exceeding €10,000,000.
|
|
|
11.
|
Loan Agreement, dated as of July 21, 2016 between Hayward Industries, Inc. and Hayward Pool Acquisition,
S.L.U. in an outstanding amount of €38,805,733.17.
|
|
|
12.
|
Loan Agreement, dated as of November 2, 2016 between Hayward Industries, Inc. and Hayward Pool
Acquisition, S.L.U. in an outstanding amount of €17,321,502.66.
|
Schedule 6.07(s)
Dispositions
|
|
1.
|
A disposition of leasehold interests in a Spanish real estate asset valued at approximately $10
million.
|
Schedule 9.01
Borrower’s Website Address for Electronic
Delivery
None.
EXHIBIT A-1
[FORM OF]
ASSIGNMENT AND ASSUMPTION
This Assignment and
Assumption (the “Assignment and Assumption”) is dated as of the Effective Date set forth below and is entered
into by and between [Insert name of Assignor] (the “Assignor”) and [Insert name of Assignee] (the “Assignee”).
Capitalized terms used but not defined herein shall have the meanings given to them in the First Lien Credit Agreement identified
below (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “First Lien
Credit Agreement”), receipt of a copy of which is hereby acknowledged by the Assignee. The Standard Terms and Conditions
set forth in Annex I attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment
and Assumption as if set forth herein in full.
For an agreed consideration,
the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases and assumes from
the Assignor, subject to and in accordance with the terms hereof (including the Standard Terms and Conditions attached hereto)
and the First Lien Credit Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below, (i) all
of the Assignor’s rights and obligations in its capacity as a Lender under the First Lien Credit Agreement and any other
documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below
of all of such outstanding rights and obligations of the Assignor under the respective facilities identified below (including any
letters of credit and guarantees included in such facilities) and (ii) to the extent permitted to be assigned under applicable
Requirements of Law, all claims, suits, causes of action and any other right of the Assignor (in its capacity as a Lender) against
any Person, whether known or unknown, arising under or in connection with the First Lien Credit Agreement, any other documents
or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of
the foregoing, including contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity
related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and
assigned pursuant to clauses (i) and (ii) above being referred to herein collectively as the “Assigned Interest”).
In the case where the Assigned Interest covers all of the Assignor’s rights and obligations under the First Lien Credit Agreement,
the Assignor shall cease to be a party thereto but shall continue to be entitled to the benefits of Sections 2.15, 2.16,
2.17 and 9.03 of the First Lien Credit Agreement with respect to facts and circumstances occurring on or prior to
the Effective Date and subject to its obligations hereunder and under Section 9.13 of the First Lien Credit Agreement.
Such sale and assignment
is (i) subject to acceptance and recording thereof in the Register by the Administrative Agent pursuant to Section 9.05(b)(iv)
of the First Lien Credit Agreement, (ii) without recourse to the Assignor and (iii) except as expressly provided in this Assignment
and Assumption, without representation or warranty by the Assignor.
1. Assignor:
[•]
2. Assignee:
[•]
[and is an Affiliate/Approved
Fund of [identify Lender]1]
3. Borrower:
HAYWARD INDUSTRIES, INC., a New Jersey corporation
4. Administrative
Agent: Bank of America, N.A., as administrative agent under the First Lien Credit Agreement
5. First
Lien Credit Agreement: That certain First Lien Credit Agreement dated as of August 4, 2017 (as amended, restated, amended and restated,
supplemented or otherwise modified and in effect on the date hereof, the “First Lien Credit Agreement”), by
and among Hayward Industries, Inc., a New Jersey corporation (as survivor of the Merger (as defined in the First Lien Credit Agreement)
with Hayward Acquisition Corp., a New Jersey corporation) (the “Borrower”), Hayward Intermediate, Inc., a Delaware
corporation (“Holdings”), the Lenders from time to time party thereto including, Bank of America, N.A. in its
capacities as administrative agent and collateral agent (the “Administrative Agent”).
6. Assigned
Interest:
|
Aggregate Amount of Commitment/Loans
|
Class of Loans Assigned
|
Amount of Commitment/Loans Assigned2
|
Percentage
Assigned of
Commitment/Loans under
Relevant Class3
|
CUSIP Number
|
|
$
|
|
$
|
%
|
|
|
$
|
|
$
|
%
|
|
|
$
|
|
$
|
%
|
|
Effective Date: [●][●],
20[●] [TO BE INSERTED BY THE ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER
IN THE REGISTER THEREFOR].
7. [The][Each]
Assignee represents and warrants as of the Effective Date to the Administrative Agent, [the][each] Assignor and the respective
Affiliates of each, and not, for the avoidance of doubt, for the benefit of the Borrower or any other Loan Party, that [the][such]
Assignee is not and will not be (1) an employee benefit plan subject to Title I of the Employee Retirement Income Security Act
of 1974, as amended (“ERISA”), (2) a plan or account subject to Section 4975 of the Internal Revenue Code of 1986
(the “Code”); (3) an entity deemed to hold “plan assets” of any such plans or accounts for purposes of
ERISA or the Code; or (4) a “governmental plan” within the meaning of ERISA.
1 Select
as applicable.
2 Not to
be less than $1,000,000 in the case of any Term Loans unless otherwise agreed by the Borrower and the Administrative Agent.
3 Set forth,
to at least 9 decimals, as a percentage of the Commitment/Loans of all Lenders thereunder.
8. THE PARTIES
HERETO ACKNOWLEDGE THAT ANY ASSIGNMENT TO ANY DISQUALIFIED INSTITUTION OR, TO THE EXTENT THE BORROWER’S CONSENT IS REQUIRED
UNDER SECTION 9.05 OF THE FIRST LIEN CREDIT AGREEMENT AND HAS NOT BEEN OBTAINED (OR DEEMED OBTAINED PURSUANT TO THE FIRST
PROVISO OF SECTION 9.05(b)(i)(A)), TO ANY OTHER PERSON, SHALL, AT THE BORROWER’S ELECTION, BE TREATED IN ACCORDANCE WITH
SECTIONS 9.05(f) and (g), AS APPLICABLE, OR THE BORROWER SHALL BE ENTITLED TO SEEK SPECIFIC PERFORMANCE TO UNWIND ANY SUCH ASSIGNMENT
IN ADDITION TO INJUNCTIVE RELIEF OR ANY OTHER REMEDIES AVAILABLE TO THE BORROWER AT LAW OR IN EQUITY, INCLUDING THE REMEDIES SPECIFIED
IN SECTION 9.05 OF THE FIRST LIEN CREDIT AGREEMENT.
[Signature Page Follows]
The terms set forth
in this Assignment and Assumption are hereby agreed to:
|
|
ASSIGNOR
|
|
|
|
|
|
[NAME OF ASSIGNOR]
|
|
|
|
|
|
By:
|
|
|
|
|
Name:
|
|
|
|
Title:
|
[Signature Page to Assignment and Assumption]
[ASSIGNEE HAS EXAMINED THE LIST OF DISQUALIFIED INSTITUTIONS
AND (I) REPRESENTS AND WARRANTS THAT (A) IT IS NOT IDENTIFIED ON SUCH LIST AND (B) IT IS NOT AN AFFILIATE OF ANY INSTITUTION IDENTIFIED
ON SUCH LIST AND (II) ACKNOWLEDGES THAT ANY ASSIGNMENT MADE TO AN AFFILIATE OF A DISQUALIFIED INSTITUTION SHALL BE SUBJECT TO SECTION
9.05(g) OF THE FIRST LIEN CREDIT AGREEMENT.]4
|
|
ASSIGNEE
|
|
|
|
|
|
[NAME OF ASSIGNEE]
|
|
|
|
|
|
By:
|
|
|
|
|
Name:
|
|
|
|
Title:
|
|
|
|
|
|
|
[Consented to and]5
Accepted:
|
|
|
|
|
|
BANK OF AMERICA, N.A., as Administrative Agent6
|
|
|
|
|
|
By:
|
|
|
|
|
Name:
|
|
|
|
Title:
|
|
|
|
|
|
|
[Consented to:
|
|
|
|
|
|
HAYWARD INDUSTRIES, INC.,
|
|
|
|
|
|
By:
|
|
|
|
|
Name:
|
|
|
|
Title:7
|
4 To be completed by Assignee except in connection
with the primary syndication.
5 To be added only if the consent of the Administrative
Agent is required
6 To be added only if the consent of the Administrative
Agent is required.
7 To be added only if the consent of the Borrower
is required by Section 9.05(b)(i)(A) of the First Lien Credit Agreement.
[Signature Page to Assignment and Assumption]
Annex I
STANDARD
TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION
1. Representations
and Warranties.
1.1 Assignor.
The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned
Interest is free and clear of any lien, encumbrance or other adverse claim, (iii) its Commitment, and the outstanding balances
of its Loans, in each case without giving effect to assignments thereof which have not become effective, are as set forth herein
and (iv) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption
and to consummate the transactions contemplated hereby; and (b) makes no representation or warranty and assumes no responsibility
with respect to (i) any statements, warranties or representations made in or in connection with the First Lien Credit Agreement,
any other Loan Document or any other instrument or document furnished pursuant thereto (other than this Assignment and Assumption)
or any collateral thereunder, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the
Loan Documents or any collateral thereunder, (iii) the financial condition of the Borrower, any of its Restricted Subsidiaries
or Affiliates or any other Person obligated in respect of any Loan Document or (iv) the performance or observance by Holdings,
the Borrower, any of its Restricted Subsidiaries or Affiliates or any other Person of any of their respective obligations under
any Loan Document.
1.2 Assignee.
The Assignee (a) represents and warrants that (i) it is an Eligible Assignee and has full power and authority, and has taken
all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated
hereby and to become a Lender under the First Lien Credit Agreement, (ii) it satisfies the requirements, if any, specified in
the First Lien Credit Agreement that are required to be satisfied by it in order to acquire the Assigned Interest and become
a Lender, (iii) from and after the Effective Date, it shall be bound by the provisions of the First Lien Credit Agreement and
the other Loan Documents as a Lender thereunder and, to the extent of the Assigned Interest, shall have the obligations of a
Lender thereunder and (iv) it has received a copy of the First Lien Credit Agreement, the ABL Intercreditor Agreement and the
Term Intercreditor Agreement, together with copies of the most recent financial statements referred to in Section
4.01(c) or the most recent financial statements delivered pursuant to Section 5.01 thereof, as applicable, and
such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into
this Assignment and Assumption and to purchase the Assigned Interest on the basis of which it has made such analysis and
decision independently and without reliance on the Administrative Agent or any other Lender, (v) it has examined the list of
Disqualified Institutions and it is not (A) a Disqualified Institution or (B) an Affiliate of a Disqualified Institution and
(vi) if it is a Foreign Lender, attached to the Assignment and Assumption is any documentation required to be delivered by it
pursuant to Section 2.17 of the First Lien Credit Agreement, duly completed and executed by the Assignee and (b)
agrees that (i) it will, independently and without reliance on the Administrative Agent, the Assignor or any other Lender,
and based on such documents and information as it deems appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Loan Documents, (ii) it appoints and authorizes the Administrative Agent to take such
action on its behalf and to exercise such powers and discretion under the First Lien Credit Agreement, the ABL Intercreditor
Agreement and the Term Intercreditor Agreement, the other Loan Documents or any other instrument or document furnished
pursuant hereto or thereto as are delegated to the Administrative Agent by the terms thereof, together with such powers as
are reasonably incidental thereto, and (iii) it will perform in accordance with their terms all of the obligations which by
the terms of the Loan Documents are required to be performed by it as a Lender.
2. Payments.
From and after the Effective Date, the Administrative Agent shall make all payments in respect of the Assigned Interest (including
payments of principal, interest, fees and other amounts) to the Assignor for amounts which have accrued to but excluding the Effective
Date and to the Assignee for amounts which have accrued from and after the Effective Date.
3. General
Provisions. This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto
and their respective successors and permitted assigns. This Assignment and Assumption may be executed in any number of counterparts,
which together shall constitute one instrument. Delivery of an executed counterpart of a signature page of this Assignment and
Assumption by facsimile or by email as a “.pdf’ or “.tiff’ attachment shall be effective as delivery of
a manually executed counterpart of this Assignment and Assumption. This Assignment and Assumption shall be construed in accordance
with and governed by the laws of the State of New York. The Administrative Agent, acting as a non-fiduciary agent of the Borrower,
shall record this Assignment and Assumption in the Register as of the Effective Date.
EXHIBIT A-2
[FORM OF]
AFFILIATED LENDER
ASSIGNMENT AND ASSUMPTION
This Affiliated Lender
Assignment and Assumption (the “Affiliated Lender Assignment and Assumption”) is dated as of the Effective Date
set forth below and is entered into by and between [Insert name of Assignor] (the “Assignor”) and [Insert name
of Affiliated Lender] (the “Assignee”). Capitalized terms used but not defined herein shall have the meanings
given to them in the First Lien Credit Agreement identified below (as amended, restated, amended and restated, supplemented or
otherwise modified from time to time, the “First Lien Credit Agreement”), receipt of a copy of which is hereby
acknowledged by the Assignee. The Standard Terms and Conditions set forth in Annex I attached hereto are hereby agreed to
and incorporated herein by reference and made a part of this Affiliated Lender Assignment and Assumption as if set forth herein
in full.
For an agreed consideration,
the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases and assumes from
the Assignor, subject to and in accordance with the terms hereof (including the Standard Terms and Conditions attached hereto)
and the First Lien Credit Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below, (i) all
of the Assignor’s rights and obligations in its capacity as a Term Lender under the First Lien Credit Agreement and any other
documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below
of all of such outstanding rights and obligations of the Assignor under the respective facilities identified below and (ii) to
the extent permitted to be assigned under applicable Requirements of Law, all claims, suits, causes of action and any other right
of the Assignor (in its capacity as a Term Lender) against any Person, whether known or unknown, arising under or in connection
with the First Lien Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed
thereby or in any way based on or related to any of the foregoing, including contract claims, tort claims, malpractice claims,
statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause
(i) above (the rights and obligations sold and assigned pursuant to clauses (i) and (ii) above being referred to herein
collectively as the “Assigned Interest”). In the case where the Assigned Interest covers all of the Assignor’s
rights and obligations under the First Lien Credit Agreement, the Assignor shall cease to be a party thereto but shall continue
to be entitled to the benefits of Sections 2.15, 2.16, 2.17 and 9.03 of the First Lien Credit Agreement
with respect to facts and circumstances occurring on or prior to the Effective Date and subject to its obligations hereunder and
under Section 9.13 of the First Lien Credit Agreement. Such sale and assignment is (i) subject to acceptance and recording
thereof in the Register by the Administrative Agent pursuant to Section 9.05(h)(iii) of the First Lien Credit Agreement,
(ii) without recourse to the Assignor and (iii) except as expressly provided in this Affiliated Lender Assignment and Assumption,
without representation or warranty by the Assignor.
1. Assignor:
[●]
2. Assignee:
[●] and is an Affiliated Lender [that is a Non-Debt Fund Affiliate/the Borrower/Holdings or a subsidiary thereof].
3. Borrower:
Hayward Industries, Inc., a New Jersey corporation
4. Administrative
Agent: Bank of America, N.A., as administrative agent under the First Lien Credit Agreement
5. First
Lien Credit Agreement: That certain First Lien Credit Agreement dated as of August 4, 2017 (as amended, restated, amended and restated,
supplemented or otherwise modified and in effect on the date hereof, the “First Lien Credit Agreement”), by
and among Hayward Industries, Inc., a New Jersey corporation (as survivor of the Merger (as defined in the First Lien Credit Agreement)
with Hayward Acquisition Corp., a New Jersey corporation) (the “Borrower”), Hayward Intermediate, Inc., a Delaware
corporation (“Holdings”), the Lenders from time to time party thereto including, Bank of America, N.A. in its
capacities as administrative agent and collateral agent (the “Administrative Agent”).
6. Assigned
Interest:
|
Aggregate Amount of Commitment/Loans
|
Class of Loans Assigned
|
Amount of Commitment/Loans Assigned8
|
Percentage Assigned of Commitment/Loans under Relevant Class9
|
CUSIP Number
|
|
$
|
|
$
|
%
|
|
|
$
|
|
$
|
%
|
|
|
$
|
|
$
|
%
|
|
7. [The][Each]
Assignee represents and warrants as of the Effective Date to the Administrative Agent, [the][each] Assignor and the respective
Affiliates of each, and not, for the avoidance of doubt, for the benefit of the Borrower or any other Loan Party, that [the][such]
Assignee is not and will not be (1) an employee benefit plan subject to Title I of the Employee Retirement Income Security Act
of 1974, as amended (“ERISA”), (2) a plan or account subject to Section 4975 of the Internal Revenue Code of 1986 (the
“Code”); (3) an entity deemed to hold “plan assets” of any such plans or accounts for purposes of ERISA
or the Code; or (4) a “governmental plan” within the meaning of ERISA.
8. THE
PARTIES HERETO ACKNOWLEDGE THAT, SUBJECT TO SECTION 9.05(h) OF THE FIRST LIEN CREDIT AGREEMENT, ANY ASSIGNMENT TO AN AFFILIATED
LENDER WHICH RESULTS IN THE AGGREGATE PRINCIPAL AMOUNT OF TERM LOANS THEN HELD BY ALL AFFILIATED LENDERS EXCEEDING THE AFFILIATED
LENDER CAP (AFTER GIVING EFFECT TO ANY SUBSTANTIALLY SIMULTANEOUS CANCELLATION OF TERM LOANS) SHALL BE DEEMED TO HAVE BEEN CONTRIBUTED
DIRECTLY OR INDIRECTLY TO THE BORROWER AND CANCELLED WITH RESPECT TO THE AMOUNT IN EXCESS OF THE AFFILIATED LENDER CAP. Effective
Date: [●] [●], 20[●] [TO BE INSERTED BY THE ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION
OF TRANSFER IN THE REGISTER THEREFOR].
[Signature Page Follows]
8 Not to be less than $1,000,000
in the case of Initial Term Loans, Additional Term Loans, Initial Term Commitments and Additional Term Commitments unless the
Borrower and the Administrative Agent otherwise consent. 9 Set forth, to at least
9 decimals, as a percentage
of the Commitment/Loans of all Lenders thereunder.
The terms set forth
in this Affiliated Lender Assignment and Assumption are hereby agreed to:
|
|
ASSIGNOR
|
|
|
|
|
|
[NAME OF ASSIGNOR]
|
|
|
|
|
|
By:
|
|
|
|
|
Name:
|
|
|
|
Title:
|
[Signature Page to Affiliated Lender Assignment and Assumption]
|
|
ASSIGNEE
|
|
|
|
|
|
[NAME OF ASSIGNEE]
|
|
|
|
|
|
By:
|
|
|
|
|
Name:
|
|
|
|
Title:
|
|
|
|
|
|
|
[Consented to and]10
|
|
|
|
|
|
HAYWARD INDUSTRIES, INC.,
as Borrower
|
|
|
|
|
|
By:
|
|
|
|
|
Name:
|
|
|
|
Title:
|
10 To be added only if the consent of the Borrower
is required by Section 9.05(b)(i)(A) of the First Lien Credit Agreement.
[Signature Page to Affiliated Lender Assignment and Assumption]
ANNEX I TO EXHIBIT A-2
STANDARD TERMS
AND CONDITIONS FOR
AFFILIATED LENDER ASSIGNMENT AND ASSUMPTION
1. Representations
and Warranties.
1.1 Assignor.
The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned
Interest is free and clear of any lien, encumbrance or other adverse claim, (iii) its Commitment in respect of Term Loans, and
the outstanding balances of its Term Loans, in each case without giving effect to assignments thereof which have not become effective,
are as set forth herein, and (iv) it has full power and authority, and has taken all action necessary, to execute and deliver this
Affiliated Lender Assignment and Assumption and to consummate the transactions contemplated hereby; and (b) makes no representation
or warranty and assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection
with the First Lien Credit Agreement, any other Loan Document or any other instrument or document furnished pursuant thereto (other
than this Affiliated Lender Assignment and Assumption) or any collateral thereunder, (ii) the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of the Borrower,
any of its Restricted Subsidiaries or Affiliates or any other Person obligated in respect of any Loan Document or (iv) the performance
or observance by Holdings, the Borrower, any of its Restricted Subsidiaries or Affiliates or any other Person of any of their respective
obligations under any Loan Document. In connection with any Dutch Auction, the Assignor acknowledges and agrees that in connection
with this Affiliated Lender Assignment and Assumption, (1) the applicable Affiliated Lender or its Affiliates may have, and later
may come into possession of, material non-public information with respect to Holdings, the Borrower and/or any subsidiary thereof
and/or their respective Securities (“MNPI”), (2) the Assignor has independently, without reliance on the applicable
Affiliated Lender, the Investors, Holdings, the Borrower, any of their respective subsidiaries, the Administrative Agent, the Arrangers
or any of their respective Affiliates, made its own analysis and determination to participate in such assignment notwithstanding
the Assignor’s lack of knowledge of the MNPI, (3) none of the applicable Affiliated Lenders, the Investors, Holdings, the
Borrower, any of their respective subsidiaries, the Administrative Agent, the Arrangers or any of their respective Affiliates shall
have any liability to the Assignor, and the Assignor hereby waives and releases, to the extent permitted by applicable Requirements
of Law, any claims it may have against the applicable Affiliated Lender, the Investors, Holdings, the Borrower, each of their respective
subsidiaries, the Administrative Agent, the Arrangers and their respective Affiliates, under applicable laws or otherwise, with
respect to the nondisclosure of the MNPI and (4) the MNPI may not be available to the Administrative Agent, the Arrangers or the
other Lenders.
1.2 Assignee.
The Assignee (a) represents and warrants that (i) it is an Affiliated Lender and has full power and authority, and has taken
all action necessary, to execute and deliver this Affiliated Lender Assignment and Assumption and to consummate the
transactions contemplated hereby and to become a Lender under the First Lien Credit Agreement, (ii) it satisfies the
requirements, if any, specified in the First Lien Credit Agreement that are required to be satisfied by it in order to
acquire the Assigned Interest and become a Lender, (iii) from and after the Effective Date, it shall be bound by the
provisions of the First Lien Credit Agreement and the other Loan Documents as a Lender (and as an Affiliated Lender)
thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Lender (and as an Affiliated Lender)
thereunder, (iv) it has received a copy of the First Lien Credit Agreement, the ABL Intercreditor Agreement and the Term
Intercreditor Agreement, together with copies of the most recent financial statements referred to in Section 4.01(c)
of the First Lien Credit Agreement or delivered pursuant to Section 5.01 of the First Lien Credit Agreement, as
applicable, and such other documents and information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Affiliated Lender Assignment and Assumption and to purchase the Assigned Interest on the basis of
which it has made such analysis and decision independently and without reliance on the Administrative Agent or any other
Lender, (v) if it is a Foreign Lender, attached to the Affiliated Lender Assignment and Assumption is any documentation
required to be delivered by it pursuant to Section 2.17 of the First Lien Credit Agreement, duly completed and
executed by the Assignee, (vi) after giving effect to this Affiliated Lender Assignment and Assumption and subject to the
provisions of Section 9.05(h)(iv), the aggregate principal amount of all Initial Term Loans and Additional Term Loans
then held by all Affiliated Lenders does not exceed the Affiliated Lender Cap (after giving effect to any substantially
simultaneous cancellations thereof) and (vii) in the case of Holdings or any of its subsidiaries, (1) no Indebtedness
incurred under the Revolving Facility or any Additional Revolving Facility has been utilized to fund the purchase of the
Assigned Interest, (2) no Default or Event of Default exists at the time of acceptance of bids for any Dutch Auction or the
confirmation of any open market purchase and (3) the Term Loans in respect of such Assigned Interest shall, to the extent
permitted by applicable Requirement of Law, be retired and cancelled immediately after the Effective Date; and (b) agrees
that (i) it will, independently and without reliance on the Administrative Agent, the Assignor or any other Lender, and based
on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Loan Documents, (ii) it appoints and authorizes the Administrative Agent to take such
action on its behalf and to exercise such powers and discretion under the First Lien Credit Agreement, the other Loan
Documents or any other instrument or document furnished pursuant hereto or thereto as are delegated to the Administrative
Agent, by the terms thereof, together with such powers as are reasonably incidental thereto, and (iii) it will perform in
accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by
it as a Lender. The Assignee agrees that, solely in its capacity as an Affiliated Lender, it will not be entitled to (a)
attend (including by telephone) or participate in any meeting or discussions (or portion thereof) among the Administrative
Agent or any Lender or among Lenders to which the Loan Parties or their representatives are not invited or (b) receive any
information or material prepared by the Administrative Agent or any Lender or any communication by or among the
Administrative Agent and one or more Lenders, except to the extent such information or materials have been made available by
the Administrative Agent or any Lender to any Loan Party or its representatives (and in any case, other than the right to
receive notices of Borrowings, prepayments and other administrative notices in respect of its Initial Term Loans or
Additional Term Loans required to be delivered to Lenders pursuant to Article 2 of the First Lien Credit Agreement).
2. Payments. From
and after the Effective Date, the Administrative Agent shall make all payments in respect of the Assigned Interest (other
than Assigned Interests assigned to Holdings, the Borrower or any of its Restricted Subsidiaries) (including payments of
principal, interest, fees and other amounts) to the Assignor for amounts which have accrued to but excluding the Effective
Date and to the Assignee for amounts which have accrued from and after the Effective Date.
3. General
Provisions. This Affiliated Lender Assignment and Assumption shall be binding upon, and inure to the benefit of,
the parties hereto and their respective successors and permitted assigns. This Affiliated Lender Assignment and Assumption may
be executed in any number of counterparts, which together shall constitute one instrument. Delivery of an executed counterpart
of a signature page of this Affiliated Lender Assignment and Assumption by facsimile or by email as a “.pdf’ or “.tiff’
attachment shall be effective as delivery of a manually executed counterpart of this Affiliated Lender Assignment and Assumption.
This Affiliated Lender Assignment and Assumption shall be construed in accordance with and governed by the laws of the State of
New York. The Administrative Agent, acting as a non-fiduciary agent of the Borrower, shall record this Assignment and Assumption
in the Register as of the Effective Date.
EXHIBIT B
[FORM OF]
BORROWING REQUEST
Bank of America, N.A.
101 N. Tryon Street
Mail Code: NC1-001-05-46
Charlotte, NC 28255
Attention: Robert Garvey
Telephone: 980-387-9468; Telecopier: 617-310-3288
Electronic Mail: Robert.garvey@baml.com
[●] [●], 20[●]11
Ladies and Gentlemen:
Reference is hereby
made to that certain First Lien Credit Agreement, dated as of August 4, 2017 (as the same may be amended, restated, amended and
restated, supplemented or otherwise modified from time to time, the “First Lien Credit Agreement”), by and among
Hayward Industries, Inc., a New Jersey corporation (as survivor of the Merger (as defined in the First Lien Credit Agreement) with
Hayward Acquisition Corp., a New Jersey corporation) (the “Borrower”), Hayward Intermediate, Inc., a Delaware
corporation (“Holdings”), the Lenders from time to time party thereto including, Bank of America, N.A. in its
capacities as administrative agent and collateral agent (the “Administrative Agent”).
The undersigned hereby
gives you notice (the “Borrowing Request”) pursuant to Section 2.03 of the First Lien Credit Agreement
of its request of a Borrowing (the “Requested Borrowing”) under the First Lien Credit Agreement, and in that
connection sets forth below the terms on which the Requested Borrowing is requested to be made:
(A) Date
of Requested Borrowing (which shall be a Business Day) [●]
11 For Borrowings after the
Closing Date, must be in writing or by telephone (and promptly confirmed in writing) and must be received by the Administrative
Agent (by hand delivery, fax or other electronic transmission (including “.pdf” or “.tiff”)) not later
than (i) 2:00 p.m. three (3) Business Days prior to the requested day of any Borrowing, conversion or continuation of LIBO Rate
Loans (or two Business Days in the case of any Borrowing of LIBO Rate Loans to be made on the Closing Date) or (ii) by 12:00 p.m.
(Noon) on the requested date of any Borrowing of ABR Loans (or, in each case, such later time as shall be acceptable to the Administrative
Agent); provided, however, that if the Borrower wishes to request LIBO Rate Loans having an Interest Period of other than one,
two, three or six months in duration as provided in the definition of “Interest Period,” (A) the applicable notice
from the Borrower must be received by the Administrative Agent not later than 2:00 p.m. four (4) Business Days prior to the requested
date of such Borrowing (or such later time as shall be reasonably acceptable to the Administrative Agent), conversion or continuation,
whereupon the Administrative Agent shall give prompt notice to the appropriate Lenders of such request and determine whether the
requested Interest Period is acceptable to them and (B) not later than 12:00 p.m. (Noon) three (3) Business Days before the requested
date of such Borrowing, conversion or continuation, the Administrative Agent shall notify the Borrower whether or not the requested
Interest Period has been consented to by all the appropriate Lenders.
(B) Aggregate
Amount of Requested Borrowing12 $[●]
(C) Type
of Requested Borrowing13 [●]
(D) Class
of Requested Borrowing [●]
(E) Interest
Period14 (in the case [●] of
a LIBO Rate Borrowing)
(F) Amount,
Account Number and Location
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Wire Transfer Instructions:
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Amount
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$[●]
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Bank:
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[●]
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ABA No.:
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[●]
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Account No.:
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[●]
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Account Name:
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[●]
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[The undersigned hereby
certifies that the following statements are true on the date hereof, and will be true on the date of the Requested Borrowing:
(A) The
representations and warranties of the Loan Parties set forth in the First Lien Credit Agreement and the other Loan Documents are
true and correct in all material respects on and as of the date of the Requested Borrowing with the same effect as though such
representations and warranties had been made on and as of the date of such Requested Borrowing; provided that (A) to the
extent that any representation and warranty specifically refers to a given date or period, it is true and correct in all material
respects as of such date or for such period and (B) if any such representation is qualified by or subject to a Material Adverse
Effect or other “materiality” qualification, such representation is true and correct in all respects.
(B) At
the time of and immediately after giving effect to the Requested Borrowing, no Default or Event of Default exists.]15
12 Subject
to Section 2.02(c) of the First Lien Credit Agreement.
13 State whether
a LIBO Rate Borrowing or ABR Borrowing. If no Type of Requested Borrowing is specified, then the Requested Borrowing shall be
an ABR Borrowing.
14 Must be
a period contemplated by the definition of “Interest Period”. If no Interest Period is specified, then the Interest
Period shall be of one-month’s duration.
15 Include
bracketed language only for Borrowings after Closing Date other than (i) Incremental Loans made in connection with any acquisition
to the extent not otherwise required by the applicable Additional Lenders and (ii) Borrowings under any Refinancing Amendment
and/or Extension to the extent not otherwise required by the applicable lenders in respect thereof.
[This Borrowing Request
(and the Requested Borrowing) is conditioned on the consummation of [ ]16
prior to or substantially simultaneously with the Requested Borrowing.]17
16 Identify
applicable permitted acquisition, investment or irrevocable repayment or redemption of Indebtedness that such Borrowing is being
used to fund.
17 To be included
for a Borrowing Request made in connection with any permitted acquisition, investment or irrevocable repayment or redemption of
Indebtedness.
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Very truly yours,
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[HAYWARD INDUSTRIES, INC.
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By:
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Name:
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Title:]
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HAYWARD ACQUISITION CORP.
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By:
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Name:
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Title:]
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[Signature Page to Borrowing Request]
EXHIBIT C
[FORM OF]
COMPLIANCE CERTIFICATE
[●] [●],
20[●]
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To:
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The Administrative Agent and each of the Lenders party to the First Lien Credit Agreement described
below
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This Compliance Certificate
is furnished pursuant to that certain First Lien Credit Agreement dated as of August 4, 2017 (as amended, restated, amended and
restated, supplemented or otherwise modified and in effect on the date hereof, the “First Lien Credit Agreement”),
by and among Hayward Industries, Inc., a New Jersey corporation (as survivor of the Merger (as defined in the First Lien Credit
Agreement) with Hayward Acquisition Corp., a New Jersey corporation) (the “Borrower”), Hayward Intermediate,
Inc., a Delaware corporation (“Holdings”), the Lenders from time to time party thereto including, Bank of America,
N.A. in its capacities as administrative agent and collateral agent (the “Administrative Agent”). Unless otherwise
defined herein, capitalized terms used in this Compliance Certificate have the meanings ascribed thereto in the First Lien Credit
Agreement.
THE UNDERSIGNED HEREBY
CERTIFIES, AS A RESPONSIBLE OFFICER OF THE BORROWER, IN SUCH CAPACITY AND NOT IN AN INDIVIDUAL CAPACITY, THAT:
1. I
am the duly elected [●] of the Borrower and a Responsible Officer of the Borrower;
2. I
have reviewed the terms of the First Lien Credit Agreement and I have made, or have caused to be made under my supervision, a review
in reasonable detail of the transactions and conditions of the Borrower and its Restricted Subsidiaries, on a consolidated basis,
during the [Fiscal Quarter][Fiscal Year] covered by the attached financial statements;
3. [The
attached financial statements fairly present, in all material respects, in accordance with GAAP, the consolidated financial condition
of the Borrower as at the dates indicated and its income and cash flows for the periods indicated, subject to the absence of footnotes
and changes resulting from audit and normal year-end adjustments.]18
4. [Except
as described in the disclosure set forth below, the][The] examinations described in paragraph 2 did not disclose, and I
have no knowledge of the existence of any condition or event which constitutes a Default or Event of Default that exists as of
the date of this Compliance Certificate [and the disclosure set forth below specifies, in reasonable detail, the nature of any
such condition or event and any action taken or proposed to be taken with respect thereto.]
18 Include
to the extent the relevant Compliance Certificate is delivered in connection with unaudited quarterly financials.
5. [Schedule
1 attached hereto sets forth reasonably detailed calculations of Excess Cash Flow for such Fiscal Year.]19
6. [Attached
as Schedule 2 hereto is a list of the subsidiaries of the Borrower that identifies each subsidiary as a Restricted Subsidiary
or an Unrestricted Subsidiary as of the date hereof.] [There is no change in the list of Restricted Subsidiaries and Unrestricted
Subsidiaries since the later of the Closing Date and the date of the last Compliance Certificate.]
7. [Attached
as Schedule 3 hereto are [[(i)] a summary of the pro forma adjustments necessary to eliminate the accounts of Unrestricted
Subsidiaries from the attached financial statements]20
[[and (ii)] if the attached financial statements relate to any Parent Company, consolidating financial information
summarizing in reasonable detail the information related to such Parent Company, on the one hand, and the information relating
to the Borrower and its consolidated subsidiaries on a standalone basis, on the other hand]21.]
8. [Attached
hereto as Schedule 4 is the Narrative Report required to be delivered with the attached financial statements in accordance
with Section 5.01(a) or (b) of the First Lien Credit Agreement, as applicable]22.
[Signature Page Follows]
19 Only required to the extent
the relevant Compliance Certificate is delivered in connection with audited annual financial statements (commencing with the Fiscal
Year ending December 31, 2018), it being agreed that the first payment under Section 2.11(b)(i) of the First Lien Credit Agreement,
if any, shall be in respect of the Fiscal Year ending December 31, 2018.
20 Only required if a subsidiary
of the Borrower is or has been designated as an Unrestricted Subsidiary at the time of delivery of the applicable Compliance Certificate.
21 Only include to the extent
the applicable financial statements cover any Parent Company (i.e., Holdings or any Person above Holdings as to which the Borrower
is an indirect Wholly-Owned Subsidiary).
22 Only include to the extent
the Borrower has opted to include a Narrative Report instead of holding a conference call for the applicable Fiscal Quarter.
The foregoing certifications,
together with the information set forth in the Schedules hereto and the financial statements delivered with this Compliance Certificate
in support hereof, are made and delivered as of the date first written above.23
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HAYWARD INDUSTRIES, INC.
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By:
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Name:
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Title:
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23 Please
note the deadlines for satisfaction of the following requirements correspond with the delivery of each Compliance Certificate
(unless otherwise indicated):
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1.
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The delivery of documents and deliverables required under Section 4.02(a) of the Security
Agreement relating to any (i) certificated Pledged Stock and/or (ii) Material Debt Instruments, in each case to the extent
the same constitutes Collateral and acquired during the Fiscal Quarter covered by the attached financial statements. NOTE:
If any Loan Party acquires such (i) certificated Pledged Stock and/or (ii) Material Debt Instruments during the fourth Fiscal
Quarter of any Fiscal Year, the documents and deliverables required under Section 4.02(a) of the Security Agreement
must be delivered within 60 days after the end of such Fiscal Quarter.
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2.
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The delivery of documents and deliverables required under Section 4.03(c) of the Security
Agreement relating to any registration (or any application for registration of) any Patent, Trademark or Copyright with the
United States Patent and Trademark Office or the United States Copyright Office, as applicable, filed or acquired during the
Fiscal Quarter covered by the attached financial statements. NOTE: If any Loan Party acquires any registration
(or files any application for registration) of any Patent, Trademark or Copyright with the United States Patent and Trademark
Office or the United States Copyright Office, as applicable, during the fourth Fiscal Quarter of any Fiscal Year, to the extent
the same constitutes Collateral, the documents and deliverables required under Section 4.03(c) of the Security Agreement
must be delivered within 60 days after the end of such Fiscal Quarter.
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3.
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To the extent the relevant Compliance Certificate is delivered in connection with audited
annual or unaudited quarterly financial statements, delivery of the Perfection Certificate Supplement required by Section
5.01(c) of the First Lien Credit Agreement.
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4.
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The delivery of the documents required to be delivered under Section 5.12 of the First
Lien Credit Agreement as a result of (i) the formation or acquisition after the Closing Date of any Restricted Subsidiary
that is a Domestic Subsidiary (other than an Excluded Subsidiary), (ii) the designation of any Unrestricted Subsidiary as
a Restricted Subsidiary (other than an Excluded Subsidiary), (iii) any Restricted Subsidiary that is a Domestic Subsidiary
ceasing to be an Immaterial Subsidiary and/or (iv) any Restricted Subsidiary that was an Excluded Subsidiary ceasing to be
an Excluded Subsidiary, in each case during the Fiscal Quarter covered by the attached financial statements. NOTE:
upon the taking of any action or the occurrence of any event described in clauses (i) through (iv) during the
fourth Fiscal Quarter of any Fiscal Year, the documents required to be delivered under Section 5.12(a) of the First
Lien Credit Agreement must be delivered within 60 days after the end of such Fiscal Quarter.
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[Signature Page to Compliance Certificate]
SCHEDULE 1
[Calculation of Excess Cash Flow]
SCHEDULE 2
[List of Restricted Subsidiaries and
Unrestricted Subsidiaries]
SCHEDULE 3
[Summary of Pro Forma Adjustments/Consolidating
Information]
SCHEDULE 4
[Narrative Report]
EXHIBIT D
[FORM OF]
INTEREST ELECTION REQUEST
Bank of America, N.A.
101 N. Tryon Street
Mail Code: NC1-001-05-46
Charlotte, NC 28255
Attention: Robert Garvey
Telephone: 980-387-9468; Telecopier: 617-310-3288
Electronic Mail: Robert.garvey@baml.com
[●] [●], 20[●]24
Ladies and Gentlemen:
Reference is hereby
made to that certain First Lien Credit Agreement dated as of August 4, 2017 (as amended, restated, amended and restated, supplemented
or otherwise modified and in effect on the date hereof, the “First Lien Credit Agreement”), by and among Hayward
Industries, Inc., a New Jersey corporation (as survivor of the Merger (as defined in the First Lien Credit Agreement) with Hayward
Acquisition Corp., a New Jersey corporation) (the “Borrower”), Hayward Intermediate, Inc., a Delaware corporation
(“Holdings”), the Lenders from time to time party thereto including, Bank of America, N.A. in its capacities
as administrative agent and collateral agent (the “Administrative Agent”). Terms defined in the First Lien Credit
Agreement are used herein with the same meanings unless otherwise defined herein.
The undersigned hereby
gives you notice pursuant to Section 2.08 of the First Lien Credit Agreement of an interest rate election, and in that connection
sets forth below the terms thereof:
(A) [on
[insert applicable date] (which is a Business Day), the undersigned will convert $[●]25 of
the aggregate outstanding principal amount of the [Term][Revolving] Loans, bearing interest at the [ABR][LIBO] Rate, into a
[LIBO][ABR] Loan [and, in the case of a LIBO Rate Loan, having an Interest Period of [●] month(s)]26 [;
and][.]]
24 The Administrative Agent
must be notified in writing or by telephone (and promptly confirmed in writing), which must be received by the Administrative
Agent (by hand delivery, fax or other electronic transmission (including “.pdf” or “.tiff”)) not later
than (i) 2:00 p.m. three (3) Business Days prior to the requested day of any Borrowing, conversion or continuation of LIBO Rate
Loans (or two Business Days in the case of any Borrowing of LIBO Rate Loans to be made on the Closing Date) or (ii) by 12:00 p.m.
(Noon) on the requested date of any Borrowing of ABR Loans (or, in each case, such later time as shall be acceptable to the Administrative
Agent); provided, however, that if the Borrower wishes to request LIBO Rate Loans having an Interest Period of other than one,
two, three or six months in duration as provided in the definition of “Interest Period,” (A) the applicable notice
from the Borrower must be received by the Administrative Agent not later than 2:00 p.m. four (4) Business Days prior to the requested
date of such Borrowing (or such later time as shall be reasonably acceptable to the Administrative Agent), conversion or continuation,
whereupon the Administrative Agent shall give prompt notice to the appropriate Lenders of such request and determine whether the
requested Interest Period is acceptable to them and (B) not later than 12:00 p.m. (Noon) three (3) Business Days before the requested
date of such Borrowing, conversion or continuation, the Administrative Agent shall notify the Borrower whether or not the requested
Interest Period is available to the appropriate Lenders.
25 Subject to Section 2.02(c)
of the First Lien Credit Agreement.
(B) [on
[insert applicable date] (which is a Business Day), the undersigned will continue $[●] of the aggregate outstanding principal
amount of the [Term] [Revolving] Loans bearing interest at the LIBO Rate, as LIBO Rate Loans having an Interest Period of [●]
month(s)27.]
[Signature Page Follows]
26 Must be a period contemplated
by the definition of “Interest Period”.
27 Must be a period contemplated
by the definition of “Interest Period”.
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HAYWARD INDUSTRIES, INC.
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By:
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Name:
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Title:
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[Signature Page to Interest Election Request]
EXHIBIT E
[FORM OF]
PERFECTION CERTIFICATE
[ATTACHED]
PERFECTION CERTIFICATE
August 4, 2017
Reference is hereby
made to (i) that certain First Lien Credit Agreement, dated as of August 4, 2017 (as amended, restated, amended and restated, supplemented
or otherwise modified and in effect on the date hereof, the “First Lien Credit Agreement”), by and among Hayward
Intermediate, Inc., a Delaware corporation (“Holdings”), Hayward Acquisition Corp., a New Jersey corporation (the “Initial
Borrower”), Hayward Industries, Inc., a New Jersey corporation (upon merging with the Initial Borrower pursuant to the
Merger (as defined in the First Lien Credit Agreement) and as survivor of the Merger, the “Borrower”), the lenders
from time to time party thereto (the “First Lien Lenders”) and Bank of America, N.A., as administrative agent
and collateral agent for the First Lien Lenders (together with its successors and permitted assigns in such capacities, the “First
Lien Agent”), (ii) that certain First Lien Pledge and Security Agreement, dated as of August 4, 2017 (as amended, restated,
amended and restated, supplemented or otherwise modified and in effect on the date hereof, the “First Lien Security Agreement”),
by and among the Initial Borrower, the Borrower, Holdings, the other Grantors from time to time party thereto and the First Lien
Agent, (iii) that certain Second Lien Credit Agreement, dated as of August 4, 2017 (as amended, restated, amended and restated,
supplemented or otherwise modified in effect on the date hereof, the “Second Lien Credit Agreement” and, together
with the First Lien Credit Agreement, each, a “Credit Agreement” and, collectively, the “Credit Agreements”),
by and among Holdings, the Initial Borrower, the Borrower, the lenders from time to time party thereto (the “Second Lien
Lenders”), Bank of America, N.A., as administrative agent and collateral agent for the Second Lien Lenders (together
with its successors and permitted assigns in such capacities, the “Second Lien Agent” and, together with the
First Lien Agent, each, an “Agent” and collectively, the “Agents”) and (iv) that certain
Second Pledge and Lien Security Agreement, dated as of August 4, 2017 (as amended, restated, amended and restated, supplemented
or otherwise modified and in effect on the date hereof, the “Second Lien Security Agreement” and, together with
the First Lien Security Agreement, each, a “Security Agreement” and, collectively, the “Security Agreements”),
by and among the Initial Borrower, the Borrower, Holdings, the other Grantors from time to time party thereto and the Second Lien
Agent. Capitalized terms used but not defined herein have the meanings assigned to such terms in the applicable Security Agreement.
As used herein, the term “Company” means each of Holdings, the Borrower and the other Loan Parties.
As of the date hereof,
the undersigned hereby represents and warrants to each Agent as follows:
1. Names.
(a) Set forth in Schedule 1(a) is a true and complete list of (i) the exact legal name of each Company, as such name appears
in its respective Organizational Documents (as defined in each Credit Agreement) filed with the Secretary of State or other relevant
office of such Company’s jurisdiction of organization or formation, (ii) the type of entity of each Company, (iii) the organizational
identification number, if any, of each Company, (iv) the Federal Taxpayer Identification Number, if any, of each Company and (v)
the jurisdiction of organization or formation of each Company.
(b) Except
as otherwise disclosed in Schedule 1(c) or Schedule 1(d), set forth in Schedule 1(b) is a true and complete
list of (i) any other legal name that any Company has had, together with the date of the relevant change and (ii) all other names
used by such Company on any filings with the Internal Revenue Service, in each case, in the past five years.
(c) Set
forth in Schedule 1(c) is a true and complete list of the information required by Section 1(a) above for any other
Person (i) to which any Company became the successor by merger, consolidation or acquisition or (ii) that has been liquidated into,
or transferred all or substantially all of its assets to, any Company, at any time within the past five years.
(d) Except
as set forth in Schedule 1(d), or as otherwise disclosed in Schedule 1(c), no Company has changed its jurisdiction
of organization or form of entity at any time during the past four months.
2. Locations.
(a) Set forth in Schedule 2(a) is a true and complete list of the address of the chief executive offices of each Company.
(b) Except
as disclosed in Schedule 2(a), set forth in Schedule 2(b) is a true and complete list of all other locations where
any Company currently maintains any Collateral consisting of Inventory (including property in possession of a third party (e.g.,
a warehouseman or other bailee or on consignment), other than Inventory in transit or out for repair in the ordinary course of
business.
3. Stock
Ownership and Other Equity Interests. Set forth Schedule 3 is a true and complete list of all of the issued and outstanding
stock, partnership interests, limited liability company membership interests or other equity interests owned by any Company constituting
Pledged Stock, the beneficial owners of such stock, partnership interests, membership interests or other equity interests and the
percentage of the total issued and outstanding stock, partnership interests, membership interests or other equity interests of
the relevant issuer represented thereby.
4. Instruments
and Tangible Chattel Paper. Set forth in Schedule 4 is a true and complete list of all Instruments (other than checks
to be deposited in the ordinary course of business) and Tangible Chattel Paper, in each case having a face amount exceeding $15,000,000,
held by any Company as of the date hereof, including the names of the obligors, the amounts owing and the due dates.
5. Intellectual
Property. (a) Set forth in Schedule 5(a) is a true and complete list of all Patents, Designs (if applicable) and Trademarks
of each Company registered with and published by (or applied for in) the United States Patent and Trademark Office (“USPTO”)
(excluding, for the avoidance of doubt, any Patent or Trademark that has expired or been abandoned, but including Trademarks that
would constitute Collateral upon the filing of a “Statement of Use” or an “Amendment to Allege Use” with
respect thereto), as applicable, including the name of the registered owner and the registration or publication number (or, if
applicable, the applicant and the application number) of each such Patent, Design (if applicable) and Trademark.
(b) Set
forth in Schedule 5(b) is a true and complete list of all Copyrights of each Company registered with (or applied for
in) the United States Copyright Office (excluding, for the avoidance of doubt, any Copyright that has expired or been
abandoned), including the name of the registered owner and the registration number (or, if applicable, the applicant and the
application number) of each such Copyright.
6. Commercial
Tort Claims. Set forth in Schedule 6 is a true and complete list of all Commercial Tort Claims with an individual value
of at least $10,000,000 (as reasonably determined by the Borrower), held by any Company, including a brief description thereof.
[Signature Page Follows]
IN WITNESS WHEREOF,
each of the undersigned has hereunto signed this Perfection Certificate as of the date first written of above.
|
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HAYWARD INTERMEDIATE, INC.
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By:
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|
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Name:
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Title:
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HAYWARD INDUSTRIES, INC.
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|
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By:
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Name:
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Title:
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HAYWARD ACQUISITION CORP.
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By:
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Name:
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Title:
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HAYWARD INDUSTRIAL PRODUCTS, INC.
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By:
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Name:
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Title:
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GOLDLINE PROPERTIES LLC
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By:
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Name:
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Title:
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SIGNATURE PAGE TO FIRST LIEN AND SECOND LIEN PERFECTION CERTIFICATE
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HAYWARD/WRIGHT-AUSTIN, INC.
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By:
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Name:
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Title:
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WEBSTER PUMPS, INC.
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By:
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Name:
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Title:
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SIGNATURE PAGE TO FIRST LIEN AND SECOND LIEN PERFECTION CERTIFICATE
SCHEDULE 1(a)
LEGAL NAMES
|
Legal Name
|
Jurisdiction
|
Type
|
Organizational Identification
Number
|
Federal Taxpayer Identification
Number
|
|
Hayward Intermediate, Inc.
|
Delaware
|
Corporation
|
6429281
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82-2078678
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Hayward Acquisition Corp.
|
New Jersey
|
Corporation
|
0101044970
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82-2163430
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Hayward Industries, Inc.
|
New Jersey
|
Corporation
|
4465526000
|
22-1715653
|
|
Hayward Industrial Products, Inc.
|
New Jersey
|
Corporation
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0100127855
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22-2337329
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Goldline Properties LLC
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Rhode Island
|
Limited Liability Company
|
129649
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81-0614191
|
|
Hayward/Wright-Austin, Inc.
|
New Jersey
|
Corporation
|
0100669270
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22-3460083
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Webster Pumps, Inc.
|
New Jersey
|
Corporation
|
0100845689
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52-2361310
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SCHEDULE 1(b)
A. PRIOR ORGANIZATIONAL
NAMES
None.
B. OTHER NAMES USED
ON IRS FILINGS:
None.
SCHEDULE 1(c)
PREDECESSOR ENTITIES
|
Company
|
Action
|
Legal Name of
Predecessor Entity
|
Jurisdiction of Organization of Predecessor Entity
|
Date of Action
|
|
Hayward Industries, Inc.
|
Merger
|
Poolvergnuegen
|
California
|
03/31/2015
|
SCHEDULE 1(d)
CHANGES IN JURISDICTION
OR FORM
None.
SCHEDULE 2(a)
CHIEF EXECUTIVE
OFFICE ADDRESSES
|
Company
|
Address
|
|
Hayward Intermediate, Inc.
|
620 Division St., Elizabeth, NJ 07201
|
|
Hayward Acquisition Corp.
|
620 Division St., Elizabeth, NJ 07201
|
|
Hayward Industries, Inc.
|
620 Division St., Elizabeth, NJ 07201
|
|
Hayward Industrial Products, Inc.
|
620 Division St., Elizabeth, NJ 07201
|
|
Goldline Properties LLC
|
61 Whitecap Dr., North Kingston, RI 02852
|
|
Hayward/Wright-Austin, Inc.
|
620 Division St., Elizabeth, NJ 07201
|
|
Webster Pumps, Inc.
|
620 Division St., Elizabeth, NJ 07201
|
SCHEDULE 2(b)
LOCATIONS OF
INVENTORY
|
Company
|
Address
|
|
Hayward Industries, Inc.
|
One Hayward Industrial Drive
Clemmons, North Carolina
|
61 Whitecap Drive
North Kingstown, Rhode Island
|
2935 and 2939 Sidco Drive
Nashville, Tennessee
|
2869 and 2875 Pomona Boulevard
2870, 2876, 2880 and 2884 Surveyor Street
159 Voyager Street
126 Explorer Street
Pomona, California
|
6220, 6240 and 6280 Clementine Drive
(Warehouse Nos. 9, 8 and 7, respectively)
Hampton Industrial Park
Clemmons, North Carolina
|
2953 Sidco Drive
Nashville, Tennessee (warehouse)
|
316 Babb Drive
Lebanon, Tennessee (warehouse)
|
|
Hayward Industrial Products, Inc.
|
One Hayward Industrial Drive
Clemmons, North Carolina
|
6220, 6240 and 6280 Clementine Drive
(Warehouse Nos. 9, 8 and 7, respectively)
Hampton Industrial Park
Clemmons, North Carolina
|
460 Podlin Drive
Franklin Park, Illinois (warehouse)
|
SCHEDULE 3
PLEDGED STOCK
|
Issuer
|
Holder
|
Certificate No.
|
No. Shares/ Interest
|
% of Issued and Outstanding Shares
|
|
Hayward Industries, Inc.
|
Hayward Intermediate, Inc.
|
1
|
1,000 shares
|
100%
|
|
Hayward Industrial Products, Inc.
|
Hayward Industries, Inc.
|
1 (2,500 shares)
3 (10 shares)
|
2,510 shares
|
100%
|
|
Hayward/Wright-Austin, Inc.
|
Hayward Industrial Products, Inc.
|
4
|
1,000 shares
|
100%
|
|
Webster Pumps, Inc.
|
Hayward Industrial Products, Inc.
|
3
|
1,000 shares
|
100%
|
|
Hayward Pool Products Canada, Inc. / Produits de Piscines Hayward Canada, Inc.
|
Hayward Industries, Inc.
|
6
|
65 shares
|
65%
|
|
Hayward Enterprises Europe S.A.
|
Hayward Industries, Inc.
|
N/A
|
8,000 shares
|
100%
|
|
Hayward Pool Europe S.A.
|
Hayward Industries, Inc.
|
N/A
|
15,000,006 shares
|
91%
|
|
Hayward Consolidated Pty. Ltd.
|
Hayward Industries, Inc.
|
4
|
1.3 shares
|
65%
|
|
Hayward Industries (Wuxi) Co. Ltd.
|
Hayward Industries, Inc.
|
N/A
|
N/A
|
100%
|
|
Hayward Pool Products Trading (Shanghai) Co. Ltd.
|
Hayward Industries, Inc.
|
N/A
|
N/A
|
100%
|
|
Hayward Pool Acquisition, S.L.U.
|
Hayward Industries, Inc.
|
N/A
|
100 shares
|
100%
|
|
Goldline Properties LLC
|
Hayward Industries, Inc.
|
N/A
|
N/A
|
100%
|
SCHEDULE 4
INSTRUMENTS AND
TANGIBLE CHATTEL PAPER
Promissory Notes/Instruments: None.
Tangible Chattel Paper: None.
SCHEDULE 5(a)
PATENTS AND TRADEMARKS
PATENTS
|
REGISTERED OWNER
|
JURISDICTION
|
PATENT NO.
|
ISSUE DATE
|
DESCRIPTION
|
|
Hayward Industries, Inc.
|
United States
|
8,343,339
|
1/1/2013
|
Apparatus for Facilitating Maintenance of a Pool Cleaning Device
|
|
Hayward Industries, Inc.
|
United States
|
8,307,485
|
11/13/2012
|
Apparatus for Facilitating Maintenance of a Pool Cleaning Device
|
|
Hayward Industries, Inc.
|
United States
|
8,678,026
|
3/25/2014
|
Automatic Increased-Suction Relief Apparatus
|
|
Hayward Industries, Inc.
|
United States
|
6,289,918
|
9/18/2001
|
Automatic Locking Bypass Valve For Liquid Suction Systems
|
|
Hayward Industries, Inc.
|
United States
|
6,460,564
|
10/8/2002
|
Automatic Locking bypass Valve For Liquid Suction Systems
|
|
Hayward Industries, Inc.
|
United States
|
8,297,920
|
10/30/2012
|
Booster Pump System for Pool Applications
|
|
Hayward Industries, Inc.
|
United States
|
8,734,098
|
5/27/2014
|
Booster Pump System for Pool Applications
|
|
Hayward Industries, Inc.
|
United States
|
8,328,240
|
12/11/2012
|
Bulkhead Fitting
|
|
Hayward Industries, Inc.
|
United States
|
D664,627
|
7/31/2012
|
Chlorinator
|
|
Hayward Industries, Inc.
|
United States
|
8,869,319
|
10/28/2014
|
Circular Suction Outlet Assembly and Cover
|
|
Hayward Industries, Inc.
|
United States
|
D613,829
|
4/13/2010
|
Circular Suction Outlet Assembly Cover Design
|
|
Hayward Industries, Inc.
|
United States
|
D663,701
|
7/17/2012
|
Controller for a Chlorinator
|
|
Hayward Industries, Inc.
|
United States
|
8,402,585
|
3/26/2013
|
Convertible Pressure/Suction Swimming Pool Cleaner
|
|
Hayward Industries, Inc.
|
United States
|
6,706,175
|
3/16/2004
|
Debris-Capturing Apparatus For Pressure Cleaners
|
|
Hayward Industries, Inc.
|
United States
|
7,931,447
|
4/26/2011
|
Drain Safety and Pump Control Device
|
|
Hayward Industries, Inc.
|
United States
|
9,300,101
|
3/29/2016
|
Electric Cable Swivel and Related Fabrication Methods
|
|
Hayward Industries, Inc.
|
United States
|
9,392,711
|
7/12/2016
|
Electrical Junction Box with Built-In Isolation Transformer
|
|
Hayward Industries, Inc.
|
United States
|
7,774,870
|
8/17/2010
|
Elongated Suction Outlet Assembly with Intrinsically Safe Sump
|
|
Hayward Industries, Inc.
|
United States
|
9,630,127
|
4/25/2017
|
Filter Vessel Assembly and Related Methods of Use
|
|
Hayward Industries, Inc.
|
United States
|
6,004,458
|
12/21/1999
|
Filter/Sanitizer
|
|
REGISTERED OWNER
|
JURISDICTION
|
PATENT NO.
|
ISSUE DATE
|
DESCRIPTION
|
|
Hayward Industries, Inc.
|
United States
|
7,677,268
|
3/16/2010
|
Fluid Distribution System for a Swimming Pool Cleaning Apparatus
|
|
Hayward Industries, Inc.
|
United States
|
6,171,073
|
1/9/2001
|
Fluid Vacuum Safety Device for Fluid Transfer and Circulation Systems
|
|
Hayward Industries, Inc.
|
United States
|
5,947,700
|
9/7/1999
|
Fluid Vacuum Safety Device For Fluid Transfer Systems in Swimming Pools
|
|
Hayward Industries, Inc.
|
United States
|
6,854,148
|
2/15/2005
|
Four-Wheel-Drive Automatic Pool Cleaner
|
|
Hayward Industries, Inc.
|
United States
|
9,695947
|
7/4/2017
|
Handle Insert For Valve
|
|
Hayward Industries, Inc.
|
United States
|
7,971,603
|
7/5/2011
|
Header for a Heat Exchanger
|
|
Hayward Industries, Inc.
|
United States
|
9,353,998
|
5/31/2016
|
Header for a Heat Exchanger
|
|
Hayward Industries, Inc.
|
United States
|
D574,938
|
8/12/2008
|
Heat Exchanger
|
|
Hayward Industries, Inc.
|
United States
|
D539,882
|
4/3/2007
|
Heat Pump
|
|
Hayward Industries, Inc.
|
United States
|
6,733,046
|
5/11/2004
|
Hose Swivel Connection Apparatus
|
|
Hayward Industries, Inc.
|
United States
|
9,046,247
|
6/2/2015
|
Low-Profile Niche for Underwater Pool/Spa Lights
|
|
Hayward Industries, Inc.
|
United States
|
9,031,702
|
5/12/2015
|
Modular Pool/Spa Control System
|
|
Hayward Industries, Inc.
|
United States
|
9,285,790
|
3/15/2016
|
Modular Pool/Spa Control System
|
|
Hayward Industries, Inc.
|
United States
|
9,506,569
|
11/29/2016
|
Needle Valve
|
|
Hayward Industries, Inc.
|
United States
|
D630,808
|
1/11/2011
|
Pool Cleaner
|
|
Hayward Industries, Inc.
|
United States
|
D630,809
|
1/11/2011
|
Pool Cleaner
|
|
Hayward Industries, Inc.
|
United States
|
D598,168
|
8/11/2009
|
Pool Cleaner
|
|
Hayward Industries, Inc.
|
United States
|
D728,873
|
5/5/2015
|
Pool Cleaner
|
|
Hayward Industries, Inc.
|
United States
|
D787,760
|
5/23/2017
|
Pool Cleaner
|
|
Hayward Industries, Inc.
|
United States
|
D787,761
|
5/23/2017
|
Pool Cleaner
|
|
Hayward Industries, Inc.
|
United States
|
D789,003
|
6/6/2017
|
Pool Cleaner
|
|
Hayward Industries, Inc.
|
United States
|
D789,624
|
6/13/2017
|
Pool Cleaner
|
|
Hayward Industries, Inc.
|
United States
|
D537,576
|
2/27/2007
|
Pool Cleaner Housing
|
|
Hayward Industries, Inc.
|
United States
|
D550,906
|
9/11/2007
|
Pool Cleaner Housing
|
|
Hayward Industries, Inc.
|
United States
|
6,298,513
|
10/9/2001
|
Pool Cleaner with Open-Ended Pin Supported Flapper Valve
|
|
Hayward Industries, Inc.
|
United States
|
8,869,337
|
10/28/2014
|
Pool Cleaning Device With Adjustable Buoyant Element
|
|
Hayward Industries, Inc.
|
United States
|
9,677,294
|
6/13/2017
|
Pool Cleaning Device with Wheel Drive Assemblies
|
|
Hayward Industries, Inc.
|
United States
|
7,118,632
|
10/10/2006
|
Pool Cleaning Method and Device
|
|
REGISTERED OWNER
|
JURISDICTION
|
PATENT NO.
|
ISSUE DATE
|
DESCRIPTION
|
|
Hayward Industries, Inc.
|
United States
|
D593,508
|
6/2/2009
|
Portable Controller for Swimming Pool or Spa Equipment
|
|
Hayward Industries, Inc.
|
United States
|
9,502,907
|
11/22/2016
|
Power Supplies for Pool and Spa Equipment
|
|
Hayward Industries, Inc.
|
United States
|
9,501,072
|
11/22/2016
|
Programmable Temperature Control System for Pools & Spas
|
|
Hayward Industries, Inc.
|
United States
|
9,084,314
|
7/14/2015
|
Programmable Underwater Lighting System
|
|
Hayward Industries, Inc.
|
United States
|
D590,842
|
4/21/2009
|
Pump
|
|
Hayward Industries, Inc.
|
United States
|
D536,705S
|
2/13/2007
|
Pump Housing
|
|
Hayward Industries, Inc.
|
United States
|
D551,256
|
9/18/2007
|
A Combined Pump Housing and Pump Cap
|
|
Hayward Industries, Inc.
|
United States
|
D588,159
|
3/10/2009
|
Pump Housing
|
|
Hayward Industries, Inc.
|
United States
|
8,182,212
|
5/22/2012
|
Pump Housing Coupling
|
|
Hayward Industries, Inc.
|
United States
|
6,321,833
|
11/27/2001
|
Sinusoidal Fin Heat Exchanger
|
|
Hayward Industries, Inc.
|
United States
|
D550,805
|
9/11/2007
|
Strainer Basket
|
|
Hayward Industries, Inc.
|
United States
|
D557,374
|
12/11/2007
|
Strainer Basket
|
|
Hayward Industries, Inc.
|
United States
|
9,079,128
|
7/14/2015
|
Strainer Basket and Related Methods of Use
|
|
Hayward Industries, Inc.
|
United States
|
8,186,517
|
5/29/2012
|
Strainer Housing Assembly and Stand For Pump
|
|
Hayward Industries, Inc.
|
United States
|
6,131,227
|
10/17/2000
|
Suction Regulating Skirt For Automated Swimming Pool Cleaner Heads
|
|
Hayward Industries, Inc.
|
United States
|
8,784,652
|
7/22/2014
|
Swimming Pool Cleaner with A Rigid Debris Canister
|
|
Hayward Industries, Inc.
|
United States
|
7,318,448
|
1/15/2008
|
Swimming Pool Cleaning Apparatus and Parts Therefor
|
|
Hayward Industries, Inc.
|
United States
|
6,782,578
|
8/31/2004
|
Swimming Pool Pressure Cleaner with Internal Steering Mechanism
|
|
Hayward Industries, Inc.
|
United States
|
D490,195
|
5/18/2004
|
Swimming Pool Vacuum Cleaner
|
|
Hayward Industries, Inc.
|
United States
|
6,292,970
|
9/25/2001
|
Turbine-Driven Automatic Swimming Pool Cleaners
|
|
Hayward Industries, Inc.
|
United States
|
7,125,146
|
10/24/2006
|
Underwater LED Light
|
|
Hayward Industries, Inc.
|
United States
|
RE43,492
|
6/26/2012
|
Underwater LED Light
|
|
Hayward Industries, Inc.
|
United States
|
9,033,557
|
5/19/2015
|
Underwater Light and Associated Systems and Methods
|
|
Hayward Industries, Inc.
|
United States
|
8,936,721
|
1/20/2015
|
Unitary Filter Tank and an Underdrain for Filtering a Body of Water
|
|
Hayward Industries, Inc.
|
United States
|
9,108,126
|
8/18/2015
|
Unitary Filter Tank and an Underdrain for Filtering a Body of Water
|
|
REGISTERED OWNER
|
JURISDICTION
|
PATENT NO.
|
ISSUE DATE
|
DESCRIPTION
|
|
Hayward Industries, Inc.
|
United States
|
6,468,052
|
10/22/2002
|
Vacuum Relief Device For Fluid Transfer and Circulation Systems
|
|
Hayward Industries, Inc.
|
United States
|
9,010,721
|
4/21/2015
|
Valve Switchbox
|
|
Hayward Industries, Inc.
|
United States
|
9,010,722
|
4/21/2015
|
Valve Switchbox
|
|
Hayward Industries, Inc.
|
United States
|
8,887,757
|
11/18/2014
|
Wafer Check Valve And Related Methods of Use
|
|
Hayward Industries, Inc.
|
United States
|
9,593,502
|
3/14/2017
|
Swimming Pool Cleaner
|
|
Hayward Industries, Inc.
|
United States
|
9,702,480
|
7/11/2017
|
Valve Switchbox
|
|
Hayward Industries, Inc.
|
United States
|
9,707,499
|
7/18/2017
|
Vertical Slide Backwash Valve
|
|
Hayward Industries, Inc.
|
United States
|
4,523,740
|
6/18/1985
|
Rotatable unitary ball valve
|
|
Hayward Industries, Inc.
|
United States
|
4,593,420
|
6/10/1986
|
Self-draining hydromassage fitting
|
|
Hayward Industries, Inc.
|
United States
|
4,629,557
|
12/16/1986
|
Pump test ring, cover and strainer and method of providing a pressure-testable pump
|
|
Hayward Industries, Inc.
|
United States
|
4,798,670
|
1/17/1989
|
Skimmer vacuum filter apparatus
|
|
Hayward Industries, Inc.
|
United States
|
4,818,389
|
4/4/1989
|
Skimmer with flow enhancer
|
|
Hayward Industries, Inc.
|
United States
|
4,941,217
|
7/17/1990
|
Flow enhancing jet fitting
|
|
Hayward Industries, Inc.
|
United States
|
4,982,460
|
1/8/1991
|
Flow enhancing jet fitting
|
|
Hayward Industries, Inc.
|
United States
|
4,985,943
|
1/22/1991
|
Two-stage adjustable hydrotherapeutic jet and method
|
|
Hayward Industries, Inc.
|
United States
|
5,068,033
|
11/26/1991
|
Underdrain assembly with pivotal ymounted and lockable laterals
|
|
Hayward Industries, Inc.
|
United States
|
5,115,974
|
5/26/1992
|
Apparatus for providing a waterfall or a fountain
|
|
Hayward Industries, Inc.
|
United States
|
5,271,561
|
12/21/1993
|
Rotary jet hydrotherapy device and method
|
|
Hayward Industries, Inc.
|
United States
|
7,531,092
|
5/12/2009
|
Pump
|
|
Hayward Industries, Inc.
|
United States
|
9,593,502
|
3/14/2017
|
Swimming pool cleaner
|
|
Hayward Industries, Inc.
|
United States
|
D299,143
|
12/2711988
|
Pump
|
|
Hayward Industries, Inc.
|
United States
|
D333,341
|
2/16/1993
|
Multi-port valve handle
|
|
Hayward Industries, Inc.
|
United States
|
RE43,492
|
6/26/2012
|
Underwater Led Light
|
|
Hayward Industries, Inc.
|
United States
|
3,640,310
|
2/8/1972
|
Multiport Valve
|
|
Hayward Industries, Inc.
|
United States
|
4,823,837
|
4/25/1989
|
Skimmer Cover Plate
|
|
Hayward Industries, Inc.
|
United States
|
4,988,437
|
1/29/1991
|
In-line Leaf Trap
|
|
Hayward Industries, Inc.
|
United States
|
5,105,496
|
4/21/1992
|
Suction Cleaning Device
|
|
Hayward Industries, Inc.
|
United States
|
5,432,688
|
7/11/1995
|
Plastic Niche and Grounding Assembly therefor
|
|
Hayward Industries, Inc.
|
United States
|
5,607,224
|
3/4/1997
|
Plastic Niche and Grounding Assembly Therefor
|
|
Hayward Industries, Inc.
|
United States
|
5,671,769
|
9/30/1997
|
Swing Check Valve and Method for Repairing Same
|
|
Hayward Industries, Inc.
|
United States
|
6,026,804
|
2/22/2000
|
Heater for Fluids
|
|
REGISTERED OWNER
|
JURISDICTION
|
PATENT NO.
|
ISSUE DATE
|
DESCRIPTION
|
|
Hayward Industries, Inc.
|
United States
|
5,809,587
|
9/22/1998
|
Safety Device for a Suction Outlet
|
|
Hayward Industries, Inc.
|
United States
|
5,947,700
|
9/7/1999
|
Fluid Vacuum Safety Device for Fluid Transfer Systems in Swimming Pools
|
|
Hayward Industries, Inc.
|
United States
|
6,076,554
|
6/20/2000
|
Multiport Plug Valve with Selectable Port Exclusion
|
|
Hayward Industries, Inc.
|
United States
|
6,082,993
|
7/4/2000
|
Induced Draft Heater with Premixing Burners
|
|
Hayward Industries, Inc.
|
United States
|
7,168,120
|
1/30/2007
|
Pressure-fed Vacuum Swimming Pool Cleaning Robot
|
|
Hayward Industries, Inc.
|
United States
|
8,281,425
|
10/9/2012
|
Load Sensor Safety Vacuum Release System
|
|
Hayward Industries, Inc.
|
United States
|
D373,176
|
8/24/1996
|
A Combined Valve Indicator and Handle
|
|
Hayward Industries, Inc.
|
United States
|
D384,782
|
10/7/1997
|
Swimming Pool Cleaner Housing
|
|
Hayward Industries, Inc.
|
United States
|
D400,319
|
10/27/1998
|
Swimming Pool Cleaner Housing
|
|
Hayward Industries, Inc.
|
United States
|
D417,322
|
11/30/1999
|
Swimming Pool Cleaner Housing
|
|
Hayward Industries, Inc.
|
United States
|
D425,911
|
5/30/2000
|
Pump
|
|
Hayward Industries, Inc.
|
United States
|
D429,393
|
8/8/2000
|
Pool Cleaner Wheel
|
|
Hayward Industries, Inc.
|
United States
|
D433,545
|
11/7/2000
|
Swimming Pool Cleaner Housing
|
|
Hayward Industries, Inc.
|
United States
|
D443,737
|
6/12/2001
|
Four Wheel Pool Cleaner
|
|
Hayward Industries, Inc.
|
United States
|
D444,280
|
6/26/2001
|
Two Wheel Pool Cleaner
|
|
Hayward Industries, Inc.
|
United States
|
D443,959
|
6/19/2001
|
Pool Cleaner
|
|
Hayward Industries, Inc.
|
United States
|
D445,225
|
7/17/2001
|
Pool Cleaner
|
PATENT APPLICATIONS
|
REGISTERED OWNER
|
JURISDICTION
|
APPLICATION NO.
|
FILING DATE
|
DESCRIPTION
|
|
Hayward Industries, Inc.
|
United States
|
62/369,526
|
8/1/2016
|
Accent Lights with Junction Box Controller
|
|
Hayward Industries, Inc.
|
United States
|
14/212,516
|
3/14/2014
|
Automatic Electric Top Bottom Swimming Pool Cleaner with Internal Pumps
|
|
Hayward Industries, Inc.
|
United States
|
15/587,672
|
05/05/2017
|
Automatic Pool Cleaner Traction Correction
|
|
Hayward Industries, Inc.
|
United States
|
15/349,183
|
11/11/2016
|
Ball Valve
|
|
Hayward Industries, Inc.
|
United States
|
13/954,130
|
7/30/2013
|
Butterfly Valve
|
|
Hayward Industries, Inc.
|
United States
|
15/372,705
|
12/8/2016
|
Butterfly Valve
|
|
Hayward Industries, Inc.
|
United States
|
15/372,747
|
12/8/2016
|
Butterfly Valve
|
|
Hayward Industries, Inc.
|
United States
|
15/372,822
|
12/8/2016
|
Butterfly Valve
|
|
Hayward Industries, Inc.
|
United States
|
13/561,836
|
7/30/2012
|
Chlorinators and Replaceable Cell Cartridges Therefor
|
|
Hayward Industries, Inc.
|
United States
|
14/839,166
|
8/28/2015
|
Combined Ultraviolet and Ozone Fluid Sterilization System
|
|
Hayward Industries, Inc.
|
United States
|
15/208,011
|
7/12/2016
|
Electrical Junction Box with Built-In Isolation Transformer
|
|
Hayward Industries, Inc.
|
United States
|
14/210,804
|
3/14/2014
|
Filtration Media and Filtration Therefor
|
|
Hayward Industries, Inc.
|
United States
|
14/210,835
|
3/14/2014
|
Filtration Media and Filtration Therefor
|
|
Hayward Industries, Inc.
|
United States
|
14/212,044
|
3/14/2014
|
Fluid Sanitization Assembly and Related Methods of Use
|
|
Hayward Industries, Inc.
|
United States
|
62/370,857
|
8/4/2016
|
Gas Switching Device And Associated Methods
|
|
Hayward Industries, Inc.
|
United States
|
14/805,913
|
7/22/2015
|
Gas-Evacuating Filter
|
|
Hayward Industries, Inc.
|
United States
|
15/592,364
|
05/11/2017
|
Hydrocyclonic Pool Cleaner
|
|
Hayward Industries, Inc.
|
United States
|
14/500,307
|
9/29/2014
|
Light With Expanding Compression Member
|
|
Hayward Industries, Inc.
|
United States
|
15/050,207
|
2/22/2016
|
Lighting System For An Environment And A Control Module For Use Therein
|
|
Hayward Industries, Inc.
|
United States
|
14/204,352
|
3/11/2014
|
Local Feature Controller for Pool and Spa Equipment
|
|
Hayward Industries, Inc.
|
United States
|
14/727,030
|
6/1/2015
|
Low-Profile Niche for Underwater Pool/Spa Lights
|
|
REGISTERED OWNER
|
JURISDICTION
|
APPLICATION NO.
|
FILING DATE
|
DESCRIPTION
|
|
Hayward Industries, Inc.
|
United States
|
14/211,461
|
3/14/2014
|
Modular Pool/Spa Control System
|
|
Hayward Industries, Inc.
|
United States
|
15/634,462
|
6/27/2017
|
Multi-Position Valve
|
|
Hayward Industries, Inc.
|
United States
|
15/592,371
|
05/11/2017
|
Pool Cleaner Caddy with Removable Wheel Assemblies
|
|
Hayward Industries, Inc.
|
United States
|
15/592,285
|
05/11/2017
|
Pool Cleaner Caddy with Retention Mechanism
|
|
Hayward Industries, Inc.
|
United States
|
15/592,244
|
05/11/2017
|
Pool Cleaner Canister Handle
|
|
Hayward Industries, Inc.
|
United States
|
15/592,254
|
05/11/2017
|
Pool Cleaner Check Valve
|
|
Hayward Industries, Inc.
|
United States
|
15/592,266
|
05/11/2017
|
Pool Cleaner Filter Medium
|
|
Hayward Industries, Inc.
|
United States
|
15/592,377
|
05/11/2017
|
Pool Cleaner Impeller Subassembly
|
|
Hayward Industries, Inc.
|
United States
|
15/592,307
|
05/11/2017
|
Pool Cleaner Power Coupling
|
|
Hayward Industries, Inc.
|
United States
|
15/592,398
|
05/11/2017
|
Pool Cleaner Power Coupling
|
|
Hayward Industries, Inc.
|
United States
|
15/592,352
|
05/11/2017
|
Pool Cleaner Power Supply
|
|
Hayward Industries, Inc.
|
United States
|
15/592,277
|
05/11/2017
|
Pool Cleaner Power Supply with Kickstand
|
|
Hayward Industries, Inc.
|
United States
|
15/592,392
|
05/11/2017
|
Pool Cleaner Roller Assembly
|
|
Hayward Industries, Inc.
|
United States
|
15/592,335
|
05/11/2017
|
Pool Cleaner Roller Latch
|
|
Hayward Industries, Inc.
|
United States
|
14/209,461
|
3/13/2014
|
Pool Cleaner with Articulated Cleaning Members
|
|
Hayward Industries, Inc.
|
United States
|
14/994,653
|
1/13/2016
|
Pool Cleaner With Capacitive Water Sensor
|
|
Hayward Industries, Inc.
|
United States
|
15/592,384
|
05/11/2017
|
Pool Cleaner Modular Drivetrain
|
|
Hayward Industries, Inc.
|
United States
|
15/049,888
|
2/22/2016
|
Pool Cleaner With Optical Out-Of-Water And Debris Detection
|
|
Hayward Industries, Inc.
|
United States
|
15/359,016
|
11/22/2016
|
Power Supplies for Pool and Spa Equipment
|
|
Hayward Industries, Inc.
|
United States
|
15/359,046
|
11/22/2016
|
Power Supplies for Pool and Spa Equipment
|
|
Hayward Industries, Inc.
|
United States
|
15/359,112
|
11/22/2016
|
Programmable Temperature Control System for Pools & Spas
|
|
Hayward Industries, Inc.
|
United States
|
13/159,161
|
6/13/2011
|
Sealing Device for an Immersible Pump
|
|
Hayward Industries, Inc.
|
United States
|
62/398,228
|
9/22/2016
|
Self-Priming Dedicated Water Feature Pump
|
|
REGISTERED OWNER
|
JURISDICTION
|
APPLICATION NO.
|
FILING DATE
|
DESCRIPTION
|
|
Hayward Industries, Inc.
|
United States
|
15/646,678
|
7/11/2017
|
Self-Priming Dedicated Water Feature Pump
|
|
Hayward Industries, Inc.
|
United States
|
15/200,040
|
7/1/2016
|
Spade Connector And Associated Systems And Methods
|
|
Hayward Industries, Inc.
|
United States
|
14/464,947
|
8/21/2014
|
Swimming Pool Cleaner
|
|
Hayward Industries, Inc.
|
United States
|
14/489,240
|
9/17/2014
|
Swimming Pool Cleaner
|
|
Hayward Industries, Inc.
|
United States
|
14/489,259
|
9/17/2014
|
Swimming Pool Cleaner
|
|
Hayward Industries, Inc.
|
United States
|
15/006,869
|
1/26/2016
|
Swimming Pool Cleaner With Hydrocyclonic Particle Separator And/Or Six-Roller Drive System
|
|
Hayward Industries, Inc.
|
United States
|
15/345,617
|
11/8/2016
|
Swimming Pool Deck Jet System And Associated Methods
|
|
Hayward Industries, Inc.
|
United States
|
62/348,186
|
6/10/2016
|
Swimming Pool Heat Exchangers And Associated Systems And Methods
|
|
Hayward Industries, Inc.
|
United States
|
15/617,760
|
6/8/2017
|
Swimming Pool Heat Exchangers And Associated Systems And Methods
|
|
Hayward Industries, Inc.
|
United States
|
14/207,110
|
3/12/2014
|
Swimming Pool Pressure Cleaner Including Automatic Timing Mechanism
|
|
Hayward Industries, Inc.
|
United States
|
14/487,846
|
9/16/2014
|
Swimming Pool Pressure Cleaner Including Automatic Timing Mechanism
|
|
Hayward Industries, Inc.
|
United States
|
14/213,172
|
3/14/2014
|
System and Method for Dynamic Device Discovery and Address Assignment
|
|
Hayward Industries, Inc.
|
United States
|
14/228,689
|
3/28/2014
|
System and Method for Presenting a Sales Demonstration Using a Pool/Spa Controller User Interface
|
|
Hayward Industries, Inc.
|
United States
|
13/562,128
|
7/30/2012
|
Systems and Methods for Controlling Chlorinators
|
|
Hayward Industries, Inc.
|
United States
|
15/115,125
|
7/28/2016
|
Systems and Methods for Interrelated Control of Chlorinators and Pumps
|
|
REGISTERED OWNER
|
JURISDICTION
|
APPLICATION NO.
|
FILING DATE
|
DESCRIPTION
|
|
Hayward Industries, Inc.
|
United States
|
62/381,903
|
8/31/2016
|
Systems and Methods for Providing Network Connectivity and Remote Monitoring, Optimization, and Control of Pool/Spa Equipment
|
|
Hayward Industries, Inc.
|
United States
|
62/412,504
|
10/25/2016
|
Systems and Methods for Providing Network Connectivity and Remote Monitoring, Optimization, and Control of Pool/Spa Equipment
|
|
Hayward Industries, Inc.
|
United States
|
62/414,545
|
10/28/2016
|
Systems and Methods for Providing Network Connectivity and Remote Monitoring, Optimization, and Control of Pool/Spa Equipment
|
|
Hayward Industries, Inc.
|
United States
|
15/413,095
|
1/23/2017
|
Systems and Methods for Providing Network Connectivity and Remote Monitoring, Optimization, and Control of Pool/Spa Equipment
|
|
Hayward Industries, Inc.
|
United States
|
15/413,117
|
1/23/2017
|
Systems and Methods for Providing Network Connectivity and Remote Monitoring, Optimization, and Control of Pool/Spa Equipment
|
|
Hayward Industries, Inc.
|
United States
|
15/413,128
|
1/23/2017
|
Systems and Methods for Providing Network Connectivity and Remote Monitoring, Optimization, and Control of Pool/Spa Equipment
|
|
Hayward Industries, Inc.
|
United States
|
15/413,141
|
1/23/2017
|
Systems and Methods for Providing Network Connectivity and Remote Monitoring, Optimization, and Control of Pool/Spa Equipment
|
|
Hayward Industries, Inc.
|
United States
|
15/413,111
|
1/23/2017
|
Systems and Methods for Providing Network Connectivity and Remote Monitoring, Optimization, and Control of Pool/Spa Equipment (Chem-Auto)
|
|
REGISTERED OWNER
|
JURISDICTION
|
APPLICATION NO.
|
FILING DATE
|
DESCRIPTION
|
|
Hayward Industries, Inc.
|
United States
|
15/413,217
|
1/23/2017
|
Systems and Methods for Providing Network Connectivity and Remote Monitoring, Optimization, and Control of Pool/Spa Equipment (Cleaners)
|
|
Hayward Industries, Inc.
|
United States
|
15/413,020
|
1/23/2017
|
Systems and Methods for Providing Network Connectivity and Remote Monitoring, Optimization, and Control of Pool/Spa Equipment (Heaters)
|
|
Hayward Industries, Inc.
|
United States
|
15/413,224
|
1/23/2017
|
Systems and Methods for Providing Network Connectivity and Remote Monitoring, Optimization, and Control of Pool/Spa Equipment (Lighting)
|
|
Hayward Industries, Inc.
|
United States
|
15/413,074
|
1/23/2017
|
Systems and Methods for Providing Network Connectivity and Remote Monitoring, Optimization, and Control of Pool/Spa Equipment (Pumps)
|
|
Hayward Industries, Inc.
|
United States
|
15/413,145
|
1/23/2017
|
Systems and Methods for Providing Network Connectivity and Remote Monitoring, Optimization, and Control of Pool/Spa Equipment (Valve Actuator)
|
|
Hayward Industries, Inc.
|
United States
|
15/413,174
|
1/23/2017
|
Systems and Methods for Providing Network Connectivity and Remote Monitoring, Optimization, and Control of Pool/Spa Equipment (Water Features)
|
|
Hayward Industries, Inc.
|
United States
|
15/413,199
|
1/23/2017
|
Systems and Methods for Providing Network Connectivity and Remote Monitoring, Optimization, and Control of Pool/Spa Equipment (Wiring Hub)
|
|
Hayward Industries, Inc.
|
United States
|
62/474,333
|
3/21/2017
|
Systems and Methods for Sanitizing Pool and Spa Water
|
|
Hayward Industries, Inc.
|
United States
|
13/562,043
|
7/30/2012
|
Systems and Methods for User-Installable Chlorinators
|
|
REGISTERED OWNER
|
JURISDICTION
|
APPLICATION NO.
|
FILING DATE
|
DESCRIPTION
|
|
Hayward Industries, Inc.
|
United States
|
14/600,515
|
1/20/2015
|
Thermally-Dissipative Flow Sensor System
|
|
Hayward Industries, Inc.
|
United States
|
15/183,961
|
6/16/2016
|
Top-Bottom Pool Cleaner Including A Nose
|
|
Hayward Industries, Inc.
|
United States
|
14/208,855
|
3/13/2014
|
Underwater LED Light with Replacement Indicator
|
|
Hayward Industries, Inc.
|
United States
|
12/769,038
|
4/28/2010
|
Underwater Light Having a Sealed Polymer Housing and Method of Manufacture Therefor
|
|
Hayward Industries, Inc.
|
United States
|
13/786,739
|
3/6/2013
|
Underwater Light Having a Sealed Polymer Housing and Method of Manufacture Therefor
|
|
Hayward Industries, Inc.
|
United States
|
13/840,751
|
3/15/2013
|
Underwater Lighting System With Bather Detection Circuitry
|
|
Hayward Industries, Inc.
|
United States
|
14/205,936
|
3/12/2014
|
Underwater Lighting System With Bather Detection Circuitry
|
|
Hayward Industries, Inc.
|
United States
|
13/034,389
|
2/24/2011
|
Universal Mount for a Variable Speed Pump Drive User Interface
|
|
Hayward Industries, Inc.
|
United States
|
14/526,299
|
10/28/2014
|
Velocity Reducing Port for a Pool Filter
|
|
Hayward Industries, Inc.
|
United States
|
14/337,873
|
7/22/2014
|
Venturi By-Pass System And Associated Methods
|
|
Hayward Industries, Inc.
|
United States
|
14/734,577
|
6/9/2015
|
Water-Cooled Electronic Inverter
|
|
Hayward Industries, Inc.
|
United States
|
11/946,267
|
11/28/2007
|
Buoyant Remote Control Unit for Swimming Pools and Spas
|
|
Hayward Industries, Inc.
|
United States
|
12/017,659
|
1/22/2008
|
Heat Exchangers and Headers Therefor
|
|
Hayward Industries, Inc.
|
United States
|
12/343,729
|
12/24/2008
|
Method and Apparatus for Forming a Thermal Interface for an Electronic Assembly
|
|
Hayward Industries, Inc.
|
United States
|
12/769,038
|
4/28/2010
|
Underwater Light Having A Sealed Hayward Industries, Inc. Polymer Housing and Method of Manufacture Therefor
|
|
Hayward Industries, Inc.
|
United States
|
13/601,436
|
8/31/2012
|
Pool Cleaning Device With Adjustable Buoyant Element
|
|
REGISTERED OWNER
|
JURISDICTION
|
APPLICATION NO.
|
FILING DATE
|
DESCRIPTION
|
|
Hayward Industries, Inc.
|
United States
|
13/786,739
|
3/6/2013
|
Underwater Light Having a Sealed Polymer Housing and Method of Manufacture Therefor
|
|
Hayward Industries, Inc.
|
United States
|
13/897,623
|
5/20/2013
|
Dynamic Ultraviolet Lamp Ballast System
|
|
Hayward Industries, Inc.
|
United States
|
14/207,110
|
3/12/2014
|
Swimming Pool Pressure Cleaner Including Automatic Timing Mechanism
|
|
Hayward Industries, Inc.
|
United States
|
14/209,461
|
3/13/2014
|
Pool Cleaner with Articulated Cleaning Members
|
|
Hayward Industries, Inc.
|
United States
|
14/213,676
|
3/14/2014
|
Pool Cleaner Drive Mechanism And Associated Systems and Methods
|
|
Hayward Industries, Inc.
|
United States
|
14/212,516
|
3/14/2014
|
Automatic Electric Top Bottom Swimming Pool Cleaner with Internal Pumps
|
|
Hayward Industries, Inc.
|
United States
|
14/206,374
|
3/12/2014
|
Vertical Slide Backwash Valve
|
|
Hayward Industries, Inc.
|
United States
|
14/210,804
|
3/14/2014
|
Filtration Media and Filter Therefor
|
|
Hayward Industries, Inc.
|
United States
|
14/210,835
|
3/14/2014
|
Filtration Media and Filter Therefor
|
|
Hayward Industries, Inc.
|
United States
|
14/207,893
|
3/13/2014
|
Swimming Pool Cleaner With Docking System And/Or Other Related Systems And Methods
|
|
Hayward Industries, Inc.
|
United States
|
14/212,044
|
3/14/2014
|
Fluid Sanitization Assembly And Related Methods of Use
|
|
Hayward Industries, Inc.
|
United States
|
14/205,936
|
3/12/2014
|
Underwater Lighting System With Bather Detection Circuitry
|
|
Hayward Industries, Inc.
|
United States
|
13/840,751
|
3/15/2013
|
Underwater Lighting System With Bather Detection Circuitry
|
|
Hayward Industries, Inc.
|
United States
|
14/208,247
|
3/13/2014
|
Electric Hose Swivel For Skimmer Attachment
|
|
Hayward Industries, Inc.
|
United States
|
14/204,352
|
3/11/2014
|
Local Feature Controller For Pool and Spa Equipment
|
|
Hayward Industries, Inc.
|
United States
|
14/211,461
|
3/14/2014
|
Modular Pool / Spa Control System
|
|
REGISTERED OWNER
|
JURISDICTION
|
APPLICATION NO.
|
FILING DATE
|
DESCRIPTION
|
|
Hayward Industries, Inc.
|
United States
|
14/213,172
|
3/14/2014
|
System And Method For Dynamic Device Discovery and Address Assignment
|
|
Hayward Industries, Inc.
|
United States
|
13/954,130
|
7/30/2013
|
Butterfly Valve
|
|
Hayward Industries, Inc.
|
United States
|
14/020,632
|
9/06/2013
|
Treaded Insert
|
|
Hayward Industries, Inc.
|
United States
|
14/526,299
|
10/28/2014
|
Velocity Reducing Pool Filter Port
|
|
Hayward Industries, Inc.
|
United States
|
14/727,030
|
6/1/2015
|
Low-Profile Niche for Underwater Pool/Spa Lights
|
|
Hayward Industries, Inc.
|
United States
|
14/228,689
|
3/28/2014
|
System and Method for Presenting a Sales Demonstration Using a Pool/Spa Controller User Interface
|
|
Hayward Industries, Inc.
|
United States
|
14/691,148
|
4/20/2015
|
Valve Switchbox
|
|
Hayward Industries, Inc.
|
United States
|
14/706,502
|
5/7/2017
|
Pool Cleaning Device Having Relief Formed in a Base Portion Thereof
|
|
Hayward Industries, Inc.
|
United States
|
14/734,577
|
6/9/2015
|
Water-Cooled Electronic Inverter
|
|
Hayward Industries, Inc.
|
United States
|
14/600,515
|
1/20/2015
|
Thermally-Dissipative Flow Sensor System
|
|
Hayward Industries, Inc.
|
United States
|
14/801,439
|
7/16/2015
|
Unitary Filter Tank And An Underdrain For Filtering A Body Of Water
|
|
Hayward Industries, Inc.
|
United States
|
14/805,913
|
7/22/2015
|
Gas-Evacuating Filter
|
|
Hayward Industries, Inc.
|
United States
|
14/337,873
|
7/22/2014
|
Venturi By-Pass System And Associated Methods
|
|
Hayward Industries, Inc.
|
United States
|
14/932,363
|
11/4/2015
|
Pool Filter with Integrated Pump
|
|
Hayward Industries, Inc.
|
United States
|
14/994,653
|
1/13/2016
|
Pool Cleaner With Capacitive Water Sensor
|
|
Hayward Industries, Inc.
|
United States
|
15/006,869
|
1/26/2016
|
Swimming Pool Cleaner With Hydrocyclonic Particle Separator And/Or Six-Roller Dnve System
|
|
Hayward Industries, Inc.
|
United States
|
15/04,988
|
2/22/2016
|
Pool Cleaner With Optical Out-Of-Water and Debris Detection
|
|
Hayward Industries, Inc.
|
United States
|
15/208,011
|
7/12/2016
|
Electrical Junction Box With Built-in Isolation Transformer
|
|
Hayward Industries, Inc.
|
United States
|
15/115,125
|
1/28/2014
|
Systems and Methods for Interrelated Control of Chlorinators and Pumps
|
|
REGISTERED OWNER
|
JURISDICTION
|
APPLICATION NO.
|
FILING DATE
|
DESCRIPTION
|
|
Hayward Industries, Inc.
|
United States
|
15/200,040
|
7/1/2016
|
Spade Connector And Associated Systems And Methods
|
|
Hayward Industries, Inc.
|
United States
|
15/359,016
|
11/22/2016
|
Power Supplies for Pool and Spa Equipment
|
|
Hayward Industries, Inc.
|
United States
|
15/359,046
|
11/22/2016
|
Power Supplies for Pool and Spa Equipment
|
|
Hayward Industries, Inc.
|
United States
|
15/372,705
|
12/8/2016
|
Butterfly Valve
|
|
Hayward Industries, Inc.
|
United States
|
15/372,747
|
12/8/2016
|
Butterfly Valve
|
|
Hayward Industries, Inc.
|
United States
|
15/372,822
|
12/8/2016
|
Butterfly Valve
|
|
Hayward Industries, Inc.
|
United States
|
15/345,617
|
11/8/2016
|
Swimming Pool Deck Jet System and Associated Methods
|
|
Hayward Industries, Inc.
|
United States
|
15/349,183
|
11/11/2016
|
Ball Valve
|
|
Hayward Industries, Inc.
|
United States
|
13/722,112
|
12/20/2012
|
Apparatus for Facilitating Maintenance of a Pool Cleaning Device
|
|
Hayward Industries, Inc.
|
United States
|
14/208,855
|
3/13/2014
|
Underwater Led Light with Replacement Indicator
|
|
Hayward Industries, Inc.
|
United States
|
14/500,307
|
9/29/2014
|
Light with Expanding Compression Member
|
|
Hayward Industries, Inc.
|
United States
|
14/487,846
|
9/16/2014
|
Swimming Pool Pressure Cleaner Including Automatic Timing Mechanism
|
|
Hayward Industries, Inc.
|
United States
|
14/839,166
|
8/28/2015
|
Combined Ultraviolet and Ozone Fluid Sterilization System
|
|
Hayward Industries, Inc.
|
United States
|
15/050,207
|
2/22/2016
|
Lighting System for an Environment and a Control Module for Use Therein
|
|
Hayward Industries, Inc.
|
United States
|
11/127,749
|
5/12/2005
|
Debris Bag for a Swimming Pool Cleaning Apparatus
|
|
Hayward Industries, Inc.
|
United States
|
11/528,493
|
9/27/2006
|
Heat Pump System Having a Defrost mechanism for Low Ambient Air Temperature Operation
|
|
Hayward Industries, Inc.
|
United States
|
11/585,650
|
10/24/2006
|
Filter Housing and Parts Therefor
|
|
Hayward Industries, Inc.
|
United States
|
11/704,717
|
2/9/2007
|
Programmable Aerator Cooling System
|
|
Hayward Industries, Inc.
|
United States
|
11/770,831
|
6/29/2007
|
Pool Cleaner Storage Device
|
|
Hayward Industries, Inc.
|
United States
|
11/789,870
|
4/26/2007
|
Heat Exchanger
|
|
Hayward Industries, Inc.
|
United States
|
11/975,254
|
10/18/2007
|
Pump
|
|
REGISTERED OWNER
|
JURISDICTION
|
APPLICATION NO.
|
FILING DATE
|
DESCRIPTION
|
|
Hayward Industries, Inc.
|
United States
|
11/975,287
|
10/18/2007
|
Debris Bag for a Swimming Pool Cleaning Apparatus
|
|
Hayward Industries, Inc.
|
United States
|
12/163,126
|
6/27/2008
|
Drain Safety and Pump Control Device with Verification
|
|
Hayward Industries, Inc.
|
United States
|
12/394,157
|
2/27/2009
|
Sealing System for Pressure Vessels
|
|
Hayward Industries, Inc.
|
United States
|
12/435,659
|
5/5/2009
|
Combination Venturi Check Valve
|
|
Hayward Industries, Inc.
|
United States
|
12/693,832
|
1/26/2010
|
True Union Quick-disconnect Cam-lock End Connector
|
|
Hayward Industries, Inc.
|
United States
|
13/034,542
|
2/24/2011
|
Pump Controller with External Device Control Capability
|
|
Hayward Industries, Inc.
|
United States
|
13/568,838
|
8/7/2012
|
Debris-capturing Apparatus for Cleaner
|
|
Hayward Industries, Inc.
|
United States
|
14/222,892
|
3/24/2014
|
Automatic Increased-suction Relief Apparatus
|
|
Hayward Industries, Inc.
|
United States
|
14/337,396
|
7/22/2014
|
Swimming Pool Cleaner with a Rigid Debris Canister
|
TRADEMARKS
|
REGISTERED OWNER
|
JURISDICTION
|
REG. NO.
|
REG. DATE
|
TRADEMARK
|
|
Hayward Industries, Inc.
|
United States
|
3,693,133
|
10/06/2009
|
AQUA CONNECT
|
|
Hayward Industries, Inc.
|
United States
|
3,963,248
|
05/17/2011
|
AQUA CONNECT
|
|
Hayward Industries, Inc.
|
United States
|
3,464,568
|
07/08/2008
|
AQUA PLUS
|
|
Hayward Industries, Inc.
|
United States
|
3,871,629
|
11/02/2010
|
AQUA POD
|
|
Hayward Industries, Inc.
|
United States
|
3,704,835
|
11/03/2009
|
AQUA RITE
|
|
Hayward Industries, Inc.
|
United States
|
2,199,560
|
10/27/1998
|
AQUA RITE (Stylized)
|
|
Hayward Industries, Inc.
|
United States
|
2,770,932
|
10/07/2003
|
AQUA SOLAR
|
|
Hayward Industries, Inc.
|
United States
|
2,454,049
|
05/22/2001
|
AQUA TROL
|
|
Hayward Industries, Inc.
|
United States
|
2,184,852
|
08/25/1998
|
AQUABUG
|
|
Hayward Industries, Inc.
|
United States
|
2,234,984
|
03/23/1999
|
AQUACRITTER
|
|
Hayward Industries, Inc.
|
United States
|
2,920,213
|
01/18/2005
|
AQUADRIVE
|
|
Hayward Industries, Inc.
|
United States
|
1,383,031
|
02/18/1986
|
AQUADROID
|
|
Hayward Industries, Inc.
|
United States
|
4,993,931
|
07/05/2016
|
AQUANAUT
|
|
Hayward Industries, Inc.
|
United States
|
1,620,986
|
11/06/1990
|
AQUAPILOT (Stylized)
|
|
Hayward Industries, Inc.
|
United States
|
4,125,679
|
04/10/2012
|
AQUARAY
|
|
Hayward Industries, Inc.
|
United States
|
1,107,778
|
12/05/1978
|
AQUA-VAC
|
|
Hayward Industries, Inc.
|
United States
|
3,612,167
|
04/28/2009
|
CAT 1000
|
|
Hayward Industries, Inc.
|
United States
|
3,612,168
|
04/28/2009
|
CAT 2000
|
|
Hayward Industries, Inc.
|
United States
|
5,022,967
|
08/16/2016
|
CAT 3500
|
|
Hayward Industries, Inc.
|
United States
|
3,612,169
|
04/28/2009
|
CAT 4000
|
|
Hayward Industries, Inc.
|
United States
|
3,612,170
|
04/28/2009
|
CAT 5000
|
|
Hayward Industries, Inc.
|
United States
|
4,893,384
|
01/26/2016
|
CAT 5500
|
|
Hayward Industries, Inc.
|
United States
|
3,626,278
|
05/26/2009
|
CAT CONTROLLERS
|
|
Hayward Industries, Inc.
|
United States
|
2,865,720
|
07/20/2004
|
COLORLOGIC
|
|
Hayward Industries, Inc.
|
United States
|
4,255,001
|
12/04/2012
|
CRYSTALOGIC
|
|
Hayward Industries, Inc.
|
United States
|
3,077,736
|
04/04/2006
|
DIVER DAVE
|
|
Hayward Industries, Inc.
|
United States
|
3,788,135
|
05/11/2010
|
EASY TEMP
|
|
Hayward Industries, Inc.
|
United States
|
3,623,810
|
05/19/2009
|
ECOMMAND
|
|
Hayward Industries, Inc.
|
United States
|
3,935,362
|
03/22/2011
|
ECOSTAR
|
|
Hayward Industries, Inc.
|
United States
|
3,829,566
|
08/03/2010
|
ES HAYWARD ENERGY SOLUTIONS and Design
|
|
Hayward Industries, Inc.
|
United States
|
1,502,090
|
08/30/1988
|
FIRETILE (Stylized)
|
|
Hayward Industries, Inc.
|
United States
|
1,600,619
|
06/12/1990
|
GOLDLINE
|
|
Hayward Industries, Inc.
|
United States
|
3,455,440
|
06/24/2008
|
GOLDLINE CONTROLS
|
|
Hayward Industries, Inc.
|
United States
|
1,132,980
|
04/15/1980
|
H & Design
|
|
Hayward Industries, Inc.
|
United States
|
4,016,737
|
08/23/2011
|
H & Design
|
|
Hayward Industries, Inc.
|
United States
|
4,118,702
|
03/27/2012
|
H HAYWARD & Design
|
|
Hayward Industries, Inc.
|
United States
|
3,969,301
|
05/31/2011
|
HAYWARD
|
|
|
|
|
|
|
|
|
REGISTERED OWNER
|
JURISDICTION
|
REG. NO.
|
REG. DATE
|
TRADEMARK
|
|
Hayward Industries, Inc.
|
United States
|
1,058,211
|
02/08/1977
|
HAYWARD
|
|
Hayward Industries, Inc.
|
United States
|
2,921,665
|
01/25/2005
|
HAYWARD ELITE
|
|
Hayward Industries, Inc.
|
United States
|
3,667,638
|
08/11/2009
|
HAYWARD ENERGY SOLUTIONS
|
|
Hayward Industries, Inc.
|
United States
|
3,489,930
|
08/19/2008
|
HAYWARD VIIO TURBO
|
|
Hayward Industries, Inc.
|
United States
|
3,588,085
|
03/10/2009
|
HAYWARD VIIO TURBO (Stylized)
|
|
Hayward Industries, Inc.
|
United States
|
2,961,464
|
06/07/2005
|
HEATPRO
|
|
Hayward Industries, Inc.
|
United States
|
4,257,942
|
12/11/2012
|
JIFFY NICHE
|
|
Hayward Industries, Inc.
|
United States
|
4,585,468
|
08/12/2014
|
LIFESTAR
|
|
Hayward Industries, Inc.
|
United States
|
2,124,181
|
12/23/1997
|
NAVIGATOR
|
|
Hayward Industries, Inc.
|
United States
|
4,672,840
|
01/13/2015
|
OMNILOGIC
|
|
Hayward Industries, Inc.
|
United States
|
3,839,066
|
08/24/2010
|
ONCOMMAND
|
|
Hayward Industries, Inc.
|
United States
|
2,055,038
|
04/22/1997
|
PERFLEX
|
|
Hayward Industries, Inc.
|
United States
|
3,489,931
|
08/19/2008
|
PHANTOM TURBO
|
|
Hayward Industries, Inc.
|
United States
|
3,499,911
|
09/09/2008
|
PHANTOM TURBO (Stylized)
|
|
Hayward Industries, Inc.
|
United States
|
5,055,736
|
10/04/2016
|
PHOENIX
|
|
Hayward Industries, Inc.
|
United States
|
2,422,021
|
01/16/2001
|
POOL VAC ULTRA
|
|
Hayward Industries, Inc.
|
United States
|
3,612,163
|
04/28/2009
|
POOLCOMM
|
|
Hayward Industries, Inc.
|
United States
|
2,075,752
|
07/01/1997
|
POWER-FLO
|
|
Hayward Industries, Inc.
|
United States
|
3,101,841
|
06/06/2006
|
POWERFLO MATRIX
|
|
Hayward Industries, Inc.
|
United States
|
3,538,131
|
11/25/2008
|
PRO LOGIC
|
|
Hayward Industries, Inc.
|
United States
|
4,667,908
|
01/06/2015
|
PURE-BLU
|
|
Hayward Industries, Inc.
|
United States
|
4,573,094
|
07/22/2014
|
SALINE C
|
|
Hayward Industries, Inc.
|
United States
|
4,255,050
|
12/04/2012
|
SALT & SWIM
|
|
Hayward Industries, Inc.
|
United States
|
3,640,451
|
06/16/2009
|
SENSE AND DISPENSE
|
|
Hayward Industries, Inc.
|
United States
|
4,023,757
|
09/06/2011
|
SHARKVAC BY HAYWARD
|
|
Hayward Industries, Inc.
|
United States
|
2,114,157
|
11/18/1997
|
SKIM-MASTER
|
|
Hayward Industries, Inc.
|
United States
|
2,191,368
|
09/22/1998
|
SMARTDRIVE
|
|
Hayward Industries, Inc.
|
United States
|
3,652,589
|
07/07/2009
|
STRATUM
|
|
Hayward Industries, Inc.
|
United States
|
1,518,655
|
01/03/1989
|
SUPER PUMP
|
|
Hayward Industries, Inc.
|
United States
|
4,335,834
|
05/14/2013
|
SURE-TUFF
|
|
Hayward Industries, Inc.
|
United States
|
2,063,080
|
05/20/1997
|
SWIM PRO
|
|
Hayward Industries, Inc.
|
United States
|
3,280,886
|
08/14/2007
|
SWIM PURE PLUS
|
|
Hayward Industries, Inc.
|
United States
|
3,280,894
|
08/14/2007
|
SWIM PURE PLUS & Design
|
|
Hayward Industries, Inc.
|
United States
|
4,117,446
|
03/27/2012
|
TANK-TITE
|
|
Hayward Industries, Inc.
|
United States
|
2,346,109
|
04/25/2000
|
TIGERSHARK & Design
|
|
Hayward Industries, Inc.
|
United States
|
3,687,673
|
09/22/2009
|
TOTAL POOL MANAGEMENT
|
|
Hayward Industries, Inc.
|
United States
|
3,190,201
|
12/26/2006
|
TRISTAR
|
|
Hayward Industries, Inc.
|
United States
|
4,993,932
|
07/05/2016
|
TRIVAC
|
|
REGISTERED OWNER
|
JURISDICTION
|
REG. NO.
|
REG. DATE
|
TRADEMARK
|
|
Hayward Industries, Inc.
|
United States
|
3,156,434
|
10/17/2006
|
TURBO CELL
|
|
Hayward Industries, Inc.
|
United States
|
3,976,710
|
06/14/2011
|
VARI-FLO
|
|
Hayward Industries, Inc.
|
United States
|
4,974,303
|
06/07/2016
|
V-FLEX
|
|
Hayward Industries, Inc.
|
United States
|
3,489,929
|
08/19/2008
|
VIIO TURBO
|
|
Hayward Industries, Inc.
|
United States
|
3,099,241
|
05/30/2006
|
WANDA THE WHALE
|
|
Hayward Industries, Inc.
|
United States
|
3,047,028
|
01/17/2006
|
XSTREAM
|
|
Hayward Industries, Inc.
|
United States
|
3,198,500
|
01/16/2007
|
XSTREAM & Design
|
TRADEMARK APPLICATIONS
|
APPLICANT
|
JURISDICTION
|
SERIAL NO.
|
FILING DATE
|
TRADEMARK
|
|
Hayward Industrial Properties, Inc.
|
United States
|
87/369,104
|
03/13/2017
|
HAYWARD FILTRATION
|
|
Hayward Industries, Inc.
|
United States
|
87/290,262
|
01/05/2017
|
HEXADRIVE
|
|
Hayward Industries, Inc.
|
United States
|
87/290,350
|
01/05/2017
|
HYDRORITE UVO3
|
|
Hayward Industries, Inc.
|
United States
|
87/290,252
|
01/05/2017
|
OPTISENSE
|
|
Hayward Industries, Inc.
|
United States
|
87/368,985
|
03/13/2017
|
PROFILE2
|
|
Hayward Industries, Inc.
|
United States
|
87/290,239
|
01/05/2017
|
SPINTECH
|
|
Hayward Industries, Inc.
|
United States
|
87/449,312
|
05/15/2017
|
SWIMPURE
|
|
Hayward Industries, Inc.
|
United States
|
87/325,729
|
02/06/2017
|
SYSTEM2
|
|
Hayward Industries, Inc.
|
United States
|
87/325,767
|
02/06/2017
|
SYSTEM2 SEALING TECHNOLOGY
|
|
Hayward Industries, Inc.
|
United States
|
87/290,228
|
01/05/2017
|
TOUCHFREE
|
SCHEDULE 5(b)
COPYRIGHTS
COPYRIGHTS
|
REGISTERED OWNER
|
TITLE
|
COUNTRY
|
REG. NO.
|
REG. DATE
|
|
Hayward Industries, Inc.
|
AQUA RITE OPERATION & INSTALLATION MANUAL
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United States
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TX0007840642
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5/27/2014
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Hayward Industries, Inc.
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AQUA RITE OPERATION & INSTALLATION MANUAL
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United States
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TX0007840644
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5/27/2014
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Hayward Industries, Inc.
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AQUA RITE OPERATION & INSTALLATION MANUAL
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United States
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TX0007841245
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5/28/2014
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COPYRIGHT APPLICATIONS
None.
SCHEDULE 6
COMMERCIAL TORT
CLAIMS
EXHIBIT F
[FORM OF]
PERFECTION CERTIFICATE SUPPLEMENT
[Insert date]
Reference is hereby
made to (i) that certain First Lien Credit Agreement, dated as of August 4, 2017 (as amended, restated, amended and restated, supplemented
or otherwise modified and in effect on the date hereof, the “First Lien Credit Agreement”), by and among Hayward
Intermediate, Inc., a Delaware corporation (“Holdings”), Hayward Industries, Inc., a New Jersey corporation
(the “Borrower”), the lenders from time to time party thereto (the “First Lien Lenders”)
and Bank of America, N.A., as administrative agent and collateral agent for the First Lien Lenders (in such capacities, the “First
Lien Agent”), (ii) that certain First Lien Pledge and Security Agreement, dated as of August 4, 2017 (as amended, restated,
amended and restated, supplemented or otherwise modified and in effect on the date hereof, the “First Lien Security Agreement”),
by and among the Loan Parties (as defined in the First Lien Credit Agreement) from time to time party thereto and the First Lien
Agent, (iii) that certain Second Lien Credit Agreement, dated as of August 4, 2017 (as amended, restated, amended and restated,
supplemented or otherwise modified in effect on the date hereof, the “Second Lien Credit Agreement” and, together
with the First Lien Credit Agreement, each, a “Credit Agreement” and, collectively, the “Credit Agreements”),
by and among Holdings, the Borrower, the lenders from time to time party thereto (the “Second Lien Lenders”),
Bank of America, N.A., as administrative agent and collateral agent for the Second Lien Lenders (in such capacities, the “Second
Lien Agent” and, together with the First Lien Agent, each, an “Agent” and collectively, the “Agents”),
(iv) that certain Second Pledge and Lien Security Agreement, dated as of August 4, 2017 (as amended, restated, amended and restated,
supplemented or otherwise modified and in effect on the date hereof, the “Second Lien Security Agreement” and,
together with the First Lien Security Agreement, each, a “Security Agreement” and, collectively, the “Security
Agreements”), by and among the Loan Parties (as defined in the Second Lien Credit Agreement) from time to time party
thereto and the Second Lien Agent and (v) the Perfection Certificate, dated as of August 4, 2017 (as supplemented by any perfection
certificate and/or perfection certificate supplement delivered prior to the date hereof, the “Prior Perfection Certificate”),
executed by the Loan Parties (as defined in the applicable Credit Agreement) signatory thereto. Capitalized terms used but not
defined herein have the meanings assigned to such terms in the applicable Security Agreement.
As used herein, the
term “Company” means each of Holdings, the Borrower and the other Loan Parties (as defined in the applicable
Credit Agreement).
As of [[●], 20[●]]
(the “Supplement Date”)28,
the undersigned hereby represents and warrants to each Administrative Agent as follows:
1. Names.
(a) Except as set forth in Schedule 1(a) hereto, the true and complete list of (i) the exact legal name of each
Company, as such name appears in its respective Organizational Documents (as defined in each Credit Agreement) filed with the
Secretary of State or other relevant office of such Company’s jurisdiction of organization or formation, (ii) the type
of entity of each Company, (iii) the organizational identification number, if any, of each Company, (iv) the Federal Taxpayer
Identification Number, if any, of each Company and (v) the jurisdiction of organization or formation of each Company is set
forth in Schedule 1(a) to the Prior Perfection Certificate.
28 To refer to end of fiscal
year or fiscal quarter as to which the Perfection Certificate Supplement relates.
(b) Except
as otherwise disclosed in Schedule 1(b), 1(c) or 1(d), the true and complete list of all other names used
by such Company on any filings with the Internal Revenue Service, in each case, in the past five years is set forth on Schedule
1(b), Schedule 1(c) and Schedule 1(d) of the Prior Perfection Certificate.
(c) Except
as set forth in Schedule 1(c) hereto, the true and complete list of the information required by Section 1(a) above
for any other Person (i) to which any Company became the successor by merger, consolidation or acquisition or (ii) that has been
liquidated into, or transferred all or substantially all of its assets to, any Company, at any time within the past five years,
is set forth in Schedule 1(c) to the Prior Perfection Certificate.
(d) Except
as set forth in Schedule 1(d) hereto, or as otherwise disclosed in Schedule 1(c) or in such Schedules to the Prior
Perfection Certificate, no Company has changed its jurisdiction of organization or form of entity since the earlier of (i) the
Supplement Date or (ii) at any time during the past four months.
2. Locations.
Except as set forth in Schedule 2(a) hereto, the true and complete list of the address of the chief executive offices of
each Company is set forth in Schedule 2(a) to the Prior Perfection Certificate.
(b) Except
as set forth in Schedule 2(a) or Schedule 2(b) hereto, the true and complete list of all other locations where any
Company currently maintains any Collateral consisting of Inventory (including property in possession of a third party (e.g., a
warehouseman or other bailee or on consignment), other than Inventory in transit or out for repair in the ordinary course of business
is set forth in Schedule 2(a) or Schedule 2(b) to the Prior Perfection Certificate.
3. Stock
Ownership and Other Equity Interests. Except as set forth in Schedule 3 hereto, the true and complete list of all of
the issued and outstanding stock, partnership interests, limited liability company membership interests or other equity interests
owned by any Company constituting Pledged Stock, the beneficial owners of such stock, partnership interests, membership interests
or other equity interests and the percentage of the total issued and outstanding stock, partnership interests, membership interests
or other equity interests of the relevant issuer represented thereby is set forth in Schedule 3 to the Prior Perfection
Certificate.
4. Instruments
and Tangible Chattel Paper. Except as set forth on Schedule 4 hereto, the true and complete list of all Instruments
(other than checks to be deposited in the ordinary course of business) having a face amount exceeding $15,000,000 and Tangible
Chattel Paper having a face amount exceeding $15,000,000, in each case held by any Company as of the Supplement Date, including
the names of the obligors, the amounts owing and the due dates, is set forth in Schedule 4 to the Prior Perfection Certificate.
5. Intellectual
Property.
(a) Except
as set forth on Schedule 5(a) hereto, the true and complete list of all Patents, Designs (if applicable) and Trademarks
of each Company registered with and published by (or applied for in) the United States Patent and Trademark Office (“USPTO”)
(excluding, for the avoidance of doubt, any Patent or Trademark that has expired or been abandoned, but including Trademarks that
would constitute Collateral upon the filing of a “Statement of Use” or an “Amendment to Allege Use” with
respect thereto), as applicable, including the name of the registered owner and the registration or publication number (or, if
applicable, the applicant and the application number) of each such Patent, Design (if applicable) and Trademark, is set forth in
Schedule 5(a) to the Prior Perfection Certificate.
(b) Except
as set forth on Schedule 5(b) hereto, the true and complete list of all Copyrights of each Company registered with (or applied
for in) the United States Copyright Office (excluding, for the avoidance of doubt, any Copyright that has expired or been abandoned),
including the name of the registered owner and the registration number (or, if applicable, the applicant and the application number)
of each such Copyright, is set forth in Schedule 5(b) to the Prior Perfection Certificate.
6. Commercial
Tort Claims. Except as set forth on Schedule 6 hereto, the true and complete list of all Commercial Tort Claims with
an individual value of at least $10,000,000 (as reasonably determined by the Borrower), held by any Company, including a brief
description thereof, is set forth in Schedule 6 to the Prior Perfection Certificate.
[Signature Page Follows]
IN WITNESS WHEREOF,
the undersigned have signed this Perfection Certificate Supplement as of the date first written of above.
[Signature Page to Perfection Certificate Supplement]
SCHEDULE 1(a)
LEGAL NAMES
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Legal Name
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Jurisdiction
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Type of Entity
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Organizational Identification Number
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Federal Taxpayer Identification Number
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SCHEDULE 1(b)
A. OTHER NAMES USED
ON IRS FILINGS:
SCHEDULE 1(c)
PREDECESSOR ENTITIES
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Company
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Action
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Legal Name of Predecessor Entity
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Jurisdiction of Organization of Predecessor Entity
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Date of Action
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SCHEDULE 1(d)
CHANGES IN JURISDICTION
OR FORM
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Company
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Current Jurisdiction of Organization/Form
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Prior Jurisdiction of Organization/Form
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Date of Change
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SCHEDULE 2(a)
CHIEF EXECUTIVE
OFFICE ADDRESSES
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Company
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Chief Executive Office Address
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SCHEDULE 2(b)
LOCATIONS OF
INVENTORY
SCHEDULE 3
PLEDGED STOCK
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Issuer
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Holder
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Certificate No.
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% of Issued and Outstanding
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SCHEDULE 4
INSTRUMENTS AND
TANGIBLE CHATTEL PAPER
1. Promissory
Notes/Instruments:
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Obligee
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Obligor
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Principal Amount
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Maturity
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2. Tangible
Chattel Paper:
SCHEDULE 5(a)
PATENTS AND TRADEMARKS
PATENTS
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REGISTERED OWNER
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SERIAL NUMBER
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DESCRIPTION
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PATENT APPLICATIONS
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APPLICANT
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APPLICATION NO.
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DESCRIPTION
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TRADEMARKS
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REGISTERED OWNER
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REGISTRATION NUMBER
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TRADEMARK
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TRADEMARK APPLICATIONS
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APPLICANT
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APPLICATION NO.
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TRADEMARK
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SCHEDULE 5(b)
COPYRIGHTS
COPYRIGHTS
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REGISTERED OWNER
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REGISTRATION NUMBER
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TITLE
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COPYRIGHT APPLICATIONS
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APPLICANT
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APPLICATION
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NUMBER TITLE
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SCHEDULE 6
COMMERCIAL TORT
CLAIMS
EXHIBIT G
[FORM OF]
PROMISSORY NOTE
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$[●]
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New York, New York
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[●] [●], 20[●]
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FOR VALUE RECEIVED,
the undersigned Hayward Industries, Inc., a New Jersey corporation (“Borrower”), hereby promises to pay on demand
to [•] (the “Lender”) or its registered permitted assign, at the office of Bank of America, N.A. (“Bank
of America”) at One Bryant Park, New York, New York 10036, [Term][Revolving] Loans in the principal amount of $[•]
or such lesser amount as is outstanding from time to time, on the dates and in the amounts set forth in the First Lien Credit Agreement
dated as of August 4, 2017 (as amended, restated, amended and restated, supplemented or otherwise modified and in effect on the
date hereof, the “First Lien Credit Agreement”), by and among Hayward Industries, Inc., a New Jersey corporation
(as survivor of the Merger (as defined in the First Lien Credit Agreement) with Hayward Acquisition Corp., a New Jersey corporation)
(the “Borrower”), Hayward Intermediate, Inc., a Delaware corporation (“Holdings”), the Lenders
from time to time party thereto including, Bank of America, N.A. in its capacities as administrative agent and collateral agent
(the “Administrative Agent”). The Borrower also promises to pay interest from the date of such Loans on the
principal amount thereof from time to time outstanding, in like Dollars, at such office, in each case, in the manner and at the
rate or rates per annum and payable on the dates provided in the First Lien Credit Agreement. Terms used but not defined herein
shall have the meanings assigned to such terms in the First Lien Credit Agreement.
The Borrower promises
to pay interest on any overdue principal and, to the extent permitted by Requirements of Law, overdue interest from the relevant
due dates, in each case, in the manner, at the rate or rates and under the circumstances provided in the First Lien Credit Agreement.
The Borrower hereby
waives diligence, presentment, demand, protest and notice of any kind to the extent possible under any applicable Requirements
of Law. The non-exercise by the holder hereof of any of its rights hereunder in any particular instance shall not constitute
a waiver thereof in that or any subsequent instance.
All Borrowings evidenced
by this Promissory Note and all payments and prepayments of the principal hereof and interest hereon and the respective dates thereof
shall be endorsed by the holder hereof on the schedules attached hereto and made a part hereof or on a continuation thereof which
shall be attached hereto and made a part hereof, or otherwise recorded by such holder in its internal records; provided,
however, that the failure of the holder hereof to make such a notation or any error in such notation shall not affect the
obligations of the Borrower under this Promissory Note.
This Promissory
Note is one of the promissory notes referred to in the First Lien Credit Agreement that, among other things, contains
provisions for the acceleration of the maturity hereof upon the happening of certain events, for optional and mandatory
prepayment of the principal hereof prior to the maturity hereof and for the amendment or waiver of certain provisions of the
First Lien Credit Agreement, all upon the terms and conditions therein specified. This Promissory Note is entitled to the
benefit of the First Lien Credit Agreement, and the obligations hereunder are guaranteed and secured as provided therein and
in the other Loan Documents referred to in the First Lien Credit Agreement.
If any assignment by
the Lender holding this Promissory Note occurs after the date of the issuance hereof, the Lender agrees that it shall, upon the
effectiveness of such assignment or as promptly thereafter as practicable, surrender this Promissory Note to the Administrative
Agent for cancellation.
THE ASSIGNMENT OF THIS PROMISSORY NOTE
AND ANY RIGHTS WITH RESPECT THERETO ARE SUBJECT TO THE PROVISIONS OF THE FIRST LIEN CREDIT AGREEMENT, INCLUDING THE PROVISIONS
GOVERNING THE REGISTER AND THE PARTICIPANT REGISTER.
THIS PROMISSORY NOTE SHALL BE CONSTRUED
IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
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HAYWARD INDUSTRIES, INC.
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By:
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Name:
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Title:
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[Signature Page to Promissory Note]
SCHEDULE A
LOANS, CONVERSIONS
AND REPAYMENTS OF ABR LOANS
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Date
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Amount of ABR Loans
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Amount Converted to ABR Loans
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Amount of Principal of ABR Loans Repaid
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Amount of ABR Loans Converted to LIBO Rate Loans
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Unpaid Principal Balance of ABR Loans
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Notation Made By
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Schedule A to Promissory Note
SCHEDULE B
LOANS, CONTINUATIONS,
CONVERSIONS AND REPAYMENTS OF LIBO RATE LOANS
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Date
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Amount of LIBO Rate Loans
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Amount Converted to LIBO Rate Loans
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Amount of Principal of LIBO Rate Loans Repaid
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Amount of LIBO Rate Loans Converted to ABR Loans
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Unpaid Principal Balance of LIBO Rate Loans
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Notation Made By
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Schedule B to Promissory Note
EXHIBIT H
[FORM OF]
GUARANTY AGREEMENT
[ATTACHED]
Execution Version
FIRST LIEN LOAN
GUARANTY
THIS FIRST LIEN LOAN
GUARANTY dated as of August 4, 2017 (as it may be amended, restated, amended and restated, supplemented or otherwise modified from
time to time, this “First Lien Loan Guaranty”), is entered into by and among Hayward Intermediate, Inc., a Delaware
corporation (“Holdings”), Hayward Acquisition Corp., a New Jersey corporation (the “Initial Borrower”),
Hayward Industries, Inc., a New Jersey corporation (upon merging with the Initial Borrower pursuant to the Merger (as defined in
the First Lien Credit Agreement) and as survivor of the Merger, the “Borrower”), the other Loan Guarantors (as
defined herein) and Bank of America, N.A. in its capacities as administrative agent and collateral agent (together with its successors
and permitted assigns in such capacities, the “Administrative Agent”).
PRELIMINARY STATEMENT
Reference is hereby
made to that certain First Lien Credit Agreement, dated as of the date hereof (as amended, restated, amended and restated, supplemented
or otherwise modified from time to time, the “First Lien Credit Agreement”), by and among, inter alios,
Holdings, the Initial Borrower, the Borrower, the Lenders from time to time party thereto and the Administrative Agent.
The Loan Guarantors
are entering into this First Lien Loan Guaranty in order to induce the Lenders to enter into and extend credit to the Borrower
under the First Lien Credit Agreement and to guarantee the Secured Obligations.
Each Loan Guarantor
will obtain benefits from the incurrence of Loans by the Borrower for the account of the Borrower and its Restricted Subsidiaries
and the incurrence by the Loan Parties of Secured Hedging Obligations and Banking Services Obligations.
ACCORDINGLY, the parties
hereto agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.01. Definitions
of Certain Terms Used Herein. As used in this First Lien Loan Guaranty, in addition to the terms defined in the preamble and
Preliminary Statement above, the following terms shall have the following meanings:
“Accommodation
Payments” has the meaning assigned to such term in Section 2.09.
“Administrative
Agent” has the meaning assigned to such term in the preamble.
“Article”
means a numbered article of this First Lien Loan Guaranty, unless another document is specifically referenced.
“Exhibit”
refers to a specific exhibit to this First Lien Loan Guaranty, unless another document is specifically referenced.
“First Lien
Credit Agreement” has the meaning assigned to such term in the Preliminary Statement.
“First Lien
Loan Guaranty” has the meaning assigned to such term in the preamble.
“Guaranteed
Obligations” has the meaning assigned to such term in Section 2.01.
“Guarantor
Percentage” has the meaning assigned to such term in Section 2.09(a).
“Guaranty
Supplement” has the meaning assigned to such term in Section 3.04.
“Holdings”
has the meaning assigned to such term in the preamble.
“Loan Guarantors”
means (i) Holdings, (ii) the Subsidiary Guarantors party hereto and (iii) solely with respect to Secured Hedging Obligations and
Banking Services Obligations, the Borrower.
“Maximum Liability”
has the meaning assigned to such term in Section 2.09(a).
“Non-ECP
Guarantor” means each Loan Guarantor other than a Qualified ECP Guarantor.
“Non-Paying
Guarantor” has the meaning assigned to such term in Section 2.09(a).
“Obligated
Party” has the meaning assigned to such term in Section 2.02.
“Paying Guarantor”
has the meaning assigned to such term in Section 2.09(a).
“Qualified
ECP Guarantor” means, in respect of any Swap Obligation, each Loan Guarantor that has total assets exceeding $10,000,000
at the time the relevant guarantee or grant of the relevant security interest becomes effective with respect to such Swap Obligation
or such other person as constitutes an “eligible contract participant” under the Commodity Exchange Act or any regulations
promulgated thereunder and can cause another person to qualify as an “eligible contract participant” at such time by
entering into a keepwell under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.
“Section”
means a numbered section of this First Lien Loan Guaranty, unless another document is specifically referenced.
“UFCA”
has the meaning assigned to such term in Section 2.09(a).
“UFTA”
has the meaning assigned to such term in Section 2.09(a).
The foregoing definitions
shall be equally applicable to both the singular and plural forms of the defined terms. Capitalized terms used in this First Lien
Loan Guaranty and not otherwise defined herein shall have the meanings set forth in the First Lien Credit Agreement.
The rules of construction
specified in Sections 1.03 and 1.04 of the First Lien Credit Agreement also apply to this First Lien Loan Guaranty, mutatis
mutandis.
ARTICLE 2
LOAN GUARANTY
Section 2.01. Guaranty.
Except as otherwise provided for herein (including under Section 3.14), each Loan Guarantor hereby agrees that it is jointly
and severally liable for, and, as primary obligor and not merely as surety, and absolutely and unconditionally and irrevocably
guarantees to the Administrative Agent (acting as agent for the Secured Parties, pursuant to Article 8 of the First Lien
Credit Agreement) for the ratable benefit of the Secured Parties, the full and prompt payment, when and as the same shall become
due, whether at stated maturity, upon acceleration or otherwise (including whether or not any bankruptcy or similar proceeding
shall have stayed the accrual or collection of any of the Secured Obligations or operated as a discharge thereof), and at all times
thereafter, and performance of the Secured Obligations (excluding, for the avoidance of doubt, (i) with respect to any Loan Guarantor
(other than the Borrower) any Excluded Swap Obligations and (ii) in the case of the Borrower, in respect of its own obligations),
together with any and all expenses which may be incurred by the Administrative Agent and the other Secured Parties in collecting
any of the Guaranteed Obligations that are reimbursable in accordance with Section 9.03 of the First Lien Credit Agreement
(collectively the “Guaranteed Obligations”). Each Loan Guarantor further agrees that the Guaranteed Obligations
may be increased, extended or renewed in whole or in part without notice to or further assent from it, and that it remains bound
upon its guarantee notwithstanding any such extension or renewal. If any or all of the Guaranteed Obligations become due and payable
hereunder, each Loan Guarantor, unconditionally and irrevocably, promises to pay such Guaranteed Obligations to the Administrative
Agent for the benefit of the Secured Parties, on demand. This First Lien Loan Guaranty is continuing and shall remain in full force
and effect until the Termination Date, and all liabilities to which it applies or may apply under the terms hereof shall be conclusively
presumed to have been created in reliance hereon.
Section 2.02. Guaranty
of Payment. This First Lien Loan Guaranty is a guaranty of payment and not of collection. Each Loan Guarantor waives any right
to require the Administrative Agent or any Lender to sue the Borrower, any Loan Guarantor, any other guarantor, or any other Person
obligated for all or any part of the Guaranteed Obligations (the Borrower, each Loan Guarantor, each other guarantor or such other
Person, an “Obligated Party”), or otherwise to enforce its rights in respect of any Collateral securing all
or any part of the Guaranteed Obligations. The Administrative Agent may enforce this First Lien Loan Guaranty at any time when
an Event of Default has occurred and is continuing.
Section 2.03. No
Discharge or Diminishment of First Lien Loan Guaranty.
(a) Except
as otherwise provided for herein (including under Section 3.14), the obligations of each Loan Guarantor hereunder are
unconditional, irrevocable and absolute and not subject to any reduction, limitation, impairment or termination for any
reason, including: (i) any claim of waiver, release, extension, renewal, settlement, surrender, alteration, or compromise of
any of the Guaranteed Obligations, by operation of law or otherwise; (ii) any change in the corporate existence, structure or
ownership of any Obligated Party; (iii) any insolvency, bankruptcy, reorganization or other similar proceeding affecting any
other Obligated Party, or their assets or any resulting release or discharge of any obligation of any Obligated Party; (iv)
the existence of any claim, setoff or other rights which any Loan Guarantor may have at any time against any Obligated Party,
the Administrative Agent, any Lender or any other Person, whether in connection herewith or in any unrelated transactions;
(v) any direction as to application of payments by the Borrower or by any other party; (vi) any other continuing or other
guaranty, undertaking or maximum liability of a guarantor or of any other party as to the Guaranteed Obligations; (vii) any
payment on or in reduction of any such other guaranty or undertaking; (viii) any dissolution, termination or increase,
decrease or change in personnel by the Borrower; or (ix) any payment made to any Secured Party on the Guaranteed Obligations
which any such Secured Party repays to the Borrower pursuant to court order in any bankruptcy, reorganization, arrangement,
moratorium or other debtor relief proceeding, and each Loan Guarantor waives any right to the deferral or modification of its
obligations hereunder by reason of any such proceeding.
(b) Except
for termination of a Loan Guarantor’s obligations hereunder or as expressly permitted by Section 3.14, the obligations
of each Loan Guarantor hereunder are not subject to any defense or setoff, counterclaim, recoupment or termination whatsoever by
reason of the invalidity, illegality or unenforceability of any of the Guaranteed Obligations or otherwise, or any Requirements
of Law purporting to prohibit payment by any Obligated Party, of the Guaranteed Obligations or any part thereof.
(c) Further,
the obligations of any Loan Guarantor hereunder are not discharged or impaired or otherwise affected by: (i) the failure of the
Administrative Agent to assert any claim or demand or to enforce any remedy with respect to all or any part of the Guaranteed Obligations;
(ii) any waiver or modification of or supplement to any provision of any agreement relating to the Guaranteed Obligations; (iii)
any release, non-perfection, or invalidity of any indirect or direct security for the obligations of the Borrower for all or
any part of the Guaranteed Obligations or any obligations of any other guarantor of or other Person liable for any of the Guaranteed
Obligations; (iv) any action or failure to act by the Administrative Agent with respect to any Collateral securing any part of
the Guaranteed Obligations; or (v) any default, failure or delay, willful or otherwise, in the payment or performance of any of
the Guaranteed Obligations, or any other circumstance, act, omission or delay that might in any manner or to any extent vary the
risk of such Loan Guarantor or that would otherwise operate as a discharge of any Loan Guarantor as a matter of law or equity (other
than as set forth in Section 3.14).
Section
2.04. Defenses Waived. To the fullest extent permitted by applicable Requirements of Law, and except for
termination of a Loan Guarantor’s obligations hereunder or as otherwise provided for herein (including under Section
3.14), each Loan Guarantor hereby waives any defense based on or arising out of any defense of the Borrower or any other
Loan Guarantor or arising out of the disability of the Borrower or any other Loan Guarantor or any other party or the
unenforceability of all or any part of the Guaranteed Obligations or any part thereof from any cause, or the cessation from
any cause of the liability of the Borrower or any other Loan Guarantor. Without limiting the generality of the foregoing,
each Loan Guarantor irrevocably waives acceptance hereof, presentment, demand, protest and, to the fullest extent permitted
by applicable Requirements of Law, any notice not provided for herein or in any other Loan Document, including notices of
nonperformance, notices of protest, notices of dishonor, notices of acceptance of this First Lien Loan Guaranty and notices
of the existence, creation or incurring of new or additional Guaranteed Obligations, as well as any requirement that at any
time any action be taken by any Person against any Obligated Party, or any other Person, including any right under any
statute, at common law, in equity or otherwise (except as may be required by applicable Requirements of Law but solely to the
extent the relevant requirement cannot be waived under such Requirement of Law) to require the Administrative Agent to (i)
proceed against the Borrower, any other Loan Guarantor or any other party, (ii) proceed against or exhaust any security held
from the Borrower, any other Loan Guarantor or any other party or (iii) pursue any other remedy in the Administrative
Agent’s power whatsoever. The Administrative Agent may, at its election and in accordance with the terms of the
applicable Loan Documents (including the Intercreditor Agreement), foreclose on any Collateral held by it by one or more
judicial or nonjudicial sales, whether or not every aspect of any such sale is commercially reasonable (to the extent
permitted by applicable Requirements of Law), accept an assignment of any such Collateral in lieu of foreclosure or otherwise
act or fail to act with respect to any Collateral securing all or a part of the Guaranteed Obligations, and the
Administrative Agent may, at its election, compromise or adjust any part of the Guaranteed Obligations, make any other
accommodation with any Obligated Party or exercise any other right or remedy available to it against any Obligated Party or
with respect to any security, without affecting or impairing in any way the liability of such Loan Guarantor under this First
Lien Loan Guaranty, except as otherwise provided in Section 3.14. To the fullest extent permitted by applicable
Requirements of Law, each Loan Guarantor waives any defense arising out of any such election even though such election may
operate, pursuant to applicable Requirements of Law, to impair or extinguish any right of reimbursement or subrogation or
other right or remedy of any Loan Guarantor against any Obligated Party or any security.
Section 2.05. Authorization.
Each Loan Guarantor authorizes the Administrative Agent without notice or demand (except as may be required by applicable Requirements
of Law and to the extent the relevant requirement cannot be waived), and without affecting or impairing its liability hereunder
(except as set forth in Section 3.14), from time to time, subject to the terms of the referenced Loan Documents (including
the Intercreditor Agreements), to:
(a) change
the manner, place or terms of payment of, and/or change or extend the time of payment of, renew, increase, accelerate or alter,
any of the Guaranteed Obligations (including any increase or decrease in the principal amount thereof or the rate of interest or
fees thereon), any security therefor, or any liability incurred directly or indirectly in respect thereof, and this First Lien
Loan Guaranty shall apply to the Guaranteed Obligations as so changed, extended, renewed or altered;
(b) take
and hold security for the payment of the Guaranteed Obligations and sell, exchange, release, impair, surrender, realize upon or
otherwise deal with in any manner and in any order any property by whomsoever at any time pledged or mortgaged to secure, or howsoever
securing, the Guaranteed Obligations or any liabilities (including any of those hereunder) incurred directly or indirectly in respect
thereof or hereof, and/or any offset there against;
(c) exercise
or refrain from exercising any rights against the Borrower, any other Loan Party or others or otherwise act or refrain from acting;
(d) release
or substitute any endorser, any guarantor, the Borrower, any other Loan Party and/or any other obligor;
(e) settle
or compromise any of the Guaranteed Obligations, any security therefor or any liability (including any of those hereunder) incurred
directly or indirectly in respect thereof or hereof, and/or subordinate the payment of all or any part thereof to the payment of
any liability (whether due or not) of the Borrower to its creditors other than the Secured Parties;
(f) apply
any sums by whomsoever paid or howsoever realized to any liability or liabilities of the Borrower to the Secured Parties regardless
of what liability or liabilities of the Borrower remain unpaid;
(g) consent
to or waive any breach of, or any act, omission or default under, this First Lien Loan Guaranty, the First Lien Credit Agreement,
any other Loan Document, any Hedge Agreement with respect to any Secured Hedging Obligation, any agreement with respect to Banking
Services Obligations or any of the instruments or agreements referred to herein or therein, or otherwise amend, modify or supplement
this First Lien Loan Guaranty, the First Lien Credit Agreement, any other Loan Document, any Hedge Agreement with respect to any
Secured Hedging Obligation, any agreement with respect to Banking Services Obligations or any of such other instruments or agreements;
and/or
(h) take
any other action which would, under otherwise applicable principles of common law, give rise to a legal or equitable discharge
of the Loan Guarantors from their respective liabilities under this First Lien Loan Guaranty.
Section 2.06. Rights
of Subrogation. No Loan Guarantor will assert any right, claim or cause of action, including a claim of subrogation, contribution
or indemnification that it has against any Loan Party in respect of this First Lien Loan Guaranty until the occurrence of the Termination
Date; provided that if any amount shall be paid to such Loan Guarantor on account of such subrogation rights at any time
prior to the Termination Date, then unless such Loan Guarantor has already discharged its liabilities under this First Lien Loan
Guaranty in an amount equal to such Loan Guarantor’s Maximum Liability as of such date, such amount shall be held in trust
for the benefit of the Secured Parties and shall forthwith be paid to the Administrative Agent (for the benefit of the Secured
Parties) to be credited and applied to the Guaranteed Obligations, whether matured or unmatured, in accordance with Section
2.18(b) of the First Lien Credit Agreement.
Section 2.07. Reinstatement;
Stay of Acceleration. If at any time any payment of any portion of the Guaranteed Obligations is rescinded or must otherwise
be restored or returned upon the insolvency, bankruptcy or reorganization of the Borrower or otherwise, each Loan Guarantor’s
obligations under this First Lien Loan Guaranty with respect to that payment shall be reinstated at such time as though the payment
had not been made. If acceleration of the time for payment of any of the Guaranteed Obligations is stayed upon the insolvency,
bankruptcy or reorganization of the Borrower, all such amounts otherwise subject to acceleration under the terms of any agreement
relating to the Guaranteed Obligations shall nonetheless be payable by the other Loan Guarantors forthwith on demand by the Administrative
Agent.
Section 2.08. Information.
Each Loan Guarantor assumes all responsibility for being and keeping itself informed of the Borrower’s financial condition
and assets, and of all other circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations and the nature, scope
and extent of the risks that each Loan Guarantor assumes and incurs under this First Lien Loan Guaranty, and agrees that none of
the Administrative Agent, any Lender or any other Secured Party shall have any duty to advise any Loan Guarantor of information
known to it regarding those circumstances or risks.
Section 2.09. Contribution;
Subordination; Maximum Liability.
(a) In
the event any Loan Guarantor (a “Paying Guarantor”) makes any payment or payments under this First Lien
Loan Guaranty or suffers any loss as a result of any realization upon any Collateral granted by it to secure its obligations
under this First Lien Loan Guaranty (each such payment or loss, an “Accommodation Payment”), each other
Loan Guarantor (each a “Non-Paying Guarantor”) shall contribute to such Paying Guarantor an amount
equal to such Non-Paying Guarantor’s Guarantor Percentage of such Accommodation Payments by such Paying Guarantor.
For purposes of this Section 2.09, each Non-Paying Guarantor’s “Guarantor Percentage”
with respect to any such Accommodation Payments by a Paying Guarantor shall be determined as of the date on which such
Accommodation Payment was made by reference to the ratio of (i) such Non-Paying Guarantor’s Maximum Liability as of
such date to (ii) the aggregate Maximum Liability of all Loan Guarantors hereunder (including such Paying Guarantor) as of
such date. As of any date of determination, the “Maximum Liability” of each Loan Guarantor shall be equal
to the maximum amount of liability which could be asserted against such Loan Guarantor hereunder and under the First Lien
Credit Agreement without (x) rendering such Loan Guarantor “insolvent” within the meaning of Section 101(32) of
the Bankruptcy Code, Section 2 of the Uniform Fraudulent Transfer Act (“UFTA”) or Section 2 of the Uniform
Fraud Conveyance Act (“UFCA”), (y) leaving such Loan Guarantor with unreasonably small capital or assets,
within the meaning of Section 548 of the Bankruptcy Code, Section 4 of the UFTA or Section 5 of the UFCA, or (z) leaving such
Loan Guarantor unable to pay its debts as they become due within the meaning of Section 548 of the Bankruptcy Code, Section 4
of the UFTA or Section 5 of the UFCA. Nothing in this provision shall affect any Loan Guarantor’s several liability for
the entire amount of the Guaranteed Obligations (up to such Loan Guarantor’s Maximum Liability). Each of the Loan
Guarantors covenants and agrees that its right to receive any contribution under this First Lien Loan Guaranty from a
Non-Paying Guarantor shall be subordinate and junior in right of payment to the Secured Obligations until the Termination
Date. If, prior to the Termination Date, any such contribution payment is received by a Paying Guarantor at any time when an
Event of Default has occurred and is continuing, such contribution payment shall be collected, enforced and received by such
Loan Guarantor as trustee for the Secured Parties and be paid over to the Administrative Agent on account of the Secured
Obligations, but without affecting or impairing in any manner the liability of such Loan Guarantor under the other provisions
of this First Lien Loan Guaranty. No failure on the part of any Loan Guarantor to make the payments required by this Section
2.09 (or any other payments required under applicable law or otherwise) shall in any respect limit the obligations and
liabilities of any Loan Guarantor with respect to its obligations hereunder, and each Loan Guarantor shall remain liable for
the full amount of the obligations of such Loan Guarantor hereunder. Each Loan Guarantor hereby agrees that upon the
occurrence and during the continuance of an Event of Default and after notice from the Administrative Agent to Holdings
(provided that no such notice shall be required to be given in the case of any Event of Default arising under Section 7.01(f)
or 7.01(g) of the Credit Agreement), all Indebtedness and other monetary obligations owed by it to, or to it by, any other
Loan Guarantor or any other Subsidiary shall be fully subordinated to the payment in full in cash of all the Secured
Obligations. This provision is for the benefit of the Administrative Agent, the Lenders and the other Secured Parties.
(b) It
is the desire and intent of the Loan Guarantors and the Secured Parties that this First Lien Loan Guaranty shall be enforced against
the Loan Guarantors to the fullest extent permissible under the Requirements of Law and public policies applied in each jurisdiction
in which enforcement is sought. The provisions of this First Lien Loan Guaranty are severable, and in any action or proceeding
involving any state corporate law, or any state, Federal or foreign bankruptcy, insolvency, reorganization or other Requirements
of Law affecting the rights of creditors generally, if the obligations of any Loan Guarantor under this First Lien Loan Guaranty
would otherwise be held or determined to be avoidable, invalid or unenforceable on account of the amount of such Loan Guarantor’s
liability under this First Lien Loan Guaranty, then, notwithstanding any other provision of this First Lien Loan Guaranty to the
contrary, the amount of such liability shall, without any further action by the Loan Guarantors or the Secured Parties, be automatically
limited and reduced to such Loan Guarantor’s Maximum Liability. Each Loan Guarantor agrees that the Guaranteed Obligations
may at any time and from time to time exceed the Maximum Liability of each Loan Guarantor without impairing this First Lien Loan
Guaranty or affecting the rights and remedies of the Administrative Agent hereunder; provided that nothing in this sentence
shall be construed to increase any Loan Guarantor’s obligations hereunder beyond its Maximum Liability.
Section 2.10. Representations
and Warranties. As and when required in accordance with the terms of the First Lien Credit Agreement, each Loan Guarantor hereby
makes each representation and warranty made in the Loan Documents by Holdings and the Borrower with respect to such Loan Guarantor,
as applicable, and each Loan Guarantor hereby further acknowledges and agrees with respect to itself that such Loan Guarantor has,
independently and without reliance upon any Secured Party and based on such documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into this First Lien Loan Guaranty and each other Loan Document to which it
is or is to be a party, and such Loan Guarantor has established adequate means of obtaining from each other Loan Guarantor on a
continuing basis information pertaining to the business, condition (financial or otherwise), operations, performance, properties
and prospects of each other Loan Guarantor.
Section
2.11. Covenants. Each Loan Guarantor covenants and agrees that until the Termination Date, such
Loan Guarantor will perform and observe, and cause each of its Restricted Subsidiaries to perform and observe, all of the
terms, covenants and agreements set forth in the Loan Documents that the Borrower has agreed to cause such Loan Guarantor or
such Restricted Subsidiary to perform or observe. Until the Termination Date, no Loan Guarantor shall, without the prior
written consent of the Administrative Agent, commence or join with any other Person in commencing any bankruptcy,
reorganization or insolvency case or proceeding against the Borrower or any Loan Guarantor (it being understood and agreed,
for the avoidance of doubt, that nothing in this Section 2.11 shall prohibit any Loan Guarantor from commencing or
joining with the Borrower or Loan Guarantor as a co-debtor in any bankruptcy, reorganization or insolvency case or
proceeding).
ARTICLE 3
GENERAL PROVISIONS
Section 3.01. Liability
Cumulative. The liability of each Loan Guarantor under this First Lien Loan Guaranty is in addition to and shall be cumulative
with all liabilities of such Loan Guarantor to the Administrative Agent and the Lenders under the First Lien Credit Agreement and
the other Loan Documents to which such Loan Guarantor is a party or in respect of any obligations or liabilities of the other Loan
Guarantors, without any limitation as to amount, unless the instrument or agreement evidencing or creating such other liability
specifically provides to the contrary.
Section 3.02. No
Waiver; Amendments. No delay or omission of the Administrative Agent in exercising any right or remedy granted under this First
Lien Loan Guaranty shall impair such right or remedy or be construed to be a waiver of any Default or Event of Default or an acquiescence
therein, and any single or partial exercise of any such right or remedy shall not preclude any other or further exercise thereof
or the exercise of any other right or remedy. No waiver, amendment or other variation of the terms, conditions or provisions of
this First Lien Loan Guaranty whatsoever shall be valid unless in writing signed by the Loan Guarantors and the Administrative
Agent with the concurrence or at the direction of the Lenders to the extent required under or otherwise in accordance with Section
9.02 of the First Lien Credit Agreement and then only to the extent specifically set forth in such writing.
Section 3.03. Severability
of Provisions. To the extent permitted by applicable Requirements of Law, any provision of this First Lien Loan Guaranty held
to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such
invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions
of this First Lien Loan Guaranty; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate
such provision in any other jurisdiction.
Section 3.04. Additional
Subsidiaries. Certain Restricted Subsidiaries of the Borrower may be required to enter into this First Lien Loan Guaranty pursuant
to and in accordance with Section 5.12 of the First Lien Credit Agreement. Upon execution and delivery by the Administrative
Agent and such Restricted Subsidiary of an instrument in substantially the form of Exhibit A hereto (each, a “Guaranty
Supplement”), such Restricted Subsidiary shall become a Subsidiary Guarantor hereunder with the same force and effect
as if originally named as a Loan Guarantor herein. The execution and delivery of any such instrument shall not require the consent
of any other Loan Guarantor hereunder or any other Person. The rights and obligations of each Loan Guarantor hereunder shall remain
in full force and effect notwithstanding the addition of any new Loan Guarantor as a party to this First Lien Loan Guaranty.
Section 3.05. Headings.
The titles of and section headings in this First Lien Loan Guaranty are for convenience of reference only, and shall not govern
the interpretation of any of the terms and provisions of this First Lien Loan Guaranty.
Section 3.06. Entire
Agreement. This First Lien Loan Guaranty and the other Loan Documents constitute the entire agreement among the parties relating
to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the
subject matter hereof.
Section 3.07. CHOICE
OF LAW. THIS FIRST LIEN LOAN GUARANTY AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS FIRST LIEN LOAN
GUARANTY, WHETHER IN TORT, CONTRACT (AT LAW OR IN EQUITY) OR OTHERWISE, SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
Section 3.08. CONSENT
TO JURISDICTION; CONSENT TO SERVICE OF PROCESS.
(a) EACH
PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION OF ANY
U.S. FEDERAL OR NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN, IN THE CITY OF NEW YORK (OR ANY APPELLATE COURT THEREFROM)
OVER ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS FIRST LIEN LOAN GUARANTY AND AGREES THAT ALL CLAIMS IN RESPECT
OF ANY SUCH ACTION OR PROCEEDING SHALL (EXCEPT AS PERMITTED BELOW) BE HEARD AND DETERMINED IN SUCH NEW YORK STATE OR, TO THE EXTENT
PERMITTED BY APPLICABLE REQUIREMENTS OF LAW, IN SUCH FEDERAL COURT. EACH PARTY HERETO AGREES THAT SERVICE OF ANY PROCESS, SUMMONS,
NOTICE OR DOCUMENTS BY REGISTERED MAIL ADDRESSED TO SUCH PERSON SHALL BE EFFECTIVE SERVICE OF PROCESS AGAINST SUCH PERSON FOR ANY
SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT. EACH PARTY HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING
MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY APPLICABLE REQUIREMENTS OF LAW.
(b) EACH
PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
FIRST LIEN LOAN GUARANTY AND BROUGHT IN ANY COURT REFERRED TO IN PARAGRAPH (a) OF THIS SECTION. EACH PARTY HERETO HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE REQUIREMENTS OF LAW, ANY CLAIM OR DEFENSE OF AN INCONVENIENT
FORUM TO THE MAINTENANCE OF SUCH ACTION, SUIT OR PROCEEDING IN ANY SUCH COURT.
(c) TO
THE EXTENT PERMITTED BY APPLICABLE REQUIREMENTS OF LAW, EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF ANY AND
ALL PROCESS UPON IT AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY REGISTERED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM
OF MAIL) DIRECTED TO IT AT ITS ADDRESS FOR NOTICES AS PROVIDED FOR IN SECTION 9.01 OF THE FIRST LIEN CREDIT AGREEMENT. EACH
PARTY HERETO HEREBY WAIVES ANY OBJECTION TO SUCH SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM
IN ANY ACTION OR PROCEEDING COMMENCED HEREUNDER THAT SERVICE OF PROCESS WAS INVALID AND INEFFECTIVE. NOTHING IN THIS FIRST LIEN
LOAN GUARANTY WILL AFFECT THE RIGHT OF ANY PARTY TO THIS FIRST LIEN LOAN GUARANTY TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED
BY LAW.
Section 3.09. WAIVER
OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
REQUIREMENTS OF LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY SUIT, ACTION, LEGAL PROCEEDING OR COUNTERCLAIM (WHETHER BASED
ON CONTRACT, TORT OR ANY OTHER THEORY) DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS FIRST LIEN LOAN GUARANTY, ANY
OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE,
AGENT OR ATTORNEY OF ANY OTHER PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT
OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED
TO ENTER INTO THIS FIRST LIEN LOAN GUARANTY BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
Section 3.10. Indemnity.
Each Loan Guarantor hereby agrees to indemnify the Administrative Agent and the other Indemnitees, as set forth in Section 9.03
of the First Lien Credit Agreement.
Section 3.11. Counterparts.
This First Lien Loan Guaranty may be executed in counterparts (and by different parties hereto on different counterparts), each
of which shall constitute an original, but all of which when taken together shall constitute a single contract. Delivery of an
executed counterpart of a signature page of this First Lien Loan Guaranty by facsimile or by email as a “.pdf’ or “tif’
attachment shall be effective as delivery of a manually executed counterpart of this First Lien Loan Guaranty.
Section
3.12. Successors and Assigns. Whenever in this First Lien Loan Guaranty any of the
parties hereto is referred to, such reference shall be deemed to include the permitted successors and assigns of such party;
and all covenants, promises and agreements by or on behalf of any Loan Guarantor or the Administrative Agent that are
contained in this First Lien Loan Guaranty shall bind and inure to the benefit of their respective successors and permitted
assigns. Except in a transaction permitted (or not prohibited) under the First Lien Credit Agreement, no Loan Guarantor may
assign any of its rights or obligations hereunder without the written consent of the Administrative Agent.
Section 3.13. Survival
of Agreement. Without limitation of any provision of the First Lien Credit Agreement or Section 3.10 hereof, all covenants,
agreements, indemnities, representations and warranties made by the Loan Guarantors in the Loan Documents and in the certificates
or other instruments delivered in connection with or pursuant to this First Lien Loan Guaranty or any other Loan Document shall
be considered to have been relied upon by the Lenders and shall survive the execution and delivery of the Loan Documents and the
making of any Loans, regardless of any investigation made by any such Lender or on its behalf and notwithstanding that the Administrative
Agent or any Lender may have had notice or knowledge of any Default or Event of Default or incorrect representation or warranty
at the time any credit is extended under the First Lien Credit Agreement, and shall continue in full force and effect until the
Termination Date, or with respect to any individual Loan Guarantor until such Loan Guarantor is otherwise released from its obligations
under this First Lien Loan Guaranty in accordance with Section 3.14.
Section 3.14. Release
of Loan Guarantors. A Subsidiary Guarantor shall automatically be released from its obligations hereunder and its First Lien
Loan Guaranty shall be automatically released in the circumstances described in Article 8 and Section 9.22 of the
First Lien Credit Agreement. In connection with any such release, the Administrative Agent shall promptly execute and deliver to
any Loan Guarantor, at such Loan Guarantor’s expense, all documents that such Loan Guarantor shall reasonably request to
evidence such termination or release. Any execution and delivery of documents pursuant to the preceding sentence of this Section
3.14 shall be without recourse to or warranty by the Administrative Agent (other than as to the Administrative Agent’s
authority to execute and deliver such documents).
Section 3.15. Payments.
All payments made by any Loan Guarantor hereunder will be made without setoff, counterclaim or other defense and on the same basis
as payments are made by the Borrower under Sections 2.18 and 2.19 of the First Lien Credit Agreement.
Section 3.16. Notice,
etc. All notices and other communications provided for hereunder shall be in writing and shall be delivered by hand or overnight
courier service, mailed by certified or registered mail or sent by facsimile or email, as follows:
(a) if
to any Loan Guarantor, addressed to it in care of the Borrower at its address specified in Section 9.01 of the First Lien
Credit Agreement;
(b) if
to the Administrative Agent or any Lender, at its address specified in Section 9.01 of the First Lien Credit Agreement;
(c) if
to any Secured Party in respect of any Secured Hedging Obligations, at its address specified in the Hedge Agreement to which it
is a party; or
(d) if
to any Secured Party in respect of any Banking Services Obligations, at its address specified in the relevant documentation to
which it is a party.
Section 3.17. Set
Off. In addition to any rights now or hereafter granted under applicable Requirements of Law and not by way of limitation of
any such rights, while an Event of Default has occurred and is continuing, the Administrative Agent, each Lender, each letter of
credit issuer under any Additional Revolving Facility and each of their respective Affiliates shall be entitled to rights of setoff
to the extent provided in Section 9.09 of the First Lien Credit Agreement.
Section 3.18. Waiver
of Consequential Damages, Etc. To the extent permitted by applicable Requirements of Law, none of the Loan Guarantors nor
the Secured Parties shall assert, and each hereby waives, any claim against each other or any Related Party thereof, on any theory
of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of,
in connection with, or as a result of, this First Lien Loan Guaranty or any agreement or instrument contemplated hereby, except,
in the case of any claim by any Indemnitee against any of the Loan Guarantors, to the extent such damages would otherwise be subject
to indemnification pursuant to the terms of Section 3.10.
Section 3.19. Keepwell.
Each Qualified ECP Guarantor hereby jointly and severally, absolutely, unconditionally and irrevocably undertakes to provide such
funds or other support as may be needed from time to time by each Non-ECP Guarantor to honor all of its obligations under this
First Lien Loan Guaranty in respect of Swap Obligations that would otherwise be Excluded Swap Obligations (provided, however,
that each Qualified ECP Guarantor shall only be liable under this Section 3.19 for the maximum amount of such liability
that can be hereby incurred, and otherwise subject to the limitations on the obligations of Loan Guarantors contained in this First
Lien Loan Guaranty, without rendering its obligations under this Section 3.19, or otherwise under this First Lien Loan Guaranty,
voidable under applicable Requirements of Law relating to fraudulent conveyance or fraudulent transfer, and not for any greater
amount). This Section 3.19 shall be deemed to constitute, a “keepwell, support, or other agreement” for the
benefit of each Non-ECP Guarantor for all purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.
[SIGNATURE PAGE
FOLLOWS]
IN WITNESS WHEREOF,
each Loan Guarantor and the Administrative Agent have executed this First Lien Loan Guaranty as of the date first above written.
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HOLDINGS
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HAYWARD INTERMEDIATE, INC.
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By:
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Name:
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Title:
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BORROWER
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HAYWARD ACQUISITION CORP.
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By:
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Name:
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Title:
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Signature
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SUBSIDIARY GUARANTORS
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GOLDLINE PROPERTIES LLC
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By:
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Name:
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Title:
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HAYWARD INDUSTRIAL PRODUCTS, INC.
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Name:
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HAYWARD / WRIGHT-AUSTIN INC.
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Name:
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WEBSTER PUMPS, INC.
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Signature
Page To First Lien Loan Guaranty
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BANK OF AMERICA, N.A.,
as Administrative Agent
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By:
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Name:
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Signature
Page To First Lien Loan Guaranty
EXHIBIT
A
JOINDER
AGREEMENT
THIS JOINDER AGREEMENT
(this “Agreement”) NO. [●], dated as of [●] [●], 20[●], is entered into among [●],
a [●] ([each, a] [the] “New Subsidiary”), and acknowledged and accepted by Bank of America, N.A., as
administrative agent and collateral agent (together with its successors and permitted assigns in such capacities, the “Administrative
Agent”), pursuant to that certain First Lien Loan Guaranty, dated as of August 4, 2017 (as amended, restated, amended
and restated, supplemented or otherwise modified from time to time, the “First Lien Loan Guaranty”), by and
among Hayward Intermediate, Inc., a Delaware corporation (“Holdings”), the other Loan Guarantors from time
to time party thereto and the Administrative Agent. All capitalized terms used herein and not otherwise defined herein shall have
the meanings set forth in the First Lien Loan Guaranty.
[Each] [The] New Subsidiary
and the Administrative Agent, for the benefit of the Secured Parties, hereby agree as follows:
1. [Each]
[The] New Subsidiary hereby acknowledges, agrees and confirms that, by its execution of this Agreement, [each] [the] New Subsidiary
will be deemed to be a Loan Guarantor under the First Lien Loan Guaranty and a Loan Guarantor for all purposes of the First Lien
Credit Agreement and shall have all of the rights, benefits, duties and obligations of a Loan Guarantor thereunder as if it had
executed the First Lien Loan Guaranty. [Each] [The] New Subsidiary hereby ratifies, as of the date hereof, and agrees to be bound
by, all of the terms, provisions and conditions contained in the First Lien Loan Guaranty. Without limiting the generality of
the foregoing terms of this paragraph 1, [each] [the] New Subsidiary hereby absolutely and unconditionally guarantees,
jointly and severally with the other Loan Guarantors, to the Administrative Agent and the Secured Parties, the prompt payment
and performance of the Guaranteed Obligations in full when due (whether at stated maturity, upon acceleration or otherwise) to
the extent of and in accordance with the First Lien Loan Guaranty.
2. [Each]
[The] New Subsidiary hereby waives acceptance by the Administrative Agent and the Secured Parties of the guaranty by [each] [the]
New Subsidiary upon the execution of this Agreement by the New Subsidiary.
3. [Each]
[The] New Subsidiary hereby (x) makes, as of the date hereof, each representation and warranty set forth in Section 2.10
of the First Lien Loan Guaranty and (y) agrees to perform and observe, and to cause each of its Restricted Subsidiaries to perform
and observe, the covenants set forth in Section 2.11 of the First Lien Loan Guaranty.
4. From
and after the execution and delivery hereof by the parties hereto, this Agreement shall constitute a “Loan Document”
for all purposes of the First Lien Credit Agreement and the other Loan Documents.
5. This
Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but
all of which shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page of this Agreement
by facsimile or by email as a “.pdf’ or “.tif’ attachment shall be effective as delivery of a manually
executed counterpart of this Agreement.
6. THIS
AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS
OF THE STATE OF NEW YORK.
[Signature Page Follows]
IN WITNESS WHEREOF, [each] [the] New Subsidiary
has caused this Agreement to be duly executed by its authorized officer, and the Administrative Agent, for the benefit of the
Secured Parties, has caused the same to be accepted by its authorized officer, as of the day and year first above written.
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[NEW SUBSIDIARY]
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By:
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Acknowledged and accepted:
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BANK OF AMERICA, N.A., as Administrative Agent
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By:
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EXHIBIT I
[FORM OF]
SECURITY AGREEMENT
[ATTACHED]
Execution Version
FIRST LIEN
PLEDGE AND SECURITY AGREEMENT
FIRST LIEN PLEDGE
AND SECURITY AGREEMENT dated as of August 4, 2017 (as amended, restated, amended and restated, supplemented or otherwise modified
from time to time, this “Security Agreement”), by and among Hayward Acquisition Corp., a New Jersey corporation
(the “Initial Borrower”), Hayward Industries, Inc., a New Jersey corporation (upon merging with the Initial
Borrower pursuant to the Merger (as defined in the First Lien Credit Agreement) and as survivor of the Merger, the “Borrower”),
Hayward Intermediate, Inc., a Delaware corporation (“Holdings”), the other Grantors (as defined below) and
Bank of America, N.A., in its capacities as administrative agent and collateral agent (together with its successors and permitted
assigns in such capacities, the “Administrative Agent”) for the Secured Parties under that certain First Lien
Credit Agreement, dated as of August 4, 2017 (as amended, restated, amended and restated, supplemented or otherwise modified from
time to time, the “First Lien Credit Agreement”), by and among Holdings, the Initial Borrower, the Borrower,
the Administrative Agent and the Lenders from time to time parties thereto.
PRELIMINARY
STATEMENT
WHEREAS, the Grantors
(as defined below) are entering into this Security Agreement in order to induce the Lenders to enter into and extend credit to
the Borrower under the First Lien Credit Agreement and to secure the Secured Obligations, including, their obligations under the
Loan Guaranty, each Hedge Agreement, the obligations under which constitute Secured Hedging Obligations, and each agreement relating
to Banking Services, the obligations under which constitute Banking Services Obligations;
WHEREAS, the ABL Intercreditor
Agreement governs the relative rights and priorities of the Term Secured Parties and the ABL Secured Parties in respect of the
Term Priority Collateral and the ABL Priority Collateral (as each term is defined therein); and
WHEREAS, the Term
Intercreditor Agreement governs the relative rights and priorities of the First Priority Secured Parties and the Second Priority
Secured Parties (as each term is defined therein) in respect of the Collateral;
ACCORDINGLY, the parties
hereto agree as follows:
ARTICLE 1
Definitions
Section 1.01. Terms
Defined in First Lien Credit Agreement. Except as set forth in Section 1.02 below, capitalized terms used herein and
not otherwise defined herein shall have the meanings assigned to such terms in the First Lien Credit Agreement. The rules of construction
set forth in Section 1.03, Section 1.07 and Section 1.10 of the First Lien Credit Agreement shall apply to
this Security Agreement as if specifically incorporated herein, mutatis mutandis.
Section 1.02. Terms
Defined in UCC. Terms defined in the UCC that are not otherwise defined in this Security Agreement or the First Lien Credit
Agreement are used herein as defined in Articles 8 or 9 of the UCC, as the context may require (including without limitation,
as if such terms were capitalized in Article 8 or 9 of the UCC, as the context may require, the following terms: “Account,”
“Chattel Paper,” “Commercial Tort Claim,” “Document,” “Electronic
Chattel Paper,” “Equipment,” “Fixture,” “General Intangible,”
“Goods,” “Instruments,” “Inventory,” “Letter-of-Credit Right,”
“Supporting Obligation” and “Tangible Chattel Paper”).
Section 1.03. Definitions
of Certain Terms Used Herein. As used in this Security Agreement, in addition to the terms defined in the preamble and the
Preliminary Statement above, the following terms shall have the following meanings:
“ABL Loan
Documents” means the “Loan Documents” as defined in the ABL Credit Agreement.
“ABL US Collateral”
has the meaning specified to ABL US Priority Collateral in the First Lien Credit Agreement.
“Administrative
Agent” has the meaning set forth in the preamble.
“Article”
means a numbered article of this Security Agreement, unless another document is specifically referenced.
“Borrower”
has the meaning set forth in the preamble.
“Collateral”
has the meaning set forth in Article 2.
“Contract
Rights” means all rights of any Grantor under any Contract, including, without limitation, (i) any and all rights to
receive and demand payments under such Contract, (ii) any and all rights to receive and compel performance under such Contract
and (iii) any and all other rights, interests and claims now existing or in the future arising in connection with such Contract.
“Contracts”
means all contracts between any Grantor and one or more additional parties (including, without limitation, any Hedge Agreement,
licensing agreement and any partnership agreement, joint venture agreement and/or limited liability company agreement).
“Control”
has the meaning set forth in Article 8 or, if applicable, in Section 9-104, 9-105, 9-106 or 9-107 of Article 9
of the UCC.
“Copyrights”
means, with respect to any Grantor, all of such Grantor’s right, title and interest in and to all Copyrights (as such term
is defined in the First Lien Credit Agreement).
“Discharge
of ABL Obligations” has the meaning given to such term in the ABL Intercreditor Agreement.
“Domain Names”
means all Internet domain names and associated URL addresses in or to which any Grantor now or hereafter has any right, title
or interest.
“Exhibit”
refers to a specific exhibit to this Security Agreement, unless another document is specifically referenced.
“First Lien
Credit Agreement” has the meaning set forth in the Preliminary Statement.
“Grantors”
means (i) Holdings, the Initial Borrower, the Borrower and the Subsidiary Guarantors party to this Security Agreement on the Closing
Date and (ii) each Subsidiary Guarantor that becomes a party to this Security Agreement as a Grantor after the Closing Date in
accordance with Section 7.10 of this Security Agreement and Section 5.12 of the First Lien Credit Agreement. Notwithstanding
anything else provided herein, any reference to Grantors in connection with a representation or covenant under this Security Agreement
that is limited by its terms to the Closing Date shall, for such purposes, mean the Grantors on the Closing Date.
“Holdings”
has the meaning set forth in the preamble.
“Intellectual
Property Collateral” means collectively, all (a) Copyrights, Patents, Trademarks, Trade Secrets, Domain Names, Licenses
and Software and any and all other IP Rights; (b) all income, royalties, damages, claims and payments now or hereafter due and/or
payable with respect to any of the foregoing, including, without limitation, damages, claims and payments for past, present and
future infringements, misappropriation, dilution or other violations of any of the foregoing; (c) all rights to sue for past,
present and future infringements, misappropriation, dilution or other violations of any of the foregoing; and (d) all rights corresponding
to any of the foregoing.
“Intellectual
Property Security Agreement Supplements” means (a) a Trademark Security Agreement Supplement, (b) a Patent Security
Agreement Supplement or (c) a Copyright Security Agreement Supplement, in each case, substantially in the form of Annex A
to the relevant Intellectual Property Security Agreement, as applicable.
“Licenses”
means, with respect to any Grantor, whether as licensor or licensee, all of such Grantor’s right, title, and interest in
and to (a) any and all licensing agreements or similar arrangements with respect to (1) Patents, (2) Copyrights, (3) Trademarks,
(4) Trade Secrets, (5) Software, or (6) any and all other IP Rights, (b) all income, royalties, damages, claims and payments now
or hereafter due and/or payable with respect to any of the foregoing, including, without limitation, damages, claims and payments
for past, present and future breaches thereof, (c) all rights to sue for past, present and future breaches thereof, and (d) all
rights corresponding to any of the foregoing.
“Money”
has the meaning set forth in Article 1 of the UCC.
“Patents”
means, with respect to any Grantor, all of such Grantor’s right, title and interest in and to all Patents (as such term
is defined in the First Lien Credit Agreement).
“Perfection
Certificate” means the Perfection Certificate delivered pursuant to Section 4.01(i) of the First Lien Credit
Agreement, as modified and supplemented from time to time as a result of the delivery of any Perfection Certificate Supplement
pursuant to Section 5.01(c) of the First Lien Credit Agreement.
“Permits”
shall mean all licenses, permits, rights, orders, variances, franchises or authorizations of or from any Governmental Authority.
“Pledged
Collateral” means all Pledged Stock and Stock Rights, including all stock certificates, options or rights of any nature
whatsoever in respect of the Pledged Stock or other Stock Rights that may be issued or granted to, or held by, any Grantor while
this Security Agreement is in effect, all Instruments, Securities and other Investment Property owned by any Grantor, whether
or not physically delivered to the Administrative Agent pursuant to this Security Agreement, whether now owned or hereafter acquired
by such Grantor and any and all Proceeds thereof, but in any case, excluding any items constituting Excluded Assets as expressly
limited or excluded by the definition of “Collateral and Guarantee Requirement” in the First Lien Credit Agreement.
“Pledged
Stock” means, with respect to any Grantor, the shares of Capital Stock described in Schedule 3 to the Perfection
Certificate as held by such Grantor, together with any other shares of Capital Stock as are hereafter acquired by such Grantor,
excluding any items constituting Excluded Assets.
“Proceeds”
has the meaning assigned in Article 9 of the UCC and, in any event, shall also include but not be limited to (i) any and all proceeds
of any insurance, indemnity, warranty or guaranty payable to the Administrative Agent or any Grantor from time to time with respect
to any of the Collateral, (ii) any and all payments (in any form whatsoever) made or due and payable to any Grantor from time
to time in connection with any requisition, confiscation, condemnation, seizure or forfeiture of all or any part of the Collateral
by any Governmental Authority (or any Person acting under color of Governmental Authority), (iii) any and all Stock Rights and
(iv) any and all other amounts from time to time paid or payable under or in connection with any of the Collateral.
“Receivables”
means any Account, Chattel Paper, Document, Instrument and/or any General Intangible, in each case, that is a right or claim to
receive money or that is otherwise included as Collateral, but in any case, excluding any item constituting Excluded Assets.
“Second Lien
Loan Documents” means the “Loan Documents” as defined in the Second Lien Credit Agreement.
“Section”
means a numbered section of this Security Agreement, unless another document is specifically referenced.
“Security
Agreement” has the meaning set forth in the preamble.
“Software”
means computer programs, source code, object code and supporting documentation including “software” as such term is
defined in Article 9 of the UCC, as well as computer programs that may be construed as included in the definition of Goods.
“Stock Rights”
means all dividends, warrants, instruments or other distributions and any other right or property which any Grantor shall receive
or shall become entitled to receive for any reason whatsoever with respect to, in substitution for or in exchange for any Capital
Stock constituting Collateral, any right to receive any Capital Stock constituting Collateral and any right to receive earnings,
in which such Grantor now has or hereafter acquires any right, issued by an issuer of such Capital Stock.
“Trade Secrets”
means, with respect to any Grantor, all of such Grantor’s right, title and interest in and to the following: (a) confidential
and proprietary information, including unpatented inventions, invention disclosures, engineering or other data, information, production
procedures, know-how, financial data, customer lists, supplier lists, business and marketing plans, processes, schematics,
algorithms, techniques, analyses, proposals, source code and data collections; (b) all income, royalties, damages, claims and
payments now or hereafter due and/or payable with respect to any of the foregoing, including, without limitation, damages, claims
and payments for past, present and future misappropriation or infringements of any of the foregoing; (c) all rights to sue for
past, present and future misappropriation or infringements of any of the foregoing, including the right to settle suits involving
claims and demands for royalties owing; and (d) all rights corresponding to any of the foregoing.
“Trademarks”
means, with respect to any Grantor, all of such Grantor’s right, title and interest in and to all Trademarks (as such term
is defined in the First Lien Credit Agreement).
ARTICLE 2
Grant of Security Interest
Section 2.01. Grant
of Security Interest.
(a) As
security for the prompt and complete payment or performance, as the case may be, in full of the Secured Obligations, each Grantor
hereby pledges, collaterally assigns, mortgages, transfers and grants to the Administrative Agent, its successors and permitted
assigns, on behalf of and for the benefit of the Secured Parties, a continuing security interest in all of its right, title and
interest in, to and under all of the following personal property and other assets, whether now owned by or owing to, or hereafter
acquired by or arising in favor of such Grantor, and regardless of where located (all of which are collectively referred to as
the “Collateral”):
(i) all
Accounts;
(ii) all
Chattel Paper (including, without limitation, all Tangible Chattel Paper and all Electronic Chattel Paper);
(iii) all
Intellectual Property Collateral;
(iv) all
Documents;
(v) all
Equipment;
(vi) all
Fixtures;
(vii) all
General Intangibles;
(viii) all
Goods;
(ix) all
Instruments;
(x) all
Inventory;
(xi) all
Investment Property, Pledged Stock and other Pledged Collateral;
(xii) all
letters of credit and Letter-of-Credit Rights;
(xiii) all
Commercial Tort Claims described on Schedule 6 to the Perfection Certificate (including any supplements to such schedule);
(xiv) all
Permits;
(xv) all
Software and all recorded data of any kind or nature, regardless of the
medium of
recording;
(xvi) all
Contracts, together with all Contract Rights arising thereunder;
(xvii) all
other personal property not otherwise described in clauses (i) through (xvi) above;
(xviii) all
Supporting Obligations;
(xix) to
the extent constituting ABL US Collateral, Deposit Accounts, Securities Accounts, all cash, Money, Securities and other investments
therein, and all Security Entitlements in respect thereof; and
(xx) all
accessions to, substitutions and replacements for and Proceeds and products of the foregoing, together with all books and records,
customer lists, credit files, computer files, programs, printouts and other computer materials and records related thereto and
any General Intangibles at any time evidencing or relating to any of the foregoing and all collateral security and Guarantees
given by any Person with respect to any of the foregoing.
(b) Notwithstanding
the foregoing, no Lien or security interest is granted hereunder on any Excluded Asset and the term “Collateral” (and
any component definition thereof) shall not include any Excluded Asset or any other asset to the extent expressly limited or excluded
by the definition of “Collateral and Guarantee Requirement” in the First Lien Credit Agreement. Notwithstanding anything
to the contrary contained herein, immediately upon the ineffectiveness, lapse or termination of any restriction or condition set
forth in the definition of “Excluded Assets” in the First Lien Credit Agreement that prevented the grant of a security
interest in any right, interest or other asset that would have, but for such restriction or condition, constituted Collateral,
the Collateral shall include, and the relevant Grantor shall be deemed to have automatically granted a security interest in, all
relevant previously restricted or conditioned rights, interests or other assets, as the case may be, as if such restriction or
condition had never been in effect.
(c) Notwithstanding
anything to the contrary in this Security Agreement or any other Loan Document, no Grantor shall be required to take any action
with respect to the Collateral pledged hereunder (and no Lien on such Collateral shall be required to be perfected and/or First
Priority, as applicable) to the extent such action is inconsistent with Section 5.12 of the First Lien Credit Agreement
or the Perfection Requirements (and is in accordance with applicable Requirements of Law). With respect to any Collateral that
is ABL US Collateral, to the extent the ABL Agent determines that any property or assets shall not become part of, or shall be
excluded from, the ABL US Collateral because it constitutes “Excluded Assets” (as defined in the ABL Credit Agreement),
or that any delivery or notice requirement in respect of any such ABL US Collateral shall be extended or waived, the Administrative
Agent shall automatically be deemed to accept such determination and shall execute any documentation, if applicable, requested
by the Borrower in connection therewith (at the Grantor’s expense).
ARTICLE 3
Representations and Warranties
The Grantors, jointly
and severally, represent and warrant to the Administrative Agent as and when required under the First Lien Credit Agreement, for
the benefit of the Secured Parties, that:
Section 3.01. Title,
Perfection and Priority; Filing Collateral. Subject to the Legal Reservations, this Security Agreement is effective to create
a legal, valid and enforceable Lien on and security interest in the Collateral in favor of the Administrative Agent for the benefit
of the Secured Parties and, subject to the terms of the last paragraph of Section 4.01 of the First Lien Credit Agreement
and Section 2.01(c) of this Security Agreement, the Administrative Agent will have a fully perfected First Priority security
interest in the Collateral securing the Secured Obligations to the extent perfection in such Collateral is required by the Perfection
Requirements upon taking all actions to perfect such Liens as in accordance with this Security Agreement and the Collateral and
Guarantee Requirement.
Section 3.02. Names,
Type and Jurisdiction of Organization, Organizational and Identification Numbers.
(a) (i)
As of the Closing Date, the exact legal name of each Grantor, as such name appears in its respective Organizational Documents
filed with the Secretary of State of such Grantor’s jurisdiction of organization, is set forth in Schedule 1(a) to
the Perfection Certificate and (ii) as of the Closing Date, each Grantor is the type of entity disclosed next to its name in Schedule
1(a) to the Perfection Certificate. Also, as of the Closing Date, set forth in Schedule 1(a) to the Perfection Certificate
is the jurisdiction of organization of each Grantor.
(b) Except
as otherwise disclosed in Schedule 1(d) to the Perfection Certificate, as of the Closing Date, set forth in Schedule
1(b) to the Perfection Certificate is any other legal name that any Grantor has had in the past five years, together with
the date of the relevant change.
(c) As
of the Closing Date, set forth in Schedule 1(c) to the Perfection Certificate is a list of the information required by
Section 1(a) of the Perfection Certificate for any other Person (i) to which any Grantor became the successor by merger,
consolidation or acquisition or (ii) that has been liquidated into, or transferred all or substantially all of its assets to,
any Grantor, at any time within the past five years preceding the Closing Date.
(d) As
of the Closing Date, except as set forth in Schedule 1(d) to the Perfection Certificate or as otherwise disclosed in Schedule
1(c) to the Perfection Certificate, no Grantor has changed its jurisdiction of organization or form of entity at any time
during the past four months.
Section 3.03. Locations.
The address of each Grantor’s chief executive office as of the Closing Date is accurately disclosed on Schedule 2
to the Perfection Certificate.
Section 3.04. Intellectual
Property.
(a) Upon
filing of appropriate financing statements with the Secretary of State (or equivalent office) of the state of organization of
such Grantor and the filing of the applicable Intellectual Property Security Agreement with the United States Copyright Office
or the United States Patent and Trademark Office, as applicable, the Administrative Agent shall have a fully perfected First Priority
Lien on the Collateral constituting United States issued or registered Patents, Trademarks and Copyrights (and applications therefor).
(b) No
Grantor is aware of (i) any third-party claim (A) that any of its owned Patent, Trademark, Domain Name or Copyright registrations
or applications is invalid or unenforceable or (B) challenging such Grantor’s rights to such registrations and applications
or (ii) any basis for such claims with respect to such Grantor, other than, in each case, to the extent any such third-party
claims would not reasonably be expected to have a Material Adverse Effect.
Section 3.05. Pledged
Collateral; Instruments and Chattel Paper. (i) All Pledged Stock has been duly authorized and validly issued (to the extent
such concepts are relevant with respect to such Pledged Stock) by the issuer thereof and is fully paid and non-assessable,
(ii) each Grantor is the direct owner, beneficially and of record, of the Pledged Stock described in Schedule 3 to the
Perfection Certificate as held by such Grantor, (iii) each Grantor holds the Pledged Stock described in Schedule 3 to the
Perfection Certificate as held by such Grantor free and clear of all Liens (other than Permitted Liens), (iv) as of the Closing
Date, subject to the terms of the last paragraph of Section 4.01 of the First Lien Credit Agreement, all certificates or
instruments representing or evidencing the Pledged Collateral which are required to be delivered pursuant to Section 4.02
hereof have been delivered to the Administrative Agent in suitable form for transfer by delivery or accompanied by duly executed
instruments of transfer or assignment in blank and the Administrative Agent has a perfected First Priority security interest therein
to the extent perfection in such Collateral is required by the Perfection Requirements.
Section 3.06. Recourse.
This Security Agreement is made with full recourse to each Grantor and pursuant to and upon all the warranties, representations,
covenants and agreements on the part of such Grantor contained herein, in the Loan Documents and otherwise in writing in connection
herewith and therewith.
ARTICLE 4
Covenants
From the date hereof,
and thereafter until the Termination Date (in each case, subject to Section 2.01(c) of this Security Agreement):
Section 4.01. General.
(a) Authorization
to File Financing Statements; Ratification. Each Grantor hereby (x) authorizes the Administrative Agent to (A) file all financing
statements (including amendments and continuations thereto) with respect to the Collateral naming such Grantor as debtor and the
Administrative Agent as secured party, in form appropriate for filing under the UCC of the relevant jurisdiction, (B) make all
filings with the United States Patent and Trademark Office and the United States Copyright Office (including filing any Intellectual
Property Security Agreement) for the purpose of perfecting, recording, enforcing, maintaining or protecting the Lien of the Administrative
Agent in each Grantor’s United States issued, registered or applied for Patents, Trademarks and Copyrights (in each case,
to the extent constituting Collateral) and naming such Grantor as debtor and the Administrative Agent as secured party and (y)
agrees to take such other actions as required by Section 5.14 of the First Lien Credit Agreement, in each case as may from
time to time be necessary and reasonably requested by the Administrative Agent in order to establish and maintain (subject to
Permitted Liens (to the extent such Permitted Liens are not prohibited from being senior to the Lien granted to the Administrative
Agent hereunder)), valid, enforceable (subject to the Legal Reservations) and perfected First Priority security interest in and
subject, in the case of Pledged Collateral, to Section 4.02 hereof, Control of, the Collateral. Each Grantor shall pay
any applicable filing fees, recordation fees and related expenses relating to its Collateral in accordance with Section 9.03(a)
of the First Lien Credit Agreement. The Administrative Agent may file financing statements in any applicable UCC jurisdiction
and may (i) indicate the Collateral (A) as “all assets” of the applicable Grantor or words of similar effect, regardless
of whether any particular asset comprised in the Collateral falls within the scope of Article 9 of the UCC of such jurisdiction,
or (B) by any other description which reasonably approximates the description contained in this Security Agreement and (ii) contain
any other information required by part 5 of Article 9 of the UCC for the sufficiency or filing office acceptance of any financing
statement or amendment, including (A) in each case to the extent applicable, whether the Grantor is an organization, the type
of organization and any organization identification number issued to the Grantor and (B) in the case of a financing statement
filed as a fixture filing, a sufficient description of the relevant real property to which the Collateral relates. Each Grantor
agrees to furnish any such information to the Administrative Agent promptly upon request.
(b) Further
Assurances. Each Grantor agrees, at its own expense, to take any and all actions reasonably necessary to defend title to the
Collateral against all Persons (other than Persons holding Permitted Liens on such Collateral that have priority over the Administrative
Agent’s Lien) and to defend the security interest of the Administrative Agent in the Collateral and the priority thereof
against any Lien that is not a Permitted Lien.
(c) Change
of Name, Etc. Following the occurrence of a change for which delivery of any notice is required by Section 5.01(i)
of the First Lien Credit Agreement, the relevant Grantor shall promptly make all filings required under the UCC or other applicable
Requirements of Law and take all other actions reasonably requested by the Administrative Agent and deemed by the Administrative
Agent to be necessary or reasonable and appropriate to ensure that the Administrative Agent shall continue at all times following
such change to have a valid, legal, enforceable (subject to the Legal Reservations) and perfected First Priority Lien (subject
to Permitted Liens (to the extent such Permitted Liens are not prohibited from being senior to the Lien granted to the Administrative
Agent hereunder)) in such Collateral for its benefit and the benefit of the other Secured Parties.
Section 4.02. Pledged
Collateral.
(a) Delivery
of Certificated Securities, Tangible Chattel Paper, Instruments and Documents. Each Grantor will, subject to the last paragraph
of Section 4.01 of the First Lien Credit Agreement and the Perfection Requirements, (i) on the Closing Date, deliver to
the Administrative Agent for the benefit of the Secured Parties, the originals of all (x) certificated Pledged Stock and (y) Material
Debt Instruments, in each case under clauses (x) and (y), to the extent constituting Collateral owned by such Grantor as
of the Closing Date, accompanied by undated instruments of transfer or assignment duly executed in blank and (ii) after the Closing
Date, hold in trust for the Administrative Agent upon receipt and, (x) if the event giving rise to the obligation under this Section
4.02(a) occurs during the first three Fiscal Quarters of any Fiscal Year, on or before the date on which financial statements
are required to be delivered pursuant to Section 5.01(a) of the First Lien Credit Agreement for the Fiscal Quarter in which
the relevant event occurred or (y) if the event giving rise to the obligation under this Section 4.02(a) occurs during
the fourth Fiscal Quarter of any Fiscal Year, on or before the date that is 60 days after the end of such Fiscal Quarter (or,
in each of the cases of clauses (x) and (y), such longer period as the Administrative Agent may reasonably agree), deliver
to the Administrative Agent for the benefit of the Secured Parties any (1) certificated Capital Stock and (2) Material Debt Instruments,
in each case, to the extent constituting Collateral received after the date hereof, accompanied by undated instruments of transfer
or assignment duly executed in blank.
(b) Uncertificated
Securities and Pledged Collateral. Except to the extent in connection with any Investment or Disposition permitted by the
First Lien Credit Agreement, with respect to any Capital Stock owned by any Grantor to the extent required to be pledged to the
Administrative Agent pursuant to the terms hereof (other than Capital Stock held by a Clearing Corporation, Securities Intermediary
or other financial intermediary of any kind) which is not a certificated Security for purposes of the UCC, to the extent constituting
Pledged Collateral, such Grantor shall not permit any issuer of such Capital Stock to (i) enter into any agreement with any Person,
other than the Administrative Agent, whereby such issuer effectively delivers “control” of such partnership interests
or limited liability company interests (as applicable) under the UCC to such Person, or (ii) if such Capital Stock is not a Security
for purposes of the UCC, allow such Capital Stock to become Securities unless such Grantor certificates such securities and complies
with the procedures set forth in Section 4.02(a) within the time period prescribed therein. Each Grantor which is an issuer
of any uncertificated Pledged Collateral described in this Section 4.02(b) hereby agrees to comply with all instructions
from the Administrative Agent without such Grantor’s further consent, in each case subject to the notice requirements set
forth in Section 5.01(a)(iv) hereof.
(c) Registration
in Nominee Name; Denominations. The Administrative Agent, on behalf of the Secured Parties, shall hold certificated Pledged
Collateral required to be delivered to the Administrative Agent under clause (a) above in the name of the applicable Grantor,
endorsed or assigned in blank or in favor of the Administrative Agent, but at any time when an Event of Default shall have occurred
and be continuing, and upon prior written notice to the Borrower, the Administrative Agent shall have the right (in its sole and
absolute discretion, but subject to the last paragraph of Section 7.01 of the First Lien Credit Agreement) to hold the
Pledged Collateral in its own name as pledgee, or in the name of its nominee (as pledgee or as sub-agent). At any time when
an Event of Default has occurred and is continuing, but subject to the last paragraph of Section 7.01 of the First Lien
Credit Agreement, the Administrative Agent shall have the right to exchange the certificates representing Pledged Collateral for
certificates of smaller or larger denominations for any purpose consistent with this Security Agreement.
(d) Exercise
of Rights in Pledged Collateral. It is agreed that:
(i) without
in any way limiting the foregoing and subject to clause (ii) below, each Grantor shall have the right, unless an Event
of Default has occurred and is continuing after prior written notice to the Borrower by the Administrative Agent, to exercise
all voting rights or other rights relating to the Pledged Collateral for any purpose that does not violate this Security Agreement,
the First Lien Credit Agreement or any other Loan Document;
(ii) the
Administrative Agent or its nominee at any time when an Event of Default has occurred and is continuing shall have the right to
exercise the rights and remedies provided under Section 5.01(a)(iv) (subject to the notice requirements set forth therein) and
upon the occurrence and during the continuance of an Event of Default after prior written notice to the Borrower, all rights of
the Grantors to exercise or refrain from exercising voting or other consensual rights as a holder with respect to any Pledged
collateral shall cease; and
(iii) subject
to Section 5.01(a)(iv), each Grantor shall be entitled to receive and retain any and all dividends, interest, principal
and other distributions paid on or distributed in respect of the Pledged Collateral (unless, and solely to the extent, otherwise
provided under the First Lien Credit Agreement or the other Loan Documents); provided that any non-cash dividends or
other distributions that would constitute Pledged Collateral, whether resulting from a subdivision, combination or reclassification
of the outstanding Capital Stock of the issuer of any Pledged Collateral or received in exchange for Pledged Collateral or any
part thereof, or in redemption thereof, or as a result of any merger, consolidation, acquisition or other exchange of assets to
which such issuer may be a party or otherwise, shall, to the extent constituting Collateral, hold in trust for the Administrative
Agent and be and become part of the Pledged Collateral, and, if received by any Grantor, shall be delivered to the Administrative
Agent as and to the extent required by clause (a) above. The Administrative Agent shall promptly deliver to the applicable
Grantor (without recourse and without any representation or warranty) any Pledged Collateral in its possession if requested to
be delivered to the issuer or the holder thereof in connection with any redemption or exchange of such Pledged Collateral not
prohibited by the First Lien Credit Agreement (unless the First Lien Credit Agreement prohibits such redemption or exchange at
such time).
Section 4.03. Intellectual
Property.
(a) At
any time when an Event of Default has occurred and is continuing, and upon the written request of the Administrative Agent, each
Grantor will (i) use its commercially reasonable efforts to obtain all consents and approvals necessary and appropriate for the
assignment to or for the benefit of the Administrative Agent of any License held by such Grantor in the U.S. to enable the Administrative
Agent to enforce the security interests granted hereunder and (ii) to the extent required pursuant to any material License in
the U.S. under which such Grantor is the licensee, deliver to the licensor thereunder any notice of the grant of security interest
hereunder or such other notices required to be delivered thereunder in order to permit the security interest created or permitted
to be created hereunder pursuant to the terms of such License.
(b) Each
Grantor shall notify the Administrative Agent promptly if it knows that any application for or registration of any Patent, Trademark,
Domain Name, or Copyright (now or hereafter existing) has become abandoned or dedicated to the public, or of any determination
or development (including the institution of, or any such determination or development in, any proceeding in the United States
Patent and Trademark Office, the United States Copyright Office or any court) abandoning such Grantor’s ownership of any
such Patent, Trademark or Copyright, its right to register the same, or to keep and maintain the same, except, in each case, for
Dispositions not prohibited by the First Lien Credit Agreement or where such occurrences individually or in the aggregate, could
not reasonably be expected to result in a Material Adverse Effect.
(c) In
the event that any Grantor (x) files an application for the registration of any Patent, Trademark or Copyright with the United
States Patent and Trademark Office or the United States Copyright Office, (y) acquires any such Patent, Trademark or Copyright
by purchase or assignment, or (z) files a Statement of Use or an Amendment to Allege Use with respect to any “intent-to-use”
Trademark application, in each case, after the Closing Date and to the extent the same constitutes Collateral (and other than
as a result of an application that is then subject to an Intellectual Property Security Agreement or Intellectual Property Security
Agreement Supplement becoming registered), it shall, (i) if the event giving rise to the obligation under this Section 4.03(c)
occurs during the first three Fiscal Quarters of any Fiscal Year, on or before the date on which financial statements are
required to be delivered pursuant to Section 5.01(a) of the First Lien Credit Agreement for the Fiscal Quarter in which
the relevant event occurred or (ii) if the event giving rise to the obligation under this Section 4.03(c) occurs during
the fourth Fiscal Quarter of any Fiscal Year, on or before the date that is 60 days after the end of such Fiscal Quarter (or,
in the case of each of clauses (i) and (ii), such longer period as the Administrative Agent may reasonably agree), notify
the Administrative Agent and, execute and deliver to the Administrative Agent, at such Grantor’s sole cost and expense,
any Intellectual Property Security Agreement or Intellectual Property Security Agreement Supplement, as applicable, or any other
instrument as the Administrative Agent may reasonably request to evidence the Administrative Agent’s security interest in
such registered Patent, Trademark or Copyright (or application therefor), and the General Intangibles of such Grantor relating
thereto or represented thereby.
(d) Each
Grantor shall take all actions necessary or reasonably requested by the Administrative Agent to (i) maintain and pursue each application
and to obtain and maintain the registration of each Patent, Trademark, Domain Name and, to the extent consistent with past practices,
Copyright that constitutes Collateral (now or hereafter existing), including by filing applications for renewal, affidavits of
use, affidavits of non-contestability and, if consistent with good business judgment (as determined by such Grantor), by initiating
opposition and interference and cancellation proceedings against third parties, (ii) maintain and protect the secrecy or confidentiality
of its Trade Secrets and (iii) otherwise protect and preserve such Grantor’s rights in, and the validity or enforceability
of, its Intellectual Property Collateral, in each case except where failure to do so (A) could not reasonably be expected to result
in a Material Adverse Effect, or (B) is otherwise permitted under the First Lien Credit Agreement.
(e) Each
Grantor shall promptly notify the Administrative Agent of any material infringement or misappropriation of such Grantor’s
Patents, Trademarks, Copyrights or Trade Secrets of which it becomes aware, and shall take such actions as are reasonable and
appropriate under the circumstances to protect such Patent, Trademark, Copyright or Trade Secret, except where such infringement,
misappropriation or dilution could not reasonably be expected to cause a Material Adverse Effect.
Section 4.04. Commercial
Tort Claims. After the Closing Date, on or before the date that is 60 days after the end of any Fiscal Quarter or Fiscal Year
(or such longer period as the Administrative Agent may reasonably agree), each relevant Grantor shall notify the Administrative
Agent of any Commercial Tort Claim with an individual value (as reasonably estimated by the Borrower) in excess of $10,000,000
acquired by it, together with an update to Schedule 6 to the Perfection Certificate containing a summary description thereof
sufficient to create a security interest therein, and such Commercial Tort Claim (and the Proceeds thereof) shall automatically
constitute Collateral, all upon the terms of this Security Agreement.
Section 4.05. Insurance.
Except to the extent otherwise permitted to be retained by any Grantor or applied by any Grantor pursuant to the terms of
the Loan Documents, the Administrative Agent shall, at the time any proceeds of any insurance in respect of the Collateral are
distributed to the Administrative Agent, apply such proceeds at any time the Administrative Agent is exercising remedies in accordance
with Section 5.01, in accordance with Section 5.04 hereof. Each Grantor assumes all liability and responsibility
in connection with the Collateral acquired by it, and the liability of such Grantor to pay the Secured Obligations shall in no
way be affected or diminished by reason of the fact that such Collateral may be lost, destroyed, stolen, damaged or for any reason
whatsoever unavailable to such Grantor.
Section 4.06. Grantors
Remain Liable Under Contracts. Each Grantor (rather than the Administrative Agent or any Secured Party) shall remain liable
(as between itself and any relevant counterparty) to observe and perform all the conditions and obligations to be observed and
performed by it under any Contract relating to the Collateral, all in accordance with the terms and conditions thereof. Neither
the Administrative Agent nor any other Secured Party shall have any obligation or liability under any Contract by reason of or
arising out of this Security Agreement or the receipt by the Administrative Agent or any other Secured Party of any payment relating
to such Contract pursuant hereto, nor shall the Administrative Agent or any other Secured Party be obligated in any manner to
perform any of the obligations of any Grantor under or pursuant to any Contract, to make any payment, to make any inquiry as to
the nature or sufficiency of any performance or to collect the payment of any amounts which may have been assigned to them or
to which they may be entitled at any time or times
Section 4.07. Grantors
Remain Liable Under Accounts. Notwithstanding anything herein to the contrary, the Grantors shall remain liable under each
of the Accounts to observe and perform all of the conditions and obligations to be observed and performed by it thereunder, all
in accordance with the terms of any agreement giving rise to such Accounts. Neither the Administrative Agent nor any other Secured
Party shall have any obligation or liability under any Account (or any agreement giving rise thereto) by reason of or arising
out of this Security Agreement or the receipt by the Administrative Agent or any other Secured Party of any payment relating to
such Account pursuant hereto, nor shall the Administrative Agent or any other Secured Party be obligated in any manner to perform
any of the obligations of any Grantor under or pursuant to any Account (or any agreement giving rise thereto), to make any payment,
to make any inquiry as to the nature or the sufficiency of any payment received by them or as to the sufficiency of any performance
by any party under any Account (or any agreement giving rise thereto), to present or file any claim, to take any action to enforce
any performance or to collect the payment of any amounts which may have been assigned to them or to which they may be entitled
at any time or times.
ARTICLE 5
Remedies
Section 5.01. Remedies.
(a) Each
Grantor agrees that, at any time when an Event of Default has occurred and is continuing, but subject to the last paragraph of
Section 7.01 of the First Lien Credit Agreement, the Administrative Agent may exercise any or all of the following rights and
remedies (in addition to the rights and remedies existing under applicable Requirements of Law):
(i) the
rights and remedies provided in this Security Agreement, the First Lien Credit Agreement, or any other Loan Document; provided
that this Section 5.01(a) shall not limit any rights available to the Administrative Agent prior to the occurrence
and continuance of an Event of Default;
(ii) the
rights and remedies available to a secured party under the UCC of each relevant jurisdiction (whether or not the UCC applies to
the affected Collateral) or under any other applicable Requirements of Law (including, without limitation, any law governing the
exercise of a bank’s right of setoff or bankers’ Lien) or in equity when a debtor is in default under a security agreement;
(iii) without
notice (except as specifically provided in Section 7.01 or elsewhere herein), demand or advertisement of any kind to any
Grantor or any other Person, but subject to the terms of any applicable lease agreement, personally, or by agents or attorneys,
enter the premises of any Grantor where any Collateral is located (through self-help and without judicial process) to collect,
receive, assemble, process, appropriate, sell, lease, assign, grant an option or options to purchase or otherwise dispose of,
deliver, or realize upon, the Collateral or any part thereof in one or more parcels at one or more public or private sales (which
sales may be adjourned or continued from time to time with or without notice and may take place at such Grantor’s premises
or elsewhere), for cash, on credit or for future delivery without assumption of any credit risk, and upon such other terms as
the Administrative Agent may deem commercially reasonable;
(iv) upon
one Business Day’s written notice to the Borrower, (A) transfer and register in its name or in the name of its nominee the
whole or any part of the Pledged Collateral and (B) exercise the voting and all other rights as a holder with respect thereto,
to collect and receive all cash dividends, interest, principal and other distributions made thereon and to otherwise act with
respect to the Pledged Collateral as though the Administrative Agent was the outright owner thereof; and
(v) to
take possession of the Collateral or any part thereof, by directing such Grantor in writing to deliver the same to the Administrative
Agent at any reasonable place or places designated by the Administrative Agent, in which event such Grantor shall at its own expense
forthwith cause the same to be moved to the place or places so designated by the Administrative Agent and there delivered to the
Administrative Agent.
(b) Each
Grantor acknowledges and agrees that compliance by the Administrative Agent, on behalf of the Secured Parties, with any applicable
state or federal Requirements of Law in connection with a disposition of the Collateral will not be considered to adversely affect
the commercial reasonableness of any sale of the Collateral.
(c) The
Administrative Agent shall have the right in any public sale and, to the extent permitted by applicable Requirements of Law, in
any private sale, to purchase for the benefit of the Administrative Agent and the Secured Parties, all or any part of the Collateral
so sold, free of any right of equity redemption that Grantor is permitted to release and waive pursuant to applicable Requirements
of Law, and, each Grantor hereby expressly releases such right to equity redemption to the extent permitted by applicable Requirements
of Law.
(d) Until
the Administrative Agent is able to effect a sale, lease, transfer or other disposition of any particular Collateral under this
Section 5.01, the Administrative Agent shall have the right to hold or use such Collateral, or any part thereof, to the
extent that it deems appropriate for the purpose of preserving such Collateral or the value of such Collateral, or for any other
purpose deemed reasonably appropriate by the Administrative Agent. At any time when an Event of Default has occurred and is continuing,
the Administrative Agent may, if it so elects, seek the appointment of a receiver or keeper to take possession of any Collateral
and to enforce any of the Administrative Agent’s remedies (for the benefit of the Administrative Agent and Secured Parties),
with respect to such appointment without prior notice or hearing as to such appointment.
(e) Notwithstanding
the foregoing, neither the Administrative Agent nor any Secured Party shall be required to (i) make any demand upon, or pursue
or exhaust any of their rights or remedies against, the Grantors, any other obligor, guarantor, pledgor or any other Person with
respect to the payment of the Secured Obligations or to pursue or exhaust any of their rights or remedies with respect to any
Collateral therefor or any direct or indirect Guarantee thereof, (ii) marshal the Collateral or any Guarantee of the Secured Obligations
or to resort to the Collateral or any such Guarantee in any particular order, or (iii) effect a public sale of any Collateral.
(f) Each
Grantor recognizes that the Administrative Agent may be unable to effect a public sale of any or all the Pledged Collateral and
may be compelled to resort to one or more private sales thereof. Each Grantor also acknowledges that any private sale may result
in prices and other terms less favorable to the seller than if such sale were a public sale and, notwithstanding such circumstances,
agrees that no such private sale shall be deemed to have been made in a commercially unreasonable manner solely by virtue of such
sale being private. The Administrative Agent shall be under no obligation to delay a sale of any of the Pledged Collateral for
the period of time necessary to permit any Grantor or the issuer of any Pledged Collateral to register such securities for public
sale under the Securities Act of 1933, as amended, or under applicable state securities laws, even if any Grantor and the issuer
would agree to do so.
(g) The
Administrative Agent and each Secured Party (by its acceptance of the benefits of this Security Agreement) acknowledges and agrees
that notwithstanding any other provisions in this Security Agreement or any other Loan Document, the exercise of rights or remedies
with respect to certain Collateral and the enforcement of any security interests therein may be limited or restricted by, or require
any consents, authorizations approvals or licenses under, any Requirement of Law.
(h) Notwithstanding
the foregoing, any rights and remedies provided in this Section 5.01 shall be subject to the Intercreditor Agreements (and
any other applicable Acceptable Intercreditor Agreements).
Section 5.02. Grantors’
Obligations Upon Default. Upon the request of the Administrative Agent at any time when an Event of Default has occurred and
is continuing, but subject to the last paragraph of Section 7.01 of the First Lien Credit Agreement, each Grantor will:
(a) at
its own cost and expense (i) assemble and make available to the Administrative Agent, the Collateral and all books and records
relating thereto at any place or places reasonably specified by the Administrative Agent, whether at such Grantor’s premises
or elsewhere, (ii) deliver all tangible evidence of its Accounts and Contract Rights (including, without limitation, all documents
evidencing the Accounts and all Contracts) and such books and records to the Administrative Agent or to its representatives (copies
of which evidence and books and records may be retained by such Grantor) and (iii) if the Administrative Agent so directs and
in a form and in a manner reasonably satisfactory to the Administrative Agent, legend the Accounts and the Contracts, as well
as books, records and documents (if any) of such Grantor evidencing or pertaining to such Accounts and Contracts with an appropriate
reference to the fact that such Accounts and Contracts have been assigned to the Administrative Agent and that the Administrative
Agent has a security interest therein; and
(b) subject
to the terms of any applicable lease agreement, permit the Administrative Agent and/or its representatives and/or agents, to enter,
occupy and use any premises where all or any part of the Collateral, or the books and records relating thereto, or both, are located,
to take possession of all or any part of the Collateral or the books and records relating thereto, or both, to remove all or any
part of the Collateral or the books and records relating thereto, or both, and to conduct sales of the Collateral, without any
obligation to pay any Grantor for such use and occupancy.
Section 5.03. Intellectual
Property Remedies.
(a) For
the purpose of enabling the Administrative Agent to exercise the rights and remedies under this Article 5 at any time when
an Event of Default has occurred and is continuing, but subject to the last paragraph of Section 7.01 of the First Lien
Credit Agreement, and at such time as the Administrative Agent shall be lawfully entitled to exercise such rights and remedies,
each Grantor hereby grants to the Administrative Agent a power of attorney to sign any document which may be required by the United
States Patent and Trademark Office, the United States Copyright Office or similar registrar or domain name registrar in order
to effect an absolute assignment of all right, title and interest in each registered Patent, Trademark, Domain Name and Copyright
and each application for any such registration, and record the same. At any time when an Event of Default has occurred and is
continuing, but subject to the last paragraph of Section 7.01 of the First Lien Credit Agreement, the Administrative Agent
may (i) declare the entire right, title and interest of such Grantor in and to each item of Intellectual Property Collateral to
be vested in the Administrative Agent for the benefit of the Secured Parties, in which event such right, title and interest shall
immediately vest in the Administrative Agent for the benefit of the Secured Parties, and the Administrative Agent shall be entitled
to exercise the power of attorney referred to in this Section 5.03 to execute, cause to be acknowledged and notarized and
record such absolute assignment with the applicable agency or registrar; (ii) sell any Grantor’s Inventory directly to any
Person, including without limitation Persons who have previously purchased any Grantor’s Inventory from such Grantor and
in connection with any such sale or other enforcement of the Administrative Agent’s rights under this Security Agreement
and subject to any restrictions contained in applicable third party licenses entered into by such Grantor, sell Inventory which
bears any Trademark owned by or licensed to any Grantor and any Inventory that is covered by any Intellectual Property Collateral
owned by or licensed to any Grantor, and the Administrative Agent may finish any work in process and affix any relevant Trademark
owned by or licensed to such Grantor, and sell such Inventory as provided herein; (iii) direct such Grantor to refrain, in which
event such Grantor shall refrain, from using any Intellectual Property Collateral in any manner whatsoever, directly or indirectly;
and (iv) assign or sell any Intellectual Property, in each case to the extent constituting Collateral, as well as the goodwill
of such Grantor’s business connected with the use of and symbolized by any such Trademark and the right to carry on the
business and use the assets of such Grantor in connection with which any such Trademark or Domain Name has been used.
(b) Each
Grantor hereby grants to the Administrative Agent an irrevocable (until the Termination Date), nonexclusive, royalty-free,
world-wide license to its right to use, license or sublicense any IP Rights now owned or hereafter acquired by such Grantor,
wherever the same may be located, and including in such license access to all media in which any of the licensed items may be
recorded or stored and (to the extent not prohibited by any applicable license) to all computer software and programs used for
compilation or printout thereof. The use of the license granted to the Administrative Agent pursuant to the preceding sentence
may be exercised, at the option of the Administrative Agent, only when an Event of Default has occurred and is continuing, but
subject to the last paragraph of Section 7.01 of the First Lien Credit Agreement; provided that such licenses to
be granted hereunder with respect to Trademarks shall be subject to, with respect to the goods and/or services on which such Trademarks
are used, the maintenance of quality standards that are sufficient to preserve the validity of such Trademarks and are consistent
with past practices.
Section 5.04. Application
of Proceeds.
(a) Subject
to the Intercreditor Agreements (and any other applicable Acceptable Intercreditor Agreements), the Administrative Agent shall
apply the proceeds of any collection, sale, foreclosure or other realization upon any Collateral received by it pursuant to the
exercise of remedies in accordance with this Security Agreement and as set forth in Section 2.18(b) of the First Lien Credit
Agreement.
(b) Except
as otherwise provided herein or in any other Loan Document, the Administrative Agent shall have absolute discretion as to the
time of application of any such proceeds, money or balance received by it pursuant to the exercise of remedies in accordance with
this Security Agreement. Upon any sale of Collateral by the Administrative Agent (including pursuant to a power of sale granted
by statute or under a judicial proceeding), a receipt by the Administrative Agent or of the officer making the sale of such proceeds,
moneys or balances shall be a sufficient discharge to the purchaser or purchasers of the Collateral so sold and such purchaser
or purchasers shall not be obligated to see to the application of any part of the purchase money paid over to the Administrative
Agent or such officer or be answerable in any way for the misapplication thereof. It is understood that the Grantors shall remain
jointly and severally liable to the extent of any deficiency between the amount of the proceeds of the Collateral and the aggregate
amount of the Secured Obligations.
ARTICLE 6
Account Verification; Attorney in Fact; Proxy
Section 6.01. Account
Verification. The Administrative Agent may at any time and from time to time when an Event of Default has occurred and is
continuing, but subject to the last paragraph of Section 7.01 of the First Lien Credit Agreement, and upon prior written
notice to the relevant Grantor, in the Administrative Agent’s own name, in the name of a nominee of the Administrative Agent,
or in the name of any Grantor, communicate (by mail, telephone, facsimile or otherwise) with the Account Debtors of such Grantor,
parties to Contracts with such Grantor and obligors in respect of Instruments of such Grantor to verify with such Persons, to
the Administrative Agent’s reasonable satisfaction, the existence, amount, terms of, and any other matter relating to, Accounts,
Contracts, Instruments, Chattel Paper, payment intangibles and/or other Receivables that constitute Collateral.
Section 6.02. Authorization
for the Administrative Agent to Take Certain Action.
(a) Each
Grantor hereby irrevocably authorizes the Administrative Agent and appoints the Administrative Agent (and all officers, employees
or agents designated by the Administrative Agent) as its true and lawful attorney in fact (i) at any time and from time to time
in its sole discretion (A) to execute (to the extent necessary under the law of the applicable jurisdiction) on behalf of such
Grantor as debtor and to file financing statements necessary or desirable in the Administrative Agent’s reasonable discretion
to perfect and to maintain the perfection and priority of the Administrative Agent’s security interest in the Collateral,
(B) to file a carbon, photographic or other reproduction of this Security Agreement as a financing statement and to file any amendment
of a financing statement with respect to the Collateral (which would not add new collateral or add a debtor, except as otherwise
provided for herein or in any other Loan Document) in such offices as the Administrative Agent in its reasonable discretion deems
necessary or desirable to perfect and to maintain the perfection and priority of the Administrative Agent’s security interest
in the Collateral and (C) during the continuation of an Event of Default after prior written notice to the Borrower, but subject
to the last paragraph of Section 7.01 of the First Lien Credit Agreement, in the sole discretion of the Administrative
Agent (in the name of such Grantor or otherwise) to contact and enter into one or more agreements with the issuers of uncertificated
securities that constitute Pledged Collateral or with securities intermediaries holding Pledged Collateral as may be necessary
or advisable to give the Administrative Agent Control over such Pledged Collateral in accordance with the terms hereof (including,
without limitation, Section 2.01(c) of this Security Agreement) and (ii) during the continuation of an Event of Default, in the
sole discretion of the Administrative Agent (in the name of such Grantor or otherwise) after prior written notice to the Borrower,
(A) to endorse and collect any cash proceeds of the Collateral and to apply the proceeds of any Collateral received by the Administrative
Agent to the Secured Obligations as provided herein or in the First Lien Credit Agreement or any other Loan Document, subject
to the terms of the Intercreditor Agreements (and any other applicable Acceptable Intercreditor Agreements), (B) to demand payment
or enforce payment of any Receivable in the name of the Administrative Agent or such Grantor and to endorse any check, draft and/or
any other instrument for the payment of money relating to any such Receivable, (C) to sign such Grantor’s name on any invoice
or bill of lading relating to any Receivable, any draft against any Account Debtor of such Grantor, and/or any assignment and/or
verification of any Receivable, (D) to exercise all of any Grantor’s rights and remedies with respect to the collection
of any Receivable and any other Collateral, (E) to settle, adjust, compromise, extend or renew any Receivable, (F) to settle,
adjust or compromise any legal proceedings brought to collect any Receivable, (G) to prepare, file and sign such Grantor’s
name on a proof of claim in bankruptcy or similar document against any Account Debtor of such Grantor, (H) to prepare, file and
sign such Grantor’s name on any notice of Lien, assignment or satisfaction of Lien or similar document in connection with
any Receivable, (I) to change the address for delivery of mail addressed to such Grantor to such address as the Administrative
Agent may designate and to receive, open and dispose of all mail addressed to such Grantor (provided copies of such mail are provided
to such Grantor), (J) to discharge past due taxes, assessments, charges, fees or Liens on the Collateral (except for Permitted
Liens), (K) to make, settle and adjust claims in respect of Collateral under policies of insurance and endorse the name of such
Grantor on any check, draft, instrument or other item of payment for the proceeds of such policies of insurance, and make all
determinations and decisions with respect thereto (L) to obtain or maintain the policies of insurance of the types referred to
in Section 5.05 of the First Lien Credit Agreement or to pay any premium in whole or in part relating thereto and (M) to
do all other acts and things or institute any proceedings which the Administrative Agent may reasonably deem to be necessary (pursuant
to this Security Agreement and the other Loan Documents and in accordance with applicable law) to carry out the terms of this
Security Agreement and to protect the interests of the Secured Parties; and, when and to the extent required pursuant to Section
9.03(a) of the First Lien Credit Agreement, such Grantor agrees to reimburse the Administrative Agent for any payment made
in connection with this paragraph or any expense (including reasonable and documented attorneys’ fees, court costs and out-of-pocket
expenses) and other charges related thereto incurred by the Administrative Agent in connection with any of the foregoing (it being
understood that any such sums shall constitute additional Secured Obligations); provided that, this authorization shall
not relieve such Grantor of any of its obligations under this Security Agreement or under the First Lien Credit Agreement.
(b) All
such acts of such attorney or designee are hereby ratified and approved by each Grantor. The powers conferred on the Administrative
Agent, for the benefit of the Administrative Agent and Secured Parties, under this Section 6.02 are solely to protect the
Administrative Agent’s interests in the Collateral and shall not impose any duty upon the Administrative Agent or any Secured
Party to exercise any such powers.
Section 6.03. PROXY.
EACH GRANTOR HEREBY IRREVOCABLY (UNTIL THE TERMINATION DATE) CONSTITUTES AND APPOINTS THE ADMINISTRATIVE AGENT AS ITS PROXY
AND ATTORNEY-IN-FACT (AS SET FORTH IN SECTION 6.02 ABOVE) WITH RESPECT TO THE PLEDGED COLLATERAL, INCLUDING, DURING
THE CONTINUATION OF AN EVENT OF DEFAULT, BUT SUBJECT TO THE LAST PARAGRAPH OF SECTION 7.01 OF THE FIRST LIEN CREDIT AGREEMENT,
AND SUBJECT TO ANY NOTICE REQUIREMENTS AS SET FORTH HEREIN, THE RIGHT TO VOTE SUCH PLEDGED COLLATERAL, WITH FULL POWER OF SUBSTITUTION
TO DO SO. IN ADDITION TO THE RIGHT TO VOTE ANY SUCH PLEDGED COLLATERAL, THE APPOINTMENT OF THE ADMINISTRATIVE AGENT AS PROXY AND
ATTORNEY-IN-FACT SHALL, DURING THE CONTINUATION OF AN EVENT OF DEFAULT AND SUBJECT TO ANY NOTICE REQUIREMENTS AS SET FORTH
HEREIN, INCLUDE THE RIGHT TO EXERCISE ALL OTHER RIGHTS, POWERS, PRIVILEGES AND REMEDIES TO WHICH A HOLDER OF SUCH PLEDGED COLLATERAL
WOULD BE ENTITLED (INCLUDING GIVING OR WITHHOLDING WRITTEN CONSENTS OF SHAREHOLDERS, CALLING SPECIAL MEETINGS OF SHAREHOLDERS
AND VOTING AT SUCH MEETINGS). SUCH PROXY SHALL BE EFFECTIVE, AUTOMATICALLY AND WITHOUT THE NECESSITY OF ANY ACTION (INCLUDING
ANY TRANSFER OF ANY SUCH PLEDGED COLLATERAL ON THE RECORD BOOKS OF THE ISSUER THEREOF) BY ANY PERSON (INCLUDING THE ISSUER OF
SUCH PLEDGED COLLATERAL OR ANY OFFICER OR ADMINISTRATIVE AGENT THEREOF), IN EACH CASE ONLY WHEN AN EVENT OF DEFAULT HAS OCCURRED
AND IS CONTINUING AND UPON ONE BUSINESS DAYS’ PRIOR WRITTEN NOTICE TO THE BORROWER.
Section 6.04. NATURE
OF APPOINTMENT; LIMITATION OF DUTY. THE APPOINTMENT OF THE ADMINISTRATIVE AGENT AS PROXY AND ATTORNEY-IN-FACT IN THIS
ARTICLE 6 IS COUPLED WITH AN INTEREST AND SHALL BE IRREVOCABLE UNTIL THE DATE ON WHICH THIS SECURITY AGREEMENT IS TERMINATED
IN ACCORDANCE WITH SECTION 7.12. NOTWITHSTANDING ANYTHING CONTAINED HEREIN, NEITHER THE ADMINISTRATIVE AGENT, NOR ANY SECURED
PARTY, NOR ANY OF THEIR RESPECTIVE AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR REPRESENTATIVES SHALL HAVE ANY DUTY TO
EXERCISE ANY RIGHT OR POWER GRANTED HEREUNDER OR OTHERWISE OR TO PRESERVE THE SAME AND SHALL NOT BE LIABLE FOR ANY FAILURE TO
DO SO OR FOR ANY DELAY IN DOING SO, EXCEPT TO THE EXTENT SUCH DAMAGES ARE ATTRIBUTABLE TO THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT
OF SUCH PERSON AS FINALLY DETERMINED BY A COURT OF COMPETENT JURISDICTION IN A FINAL AND NON-APPEALABLE DECISION SUBJECT TO
SECTION 7.20 HEREOF; PROVIDED, THAT THE FOREGOING EXCEPTION SHALL NOT BE CONSTRUED TO OBLIGATE THE ADMINISTRATIVE
AGENT TO TAKE OR REFRAIN FROM TAKING ANY ACTION WITH RESPECT TO THE COLLATERAL.
ARTICLE 7
General Provisions
Section 7.01. Waivers.
To the maximum extent permitted by applicable Requirements of Law, each Grantor hereby waives notice of the time and place
of any judicial hearing in connection with the Administrative Agent’s taking possession of the Collateral or of any public
sale or the time after which any private sale or other disposition of all or any part of the Collateral may be made, including
without limitation, any and all prior notice and hearing for any prejudgment remedy or remedies. To the extent such notice may
not be waived under applicable Requirements of Law, any notice made shall be deemed reasonable if sent to any Grantor, addressed
as set forth in Article 8, at least 10 days prior to (a) the date of any such public sale or (b) the time after which any
such private Disposition may be made. To the maximum extent permitted by applicable Requirements of Law, each Grantor waives all
claims, damages and demands against the Administrative Agent arising out of the repossession, retention or sale of the Collateral,
except those arising out of the bad faith, the gross negligence or willful misconduct of the Administrative Agent as determined
by a court of competent jurisdiction in a final and non-appealable judgment. To the extent it may lawfully do so, each Grantor
absolutely and irrevocably waives and relinquishes the benefit and advantage of, and covenants not to assert against the Administrative
Agent, any valuation, stay (other than an automatic stay under any applicable Debtor Relief Law), appraisal, extension, moratorium,
redemption or similar law and any and all rights or defenses it may have as a surety now or hereafter existing which, but for
this provision, might be applicable to the sale of any Collateral made under the judgment, order or decree of any court, or privately
under the power of sale conferred by this Security Agreement, or otherwise. Except as otherwise specifically provided herein,
each Grantor hereby waives presentment, demand, protest, any notice (to the maximum extent permitted by applicable Requirements
of Law) of any kind or all other requirements as to the time, place and terms of sale in connection with this Security Agreement
or any Collateral.
Section 7.02. Limitation
on the Administrative Agent’s and Secured Party’s Duty with Respect to the Collateral. The Administrative Agent
shall not have any obligation to clean or otherwise prepare the Collateral for sale. The Administrative Agent shall use reasonable
care with respect to the Collateral in its possession; provided that the Administrative Agent shall be deemed to have exercised
reasonable care in the custody and preservation of any Collateral in its possession if such Collateral is accorded treatment substantially
equal to which it accords its own property. Neither the Administrative Agent nor any Secured Party shall have any other duty as
to any Collateral in its possession or control or in the possession or control of any agent or nominee of the Administrative Agent
or of such Secured Party, or any income thereon or as to the preservation of rights against prior parties or any other rights
pertaining thereto. To the extent that applicable Requirements of Law impose duties on the Administrative Agent to exercise remedies
in a commercially reasonable manner, each Grantor acknowledges and agrees that it would be commercially reasonable for the Administrative
Agent, subject to Section 7.06, (a) to fail to incur expenses to prepare Collateral for Disposition or otherwise to transform
raw material or work in process into finished goods or other finished products for Disposition, (b) to fail to obtain third party
consents for access to Collateral to be Disposed of (unless expressly required under any applicable agreement), or to obtain or,
if not required by any other Requirement of Law, to fail to obtain governmental or third party consents for the collection or
Disposition of Collateral to be collected or Disposed of, (c) to fail to exercise collection remedies against Account Debtors
or other Persons obligated on Collateral or to remove Liens on or any adverse claims against Collateral, (d) to exercise collection
remedies against Account Debtors and other Persons obligated on Collateral directly or through the use of collection agencies
and other collection specialists, (e) to advertise Dispositions of Collateral through publications or media of general circulation,
whether or not the Collateral is of a specialized nature, (f) to contact other Persons, whether or not in the same business as
any Grantor, for expressions of interest in acquiring all or any portion of such Collateral, (g) to hire one or more professional
auctioneers to assist in the Disposition of Collateral, whether or not the Collateral is of a specialized nature, (h) to Dispose
of Collateral by utilizing internet sites that provide for the auction of assets of the types included in the Collateral or that
have the reasonable capacity of doing so, or that match buyers and sellers of assets, (i) to Dispose of assets in wholesale rather
than retail markets, (j) to disclaim Disposition warranties, such as title, possession or quiet enjoyment, (k) to purchase insurance
or credit enhancements (which, subject to Section 9.03 of the First Lien Credit Agreement, shall be at the cost of the Grantors)
to insure the Administrative Agent against risks of loss in connection with any collection or Disposition of Collateral or to
provide to the Administrative Agent a guaranteed return from the collection or Disposition of Collateral or (l) to the extent
deemed appropriate by the Administrative Agent, to obtain the services of other brokers, investment bankers, consultants and other
professionals to assist the Administrative Agent in the collection or Disposition of any of the Collateral. Each Grantor acknowledges
that the purpose of this Section 7.02 is to provide non-exhaustive indications of what actions or omissions by the
Administrative Agent would be commercially reasonable in the Administrative Agent’s exercise of remedies with respect to
the Collateral and that other actions or omissions by the Administrative Agent shall not be deemed commercially unreasonable solely
on account of not being indicated in this Section 7.02. Without limitation upon the foregoing, nothing contained in this
Section 7.02 shall be construed to grant any rights to any Grantor or to impose any duties on the Administrative Agent
that would not have been granted or imposed by this Security Agreement or by applicable law in the absence of this Section
7.02.
Section 7.03. Compromises
and Collection of Collateral. Each Grantor and the Administrative Agent recognize that setoffs, counterclaims, defenses and
other claims may be asserted by obligors with respect to certain of the Receivables, that certain of the Receivables may be or
become uncollectible in whole or in part and that the expense and probability of success in litigating a disputed Receivable may
exceed the amount that reasonably may be expected to be recovered with respect to any Receivable. In view of the foregoing, each
Grantor agrees that the Administrative Agent may at any time and from time to time, if an Event of Default has occurred and is
continuing and upon prior written notice to the relevant Grantor, compromise with the obligor on any Receivable, accept in full
payment of any Receivable such amount as the Administrative Agent in its sole discretion shall determine or abandon any Receivable,
and any such action by the Administrative Agent shall be commercially reasonable so long as the Administrative Agent acts in good
faith based on information known to it at the time it takes any such action.
Section 7.04. Administrative
Agent Performance of Debtor Obligations. Without having any obligation to do so, the Administrative Agent may, at any time
when an Event of Default has occurred and is continuing, but subject to the last paragraph of Section 7.01 of the First
Lien Credit Agreement, and upon prior written notice to the Borrower, perform or pay any obligation which any Grantor has agreed
to perform or pay under this Security Agreement and which obligation is due and unpaid and not being contested by such Grantor
in good faith, and such Grantor shall reimburse the Administrative Agent for any amounts paid by the Administrative Agent pursuant
to this Section 7.04 as a Secured Obligation payable in accordance with Section 9.03(a) of the First Lien Credit
Agreement.
Section 7.05. No
Waiver; Amendments; Cumulative Remedies. No delay or omission of the Administrative Agent (subject to the provisions of Article
8 of the First Lien Credit Agreement) to exercise any right or remedy granted under this Security Agreement shall impair
such right or remedy or be construed to be a waiver of any Default or an acquiescence therein, and no single or partial
exercise of any such right or remedy shall preclude any other or further exercise thereof or the exercise of any other right
or remedy. No waiver, amendment or other variation of the terms, conditions or provisions of this Security Agreement
whatsoever shall be valid unless in writing signed by the Grantors and the Administrative Agent with the concurrence or at
the direction of the Lenders to the extent required under Section 9.02 of the First Lien Credit Agreement and then
only to the extent in such writing specifically set forth. All rights and remedies contained in this Security Agreement or
afforded by law shall be cumulative and all shall be available to the Administrative Agent until the Termination Date.
Section 7.06. Limitation
by Law; Severability of Provisions. All rights, remedies and powers provided in this Security Agreement may be exercised
only to the extent that the exercise thereof does not violate any applicable Requirements of Law, and all of the provisions
of this Security Agreement are intended to be subject to all applicable Requirements of Law that may be controlling and to be
limited to the extent necessary so that such provisions do not render this Security Agreement invalid, unenforceable or not
entitled to be recorded or registered, in whole or in part. To the extent permitted by law, any provision of this Security
Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of
the remaining provisions of this Security Agreement; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction. If the exercise of rights or remedies with
respect to certain Collateral and the enforcement of any security interests therein require any consents, authorizations
approvals or licenses under any Requirement of Law, no such actions shall be taken unless and until all requisite consents,
authorizations approvals or licenses have been obtained.
Section 7.07. Security
Interest Absolute. All rights of the Administrative Agent hereunder, the security interests granted hereunder and all
obligations of each Grantor hereunder shall be absolute and unconditional irrespective of (a) any lack of validity or
enforceability of the First Lien Credit Agreement, any other Loan Document, any agreement with respect to any of the Secured
Obligations or any other agreement or instrument relating to any of the foregoing, (b) any change in the time, manner or
place of payment of, or in any other term of, all or any of the Secured Obligations, or any other amendment or waiver of or
any consent to any departure from the First Lien Credit Agreement, any other Loan Document or any other agreement or
instrument relating to the foregoing, (c) any exchange, release or non-perfection of any Lien on any Collateral, or any
release or amendment or waiver of or consent under or departure from any guaranty, securing or guaranteeing all or any of the
Secured Obligations, (d) any bankruptcy, insolvency, reorganization, arrangement, readjustment, composition, liquidation or
the like of any Grantor, (e) any exercise or non-exercise, or any waiver of, any right, remedy, power or privilege under
or in respect of this Security Agreement or any other Loan Document or (f) any other circumstance that might otherwise
constitute a defense available to, or a discharge of, any Grantor in respect of the Secured Obligations or this Security
Agreement (other than a termination of any Lien contemplated by Section 7.12 or the occurrence of the Termination
Date).
Section 7.08. Benefit
of Security Agreement. The terms and provisions of this Security Agreement shall be binding upon and inure to the benefit
of each Grantor, the Administrative Agent and the Secured Parties and their respective successors and permitted assigns
(including all Persons who become bound as a debtor to this Security Agreement). No sales of participations, assignments,
transfers, or other dispositions of any agreement governing the Secured Obligations or any portion thereof or interest
therein shall in any manner impair the Lien granted to the Administrative Agent hereunder for the benefit of the
Administrative Agent and the Secured Parties.
Section 7.09.
[RESERVED]
Section
7.10. Additional Subsidiaries. Each Person required to become a Loan Party
pursuant to and in accordance with Section 5.12 of the First Lien Credit Agreement shall, within the time periods specified
in Section 5.12 of the First Lien Credit Agreement, execute an instrument in the form of Exhibit D. Upon the execution
and delivery by the Administrative Agent and any Restricted Subsidiary of an instrument in the form of Exhibit D in
accordance with Section 5.12 of the First Lien Credit Agreement, such Restricted Subsidiary shall become a Grantor
hereunder with the same force and effect as if such Restricted Subsidiary was originally named as a Grantor herein. The
execution and delivery of any such instrument shall not require the consent of any other Grantor hereunder. The rights and
obligations of each Grantor hereunder shall remain in full force and effect notwithstanding the addition of any new Grantor
as a party to this Security Agreement.
Section 7.11. Headings. The
titles of and section headings in this Security Agreement are for convenience of reference only, and shall not govern the
interpretation of any of the terms and provisions of this Security Agreement.
Section 7.12. Termination
or Release.
(a) This
Security Agreement shall continue in effect until the Termination Date, and the Liens granted hereunder shall automatically be
released, in whole or in part, in the circumstances described in the First Lien Credit Agreement, including Article 8 thereof.
(b) In
connection with any termination or release pursuant to paragraph (a) above, the Administrative Agent shall promptly execute
(if applicable) and deliver to any Grantor, at such Grantor’s expense, all UCC termination statements and similar documents
that such Grantor shall reasonably request to evidence and/or effectuate such termination or release and deliver all applicable
Pledged Collateral. Any execution and delivery of documents pursuant to this Section 7.12 shall be without recourse to or
representation or warranty by the Administrative Agent or any Secured Party. The Borrower shall reimburse the Administrative Agent
for all reasonable and documented costs and out-of-pocket expenses, including the fees and expenses of one outside counsel
(and, if necessary, of one local counsel in any relevant jurisdiction), incurred by it in connection with any action contemplated
by this Section 7.12 pursuant to and to the extent required by Section 9.03(a) of the First Lien Credit Agreement.
(c) The
Administrative Agent shall have no liability whatsoever to any other Secured Party as the result of any release of Collateral by
it in accordance with (or which the Administrative Agent in good faith believes to be in accordance with) the terms of this Section
7.12.
Section 7.13. Entire
Agreement. This Security Agreement, together with the other Loan Documents and the Intercreditor Agreements, embodies the
entire agreement and understanding between each Grantor and the Administrative Agent relating to the Collateral and
supersedes all prior agreements and understandings between any Grantor and the Administrative Agent relating to the
Collateral.
Section 7.14. CHOICE
OF LAW. THIS SECURITY AGREEMENT AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS SECURITY
AGREEMENT, WHETHER IN TORT, CONTRACT (AT LAW OR IN EQUITY) OR OTHERWISE, SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
Section
7.15. CONSENT TO JURISDICTION; CONSENT TO SERVICE OF PROCESS.
(a) EACH
PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION (SUBJECT
TO THE LAST SENTENCE OF THIS CLAUSE (A)) OF ANY U.S. FEDERAL OR NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN, IN THE
CITY OF NEW YORK (OR ANY APPELLATE COURT THEREFROM) OVER ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS SECURITY
AGREEMENT AND AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING SHALL (EXCEPT AS PERMITTED BELOW) BE HEARD AND
DETERMINED IN SUCH NEW YORK STATE OR, TO THE EXTENT PERMITTED BY APPLICABLE REQUIREMENTS OF LAW, IN SUCH FEDERAL COURT. EACH PARTY
HERETO AGREES THAT SERVICE OF ANY PROCESS, SUMMONS, NOTICE OR DOCUMENTS BY REGISTERED MAIL ADDRESSED TO SUCH PERSON SHALL BE EFFECTIVE
SERVICE OF PROCESS AGAINST SUCH PERSON FOR ANY SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT. EACH PARTY HERETO AGREES THAT
A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER
MANNER PROVIDED BY APPLICABLE REQUIREMENTS OF LAW. EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST
EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT,
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS SECURITY AGREEMENT IN ANY SUCH COURT. EACH PARTY HERETO HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE REQUIREMENTS OF LAW, ANY CLAIM OR DEFENSE OF AN INCONVENIENT FORUM TO THE
MAINTENANCE OF SUCH ACTION, SUIT OR PROCEEDING IN ANY SUCH COURT. EACH PARTY HERETO AGREES THAT THE ADMINISTRATIVE AGENT AND SECURED
PARTIES RETAIN THE RIGHT TO BRING PROCEEDINGS AGAINST ANY GRANTOR IN THE COURTS OF ANY OTHER JURISDICTION SOLELY IN CONNECTION
WITH THE EXERCISE OF ANY RIGHTS IN RESPECT OF THE COLLATERAL UNDER THIS SECURITY AGREEMENT.
(b) TO
THE EXTENT PERMITTED BY APPLICABLE REQUIREMENTS OF LAW, EACH PARTY TO THIS SECURITY AGREEMENT HEREBY IRREVOCABLY WAIVES
PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY REGISTERED MAIL
(OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL) DIRECTED TO IT AT ITS ADDRESS FOR NOTICES AS PROVIDED FOR IN SECTION 9.01
OF THE FIRST LIEN CREDIT AGREEMENT. EACH PARTY TO THIS SECURITY AGREEMENT HEREBY WAIVES ANY OBJECTION TO SUCH SERVICE OF
PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY ACTION OR PROCEEDING COMMENCED HEREUNDER THAT
SERVICE OF PROCESS WAS INVALID AND INEFFECTIVE. NOTHING IN THIS SECURITY AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY TO THIS
SECURITY AGREEMENT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE REQUIREMENTS OF LAW.
Section 7.16. WAIVER
OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE REQUIREMENTS OF
LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY SUIT, ACTION, LEGAL PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY) DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS SECURITY AGREEMENT, ANY OTHER
LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE,
AGENT OR ATTORNEY OF ANY OTHER PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS SECURITY AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.
Section
7.17. Indemnity. Each Grantor hereby agrees to indemnify the Indemnitees, as, and
to the extent, set forth in Section 9.03 of the First Lien Credit Agreement.
Section 7.18. Counterparts.
This Security Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of
which shall constitute an original, but all of which when taken together shall constitute a single contract. Delivery of an
executed counterpart of a signature page of this Security Agreement by facsimile or by email as a “.pdf’ or
“.tif’ attachment or other electronic transmission shall be effective as delivery of a manually executed
counterpart of this Security Agreement.
Section 7.19. Waiver
of Consequential Damages, Etc. To the extent permitted by applicable law, none of the Grantors or Secured Parties shall
assert, and each hereby waives, any claim against each other or any Related Party thereof, on any theory of liability, for
special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection
with, or as a result of, this Security Agreement or any agreement or instrument contemplated hereby, except, in the case of
any claim by any Indemnitee against any of the Grantors, to the extent such damages would otherwise be subject to
indemnification pursuant to the terms of Section 7.17.
Section 7.20. Successors
and Assigns. Whenever in this Security Agreement any party hereto is referred to, such reference shall be deemed to
include the successors and permitted assigns of such party and all covenants, promises and agreements by or on behalf of any
Grantor or the Administrative Agent in this Security Agreement shall bind and inure to the benefit of their respective
successors and permitted assigns. Except in a transaction expressly permitted under the First Lien Credit Agreement, no
Grantor may assign any of its rights or obligations hereunder without the written consent of the Administrative Agent.
Section 7.21. Survival
of Agreement. Without limiting any provision of the First Lien Credit Agreement or Section 7.17 hereof, all
covenants, agreements, indemnities, representations and warranties made by the Grantors in the Loan Documents and in the
certificates or other instruments delivered in connection with or pursuant to this Security Agreement or any other Loan
Document shall be considered to have been relied upon by the Lenders and shall survive the execution and delivery of the Loan
Documents and the making of any Loans, regardless of any investigation made by any such Lender or on its behalf and
notwithstanding that the Administrative Agent or any Lender may have had notice or knowledge of any Default or Event of
Default or incorrect representation or warranty at the time any credit is extended under the First Lien Credit Agreement, and
shall continue in full force and effect until the Termination Date, or with respect to any individual Grantor until such
Grantor is otherwise released from its obligations under this Security Agreement in accordance with the terms hereof and the
First Lien Credit Agreement.
ARTICLE 8
Notices
Section 8.01. Sending
Notices. Any notice required or permitted to be given under this Security Agreement shall be delivered in accordance with Section
9.01 of the First Lien Credit Agreement (it being understood and agreed that references in such Section to
“herein,” “hereunder” and other similar terms shall be deemed to be references to this Security
Agreement).
Section 8.02. Change
in Address for Notices. The Administrative Agent, any Grantor and any Lender may change the address or facsimile number
for service of notice upon it by a notice in writing to the other parties hereto.
ARTICLE 9
The Administrative Agent
Bank of America, N.A.
has been appointed Administrative Agent for the Lenders hereunder pursuant to Article 8 of the First Lien Credit Agreement.
It is expressly understood and agreed by the parties to this Security Agreement that any authority conferred upon the Administrative
Agent hereunder is subject to the terms of the delegation of authority made by the Lenders to the Administrative Agent pursuant
to the First Lien Credit Agreement, and that the Administrative Agent has agreed to act (and any successor Administrative Agent
shall act) as such hereunder only on the express conditions contained in such Article 8. Any successor Administrative Agent
appointed pursuant to Article 8 of the First Lien Credit Agreement shall be entitled to all the rights, interests and benefits
of the Administrative Agent hereunder.
By accepting the
benefits of this Security Agreement and each other Loan Document, each Secured Party expressly acknowledges and agrees that
this Security Agreement and each other Loan Document may be enforced only by the action of the Administrative Agent, and that
such Secured Party shall not have any right individually to seek to enforce or to enforce this Security Agreement or to
realize upon the security to be granted hereby, it being understood and agreed that such rights and remedies may be exercised
by the Administrative Agent for the benefit of the Secured Parties upon the terms of this Security Agreement and the other
Loan Documents.
The Administrative
Agent may rely on advice of counsel as to whether any or all UCC financing statements of the Grantors need to be amended as a result
of any of the changes described in Section 5.01(i) of the First Lien Credit Agreement. If any Grantor fails to provide information
to the Administrative Agent about such changes on a timely basis, the Administrative Agent shall not be liable or responsible to
any Secured Party for any failure to maintain a perfected security interest in such Grantor’s property constituting Collateral,
for which the Administrative Agent needed to have information relating to such changes. The Administrative Agent shall have no
duty to inquire about such changes if any Grantor does not inform the Administrative Agent of such changes, the Secured Parties
acknowledging and agreeing that it would not be feasible or practical for the Administrative Agent to search for information on
such changes if such information is not provided by any Grantor.
ARTICLE 10
Intercreditor Agreements
Section 10.01. ABL
Intercreditor Agreement.
(a) Notwithstanding
anything herein to the contrary, the Liens granted to the Administrative Agent under this Security Agreement and the exercise of
the rights and remedies of the Administrative Agent hereunder and under any other Collateral Document are subject to the provisions
of the ABL Intercreditor Agreement. In the event of any conflict between the terms of the ABL Intercreditor Agreement and this
Security Agreement or any other Collateral Document, the terms of the ABL Intercreditor Agreement shall govern and control.
(b) In
accordance with the terms of the ABL Intercreditor Agreement, all ABL US Collateral delivered to the ABL Agent shall be held by
the ABL Agent as gratuitous bailee for the Administrative Agent and the Secured Parties solely for the purpose of perfecting the
security interest granted under this Security Agreement. Notwithstanding anything herein to the contrary, prior to the Discharge
of ABL Obligations, to the extent any Grantor is required hereunder to deliver ABL US Collateral to the Administrative Agent and
is unable to do so as a result of having previously delivered such ABL US Collateral to the ABL Agent in accordance with the terms
of the ABL Loan Documents, such Grantor’s obligations hereunder with respect to such delivery shall be deemed satisfied by
the delivery to the ABL Agent, acting as gratuitous bailee of the Administrative Agent and the Secured Parties.
(c) Furthermore,
at all times prior to the Discharge of ABL Obligations, the Administrative Agent is authorized by the parties hereto to effect
transfers of ABL US Collateral at any time in its possession (and any “control” or similar agreements with respect
to ABL US Collateral) to the ABL Agent.
(d) Notwithstanding
anything to the contrary herein but subject to the ABL Intercreditor Agreement, in the event the ABL Loan Documents provide
for the grant of a security interest or pledge over the assets (other than ABL Exclusive Collateral (as defined in the ABL
Intercreditor Agreement)) of any Grantor and such assets do not otherwise constitute Collateral under this Security Agreement
or any other Loan Document, such Grantor shall (i) promptly grant a security interest in or pledge such assets to secure the
Secured Obligations, (ii) promptly take any actions necessary to perfect such security interest or pledge to the extent set
forth in the ABL Loan Documents and (iii) take all other steps reasonably requested by the Administrative Agent in connection
with the foregoing.
(e) Nothing
contained in the ABL Intercreditor Agreement shall be deemed to modify any of the provisions of this Security Agreement, which,
as among the Grantors and the Administrative Agent shall remain in full force and effect in accordance with its terms.
Section 10.02. Term
Intercreditor Agreement
(a) Notwithstanding
anything herein to the contrary, the Liens granted to the Administrative Agent under this Security Agreement and the exercise of
the rights and remedies of the Administrative Agent hereunder and under any other Collateral Document are subject to the provisions
of the Term Intercreditor Agreement. In the event of any conflict between the terms of the Term Intercreditor Agreement and this
Security Agreement or any other Collateral Document (other than the ABL Intercreditor Agreement), the terms of the Term Intercreditor
Agreement shall govern and control.
(b) Notwithstanding
anything to the contrary herein but subject to the Term Intercreditor Agreement, in the event the Second Lien Loan Documents provide
for the grant of a security interest or pledge over the assets of any Grantor and such assets do not otherwise constitute Collateral
under this Security Agreement or any other Loan Document, such Grantor shall (i) promptly grant a security interest in or pledge
such assets to secure the Secured Obligations, (ii) promptly take any actions necessary to perfect such security interest or pledge
to the extent set forth in the Second Lien Loan Documents and (iii) take all other steps reasonably requested by the Administrative
Agent in connection with the foregoing.
(c) Nothing
contained in the Term Intercreditor Agreement shall be deemed to modify any of the provisions of this Security Agreement, which,
as among the Grantors and the Administrative Agent shall remain in full force and effect in accordance with its terms.
[Signature Pages Follow]
IN WITNESS WHEREOF,
each Grantor and the Administrative Agent have executed this Security Agreement as of the date first above written.
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GRANTORS
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HAYWARD ACQUISITION CORP.
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By:
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Name:
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Title:
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HAYWARD INTERMEDIATE, INC.
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By:
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Name:
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Title:
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HAYWARD INDUSTRIES, INC.
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By:
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Name:
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Title:
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HAYWARD INDUSTRIAL PRODUCTS, INC.
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By:
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Name:
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Title:
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GOLDLINE PROPERTIES LLC
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By:
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Name:
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Title:
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Signature Page to First
Lien Pledge and Security Agreement
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HAYWARD/WRIGHT-AUSTIN, INC.
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By:
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Name:
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Title:
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WEBSTER PUMPS, INC.
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By:
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Name:
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Title:
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Signature Page to First
Lien Pledge and Security Agreement
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BANK OF AMERICA, N.A., as Administrative Agent
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By:
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Name:
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Title:
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Signature Page to First
Lien Pledge and Security Agreement
EXHIBIT
A
FORM OF
FIRST LIEN COPYRIGHT SECURITY AGREEMENT
FIRST LIEN COPYRIGHT
SECURITY AGREEMENT dated as of [●], 20[●] (this “Copyright Security Agreement”), by and [between][among]
[●], a [●] ([each, a][the] “Grantor”) and Bank of America, N.A., as administrative agent and collateral
agent (together with its successors and permitted assigns in such capacities, the “Administrative Agent”) for
the Secured Parties (as defined in the First Lien Credit Agreement).
Reference is made to
that certain First Lien Credit Agreement, dated as of August 4, 2017 (as amended, restated, amended and restated, supplemented
or otherwise modified from time to time, the “First Lien Credit Agreement”), by and among Hayward Industries,
Inc., a New Jersey corporation (as survivor of the Merger (as defined in the First Lien Credit Agreement) with Hayward Acquisition
Corp., a New Jersey corporation) (the “Borrower”), Hayward Intermediate, Inc., a Delaware corporation (“Holdings”),
the Lenders from time to time party thereto and the Administrative Agent.
Reference is also made[
to that certain Joinder No. [●] dated as of [●], 20[●], by [and among][●] [and [●]]and acknowledged
and agreed by the Administrative Agent,]1
to that certain First Lien Pledge and Security Agreement dated as of August 4, 2017 (as amended, restated, amended and restated,
supplemented or otherwise modified from time to time, the “Security Agreement”), by and among the Borrower,
Holdings, the other Grantors (as defined therein) and the Administrative Agent for the Secured Parties.
The Lenders (as defined
in the First Lien Credit Agreement) have extended credit to the Borrower subject to the terms and conditions set forth in the First
Lien Credit Agreement. Consistent with the requirements set forth in Sections 4.01 and 5.12 of the First Lien Credit
Agreement and Section 4.03(c) of the Security Agreement, the parties hereto agree as follows:
SECTION 1. Terms.
Capitalized terms used herein and not otherwise defined herein have the meanings specified in the Security Agreement.
SECTION 2. Grant
of Security Interest. As security for the prompt and complete payment or performance, as the case may be, in full of the Secured
Obligations, [each][the] Grantor, pursuant to the Security Agreement, did and hereby does pledge, collaterally assign, mortgage,
transfer and grant to the Administrative Agent, its successors and permitted assigns, on behalf of and for the benefit of the Secured
Parties, a continuing security interest in all of its right, title and interest in, to and under all of the following assets, whether
now owned by or owing to, or hereafter acquired by or arising in favor of [such][the] Grantor, and regardless of where located
(collectively, the “Copyright Collateral”):
(a) all
copyrights, rights and interests in copyrights, works protectable by copyright whether published or unpublished,
registrations and copyright applications (including but not limited to the registrations and applications set forth on Schedule
I hereto); (b) all renewals of any of the foregoing; (c) all income, royalties, damages, and payments now or hereafter
due and/or payable under any of the foregoing, including, without limitation, damages or payments for past, present or future
infringements for any of the foregoing; (d) the right to sue for past, present, and future infringements of any of the
foregoing; and (e) all rights corresponding to any of the foregoing.
1 To be used after
a Joinder by a new Restricted Subsidiary Grantor.
SECTION 3. Security
Agreement. The security interests granted to the Administrative Agent herein are granted in furtherance, and not in limitation
of, the security interests granted to the Administrative Agent pursuant to the Security Agreement. [Each][The] Grantor hereby acknowledges
and affirms that the rights and remedies of the Administrative Agent with respect to the Copyright Collateral are more fully set
forth in the Security Agreement, the terms and provisions of which are hereby incorporated herein by reference as if fully set
forth herein. In the event of any conflict between the terms of this Copyright Security Agreement and the Security Agreement, the
terms of the Security Agreement shall govern.
SECTION 4. Governing
Law. This Copyright Security Agreement shall be governed by, and construed in accordance with, the laws of the State of New
York.
SECTION 5. Counterparts.
This Copyright Security Agreement may be executed in one or more counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but
one and the same instrument.
[Signature Pages Follow]
IN WITNESS WHEREOF,
the parties hereto have duly executed this Copyright Security Agreement as of the day and year first above written.
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[●]
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By:
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Name:
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[●]
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Title:
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[●]
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[Signature Page to First Lien Copyright Security Agreement]
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BANK OF AMERICA, N.A., as Administrative Agent
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By:
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Name:
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Title:
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[Signature Page to First Lien Copyright Security Agreement]
SCHEDULE
I
COPYRIGHTS
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REGISTERED OWNER
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REGISTRATION NUMBER
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REGISTRATION DATE
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TITLE
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COPYRIGHT APPLICATIONS
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APPLICANT
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APPLICATION NUMBER
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FILING DATE
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TITLE
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EXCLUSIVE COPYRIGHT LICENSES
ANNEX A
TO FIRST LIEN COPYRIGHT SECURITY AGREEMENT
FORM OF
FIRST LIEN COPYRIGHT SECURITY AGREEMENT SUPPLEMENT
FIRST LIEN COPYRIGHT
SECURITY AGREEMENT SUPPLEMENT dated as of [●], 20[●] (this “Copyright Security Agreement Supplement”),
by and [between][among] [●], a [●] ([each, a][the] “Grantor”) and Bank of America, N.A., as administrative
agent and collateral agent (together with its successors and permitted assigns in such capacities, the “Administrative
Agent”) for the Secured Parties (as defined in the First Lien Credit Agreement).
Reference is made to
that certain First Lien Credit Agreement, dated as of August 4, 2017 (as amended, restated, amended and restated, supplemented
or otherwise modified from time to time, the “First Lien Credit Agreement”), by and among Hayward Industries,
Inc., a New Jersey corporation (as survivor of the Merger (as defined in the First Lien Credit Agreement) with Hayward Acquisition
Corp., a New Jersey corporation) (the “Borrower”), Hayward Intermediate, Inc., a Delaware corporation (“Holdings”),
the Lenders from time to time party thereto and the Administrative Agent.
Reference is also made
to that certain First Lien Pledge and Security Agreement dated as of August 4, 2017 (as amended, restated, amended and restated,
supplemented or otherwise modified from time to time, the “Security Agreement”), by and among the Borrower,
Holdings, the other Grantors (as defined therein) from time to time party thereto and the Administrative Agent for the Secured
Parties under and as defined in the First Lien Credit Agreement.
Reference is also made
to that certain First Lien Copyright Security Agreement, dated as of [●], 20[●] (as amended, restated, amended and
restated, supplemented or otherwise modified from time to time and in effect on the date hereof, the “Copyright Security
Agreement”) by and [between] [among] the Grantor[s] thereto and the Administrative Agent for the Secured Parties (as
defined in the First Lien Credit Agreement).
The Lenders (as defined
in the First Lien Credit Agreement) have extended credit to the Borrower subject to the terms and conditions set forth in the First
Lien Credit Agreement. Under the terms of the Security Agreement, [each] [the] Grantor has granted to the Administrative Agent
for the benefit of the Secured Parties a security interest in the Additional Copyright Collateral (as defined below) and has agreed,
consistent with the requirements of Section 4.03(c) of the Security Agreement, to execute this Copyright Security Agreement
Supplement. Now, therefore, the parties hereto agree as follows:
SECTION 1. Terms.
Capitalized terms used in this Copyright Security Agreement Supplement and not otherwise defined herein have the meanings specified
in the Security Agreement.
SECTION
2. Grant of Security Interest. As security for the prompt and complete payment or performance, as the case may be,
in full of the Secured Obligations, [each][the] Grantor, pursuant to the Security Agreement, did and hereby does pledge,
collaterally assign, mortgage, transfer and grant to the Administrative Agent, its successors and permitted assigns, on
behalf of and for the benefit of the Secured Parties, a continuing security interest in all of its right, title and interest
in, to and under all of the following assets, whether now owned by or owing to, or hereafter acquired by or arising in favor
of [such][the] Grantor, and regardless of where located (collectively, the “Additional Copyright
Collateral”):
(a) all
copyrights, rights and interests in copyrights, works protectable by copyright whether published or unpublished, registrations
and copyright applications (including but not limited to the registrations and applications set forth on Schedule I hereto); (b)
all renewals of any of the foregoing; (c) all income, royalties, damages, and payments now or hereafter due and/or payable under
any of the foregoing, including, without limitation, damages or payments for past, present or future infringements for any of the
foregoing; (d) the right to sue for past, present, and future infringements of any of the foregoing; and (e) all rights corresponding
to any of the foregoing.
SECTION 3. Security
Agreement. The security interests granted to the Administrative Agent herein are granted in furtherance, and not in limitation
of, the security interests granted to the Administrative Agent pursuant to the Security Agreement. [Each][The] Grantor hereby acknowledges
and affirms that the rights and remedies of the Administrative Agent with respect to the Additional Copyright Collateral are more
fully set forth in the Security Agreement, the terms and provisions of which are hereby incorporated herein by reference as if
fully set forth herein. In the event of any conflict between the terms of this Copyright Security Agreement Supplement and the
Security Agreement, the terms of the Security Agreement shall govern.
SECTION 4. Governing
Law. This Copyright Security Agreement Supplement shall be governed by, and construed in accordance with, the laws of the State
of New York.
SECTION 5. Counterparts.
This Copyright Security Agreement Supplement may be executed in one or more counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together
shall constitute but one and the same instrument.
[Signature Pages Follow]
IN WITNESS WHEREOF,
the parties hereto have duly executed this Copyright Security Agreement Supplement as of the day and year first above written.
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[●]
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By:
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Name:
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[●]
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Title:
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[●]
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[Signature Page to First Lien Copyright Security Agreement Supplement]
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BANK OF AMERICA, N.A., as Administrative Agent
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By:
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Name:
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Title:
|
[Signature Page to First Lien Copyright Security Agreement
Supplement]
SCHEDULE
I
COPYRIGHTS
|
REGISTERED OWNER
|
REGISTRATION NUMBER
|
REGISTRATION DATE
|
TITLE
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COPYRIGHT APPLICATIONS
|
APPLICANT
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APPLICATION NUMBER
|
FILING DATE
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TITLE
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EXCLUSIVE COPYRIGHT LICENSES
EXHIBIT
B
FORM OF
FIRST LIEN PATENT SECURITY AGREEMENT
FIRST LIEN PATENT SECURITY
AGREEMENT dated as of [●], 20[●] (this “Patent Security Agreement”), by and [between][among] [●],
a [●] ([each, a][the] “Grantor”) and Bank of America, N.A., as administrative agent and collateral agent
(together with its successors and permitted assigns in such capacities, the “Administrative Agent”) for the
Secured Parties (as defined in the First Lien Credit Agreement).
Reference is made to
that certain First Lien Credit Agreement, dated as of August 4, 2017 (as amended, restated, amended and restated, supplemented
or otherwise modified from time to time, the “First Lien Credit Agreement”), by and among Hayward Industries,
Inc., a New Jersey corporation (as survivor of the Merger (as defined in the First Lien Credit Agreement) with Hayward Acquisition
Corp., a New Jersey corporation) (the “Borrower”), Hayward Intermediate, Inc., a Delaware corporation (“Holdings”),
the Lenders from time to time party thereto and Bank of America, N.A., in its capacities as administrative agent and collateral
agent (together with its successors and permitted assigns in such capacities, the “Administrative Agent”).
Reference is also made[
to that certain Joinder No. [●] dated as of [●], 20[●], by [and among][●] [and [●]] and acknowledged
and agreed by the Administrative Agent,]1
to that certain First Lien Pledge and Security Agreement dated as of August 4, 2017
(as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Security Agreement”),
by and among the Borrower, Holdings, the other Grantors (as defined therein) from time to time party thereto and the Administrative
Agent for the Secured Parties under and as defined in the First Lien Credit Agreement.
The Lenders (as defined
in the First Lien Credit Agreement) have extended credit to the Borrower subject to the terms and conditions set forth in the First
Lien Credit Agreement. Consistent with the requirements set forth in Sections 4.01 and 5.12 of the First Lien Credit
Agreement and Section 4.03(c) of the Security Agreement, the parties hereto agree as follows:
SECTION 1. Terms.
Capitalized terms used herein and not otherwise defined herein have the meanings specified in the Security Agreement.
SECTION 2. Grant
of Security Interest. As security for the prompt and complete payment or performance, as the case may be, in full of the Secured
Obligations, [each][the] Grantor, pursuant to the Security Agreement, did and hereby does pledge, collaterally assign, mortgage,
transfer and grant to the Administrative Agent, its successors and permitted assigns, on behalf of and for the benefit of the Secured
Parties, a continuing security interest in all of its right, title and interest in, to and under all of the following assets, whether
now owned by or owing to, or hereafter acquired by or arising in favor of [such][the] Grantor, and regardless of where located
(collectively, the “Patent Collateral”):
(a) any
and all patents and patent applications (including but not limited to the patents and patent applications listed on Schedule
I hereto); (b) all inventions described and claimed therein; (c) all reissues, divisions, continuations, renewals,
extensions and continuations in part thereof; (d) all income, royalties, damages, claims, and payments now or hereafter due
or payable under and with respect thereto, including, without limitation, damages and payments for past, present and future
infringements thereof; (e) all rights to sue for past, present, and future infringements thereof; and (f) all rights
corresponding to any of the foregoing, in each case, excluding any Excluded Assets.
1
To be used after a Joinder by a new Restricted Subsidiary Grantor.
SECTION 3. Security
Agreement. The security interests granted to the Administrative Agent herein are granted in furtherance, and not in limitation
of, the security interests granted to the Administrative Agent pursuant to the Security Agreement. [Each][The] Grantor hereby acknowledges
and affirms that the rights and remedies of the Administrative Agent with respect to the Patent Collateral are more fully set forth
in the Security Agreement, the terms and provisions of which are hereby incorporated herein by reference as if fully set forth
herein. In the event of any conflict between the terms of this Patent Security Agreement and the Security Agreement, the terms
of the Security Agreement shall govern.
SECTION 4. Governing
Law. This Patent Security Agreement shall be governed by, and construed in accordance with, the laws of the State of New York.
SECTION 5. Counterparts.
This Patent Security Agreement may be executed in one or more counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute
but one and the same instrument.
[Signature Pages Follow]
IN WITNESS WHEREOF,
the parties hereto have duly executed this Patent Security Agreement as of the day and year first above written.
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[●]
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By:
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Name:
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[●]
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Title:
|
[●]
|
[Signature Page to First Lien Patent Security Agreement]
|
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BANK OF AMERICA, N.A., as Administrative Agent
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By:
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Name:
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Title:
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[Signature Page to First Lien Patent Security Agreement]
SCHEDULE
I
PATENTS
|
REGISTERED OWNER
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PATENT NO.
|
ISSUE DATE
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TITLE
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PATENT APPLICATIONS
|
APPLICANT
|
APPLICATION NO.
|
FILING DATE
|
TITLE
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annex a
to first lien patent security agreement
FORM OF
FIRST LIEN PATENT SECURITY AGREEMENT SUPPLEMENT
FIRST LIEN PATENT SECURITY
AGREEMENT SUPPLEMENT dated as of [•], 20[•] (this “Patent Security Agreement Supplement”), by and
[between][among] [•], a [•] ([each, a][the] “Grantor”) and Bank of America, N.A., as administrative
agent and collateral agent (together with its successors and permitted assigns in such capacities, the “Administrative
Agent”) for the Secured Parties (as defined in the First Lien Credit Agreement).
Reference is made to
that certain First Lien Credit Agreement, dated as of August 4, 2017 (as amended, restated, amended and restated, supplemented
or otherwise modified from time to time, the “First Lien Credit Agreement”), by and among Hayward Industries,
Inc., a New Jersey corporation (as survivor of the Merger (as defined in the First Lien Credit Agreement) with Hayward Acquisition
Corp., a New Jersey corporation) (the “Borrower”), Hayward Intermediate, Inc., a Delaware corporation (“Holdings”),
the Lenders from time to time party thereto and the Administrative Agent.
Reference is also made
to that certain First Lien Pledge and Security Agreement dated as of August 4, 2017 (as amended, restated, amended and restated,
supplemented or otherwise modified from time to time, the “Security Agreement”), by and among the Borrower,
Holdings, the other Grantors (as defined therein) and the Administrative Agent for the Secured Parties.
Reference is also made
to that certain First Lien Patent Security Agreement, dated as of [•], 20[*| (as amended, restated, amended and restated,
supplemented or otherwise modified from time to time and in effect on the date hereof, the “Patent Security Agreement”)
by and [between][among] the Grantor[s] thereto and the Administrative Agent for the Secured Parties.
The Lenders (as defined
in the First Lien Credit Agreement) have extended credit to the Borrower subject to the terms and conditions set forth in the First
Lien Credit Agreement. Under the terms of the Security Agreement, [each] [the] Grantor has granted to the Administrative Agent
for the benefit of the Secured Parties a security interest in the Additional Patent Collateral (as defined below) and has agreed,
consistent with the requirements of Section 4.03(c) of the Security Agreement, to execute this Patent Security Agreement
Supplement. Now, therefore, the parties hereto agree as follows:
SECTION 1. Terms.
Capitalized terms used in this Patent Security Agreement Supplement and not otherwise defined herein have the meanings specified
in the Security Agreement.
SECTION 2. Grant
of Security Interest. As security for the prompt and complete payment or performance, as the case may be, in full of the
Secured Obligations, [each][the] Grantor, pursuant to the Security Agreement, did and hereby does pledge, collaterally
assign, mortgage, transfer and grant to the Administrative Agent, its successors and permitted assigns, on behalf of and for
the benefit of the Secured Parties, a continuing security interest in all of its right, title and interest in, to and under
all of the following assets, whether now owned by or owing to, or hereafter acquired by or arising in favor of [such][the]
Grantor, and regardless of where located (collectively, the “Additional Patent Collateral”):
(a) any and
all patents and patent applications (including but not limited to the patents and patent applications listed on Schedule I
hereto); (b) all inventions described and claimed therein; (c) all reissues, divisions, continuations, renewals, extensions and
continuations in part thereof; (d) all income, royalties, damages, claims, and payments now or hereafter due or payable under and
with respect thereto, including, without limitation, damages and payments for past, present and future infringements thereof; (e)
all rights to sue for past, present, and future infringements thereof; and (f) all rights corresponding to any of the foregoing,
in each case, excluding any Excluded Assets.
SECTION 3. Security
Agreement. The security interests granted to the Administrative Agent herein are granted in furtherance, and not in limitation
of, the security interests granted to the Administrative Agent pursuant to the Security Agreement. [Each][The] Grantor hereby acknowledges
and affirms that the rights and remedies of the Administrative Agent with respect to the Additional Patent Collateral are more
fully set forth in the Security Agreement, the terms and provisions of which are hereby incorporated herein by reference as if
fully set forth herein. In the event of any conflict between the terms of this Patent Security Agreement Supplement and the Security
Agreement, the terms of the Security Agreement shall govern.
SECTION 4. Governing
Law. This Patent Security Agreement Supplement shall be governed by, and construed in accordance with, the laws of the State
of New York.
SECTION 5. Counterparts.
This Patent Security Agreement Supplement may be executed in one or more counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall
constitute but one and the same instrument.
[Signature Pages Follow]
IN WITNESS WHEREOF,
the parties hereto have duly executed this Patent Security Agreement Supplement as of the day and year first above written.
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[●]
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By:
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Name:
|
[●]
|
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Title:
|
[●]
|
[Signature Page to First Lien Patent Security Agreement Supplement]
|
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BANK OF AMERICA
as Administrative Agent
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By:
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Name:
|
|
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Title:
|
|
[Signature Page to First Lien Patent Security Agreement Supplement]
SCHEDULE
I
PATENTS
|
REGISTERED OWNER
|
PATENT NO.
|
ISSUE DATE
|
TITLE
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PATENT APPLICATIONS
|
APPLICANT
|
APPLICATION NO.
|
FILING DATE
|
TITLE
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EXHIBIT
C
FORM OF
FIRST LIEN TRADEMARK SECURITY AGREEMENT
FIRST LIEN TRADEMARK
SECURITY AGREEMENT dated as of [•], 20[•] (this “Trademark Security Agreement”), by and [between][among]
[•], a [•] ([each, a][the] “Grantor”) and Bank of America, N.A., as administrative agent and collateral
agent (together with its successors and permitted assigns in such capacities. the “Administrative Agent”) for
the Secured Parties (as defined in the First Lien Credit Agreement).
Reference is made to
that certain First Lien Credit Agreement. dated as of August 4, 2017 (as amended, restated, amended and restated, supplemented
or otherwise modified from time to time, the “First Lien Credit Agreement”), by and among Hayward Industries,
Inc., a New Jersey corporation (as survivor of the Merger (as defined in the First Lien Credit Agreement) with Hayward Acquisition
Corp.. a New Jersey corporation) (the “Borrower”), Hayward Intermediate, Inc., a Delaware corporation (“Holdings”),
the Lenders from time to time party thereto and the Administrative Agent.
Reference is also made[
to that certain Joinder No. [•] dated as of [•], 20[•], by [and among ][•] [and [•] ]and acknowledged
and agreed by the Administrative Agent,] to that certain First Lien Pledge and Security Agreement dated as of August 4, 2017 (as
amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Security Agreement”),
by and among the Borrower, Holdings, the other Grantors (as defined therein) and the Administrative Agent for the Secured Parties.
The Lenders (as defined
in the First Lien Credit Agreement) have extended credit to the Borrower subject to the terms and conditions set forth in the First
Lien Credit Agreement. Consistent with the requirements set forth in Sections 4.01 and 5.12 of the First Lien Credit
Agreement and Section 4.03(c) of the Security Agreement, the parties hereto agree as follows:
SECTION 1. Terms.
Capitalized terms used herein and not otherwise defined herein have the meanings specified in the Security Agreement.
SECTION 2. Grant
of Security Interest. As security for the prompt and complete payment or performance, as the case may be, in full of the Secured
Obligations, [each][the] Grantor, pursuant to the Security Agreement, did and hereby does pledge, collaterally assign, mortgage,
transfer and grant to the Administrative Agent, its successors and permitted assigns, on behalf of and for the benefit of the Secured
Parties, a continuing security interest in all of its right, title and interest in, to and under all of the following assets, whether
now owned by or owing to, or hereafter acquired by or arising in favor of [such][the] Grantor, and regardless of where located
(collectively, the “Trademark Collateral”):
(a) all
trademarks (including service marks), common law marks, trade names, trade dress, domain names and logos, slogans and other
indicia of origin under the laws of any jurisdiction in the world, and the registrations and applications for registration
thereof (including but not limited to the registrations and applications listed on Schedule I hereto); and the
goodwill of the business connected with the use of and symbolized by the foregoing; (b) all renewals of the foregoing; (c)
all income, royalties, damages, and payments now or hereafter due or payable with respect thereto, including, without
limitation, damages, claims and payments for past, present and future infringements or dilutions thereof; (d) all rights to
sue for past, present, and future infringements or dilutions of any of the foregoing, including the right to settle suits
involving claims and demands for royalties owing; and (e) all rights corresponding to any of the foregoing. Notwithstanding
anything herein to the contrary, in no event shall the Trademark Collateral include (i) any foreign IP Rights and any
intent-to-use Trademark application prior to the filing of a “Statement of Use” or an “Amendment to
Allege Use” with respect thereto, only to the extent, if any, that, and solely during the period, if any, in which, the
grant of a security interest therein would impair the validity or enforceability of such intent-to-use Trademark
application or any registration issuing therefrom under applicable law, or (ii) any other Excluded Assets.
SECTION 3. Security
Agreement. The security interests granted to the Administrative Agent herein are granted in furtherance, and not in limitation
of, the security interests granted to the Administrative Agent pursuant to the Security Agreement. [Each][The] Grantor hereby acknowledges
and affirms that the rights and remedies of the Administrative Agent with respect to the Trademark Collateral are more fully set
forth in the Security Agreement, the terms and provisions of which are hereby incorporated herein by reference as if fully set
forth herein. In the event of any conflict between the terms of this Trademark Security Agreement and the Security Agreement, the
terms of the Security Agreement shall govern.
SECTION 4. Governing
Law. This Trademark Security Agreement shall be governed by, and construed in accordance with, the laws of the State of New
York.
SECTION 5. Counterparts.
This Trademark Security Agreement may be executed in one or more counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but
one and the same instrument.
[Signature Pages Follow]
IN WITNESS WHEREOF,
the parties hereto have duly executed this Trademark Security Agreement as of the day and year first above written.
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[•]
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By:
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Name: [•]
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Title: [•]
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[Signature Page to First Lien Trademark Security Agreement]
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BANK OF AMERICA
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as Administrative Agent
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By:
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Name:
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Title:
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[Signature Page to First Lien Trademark Security Agreement]
SCHEDULE
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TRADEMARKS
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REGISTERED OWNER
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REGISTRATION NUMBER
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REGISTRATION DATE
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TRADEMARK
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TRADEMARK APPLICATIONS
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APPLICANT
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APPLICATION NO.
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FILING DATE
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TRADEMARK
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ANNEX A
TO FIRST LIEN TRADEMARK SECURITY AGREEMENT
FORM OF
FIRST LIEN TRADEMARK SECURITY AGREEMENT SUPPLEMENT
FIRST LIEN TRADEMARK
SECURITY AGREEMENT SUPPLEMENT dated as of [•], 20[•] (this “Trademark Security Agreement Supplement”),
by and [between][among] [•], a [•] ([each, a][the] “Grantor”) and Bank of America, N.A., as administrative
agent and collateral agent (together with its successors and permitted assigns in such capacities, the “Administrative
Agent”) for the Secured Parties (as defined in the First Lien Credit Agreement).
Reference is made to
that certain First Lien Credit Agreement, dated as of August 4, 2017 (as amended, restated, amended and restated, supplemented
or otherwise modified from time to time, the “First Lien Credit Agreement”), by and among Hayward Industries,
Inc., a New Jersey corporation (as survivor of the Merger (as defined in the First Lien Credit Agreement) with Hayward Acquisition
Corp., a New Jersey corporation) (the “Borrower”), Hayward Intermediate, Inc., a Delaware corporation (“Holdings”),
the Lenders from time to time party thereto and the Administrative Agent.
Reference is also made
to that certain First Lien Pledge and Security Agreement dated as of August 4, 2017 (as amended, restated, amended and restated,
supplemented or otherwise modified from time to time, the “Security Agreement”), by and among the Borrower,
Holdings, the other Grantors (as defined therein) and the Administrative Agent for the Secured Parties.
Reference is also made
to that certain First Lien Trademark Security Agreement, dated as of [•], 20[•] (as amended, restated, amended and restated,
supplemented or otherwise modified from time to time and in effect on the date hereof, the “Trademark Security Agreement”)
by and [between] [among] the Grantor[s] thereto and the Administrative Agent for the Secured Parties.
The Lenders (as defined
in the First Lien Credit Agreement) have extended credit to the Borrower subject to the terms and conditions set forth in the First
Lien Credit Agreement. Under the terms of the Security Agreement, [each] [the] Grantor has granted to the Administrative Agent
for the benefit of the Secured Parties a security interest in the Additional Trademark Collateral (as defined below) and has agreed,
consistent with the requirements of Section 4.03(c) of the Security Agreement, to execute this Trademark Security Agreement
Supplement. Now, therefore, the parties hereto agree as follows
SECTION 1. Terms.
Capitalized terms used in this Trademark Security Agreement Supplement and not otherwise defined herein have the meanings specified
in the Security Agreement.
SECTION 2. Grant
of Security Interest. As security for the prompt and complete payment or performance, as the case may be, in full of the Secured
Obligations, [each][the] Grantor, pursuant to the Security Agreement, did and hereby does pledge, collaterally assign, mortgage,
transfer and grant to the Administrative Agent, its successors and permitted assigns, on behalf of and for the ratable benefit
of the Secured Parties, a continuing security interest in all of its right, title or interest in, to or under all of the following
assets, whether now owned or at any time hereafter acquired by or arising in favor of the [such][the] Grantor and regardless of
where located (collectively, the “Additional Trademark Collateral”):
(a) all
trademarks (including service marks), common law marks, trade names, trade dress, domain names and logos, slogans and other indicia
of origin under the laws of any jurisdiction in the world, and the registrations and applications for registration thereof (including
but not limited to the registrations and applications listed on Schedule I hereto); and the goodwill of the business connected
with the use of and symbolized by the foregoing; (b) all renewals of the foregoing; (c) all income, royalties, damages, and payments
now or hereafter due or payable with respect thereto, including, without limitation, damages, claims and payments for past, present
and future infringements or dilutions thereof; (d) all rights to sue for past, present, and future infringements or dilutions of
any of the foregoing, including the right to settle suits involving claims and demands for royalties owing; and (e) all rights
corresponding to any of the foregoing. Notwithstanding anything herein to the contrary, in no event shall the Additional Trademark
Collateral include (i) any foreign IP Rights and any intent-to-use Trademark application prior to the filing of a “Statement
of Use” or an “Amendment to Allege Use” with respect thereto, only to the extent, if any, that, and solely during
the period, if any, in which, the grant of a security interest therein would impair the validity or enforceability of such intent-to-use
Trademark application or any registration issuing therefrom under applicable law, or (ii) any other Excluded Assets.
SECTION 3. Security
Agreement. The security interests granted to the Administrative Agent herein are granted in furtherance, and not in limitation
of, the security interests granted to the Administrative Agent pursuant to the Security Agreement. [Each][The] Grantor hereby acknowledges
and affirms that the rights and remedies of the Administrative Agent with respect to the Additional Trademark Collateral are more
fully set forth in the Security Agreement, the terms and provisions of which are hereby incorporated herein by reference as if
fully set forth herein. In the event of any conflict between the terms of this Trademark Security Agreement Supplement and the
Security Agreement, the terms of the Security Agreement shall govern.
SECTION 4. Governing
Law. This Trademark Security Agreement Supplement shall be governed by, and construed in accordance with, the laws of the State
of New York.
SECTION 5. Counterparts.
This Trademark Security Agreement Supplement may be executed in one or more counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall
constitute but one and the same instrument.
[Signature Pages Follow]
IN WITNESS WHEREOF,
the parties hereto have duly executed this Trademark Security Agreement Supplement as of the day and year first above written.
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[•]
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By:
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Name: [•]
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Title: [•]
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[Signature Page to First Lien Trademark
Security Agreement Supplement]
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BANK OF AMERICA
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as Administrative Agent
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By:
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Name:
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Title:
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[Signature Page to First Lien Trademark
Security Agreement Supplement]
SCHEDULE
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TRADEMARKS
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REGISTERED OWNER
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REGISTRATION NUMBER
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REGISTRATION DATE
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TRADEMARK
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TRADEMARK APPLICATIONS
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APPLICANT
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APPLICATION NO.
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FILING DATE
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TRADEMARK
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EXHIBIT
D
FORM OF
FIRST LIEN SECURITY AGREEMENT JOINDER
JOINDER NO. [•]
dated as of [•] (this “Joinder”), to the First Lien Pledge and Security Agreement, dated as of August 4, 2017
(as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Security Agreement”),
by and among Hayward Industries, Inc., a New Jersey corporation (as survivor of the Merger (as defined in the First Lien Credit
Agreement) with Hayward Acquisition Corp., a New Jersey corporation) (the “Borrower”), Hayward Intermediate, Inc.,
a Delaware corporation (“Holdings”), the other Grantors (as defined in the Security Agreement) and Bank of America,
N.A., in its capacities as administrative agent and collateral agent (together with its successors and permitted assigns in such
capacities, the “Administrative Agent”) for the Secured Parties.
A. Reference
is made to that certain First Lien Credit Agreement, dated as of August 4, 2017 (as amended, restated, amended and restated, supplemented
or otherwise modified from time to time, the “First Lien Credit Agreement”), by and among, inter alios,
the Borrower, Holdings, the Lenders from time to time party thereto and the Administrative Agent.
B. Capitalized
terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the First Lien Credit Agreement
or the Security Agreement, as applicable.
C. [The][Each]
undersigned Restricted Subsidiary ([each a][the] “New Subsidiary”) is executing this Joinder in accordance with
Section 7.10 of the Security Agreement and Section 5.12 of the First Lien Credit Agreement, each of which require
that each additional Domestic Subsidiary of the Borrower becomes a Grantor under the Security Agreement by executing and delivering
an instrument in the form of this Joinder in order to induce the Lenders to make additional Loans and as consideration for Loans
previously made.
Accordingly, the Administrative
Agent and [each][the] New Subsidiary agree as follows:
SECTION 1. In accordance
with Section 7.10 of the Security Agreement, [the][each] New Subsidiary by its signature below becomes a Grantor under
the Security Agreement with the same force and effect as if originally named therein as a Grantor, and [the][each] New Subsidiary
hereby (a) agrees to all the terms and provisions of the Security Agreement applicable to it as a Grantor thereunder and (b) represents
and warrants as of the date hereof that the applicable representations and warranties made by it as a Grantor thereunder on the
date hereof that are qualified as to materiality are true and correct in all respects on and as of the date hereof and those that
are not so qualified are true and correct in all material respects on and as of the date hereof; it being understood and agreed
that any representation or warranty that expressly relates to an earlier date shall be deemed to refer to the date hereof. In
furtherance of the foregoing, [the][each] New Subsidiary, as security for the payment and performance in full of the Secured Obligations,
hereby pledges, collaterally assigns, mortgages, transfers and grants to the Administrative Agent, its successors and permitted
assigns, for the benefit of the Secured Parties, their successors and permitted assigns, a security interest in and Lien on all
of [the][each] New Subsidiary’s right, title and interest in and to the Collateral of [the][each] New Subsidiary to the
extent provided in Section 2.01 of the Security Agreement. Upon the effectiveness of this Joinder, each reference to a
“Grantor” and “Subsidiary Guarantor” in the Security Agreement shall be deemed to include [the][each]
New Subsidiary. The Security Agreement is hereby incorporated herein by reference.
SECTION 2. [The][Each]
New Subsidiary represents and warrants to the Administrative Agent and the other Secured Parties that this Joinder has been duly
authorized, executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance
with its terms, subject to the Legal Reservations.
SECTION 3. This Joinder
may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an
original, but all of which when taken together shall constitute a single contract. This Joinder shall become effective when the
Administrative Agent shall have received a counterpart of this Joinder that bears the signature of [the][each] New Subsidiary and
the Administrative Agent has executed a counterpart hereof. Delivery of an executed signature page to this Joinder by facsimile
transmission or by email as a “.pdf’ or “.tiff’ attachment shall be as effective as delivery of a manually
signed counterpart of this Joinder.
SECTION 4. Attached
hereto is a duly prepared, completed and executed Perfection Certificate with respect to [the][each] New Subsidiary, and [the][each]
New Subsidiary hereby represents and warrants that the information set forth therein is correct and complete in all material respects
as of the date hereof.
SECTION 5. Except as
expressly supplemented hereby, the Security Agreement shall remain in full force and effect.
SECTION 6. THIS JOINDER
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 7. In case
any one or more of the provisions contained in this Joinder is invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein and in the Security Agreement shall not in any way be
affected or impaired thereby (it being understood that the invalidity of a particular provision in a particular jurisdiction shall
not in and of itself affect the validity of such provision in any other jurisdiction). The parties hereto shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes
as close as possible to that of the invalid, illegal or unenforceable provisions.
SECTION 8. All communications
and notices hereunder shall be in writing and given as provided in Section 8.01 of the Security Agreement.
SECTION 9. [The][Each]
New Subsidiary agrees to reimburse the Administrative Agent for its expenses in connection with this Joinder, including the fees,
other charges and disbursements of counsel in accordance with Section 9.03(a) of the First Lien Credit Agreement.
SECTION 10. This Joinder
shall constitute a Loan Document, under and as defined in, the First Lien Credit Agreement.
[Signature pages follow]
IN WITNESS WHEREOF,
[the][each] New Subsidiary has duly executed this Joinder to the Security Agreement, and the Administrative Agent, for the benefit
of the Secured Parties, has caused the same to be accepted, as of the day and year first above written.
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[NAME OF NEW SUBSIDIARY]
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By:
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Name:
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Title:
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[Signature Page to First Lien Security Agreement
Joinder]
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ACKNOWLEDGED AND ACCEPTED:
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BANK OF AMERICA
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as Administrative Agent
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By:
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Name:
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Title:
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[Signature Page to First Lien Security Agreement
Joinder]
EXHIBIT J-1
[FORM OF]
U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Lenders That Are Not Partnerships
For U.S. Federal Income Tax Purposes)
Reference is hereby
made to that certain First Lien Credit Agreement dated as of August 4, 2017 (as amended, restated, amended and restated, supplemented
or otherwise modified and in effect on the date hereof, the “First Lien Credit Agreement”), by and among Hayward
Industries, Inc., a New Jersey corporation (as survivor of the Merger (as defined in the First Lien Credit Agreement) with Hayward
Acquisition Corp., a New Jersey corporation) (the “Borrower”), Hayward Intermediate, Inc., a Delaware corporation
(“Holdings”), the Lenders from time to time party thereto including, Bank of America, N.A. in its capacities
as administrative agent and collateral agent (the “Administrative Agent”).
Pursuant to the provisions
of Section 2.17(f)(ii)(B)(3) of the First Lien Credit Agreement, the undersigned hereby certifies that (i) it is the sole
record and beneficial owner of the Loan(s) (as well as any Promissory Notes evidencing such Loan(s)) in respect of which it is
providing this certificate, (ii) it is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (iii) it
is not a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Code, (iv) it is
not a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code and (v) the interest payments
in question are not effectively connected with the undersigned’s conduct of a United States trade or business.
The undersigned has
furnished the Borrower and the Administrative Agent with a duly executed certificate of its non-U.S. person status on IRS Form
W-8BEN or IRS Form W-8BEN-E, as applicable.
By executing this certificate,
the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform
each of the Borrower and the Administrative Agent, and (2) the undersigned shall have at all times furnished each of the Borrower
and the Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which
each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.
Unless otherwise defined
herein, terms defined in the First Lien Credit Agreement and used herein shall have the meanings given to them in the First Lien
Credit Agreement.
[NAME OF LENDER]
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By:
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Name:
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Title:
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Date: [•] [•], 20[•]
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EXHIBIT J-2
[FORM OF]
U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Participants That Are Not Partnerships
For U.S. Federal Income Tax Purposes)
Reference is hereby
made to that certain First Lien Credit Agreement dated as of August 4, 2017 (as amended, restated, amended and restated, supplemented
or otherwise modified and in effect on the date hereof, the “First Lien Credit Agreement”), by and among Hayward
Industries, Inc., a New Jersey corporation (as survivor of the Merger (as defined in the First Lien Credit Agreement) with Hayward
Acquisition Corp., a New Jersey corporation) (the “Borrower”), Hayward Intermediate, Inc., a Delaware corporation
(“Holdings”), the Lenders from time to time party thereto including, Bank of America, N.A. in its capacities
as administrative agent and collateral agent (the “Administrative Agent”).
Pursuant to the provisions
of Section 2.17(f)(ii)(B)(4) of the First Lien Credit Agreement, the undersigned hereby certifies that (i) it is the sole
record and beneficial owner of the participation in respect of which it is providing this certificate, (ii) it is not a “bank”
within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a “10 percent shareholder” of the Borrower
within the meaning of Section 881(c)(3)(B) of the Code, (iv) it is not a “controlled foreign corporation” described
in Section 881(c)(3)(C) of the Code, and (v) the interest payments in question are not effectively connected with the undersigned’s
conduct of a United States trade or business.
The undersigned has
furnished its participating Lender with a duly executed certificate of its non-U.S. person status on IRS Form W-8BEN or
IRS Form W-8BEN-E, as applicable. By executing this certificate, the undersigned agrees that (1) if the information provided
on this certificate changes, the undersigned shall promptly so inform such Lender in writing, and (2) the undersigned shall have
at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in
which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.
Unless otherwise defined
herein, terms defined in the First Lien Credit Agreement and used herein shall have the meanings given to them in the First Lien
Credit Agreement.
[NAME OF PARTICIPANT]
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By:
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Name:
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Title:
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Date: [•] [•], 20[•]
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EXHIBIT J-3
[FORM OF]
U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Participants That Are Partnerships
For U.S. Federal Income Tax Purposes)
Reference is hereby
made to that certain First Lien Credit Agreement dated as of August 4, 2017 (as amended, restated, amended and restated, supplemented
or otherwise modified and in effect on the date hereof, the “First Lien Credit Agreement”), by and among Hayward
Industries, Inc., a New Jersey corporation (as survivor of the Merger (as defined in the First Lien Credit Agreement) with Hayward
Acquisition Corp., a New Jersey corporation) (the “Borrower”), Hayward Intermediate, Inc., a Delaware corporation
(“Holdings”), the Lenders from time to time party thereto including, Bank of America, N.A. in its capacities
as administrative agent and collateral agent (the “Administrative Agent”).
Pursuant to the provisions
of Section 2.17(f)(ii)(B)(4) of the First Lien Credit Agreement, the undersigned hereby certifies (with respect to its direct
or indirect partners/members that are claiming the portfolio interest exemption) that (i) it is the sole record owner of the participation
in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners
of such participation, (iii) with respect to such participation, neither the undersigned nor any of its direct or indirect partners/members
is a “bank” extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business
within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members is a “10 percent
shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Code, (v) none of its direct or indirect partners/members
is a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code and (vi) the interest payments
in question are not effectively connected with the undersigned’s or its direct or indirect partners’/members’
conduct of a United States trade or business.
The undersigned has
furnished its participating Lender with a duly executed IRS Form W-8IMY accompanied by one of the following forms from each
of its partners/members that is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or IRS Form W-8BEN-E,
as applicable, or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable,
from each of such partner’s/member’s beneficial owners that is claiming the portfolio interest exemption.
By executing this certificate,
the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform
such Lender and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective
certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar
years preceding such payments.
Unless otherwise defined
herein, terms defined in the First Lien Credit Agreement and used herein shall have the meanings given to them in the First Lien
Credit Agreement.
[NAME OF PARTICIPANT]
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By:
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Name:
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Title:
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Date: [•] [•], 20[•]
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EXHIBIT J-4
[FORM OF]
U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Lenders That Are Partnerships
For U.S. Federal Income Tax Purposes)
Reference is hereby
made to that certain First Lien Credit Agreement dated as of August 4, 2017 (as amended, restated, amended and restated, supplemented
or otherwise modified and in effect on the date hereof, the “First Lien Credit Agreement”), by and among Hayward
Industries, Inc., a New Jersey corporation (as survivor of the Merger (as defined in the First Lien Credit Agreement) with Hayward
Acquisition Corp., a New Jersey corporation) (the “Borrower”), Hayward Intermediate, Inc., a Delaware corporation
(“Holdings”), the Lenders from time to time party thereto including, Bank of America, N.A. in its capacities
as administrative agent and collateral agent (the “Administrative Agent”).
Pursuant to the provisions
of Section 2.17(f)(ii)(B)(4) of the First Lien Credit Agreement, the undersigned hereby certifies that (i) it is the sole
record owner of the Loan(s) (as well as any Promissory Note(s) evidencing such Loan(s)) in respect of which it is providing this
certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such Loan(s) (as well as any Promissory
Note(s) evidencing such Loan(s)), (iii) with respect to the extension of credit pursuant to this First Lien Credit Agreement or
any other Loan Document, neither the undersigned nor any of its direct or indirect partners/members is a “bank” extending
credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section
881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members is a “10 percent shareholder” of the
Borrower within the meaning of Section 881(c)(3)(B) of the Code and (v) none of its direct or indirect partners/members is a “controlled
foreign corporation” described in Section 881(c)(3)(C) of the Code.
The undersigned has
furnished the Borrower and the Administrative Agent with a duly executed IRS Form W-8IMY accompanied by one of the following
forms from each of its partners/members that is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or IRS Form
W-8BEN-E, as applicable, or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN or IRS Form W-8BENE,
as applicable, from each of such partner’s/member’s beneficial owners that is claiming the portfolio interest exemption.
By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned
shall promptly so inform the Borrower and the Administrative Agent, and (2) the undersigned shall have at all times furnished the
Borrower and the Administrative Agent with a properly completed and currently effective certificate in either the calendar year
in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.
Unless otherwise defined
herein, terms defined in the First Lien Credit Agreement and used herein shall have the meanings given to them in the First Lien
Credit Agreement.
[NAME OF PARTICIPANT]
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By:
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Name:
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Title:
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Date: [•] [•], 20[•]
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EXHIBIT K
[FORM OF]
solvency CERTIFICATE
[•] [•], 20[•]
This Solvency Certificate
is being executed and delivered pursuant to Section 4.01(h) of that certain First Lien Credit Agreement, dated as of the
date hereof (the “First Lien Credit Agreement”; the terms defined therein being used herein as therein defined),
by and among HAYWARD INDUSTRIES, INC., a New Jersey corporation (as survivor of the Merger (as defined in the First Lien Credit
Agreement) with HAYWARD ACQUISITION CORP., a New Jersey corporation) (the “Borrower”), HAYWARD INTERMEDIATE,
INC., a Delaware corporation (“Holdings”), the Lenders from time to time party thereto including, BANK OF AMERICA,
N.A. in its capacities as administrative agent and collateral agent (the “Administrative Agent”).
I, [•], the [Chief
Financial Officer/equivalent officer] of the Borrower, in such capacity and not in an individual capacity, hereby certify as follows:
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1.
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I am generally familiar with the businesses and assets of the Borrower and its Restricted Subsidiaries,
taken as a whole, and am duly authorized to execute this Solvency Certificate on behalf of the Borrower pursuant to the First Lien
Credit Agreement; and
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2.
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As of the date hereof and after giving effect to the Transactions and the incurrence of the indebtedness
and obligations being incurred in connection with the First Lien Credit Agreement and the Transactions, (i) the sum of the debt
(including contingent liabilities) of the Borrower and its Restricted Subsidiaries, taken as a whole, does not exceed the fair
value of the assets of the Borrower and its Restricted Subsidiaries, taken as a whole; (ii) the present fair saleable value of
the assets of the Borrower and its Restricted Subsidiaries, taken as a whole, is not less than the amount that will be required
to pay the probable liabilities of the Borrower and its Restricted Subsidiaries, taken as a whole, on their debts as they become
absolute and matured; (iii) the capital of the Borrower and its Restricted Subsidiaries, taken as a whole, is not unreasonably
small in relation to the business of the Borrower or its Restricted Subsidiaries, taken as a whole, contemplated as of the date
hereof; and (iv) the Borrower and its Restricted Subsidiaries, taken as a whole, do not intend to incur, or believe that they will
incur, debts (including current obligations and contingent liabilities) beyond their ability to pay such debts as they mature in
the ordinary course of business. For the purposes hereof, 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 Standards No. 5).
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[Signature Page Follows]
IN WITNESS WHEREOF,
I have executed this Solvency Certificate on the date first above written.
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HAYWARD INDUSTRIES, INC.
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By:
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Name:
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Title:
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[Signature Page to Solvency Certificate]
EXHIBIT L
[FORM OF]
ABL INTERCREDITOR AGREEMENT
[ATTACHED]
Execution Version
ABL INTERCREDITOR
AGREEMENT
THIS ABL INTERCREDITOR
AGREEMENT (as amended, restated, amended and restated, extended, supplemented or otherwise modified from time to time pursuant
to the terms hereof, this “Agreement”) is entered into as of August 4, 2017 between (x) BANK OF AMERICA,
N.A. (“Bank of America”), in its capacities as administrative agent and collateral agent (Bank of America,
together with its successors and assigns in such capacities, the “ABL Agent”) for (i) the financial institutions,
lenders and investors party from time to time to any ABL Credit Agreement (as defined below) (including any swingline lenders or
letter of credit issuers under the ABL Credit Agreement) (such financial institutions, lenders and investors, together with their
respective successors, assigns and transferees, the “ABL Lenders”), (ii) any ABL Cash Management Affiliates
(as defined below) and (iii) any ABL Hedging Banks (as defined below) (such ABL Cash Management Affiliates and ABL Hedging Banks,
together with the ABL Agent, the ABL Lenders and any other Secured Parties under, and as defined in, any ABL Credit Agreement,
the “ABL Secured Parties”), (y) Bank of America, in its capacities as administrative agent and collateral
agent (Bank of America, together with its successors and assigns in such capacities, the “First Lien Term Agent”)
for (i) the financial institutions, lenders and investors party from time to time to any First Lien Term Credit Agreement (as defined
below) (including, if applicable, any letter of credit issuers under the First Lien Term Credit Agreement) (such financial institutions,
lenders and investors, together with their respective successors, assigns and transferees, the “First Lien Term Lenders”),
(ii) any Term Cash Management Affiliates (as defined below) and (iii) any Term Hedging Affiliates (as defined below) (such Term
Cash Management Affiliates and Term Hedging Affiliates, together with the First Lien Term Agent and the First Lien Term Lenders
and any other Secured Parties under, and as defined in, any First Lien Term Credit Agreement, the “First Lien Term
Secured Parties”) and (z) Bank of America, in its capacities as administrative agent and collateral agent (Bank of
America, together with its successors and assigns in such capacities, the “Second Lien Term Agent” and,
together with the First Lien Term Agent, collectively, the “Term Agents”) for the financial institutions,
lenders and investors party from time to time to the Second Lien Term Credit Agreement (as defined below) (such financial institutions,
lenders and investors, together with their respective successors, assigns and transferees, the “Second Lien Term Lenders”
and, together with the First Lien Term Lenders, collectively, the “Term Lenders”) (the Second Lien Term
Agent, the Second Lien Term Lenders and any other Secured Parties under, and as defined in, any Second Lien Term Credit Agreement,
the “Second Lien Term Secured Parties” and, together with the First Lien Term Secured Parties, collectively,
the “Term Secured Parties”), and acknowledged and agreed to by the Initial Borrower, the Borrower, Holdings
and the other ABL Guarantors (as such terms are defined below).
RECITALS
A. Pursuant
to that certain ABL Credit Agreement dated as of the date hereof by and among, inter alia, HAYWARD INTERMEDIATE, INC., a Delaware
corporation (“Holdings”), HAYWARD ACQUISITION CORP., a New Jersey corporation (the “Initial
Borrower”, to be merged on the Closing Date with and into HAYWARD INDUSTRIES, INC., a New Jersey corporation (the
“Borrower”), with the Borrower as survivor of such merger), HAYWARD POOL PRODUCTS CANADA, INC. / Produits
De Piscines Hayward Canada, Inc., a Canadian federal corporation (the “Canadian Borrower”), the ABL
Lenders and the ABL Agent (the “ABL Credit Agreement”), the ABL Lenders have agreed to make
certain loans and other financial accommodations to or for the benefit of the Borrower and the Canadian Borrower.
B. Pursuant
to that certain US Loan Guaranty dated as of the date hereof (as the same may be amended, restated, amended and restated, extended,
supplemented and/or otherwise modified from time to time, the “ABL Guaranty”) by each of the ABL Guarantors
(as hereinafter defined) in favor of the ABL Agent, for the benefit of the ABL Secured Parties, the ABL Guarantors have agreed
to guarantee, inter alia, the payment and performance of the obligations under the ABL Documents (as hereinafter defined).
C. As
a condition to the effectiveness of the ABL Credit Agreement and to secure the obligations of the Borrower and the ABL Guarantors
(the Borrower and the ABL Guarantors, collectively, the “ABL Credit Parties”) under and in connection
with the ABL Documents, the ABL Credit Parties on the Closing Date have granted to the ABL Agent (for the benefit of the ABL Secured
Parties) Liens on the Collateral.
D. Pursuant
to that certain First Lien Credit Agreement dated as of the date hereof by and among Holdings, the Borrower, the First Lien Term
Lenders and the First Lien Term Agent (the “First Lien Term Credit Agreement”), the First Lien Term Lenders
have agreed to make certain loans to the Borrower.
E. Pursuant
to that certain Second Lien Credit Agreement dated as of the date hereof by and among Holdings, the Borrower, the Second Lien Term
Lenders and the Second Lien Term Agent (the “Second Lien Term Credit Agreement”), the Second Lien Term
Lenders have agreed to make certain loans to the Borrower.
F. Pursuant
to that certain first lien Guaranty Agreement and that certain second lien Guaranty Agreement, each dated as of the date hereof
(as the same may be amended, restated, amended and restated, extended, supplemented and/or otherwise modified from time to time,
each a “Term Guaranty”) by each of the Term Guarantors (as hereinafter defined) in favor of the relevant
Term Agent, for the benefit of the relevant Term Secured Parties represented by such Term Agent, the Term Guarantors have agreed
to guarantee, inter alia, the payment and performance of the obligations under each applicable Term Document (as hereinafter defined).
G. As
a condition to the effectiveness of the Term Credit Agreements and to secure the obligations of the Borrower and the Term Guarantors
(the Borrower and the Term Guarantors, collectively, the “Term Credit Parties”) under and in connection
with the Term Documents, the Term Credit Parties on the Closing Date have granted to the relevant Term Agent (in each case, for
the benefit of the relevant Term Secured Parties represented by such Term Agent) Liens on the Collateral.
H. Each
of the ABL Agent (on behalf of the ABL Secured Parties) and each of the Term Agents (in each case, on behalf of the relevant Term
Secured Parties represented by such Term Agent) and, by their acknowledgment hereof, the ABL Credit Parties and the Term Credit
Parties, desire to agree to the relative priority of Liens on the Collateral and certain other rights, priorities and interests
as provided herein.
NOW THEREFORE,
in consideration of the foregoing and for other good and valuable consideration, receipt of which is hereby acknowledged, the parties
hereto agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.1 UCC
Definitions. Unless otherwise defined herein (or defined in reference to a Credit Document), all terms which are defined
in the Uniform Commercial Code are used herein as so defined, including the following: Account, Chattel Paper, Commercial Tort
Claim, Commodity Account, Commodity Contract, Deposit Account, Document, Electronic Chattel Paper, Financial Asset, Fixtures, General
Intangible, Instrument, Inventory, Investment Property, Letter-of-Credit Right, Money, Payment Intangible, Promissory Note,
Records, Securities Account, Security Entitlement, Supporting Obligation and Tangible Chattel Paper.
Section 1.2 Other
Definitions. Subject to Section 1.1 hereof, as used in this Agreement, the following terms shall have the meanings
set forth below:
“ABL Agent”
shall have the meaning assigned to that term in the introduction to this Agreement and shall include any successor thereto as well
as any Person designated as the “Agent”, “Administrative Agent”, “Collateral Agent”, “Trustee”
or “Collateral Trustee” or similar term under any ABL Credit Agreement.
“ABL Bankruptcy
Sale” shall have the meaning set forth in Section 6.4 hereof.
“ABL Cash
Management Affiliate” shall mean any ABL Cash Management Bank (together with its respective successors, assigns and
transferees) that is owed ABL Cash Management Obligations by any ABL Credit Party or any Restricted Subsidiary, as applicable,
which ABL Cash Management Obligations are secured by Liens granted under one or more ABL Collateral Documents.
“ABL Cash
Management Agreement” shall mean any agreement to provide Cash Management Services between any ABL Cash Management
Bank and any ABL Credit Party (or any Restricted Subsidiary of any ABL Credit Party).
“ABL Cash
Management Bank” shall have the meaning assigned to the term “Secured Banking Services Provider” in any
ABL Credit Agreement.
“ABL Cash
Management Obligations” shall mean obligations owed by any ABL Credit Party or any Restricted Subsidiary, as applicable,
to any ABL Cash Management Bank in respect of or in connection with any Cash Management Services and pursuant to an ABL
Cash Management Agreement.
“ABL
Collateral Documents” shall mean all “Collateral Documents” (as defined in any ABL Credit
Agreement) or similar term, executed and delivered by one or more of the ABL Credit Parties, and all other security
agreements, mortgages, deeds of trust and other collateral documents executed and delivered by any ABL Credit Party in
connection with any ABL Credit Agreement (in each case, other than any such “Collateral Document” or similar
term, other security agreement, mortgage, deed of trust or other collateral document to the extent relating to any ABL
Exclusive Credit Party or any ABL Exclusive Collateral), in each case as the same may be amended, restated, amended and
restated, extended, supplemented or otherwise modified from time to time.
“ABL Credit
Agreement” shall mean the ABL Credit Agreement dated as of the date hereof (as such agreement may be amended, restated,
amended and restated, supplemented or otherwise modified from time to time or refunded, refinanced, restructured, replaced,
renewed, repaid, increased or extended from time to time (whether in whole or in part, whether with the original administrative
agent and lenders or other agents and lenders or otherwise, and whether provided under the original credit agreement or one or
more other credit agreements, indentures, financing agreements or otherwise, including any agreement extending the maturity thereof,
otherwise restructuring all or any portion of the Indebtedness thereunder, increasing the amount loaned or issued thereunder, altering
the maturity thereof or providing for other Indebtedness), in each case as and to the extent permitted by this Agreement, unless
such agreement, instrument or document expressly provides that it is not intended to be and is not an ABL Credit Agreement).
“ABL Credit
Parties” shall have the meaning assigned to that term in the recitals to this Agreement.
“ABL Deposit
and Securities Accounts” shall mean all Deposit Accounts, Securities Accounts, collection accounts and lockbox
accounts (and all related lockboxes) of the ABL Credit Parties (other than the Term Loan Priority Accounts).
“ABL DIP
Financing” shall have the meaning set forth in Section 6.1(a) hereof.
“ABL Documents”
shall mean any ABL Credit Agreement, any ABL Guaranty, any ABL Collateral Document, any ABL Cash Management Agreement between
any ABL Credit Party and any ABL Cash Management Affiliate, any ABL Hedging Agreement between any ABL Credit Party and any ABL
Hedging Bank, any other ancillary agreement executed and delivered by an ABL Credit Party as to which any ABL Secured Party is
a party or a beneficiary and all other agreements, instruments, documents and certificates, now or hereafter executed by or on
behalf of any ABL Credit Party, and delivered to the ABL Agent or any other ABL Secured Party in connection with any of the foregoing
or any ABL Credit Agreement, in each case as the same may be amended, restated, amended and restated, extended, supplemented or
otherwise modified from time to time.
“ABL Exclusive
Collateral” shall have the meaning assigned to that term in the definition of “ABL Priority Collateral”.
“ABL Exclusive
Credit Parties” shall mean the collective reference to (x) each “Guarantor” (as defined in the ABL Credit
Agreement) and (y) each borrower under any ABL Credit Agreement that, in the case of each of the foregoing clauses (x) and (y),
does not also guarantee any Term Obligations or become a borrower under any Term Credit Agreement. For the avoidance of doubt,
any Canadian Loan Party is an ABL Exclusive Credit Party.
“ABL Guarantors”
shall mean the collective reference to Holdings and all “Subsidiary Guarantors” under and as defined in any ABL Credit
Agreement other than any ABL Exclusive Credit Party.
“ABL Guaranty”
shall have the meaning assigned to that term in the recitals to this Agreement and shall also include any other guaranty made by
any ABL Guarantor guaranteeing, inter alia, the payment and performance of any ABL Obligations.
“ABL Hedging
Agreement” means any “Hedge Agreement” as defined in the ABL Credit Agreement.
“ABL Hedging
Bank” shall mean any counterparty (together with its respective successors, assigns and transferees) that has entered
into an ABL Hedging Agreement with an ABL Credit Party with the obligations of such ABL Credit Party thereunder being secured by
Liens granted under one or more ABL Collateral Documents.
“ABL Joint
Collateral” shall have the meaning set forth in Section 3.6(a) hereof.
“ABL Lenders”
shall have the meaning assigned to that term in the introduction to this Agreement, and shall include any Person designated as
a “Lender” or similar term under any ABL Credit Agreement.
“ABL Obligations”
shall mean any and all obligations of every nature of each ABL Credit Party from time to time owed to the ABL Secured Parties,
or any of them, under, in connection with, or evidenced or secured by any ABL Document, including, without limitation, all “Obligations”
(as defined in any ABL Credit Agreement) or similar term, and whether for principal, interest, fees, expenses (including interest,
fees, or expenses which, but for the filing of a petition in bankruptcy with respect to such ABL Credit Party, would have accrued
on any ABL Obligation, whether or not a claim is allowed against such ABL Credit Party for such interest, fees, or expenses in
the related bankruptcy proceeding), reimbursement of amounts drawn under letters of credit, payments for early termination of ABL
Secured Hedging Obligations, indemnification or otherwise, and all other amounts owing or due from any ABL Credit Party under the
terms of any ABL Document.
“ABL Priority
Collateral” shall mean all Collateral (including, for the avoidance of doubt, any such assets that, but for the application
of Section 552 of the Bankruptcy Code or similar provision in any foreign Debtor Relief Laws, would constitute Collateral) consisting
of the following:
(1) all
Accounts and other Receivables, other than Accounts and other Receivables which constitute identifiable proceeds of Term Priority
Collateral;
(2) cash,
Money, cash equivalents and tax refunds (other than, in each case, to the extent constituting proceeds of Term Priority Collateral);
(3) all
(x) Deposit Accounts (other than Term Loan Priority Accounts) and Money and all cash, checks, other negotiable instruments,
funds and other evidences of payments properly held therein, including intercompany indebtedness between or among the ABL
Credit Parties or their Affiliates, to the extent owing in respect of ABL Priority Collateral, (y) Securities Accounts (other
than Term Loan Priority Accounts), Security Entitlements and Securities credited to such a Securities Account (in each case,
other than Equity Interests or Instruments evidencing indebtedness to the extent such indebtedness is not relating to,
evidencing or owing in respect of, ABL Priority Collateral (provided that to the extent such Instruments also relate
to Term Priority Collateral then only the portion thereof relating to ABL Priority Collateral shall be included in ABL
Priority Collateral)) and (z) Commodity Accounts (other than Term Loan Priority Accounts) and Commodity Contracts credited
thereto, and, in each case, all cash, Money, cash equivalents, checks and other property properly held therein or credited
thereto (other than Equity Interests or Instruments evidencing indebtedness to the extent such indebtedness is not relating
to, evidencing or owing in respect of, ABL Priority Collateral (provided that to the extent such Instruments also
relate to Term Priority Collateral then only the portion thereof relating to ABL Priority Collateral shall be included in ABL
Priority Collateral)); provided, however, that, subject to the last sentence of Section 4.1(a), to the
extent that identifiable proceeds of Term Priority Collateral are deposited in any such Deposit Accounts, Securities Accounts
or Commodities Accounts, such identifiable proceeds shall be treated as Term Priority Collateral;
(4) all
Inventory;
(5) to
the extent relating to, evidencing or governing (x) any of the items referred to in the preceding clauses (1) through (4) constituting
ABL Priority Collateral, all Documents, Instruments (including Promissory Notes), Chattel Paper (including Tangible Chattel Paper
and Electronic Chattel Paper), Investment Property and Commercial Tort Claims or (y) any other ABL Priority Collateral, General
Intangibles (including all rights under contracts but excluding any Intellectual Property and Equity Interests); provided
that, to the extent any of the foregoing also relates to Term Priority Collateral, only that portion related to the items referred
to in the preceding clauses (1) through (4) shall be included in the ABL Priority Collateral;
(6) to
the extent relating to any of the items referred to in the preceding clauses (1) through (5) constituting ABL Priority Collateral,
all Supporting Obligations, letters of credit and Letter-of-Credit Rights; provided that, to the extent any of the
foregoing also relates to Term Priority Collateral only that portion related to the items referred to in the preceding clauses
(1) through (5) shall be included in the ABL Priority Collateral;
(7) all
books and Records relating to any of the items referred to in the preceding clauses (1) through (6) constituting ABL Priority Collateral
(including all books, databases, customer lists, engineer drawings, and Records, whether tangible or electronic, which contain
any information relating to any of the items referred to in the preceding clauses (1) through (6) constituting ABL Priority Collateral
but, in each case, excluding any Intellectual Property); and
(8) all
collateral security and guarantees with respect to any of the items referred to in the preceding clauses (1) through (7) constituting
ABL Priority Collateral and all cash, Money, cash equivalents, insurance proceeds, Instruments, Securities and Financial Assets
(other than Equity Interests) received as Proceeds of, and any other Proceeds of, any of the items referred to in the preceding
clauses (1) through (7) and this clause (8) constituting ABL Priority Collateral (“ABL Priority Proceeds”);
provided, that in no case shall ABL Priority Collateral include Equipment, Intellectual Property or Real Property owned
or leased by any Term Credit Party.
For the avoidance
of doubt, it is understood and agreed that “ABL Priority Collateral” shall include any Collateral consisting of
assets or property of any ABL Exclusive Credit Party and any Proceeds thereof which would not otherwise constitute ABL
Priority Collateral or Term Priority Collateral (such assets and property, the “ABL Exclusive
Collateral”).
“ABL Priority
Proceeds” shall have the meaning assigned to that term in the definition of “ABL Priority Collateral”.
“ABL Recovery”
shall have the meaning set forth in Section 5.3(a) hereof.
“ABL Secured
Hedging Obligations” shall mean obligations owed by any ABL Credit Party to any ABL Hedging Bank in respect of or
in connection with any ABL Hedging Agreement.
“ABL Secured
Parties” shall have the meaning assigned to that term in the introduction to this Agreement.
“Affiliate”
shall mean, as applied to any Person, any other Person directly or indirectly Controlling, Controlled by, or under common Control
with, that Person.
“Agent”
shall mean the ABL Agent or a Term Agent (and collectively, the “Agents”).
“Agreement”
shall have the meaning assigned to that term in the introduction to this Agreement.
“Asset
Sale Proceeds Pledged Account” shall mean any account held at, and subject to the sole dominion and control of any
Term Agent in which the proceeds from any disposition of Term Priority Collateral is held pending reinvestment pursuant to any
Term Credit Agreement.
“Bankruptcy
Code” shall mean Title 11 of the United States Code, as now or hereafter in effect or any successor thereto.
“Borrower”
shall have the meaning assigned to that term in the Recitals of this Agreement.
“Business
Day” shall mean any day that is not a Saturday, Sunday or other day on which commercial banks in New York, New York
are authorized or required by law to remain closed (or are in fact closed).
“Canadian
Loan Party” shall have the meaning provided in the ABL Credit Agreement.
“Cash Management
Services” means any one or more of the following types of services or facilities: commercial credit cards, stored
value cards, purchasing cards, treasury management services, netting services, overdraft protections, check drawing services, automated
payment services (including depository, overdraft, controlled disbursement, ACH transactions, return items and interstate depository
network services), employee credit card programs, cash pooling services and any arrangements or services similar to any of the
foregoing and/or otherwise in connection with Cash (as defined in the First Lien Term Credit Agreement) management and Deposit
Accounts (as defined in the First Lien Term Credit Agreement).
“Closing
Date” shall mean August 4, 2017.
“Collateral”
shall mean all Property now owned or hereafter acquired by the Borrower or any Guarantor in or upon which a Lien is granted or
purported to be granted to any ABL Agent or any Term Agent under any of the ABL Collateral Documents or the Term Collateral Documents,
together with all rents, issues, profits, products and Proceeds thereof.
“Control”
means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled”
have meanings correlative thereto.
“Control
Collateral” shall mean any Collateral consisting of any Certificated Security (as defined in Section 8-102 of
the Uniform Commercial Code), Investment Property, Deposit Account, Securities Account, Instruments and any other Collateral as
to which a Lien may be perfected through possession or control by the secured party or any agent therefor.
“Controlling
Term Agent” shall mean (i) at any time prior to the Discharge of First Lien Term Obligations, the “Designated
First Priority Representative” (as such term is defined in the Term Loan Intercreditor Agreement) and (ii) after the Discharge
of First Lien Term Obligations has occurred and the ABL Agent has received written notice thereof from the Borrower and the “Designated
Second Priority Representative” (as such term is defined in the Term Loan Intercreditor Agreement), such Designated Second
Priority Representative.
“Copyright
Licenses” shall mean any written agreement, now or hereafter in effect, naming any Credit Party as licensor and granting
any right to any third party under any Copyright now or hereafter owned by such Credit Party or that such Credit Party otherwise
has the right to license, or naming any Credit Party as a licensee and granting any right to such Credit Party under any Copyright
now or hereafter owned by any third party, and all rights of such Credit Party under any such agreement.
“Copyrights”
shall mean the following: (a) all copyrights, rights and interests in copyrights, works protectable by copyright whether published
or unpublished, copyright registrations and copyright applications; (b) all renewals of any of the foregoing; (c) all income, royalties,
damages, and payments now or hereafter due and/or payable under any of the foregoing, including, without limitation, damages or
payments for past, present or future infringements for any of the foregoing; (d) the right to sue for past, present, and future
infringements of any of the foregoing; and (e) all rights corresponding to any of the foregoing.
“Credit
Documents” shall mean the ABL Documents and the Term Documents.
“Credit
Parties” shall mean the ABL Credit Parties and the Term Credit Parties.
“Debtor
Relief Laws” shall mean the Bankruptcy Code of the United States, the Companies’ Creditor Arrangement Act (Canada),
the Bankruptcy and Insolvency Act (Canada), the Winding-up and Restructuring Act (Canada) and all other liquidation, conservatorship,
bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar
debtor relief Laws of the United States, Canada or other applicable jurisdictions from time to time in effect and affecting the
rights of creditors generally.
“Discharge
of ABL Obligations” shall mean the time at which all the ABL Obligations (other than contingent indemnification and
reimbursement obligations as to which no claim has been asserted by the Person entitled thereto) have been paid in full in cash,
all Letters of Credit (as defined in any ABL Credit Agreement) have expired or been terminated (other than Letters of Credit for
which other arrangements reasonably satisfactory to the ABL Agent and each applicable Issuing Bank (or similar term) (as defined
in any ABL Credit Agreement) have been made), all Commitments (as defined in the ABL Credit Agreement) have been terminated and,
with respect to any Hedging Obligations (as defined in the ABL Credit Agreement) and Banking Services Obligations (as defined in
any ABL Credit Agreement), such Hedging Obligations and Banking Services Obligations have either been paid in full, cash collateralized
on terms reasonably satisfactory to each applicable counterparty (or other arrangements reasonably satisfactory to the applicable
counterparty shall have been made) or are no longer secured by the Collateral pursuant to the terms of any ABL Credit Agreement.
“Discharge
of First Lien Term Obligations” shall mean the time at which all the First Lien Term Obligations (other than contingent
indemnification and reimbursement obligations as to which no claim has been asserted by the Person entitled thereto) have been
paid in full in cash and all Commitments (as defined in any First Lien Term Credit Agreement) have been terminated, and, with respect
to any First Lien Term Obligations in respect of Hedge Agreements (as defined in any First Lien Term Credit Agreement) and in respect
of Banking Services (as defined in any First Lien Term Credit Agreement), such First Lien Term Obligations have either been paid
in full, cash collateralized on terms reasonably satisfactory to each applicable counterparty (or other arrangements reasonably
satisfactory to the applicable counterparty shall have been made) or are no longer secured by the Collateral pursuant to the terms
of any First Lien Term Credit Agreement.
“Discharge
of Second Lien Term Obligations” shall mean the time at which all the Second Lien Term Obligations (other than contingent
indemnification and reimbursement obligations as to which no claim has been asserted by the Person entitled thereto) have been
paid in full in cash and all Commitments (as defined in each Second Lien Term Credit Agreement) have been terminated.
“Discharge
of Term Obligations” shall mean the time at which both the Discharge of First Lien Term Obligations and Discharge
of Second Lien Term Obligations shall have occurred.
“Domain
Names” shall mean all Internet domain names and associated URL addresses in or to which any Credit Party now or hereafter
has any right, title or interest.
“Enforcement
Notice” shall mean a written notice delivered by either the ABL Agent to the Controlling Term Agent, or by the Controlling
Term Agent to the ABL Agent, announcing that it intends to commence an Exercise of Any Secured Creditor Remedies.
“Equipment”
shall mean (x) any “equipment” as such term is defined in Article 9 of the Uniform Commercial Code, and in any
event, shall include, but shall not be limited to, all machinery, equipment, furnishings, appliances, furniture, fixtures,
tools, and vehicles now or hereafter owned by any Credit Party in each case, regardless of whether characterized as equipment
under the Uniform Commercial Code (but excluding any such items which constitute Inventory), and (y) any and all additions,
substitutions and replacements of any of the foregoing and all accessions thereto, wherever located, whether or not at any
time of determination incorporated or installed therein or attached thereto, and all replacements therefor, together with all
attachments, components, parts, equipment and accessories installed thereon or affixed thereto.
“Equity
Interest” shall mean any and all shares, interests, participations or other equivalents (however designated) of capital
stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation), including partnership
interests and membership interests, and any and all warrants, rights or options to purchase or other arrangements or rights to
acquire any of the foregoing, but excluding for the avoidance of doubt any Indebtedness convertible into or exchangeable for any
of the foregoing.
“Event
of Default” shall mean an “Event of Default” or similar term under and as defined in any ABL Credit Agreement
or any Term Credit Agreement, as applicable.
“Exercise
of Any Secured Creditor Remedies” or “Exercise Any Secured Creditor Remedies” or “Exercise
of Secured Creditor Remedies” or similar phrase shall mean, except as otherwise provided in the final sentence of
this definition:
(a) the
taking by any Secured Party of any action to enforce or realize upon any Lien (including any judgment lien), including the institution
of any foreclosure proceedings, action, exercise of a power of sale or the noticing of any public or private sale pursuant to Article
9 of the Uniform Commercial Code or other applicable law;
(b) the
exercise by any Secured Party of any right or remedy provided to a secured creditor on account of a Lien under any of the Credit
Documents, under applicable law, in an Insolvency Proceeding or otherwise, including the election to retain any of the Collateral
in satisfaction of a Lien;
(c) the
taking of any action by any Secured Party or the exercise of any right or remedy by any Secured Party in respect of the collection
on, set off against, marshaling of, injunction respecting or foreclosure or power of sale on the Collateral or the Proceeds thereof;
(d) the
appointment on the application of a Secured Party, of a liquidator, trustee in bankruptcy, receiver, receiver and manager or interim
receiver of all or part of the Collateral;
(e) the
sale, lease, license or other disposition of all or any portion of the Collateral by private or public sale conducted by any Secured
Party or any other means at the direction of any Secured Party permissible under applicable law;
(f) the
exercise of any other right of a secured creditor under Part 6 of Article 9 of the Uniform Commercial Code or under provisions
of similar effect under other applicable law; and
(g) the exercise by
any Secured Party of any voting rights relating to any Equity Interest included in the Collateral.
For the avoidance of doubt, none of
the following shall be deemed to constitute an Exercise of Any Secured Creditor Remedies or an Exercise of Secured Creditor
Remedies: (i) the filing of a proof of claim or voting with respect to such claim in any Insolvency Proceeding or the seeking
of adequate protection (subject to Section 6.3), in each instance in a manner otherwise consistent with the terms and
conditions of this Agreement, (ii) the exercise of rights with respect to the ABL Priority Collateral by the ABL Agent upon
the occurrence of a Cash Dominion Period (as defined in any ABL Credit Agreement) of the type provided in the ABL Credit
Agreement as in effect on the Closing Date, including, without limitation, the notification of account debtors, depository
institutions or any other Person to deliver proceeds of ABL Priority Collateral to the ABL Agent, (iii) the consent by the
ABL Agent to a going out of business sale or other disposition by any Credit Party of any of the ABL Priority Collateral
(other than after the occurrence of an Event of Default), (iv) the consent of the Controlling Term Agent to disposition by
any Credit Party of any of the Term Priority Collateral (other than after the occurrence of an Event of Default), (v) the
reduction of advance rates or sub-limits by the ABL Agent and the ABL Lenders, (vi) the change in eligibility criteria
for components of the borrowing base under the ABL Credit Agreement by the ABL Agent and the ABL Lenders or (vii) the
imposition of Availability Reserves (as defined in the ABL Credit Agreement) by the ABL Agent.
“First
Lien Term Agent” shall have the meaning assigned to that term in the introduction to this Agreement.
“First
Lien Term Credit Agreement” (i) shall mean the First Lien Term Credit Agreement referred to in the recitals to this
Agreement (as such agreement may be amended, restated, amended and restated, supplemented or otherwise modified from time to time
or refunded, refinanced, restructured, replaced, renewed, repaid, increased or extended from time to time (whether in whole or
in part, whether with the original administrative agent and lenders or other agents and lenders or otherwise, and whether provided
under the original credit agreement or one or more other credit agreements, indentures, financing agreements or otherwise, including
any agreement extending the maturity thereof, otherwise restructuring all or any portion of the Indebtedness thereunder, increasing
the amount loaned or issued thereunder, altering the maturity thereof or providing for other Indebtedness), in each case as and
to the extent permitted by this Agreement, unless such agreement, instrument or document expressly provides that it is not intended
to be and is not a First Lien Term Credit Agreement) and (ii) shall include any one or more other agreements, indentures or facilities
relating to additional First Lien Term Obligations joined to this Agreement pursuant to Section 7.20 hereof.
“First
Lien Term Credit Agreement Obligations” shall have the meaning assigned to that term in the definition of “First
Lien Term Obligations”.
“First
Lien Term Documents” shall mean any First Lien Term Credit Agreement, any Term Guaranty relating to the First
Lien Term Obligations, any Term Collateral Document relating to the First Lien Term Obligations, any Cash Management Services
between any Term Credit Party and any Term Cash Management Affiliate, any Term Hedging Agreement between any Term Credit
Party and any Term Hedging Affiliate, any other ancillary agreement executed and delivered by a Term Credit Party as to which
any First Lien Term Secured Party is a party or a beneficiary relating to the First Lien Term Obligations and all other
agreements, instruments, documents and certificates, now or hereafter executed by or on behalf of any Term Credit Party, and
delivered to the First Lien Term Agent or any other First Lien Term Secured Party, in connection with any of the foregoing or
any First Lien Term Credit Agreement, in each case as the same may be amended, restated, amended and restated, extended,
supplemented or otherwise modified from time to time.
“First
Lien Term Lender” shall have the meaning assigned to that term in the introduction to this Agreement, and shall include
any Person that is a “Lender” or similar term under any First Lien Term Credit Agreement.
“First
Lien Term Obligations” shall mean (i) any and all obligations of every nature of each Term Credit Party from time
to time owed to the First Lien Term Secured Parties, or any of them, under, in connection with, or evidenced or secured by any
First Lien Term Document, including, without limitation, all “Obligations” (as defined in the First Lien Term Credit
Agreement) or similar term, and whether for principal, interest, fees, expenses (including interest, fees, or expenses which, but
for the filing of a petition in bankruptcy with respect to such Term Credit Party, would have accrued on any First Lien Term Obligation,
whether or not a claim is allowed against such Term Credit Party for such interest, fees, or expenses in the related bankruptcy
proceeding), payments for early termination of Term Secured Hedging Obligations, indemnification or otherwise, and all other amounts
owing or due from any Term Credit Party under the terms of any First Lien Term Document, as amended, restated, modified, renewed,
refunded, replaced or refinanced in whole or in part from time to time (the “First Lien Term Credit Agreement Obligations”)
and (ii) all Other First Lien Term Obligations.
“First
Lien Term Secured Parties” shall have the meaning assigned to that term in the introduction to this Agreement and
shall include all other Persons holdings First Lien Term Obligations.
“Governmental
Authority” means any federal, state, provincial, municipal, national or other government, governmental department,
commission, board, bureau, court, agency or instrumentality or political subdivision thereof or any entity or officer exercising
executive, legislative, judicial, regulatory or administrative functions of or pertaining to any government or any court, in each
case whether associated with a state or locality of the U.S., the U.S., or a foreign government or any other political subdivision
thereof, including central banks and supra national bodies.
“Guarantor”
shall mean any of the ABL Guarantors or Term Guarantors.
“Holdings”
shall have the meaning assigned to that term in the recitals to this Agreement.
“Indebtedness”
shall have the meaning provided in the ABL Credit Agreement and the Term Credit Agreements as in effect on the date hereof.
“Insolvency
Proceeding” shall mean (a) any case, action or proceeding before any court or other Governmental Authority relating
to bankruptcy, reorganization, insolvency, liquidation, receivership, dissolution, arrangement (pursuant to any corporate statutes)
winding-up or relief of debtors, or (b) any general assignment for the benefit of creditors, composition, marshalling of assets
for creditors or other similar arrangement in respect of a Person’s creditors generally or any substantial portion of a Person’s
creditors; in each case covered by clauses (a) and (b) undertaken under any Debtor Relief Laws.
“Intellectual
Property” shall mean all intellectual and similar property of every kind and nature now owned, licensed or hereafter
acquired by any Credit Party that is subject to a security interest under any ABL Documents and any Term Documents, including inventions,
designs, Patents, Copyrights, Licenses, Trademarks, Domain Names, trade secrets, confidential or proprietary technical and business
information, know how, show how or other data or information, software, databases, all other proprietary information and all embodiments
or fixations thereof and related documentation and registrations and all additions, improvements and accessions to, and books and
records describing or used in connection with, any of the foregoing.
“Lenders”
means, collectively, all of the ABL Lenders and the Term Lenders.
“License”
shall mean any Patent License, Trademark License, Copyright License, or other license or sublicense agreement granting rights under
Intellectual Property to which any Credit Party is a party.
“Lien”
shall mean any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge,
or preference, priority or other security interest or preferential arrangement of any kind or nature whatsoever (including any
conditional sale or other title retention agreement, any easement, right of way or other encumbrance on title to real property,
and any Capital Lease having substantially the same economic effect as any of the foregoing), in each case, in the nature of security;
provided that in no event shall an operating lease in and of itself be deemed to constitute a Lien on any asset.
“Lien Priority”
shall mean with respect to any Lien of the ABL Secured Parties or the Term Secured Parties in the Collateral, the order of priority
of such Lien as specified in Section 2.1 hereof.
“Other
First Lien Term Obligations” means (a) if the Pari Passu Intercreditor Agreement (as defined in the First Lien Term
Credit Agreement) has been entered into, all “Additional Pari Obligations” (as defined in such Pari Passu Intercreditor
Agreement), (b) if the Term Loan Intercreditor Agreement has been entered into, all other obligations in connection with, or evidenced
or secured by, “Additional First Priority Debt” (as defined in the Term Loan Intercreditor Agreement) and (c) in any
event, any indebtedness or obligations (other than First Lien Term Credit Agreement Obligations) of the Loan Parties (as defined
in the Term Loan Intercreditor Agreement) that are to be secured with a Lien pari passu with the Liens on the Collateral securing
the First Lien Term Credit Agreement Obligations and are designated by the Borrower as First Lien Term Obligations hereunder; provided,
however, that with respect to this clause (c), the requirements set forth in Section 7.20 shall have been satisfied.
“Other
Liabilities” means ABL Cash Management Obligations and ABL Secured Hedging Obligations.
“Other
Second Lien Term Obligations” means (a) if the Pari Passu Intercreditor Agreement (as defined in the Second
Lien Term Credit Agreement) has been entered into, all “Additional Pari Obligations” as defined in such Pari
Passu Intercreditor Agreement, (b) if the Term Loan Intercreditor Agreement has been entered into, all other obligations in
connection with, or evidenced or secured by, “Additional Second Priority Debt” as defined in the Term Loan
Intercreditor Agreement and (c) in any event, any indebtedness or obligations (other than Second Lien Term Credit Agreement
Obligations) of the Loan Parties (as defined in the Term Loan Intercreditor Agreement) that are to be secured with a Lien
pari passu with the Liens on the Collateral securing the Second Lien Term Credit Agreement Obligations and are designated by
the Borrower as Second Lien Term Obligations hereunder; provided, however, that with respect to this clause
(c), the requirements set forth in Section 7.20 shall have been satisfied.
“Party”
shall mean the ABL Agent, the First Lien Term Agent or the Second Lien Term Agent (and collectively, the “Parties”).
“Patent
License” shall mean any written agreement, now or hereafter in effect, naming any Credit Party as licensor and granting
to any third party any right to develop, commercialize, import, make, have made, offer for sale, use or sell any invention on which
a Patent, now or hereafter owned by such Credit Party or that such Credit Party otherwise has the right to license, is in existence,
or naming any Credit Party as licensee and granting to such Credit Party any such right with respect to any invention on which
a Patent, now or hereafter owned by any third party, is in existence, and all rights of such Credit Party under any such agreement.
“Patents”
shall mean the following: (a) any and all patents and patent applications; (b) all inventions described and claimed therein; (c)
all reissues, divisions, continuations, renewals, extensions and continuations in part thereof; (d) all income, royalties, damages,
claims, and payments now or hereafter due or payable under and with respect thereto, including, without limitation, damages and
payments for past, present and future infringements thereof; (e) all rights to sue for past, present, and future infringements
thereof; and (f) all rights corresponding to any of the foregoing.
“Person”
shall mean any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership,
Governmental Authority or any other entity.
“Priority
Collateral” shall mean the ABL Priority Collateral or the Term Priority Collateral, as applicable.
“Proceeds”
shall mean (a) all “proceeds,” as defined in Article 9 of the Uniform Commercial Code, with respect to the Collateral,
and (b) whatever is recoverable or recovered when any Collateral is sold, exchanged, collected, or disposed of, whether voluntarily
or involuntarily.
“Property”
shall mean any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible.
“Real Property”
shall mean any right, title or interest in and to real property, including any fee interest, leasehold interest, easement, or license
and any other right to use or occupy real property.
“Receivables”
shall mean all of the following now owned or hereafter arising or acquired assets of any ABL Credit Party: (a) all amounts at
any time payable to any ABL Credit Party in respect of the sale or other Disposition of any Account; (b) all interest, fees,
late charges, penalties, collection fees, and other amounts due or to become due or otherwise payable in connection with any
Account; (c) all credit card receivables and other payment intangibles; and (d) all other contract rights, chattel paper,
instruments, or other forms of rights to payment, in each case arising from the sale, lease, or other Disposition of
Inventory, the licensing of Inventory, the rendition of services, or otherwise related to any Accounts or Inventory of an ABL
Credit Party (including, choses in action, causes of action, or other rights and claims against carriers or shippers, rights
to indemnification, and identifiable proceeds thereof, casualty or similar types of insurance, in each case relating to ABL
Priority Collateral and identifiable proceeds thereof).
“Restricted
Subsidiary” means (a) with respect to ABL Credit Parties, any “Restricted Subsidiary” under and as defined
in any ABL Credit Agreement and (b) with respect to the Term Credit Parties, any “Restricted Subsidiary” under and
as defined in any Term Credit Agreement.
“Second
Lien Term Agent” shall have the meaning assigned to that term in the introduction to this Agreement.
“Second
Lien Term Credit Agreement” (i) shall mean the Second Lien Term Credit Agreement referred to in the recitals to this
Agreement (as such agreement may be amended, restated, amended and restated, supplemented or otherwise modified from time to time
or refunded, refinanced, restructured, replaced, renewed, repaid, increased or extended from time to time (whether in whole or
in part, whether with the original administrative agent and lenders or other agents and lenders or otherwise, and whether provided
under the original credit agreement or one or more other credit agreements, indentures, financing agreements or otherwise, including
any agreement extending the maturity thereof, otherwise restructuring all or any portion of the Indebtedness thereunder, increasing
the amount loaned or issued thereunder, altering the maturity thereof or providing for other Indebtedness), in each case as and
to the extent permitted by this Agreement, unless such agreement, instrument or document expressly provides that it is not intended
to be and is not a Second Lien Term Credit Agreement) and (ii) shall include any one or more other agreements, indentures or facilities
relating to additional Second Lien Term Obligations joined to this Agreement pursuant to Section 7.20 hereof.
“Second
Lien Term Credit Agreement Obligations” shall have the meaning assigned to that term in the definition of “Second
Lien Term Obligations”.
“Second
Lien Term Documents” shall mean any Second Lien Term Credit Agreement, any Term Guaranty relating to the Second Lien
Term Obligations, any Term Collateral Document relating to the Second Lien Term Obligations, any other ancillary agreement executed
and delivered by a Term Credit Party as to which any Second Lien Term Secured Party is a party or a beneficiary relating to the
Second Lien Term Obligations and all other agreements, instruments, documents and certificates, now or hereafter executed by or
on behalf of any Term Credit Party, and delivered to the Second Lien Term Agent or any other Second Lien Term Secured Party, in
connection with any of the foregoing or any Second Lien Term Credit Agreement, in each case as the same may be amended, restated,
amended and restated, extended, supplemented or otherwise modified from time to time.
“Second
Lien Term Lender” shall have the meaning assigned to that term in the introduction to this Agreement, and shall include
any Person that is a “Lender” or similar term under any Second Lien Term Credit Agreement.
“Second
Lien Term Obligations” (i) shall mean any and all obligations of every nature of each Term Credit Party from time
to time owed to the Second Lien Term Secured Parties, or any of them, under, in connection with, or evidenced or secured by any
Second Lien Term Document, including, without limitation, all “Obligations” (as defined in the Second Lien Term Credit
Agreement) or similar term, and whether for principal, interest, fees, expenses (including interest, fees, or expenses which, but
for the filing of a petition in bankruptcy with respect to such Term Credit Party, would have accrued on any Second Lien Term Obligation,
whether or not a claim is allowed against such Term Credit Party for such interest, fees, or expenses in the related bankruptcy
proceeding) indemnification or otherwise, and all other amounts owing or due from any Term Credit Party under the terms of any
Second Lien Term Document, as amended, restated, modified, renewed, refunded, replaced or refinanced in whole or in part from time
to time (the “Second Lien Term Credit Agreement Obligations”) and (ii) all Other Second Lien Term Obligations.
“Second
Lien Term Secured Parties” shall have the meaning assigned to that term in the introduction to this Agreement and
all other Persons holdings Second Lien Term Obligations.
“Secured
Parties” shall mean the ABL Secured Parties and the Term Secured Parties.
“Subsidiary”
shall mean, with respect to any Person, any corporation, partnership, limited liability company, association, joint venture or
other business entity of which more than 50% of the total voting power of stock or other ownership interests entitled (without
regard to the occurrence of any contingency) to vote in the election of the Person or Persons (whether directors, trustees or other
Persons performing similar functions) having the power to direct or cause the direction of the management and policies thereof
is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other subsidiaries of such Person
or a combination thereof, in each case to the extent such entity’s financial results are required to be included in such
Person’s consolidated financial statements under GAAP; provided that in determining the percentage of ownership interests
of any Person controlled by another Person, no ownership interests in the nature of a “qualifying share” of the former
Person shall be deemed to be outstanding. Unless otherwise specified, “subsidiary” shall mean any subsidiary of the
Borrower.
“Term Agents”
shall have the meaning assigned to that term in the introduction to this Agreement and shall include any successor thereto as well
as any Person designated as the “Agent”, “Administrative Agent”, “Collateral Agent”, “Trustee”,
“Collateral Trustee” or similar term under any Term Credit Agreement that become party to this Agreement.
“Term Arranger”
means any Person that has acted as an arranger, bookrunner or in a similar role under any Term Document.
“Term Bankruptcy
Sale” shall have the meaning set forth in Section 6.4 hereof.
“Term Cash
Management Affiliate” shall mean any Term Cash Management Bank (together with its respective successors, assigns
and transferees) that is owed Term Cash Management Obligations by any Term Credit Party and which Term Cash Management Obligations
are secured by Liens granted under one or more Term Collateral Documents under the First Lien Term Credit Agreement.
“Term Cash
Management Agreement” shall mean any agreement entered into between a Term Credit Party and a Term Cash Management
Bank in connection with Cash Management Services.
“Term Cash
Management Bank” shall mean any Term Agent, Term Arranger or Term Lender or any of their respective Affiliates that
has entered into a Term Cash Management Agreement.
“Term Cash
Management Obligations” means, in connection with any First Lien Term Credit Agreement, obligations owed by any Term
Credit Party to any Term Cash Management Bank in respect of or in connection with any Cash Management Services pursuant to any
Term Cash Management Agreement.
“Term Cash
Proceeds Notice” shall mean a written notice delivered by the relevant Term Agent to the ABL Agent (a) stating that
an Event of Default has occurred and is continuing under any Term Document and specifying the relevant Event of Default and (b)
stating that certain cash proceeds which may be deposited in an ABL Deposit and Securities Account constitute Term Priority Collateral,
and reasonably identifying the amount of such proceeds and specifying the origin thereof.
“Term Collateral
Documents” shall mean all “Collateral Documents” (as defined in any Term Credit Agreement) or similar
term, executed and delivered by one or more Term Credit Parties, and all other security agreements, mortgages, deeds of trust and
other collateral documents executed and delivered by any Term Credit Party in connection with any Term Credit Agreement (in each
case, other than any “Collateral Document” (as defined in any Term Credit Agreement) or similar term, security agreement,
mortgage, deed of trust or other collateral document to the extent relating to any Term Exclusive Credit Party or any Term Exclusive
Collateral), in each case as the same may be amended, restated, amended and restated, extended, supplemented or otherwise modified
from time to time.
“Term Credit
Agreements” shall mean any First Lien Term Credit Agreement and any Second Lien Term Credit Agreement and shall include
any one or more other agreements, indentures or facilities (i) extending the maturity of, consolidating, restructuring, refunding,
replacing or refinancing all or any portion of the Term Obligations, whether by the same or any other agent, trustee, lender, group
of lenders, creditor or group of creditors and whether or not increasing the amount of any Indebtedness that may be incurred or
issued thereunder and (ii) relating to additional Term Obligations joined to this Agreement pursuant to Section 7.20 hereof.
“Term Credit
Parties” shall have the meaning assigned to that term in the recitals to this Agreement.
“Term DIP
Financing” shall have the meaning set forth in Section 6.1(b) hereof.
“Term
Documents” shall mean any Term Credit Agreement, any Term Guaranty, any Term Collateral Document, the Term Loan
Intercreditor Agreement, any Cash Management Services between any Term Credit Party and any Term Cash Management Affiliate,
any Term Hedging Agreements between any Term Credit Party and any Term Hedging Affiliate, any other ancillary agreement
executed and delivered by a Term Credit Party as to which any Term Secured Party is a party or a beneficiary and all other
agreements, instruments, documents and certificates, now or hereafter executed by or on behalf of any Term Credit Party, and
delivered to the relevant Term Agent or any other Term Secured Party in connection with any of the foregoing or any Term
Credit Agreement, in each case as the same may be amended, restated, amended and restated, extended, supplemented or
otherwise modified from time to time.
“Term Exclusive
Collateral” shall have the meaning assigned to that term in the definition of “Term Priority Collateral”.
“Term Exclusive
Credit Parties” shall mean the collective reference to (x) each “Guarantor” (as defined in any Term Credit
Agreement) and (y) each borrower under any Term Credit Agreement that, in the case of each of the foregoing clauses (x) and (y),
does not also guarantee any ABL Obligations or become a borrower under any ABL Credit Agreement.
“Term Guarantors”
shall mean the collective reference to Holdings and all “Subsidiary Guarantors” under and as defined in the Term Credit
Agreements, in each case, other than any Term Exclusive Credit Party.
“Term Guaranty”
shall have the meaning assigned to that term in the recitals to this Agreement and shall also include any other guaranty made by
a Term Guarantor guaranteeing, inter alia, the payment and performance of any Term Obligations.
“Term Hedging
Bank” shall mean any Term Agent, Term Arranger or Term Lender or any of their respective Affiliates that has entered
into a Term Hedging Agreement.
“Term Hedging
Affiliate” shall mean any Term Hedging Bank (together with its respective successors, assigns and transferees) that
has entered into a Term Hedging Agreement with any Term Credit Party with the obligations of such Term Credit Party thereunder
being secured by Liens granted under one or more Term Collateral Documents under the First Lien Term Credit Agreement.
“Term Hedging
Agreement” shall mean any agreement entered into between a Term Credit Party and a Term Hedging Bank in connection
with Secured Hedging Obligations under, and as defined in, the First Lien Term Credit Agreement.
“Term Lenders”
shall have the meaning assigned to that term in the introduction to this Agreement, and shall include any Person designated as
a “Lender” or similar term under any Term Credit Agreement.
“Term Loan
Intercreditor Agreement” shall mean the Term Intercreditor Agreement, dated as of the date hereof, by and among the
First Lien Term Agent for the First Lien Term Secured Parties, the Second Lien Term Agent for the Second Lien Term Secured Parties,
Holdings, the Borrower and the other Term Credit Parties party thereto, as amended, restated, amended and restated, extended, supplemented
or otherwise modified.
“Term
Loan Priority Accounts” means the Asset Sale Proceeds Pledged Account and any Deposit Accounts, Securities
Accounts or Commodity Accounts, in each case that contain solely Term Priority Collateral or identifiable proceeds of the
Term Priority Collateral (it being understood that any property in such Deposit Accounts, Securities Accounts or Commodities
Accounts which is not Term Priority Collateral or identifiable proceeds of Term Priority Collateral shall not be Term
Priority Collateral solely by virtue of being on deposit in any such Deposit Account, Securities Account or Commodity
Account).
“Term Obligations”
shall mean collectively the First Lien Term Obligations and the Second Lien Term Obligations.
“Term Priority
Collateral” shall mean all Collateral (including, for the avoidance of doubt, any such assets that, but for the application
of Section 552 of the Bankruptcy Code or any similar provision in any foreign Debtor Relief Laws, would constitute Collateral)
consisting of the following:
(1) all
Equipment, Fixtures, Real Property, Intellectual Property, intercompany indebtedness between or among the Credit Parties or their
Affiliates, except to the extent constituting ABL Priority Collateral, and Investment Property (other than any Investment Property
that constitutes ABL Priority Collateral);
(2) except
to the extent constituting ABL Priority Collateral, all Instruments, Documents and General Intangibles (including contract rights);
(3) Term
Loan Priority Accounts;
(4) all
other Collateral, other than the ABL Priority Collateral; and
(5) all
collateral security and guarantees with respect to any of the foregoing, items referred to in the preceding clauses (1) through
(4) constituting Term Priority Collateral and all cash, Money, cash equivalents, insurance proceeds, Instruments, Securities and
Financial Assets received as Proceeds of, and any other Proceeds of, any of the foregoing items referred to in the preceding clauses
(1) through (4) and this clause (5) constituting Term Priority Collateral, other than the ABL Priority Collateral (“Term
Priority Proceeds”).
For the avoidance of
doubt, it is understood and agreed that “Term Priority Collateral” shall include any Collateral consisting of assets
or property of any Term Exclusive Credit Party and any Proceeds thereof which would not otherwise constitute Term Priority Collateral
or ABL Priority Collateral (such assets and property, the “Term Exclusive Collateral”).
“Term Priority
Proceeds” shall have the meaning assigned to that term in the definition of “Term Priority Collateral”.
“Term Recovery”
shall have the meaning set forth in Section 5.3(b) hereof.
“Term Secured
Hedging Obligations” shall mean, in connection with the First Lien Term Credit Agreement, obligations owed by any
Term Credit Party to any Term Hedging Bank in respect of or in connection with any Term Hedging Agreement.
“Term Secured
Parties” shall have the meaning assigned to that term in the introduction to this Agreement.
“Trademark
License” shall mean any written agreement, now or hereafter in effect, granting to any third party any right to use
any Trademark now or hereafter owned by any Credit Party or that any Credit Party otherwise has the right to license to a third
party, or granting to any Credit Party any right to use any Trademark now or hereafter owned by any third party, and all rights
of any Credit Party under any such agreement (not including vendor or distribution agreements that allow incidental use of intellectual
property rights in connection with the sale or distribution of such products or services).
“Trademarks”
shall mean the following: (a) all trademarks (including service marks), common law marks, trade names, trade dress, domain names
and logos, slogans and other indicia of origin under the laws of any jurisdiction in the world, and the registrations and applications
for registration thereof and the goodwill of the business connected to the use of and symbolized by the foregoing; (b) all renewals
of the foregoing; (c) all income, royalties, damages, and payments now or hereafter due or payable with respect thereto, including,
without limitation, damages, claims and payments for past, present and future infringements or dilutions thereof; (d) all rights
to sue for past, present, and future infringements or dilutions of any of the foregoing, including the right to settle suits involving
claims and demands for royalties owing; and (e) all rights corresponding to any of the foregoing.
“Uniform
Commercial Code” or “UCC” shall mean the Uniform Commercial Code as in effect from time to time
in the State of New York; provided that, if by reason of mandatory provisions of law, perfection, or the effect of perfection
or non-perfection or the priority of a security interest in any Collateral or the availability of any remedy hereunder is governed
by the Uniform Commercial Code as in effect in a jurisdiction other than New York, “Uniform Commercial Code” means
the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such perfection
or effect of perfection or non-perfection or priority or availability of such remedy, as the case may be.
“Use Period”
means the period commencing on the date that the ABL Agent or an agent acting on its behalf (or an ABL Credit Party acting with
the consent of the ABL Agent) commences the liquidation and sale of the ABL Priority Collateral in a manner as provided in Section
3.6 hereof (having theretofore furnished the Controlling Term Agent with an Enforcement Notice) and ending 180 days thereafter.
If any stay or other order that prohibits any of the ABL Agent, the other ABL Secured Parties or any ABL Credit Party (with the
consent of the ABL Agent) from commencing and continuing to Exercise Any Secured Creditor Remedies or from liquidating and selling
the ABL Priority Collateral has been entered by a court of competent jurisdiction, such 180-day period shall be tolled during
the pendency of any such stay or other order and the Use Period shall be so extended.
Section 1.3 Rules
of Construction. Unless the context of this Agreement clearly requires otherwise, references to the plural include the
singular, references to the singular include the plural, the term “including” is not limiting and shall be deemed
to be followed by the phrase “without limitation,” 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 refer to this Agreement as a whole and not to any particular provision
of this Agreement. Article, section, subsection, clause, schedule and exhibit references herein are to this Agreement unless otherwise
specified. Any reference in this Agreement to any agreement, instrument, or document shall include all alterations, amendments,
changes, restatements, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements thereto and
thereof, as applicable (subject to any restrictions on such alterations, amendments, changes, restatements, extensions, modifications,
renewals, replacements, substitutions, joinders, and supplements set forth herein). Any reference herein to any Person shall be
construed to include such Person’s successors and assigns. Any reference herein to the repayment in full of an obligation
shall mean the payment in full in cash of such obligation, or in such other manner as may be approved in writing by the requisite
holders or representatives in respect of such obligation.
ARTICLE 2
LIEN PRIORITY
Section 2.1 Priority
of Liens.
(a) Subject to the
order of application of proceeds set forth in sub-clauses (b) and (c) of Section 4.1 hereof, notwithstanding (i) the
date, time, method, manner, or order of grant, attachment or perfection (including any defect or deficiency or alleged defect or
deficiency in any of the foregoing) of any Liens granted to the ABL Secured Parties in respect of all or any portion of the Collateral
or of any Liens granted to the Term Secured Parties in respect of all or any portion of the Collateral and regardless of how any
such Lien was acquired (whether by grant, statute, operation of law, subrogation or otherwise), (ii) the order or time of filing
or recordation of any document or instrument for perfecting the Liens in favor of the ABL Agent or any Term Agent (or ABL Secured
Parties or Term Secured Parties) in any Collateral, (iii) any provision of the Uniform Commercial Code, Debtor Relief Laws
or any other applicable law, or of the ABL Documents or the Term Documents, (iv) whether the ABL Agent or any Term Agent, in each
case, either directly or through agents, holds possession of, or has control over, all or any part of the Collateral, (v) the date
on which the ABL Obligations or the Term Obligations are advanced or made available to the Credit Parties, (vi) the fact that
any such Liens in favor of the ABL Agent or the ABL Secured Parties or any Term Agent or the Term Secured Parties securing any
of the ABL Obligations or Term Obligations, respectively, are (x) subordinated to any Lien securing any obligation of any Credit
Party other than the Term Obligations or the ABL Obligations, respectively, or (y) otherwise subordinated, voided, avoided, invalidated
or lapsed, or (vii) any other circumstance of any kind or nature whatsoever, the ABL Agent, on behalf of itself and the ABL Secured
Parties, and each of the Term Agents, on behalf of itself and the relevant Term Secured Parties, hereby agree that:
(1) any
Lien in respect of all or any portion of the ABL Priority Collateral now or hereafter held by or on behalf of any Term Agent or
any Term Secured Party that secures all or any portion of the Term Obligations shall in all respects be junior and subordinate
to all Liens granted to the ABL Agent and the ABL Secured Parties in such ABL Priority Collateral to secure all or any portion
of the ABL Obligations;
(2) any
Lien in respect of all or any portion of the ABL Priority Collateral now or hereafter held by or on behalf of the ABL Agent
or any ABL Secured Party that secures all or any portion of the ABL Obligations shall in all respects be senior and prior to
all Liens granted to any Term Agent or any Term Secured Party in such ABL Priority Collateral to secure all or any portion of
the Term Obligations;
(3) any
Lien in respect of all or any portion of the Term Priority Collateral now or hereafter held by or on behalf of the ABL Agent or
any ABL Secured Party that secures all or any portion of the ABL Obligations shall in all respects be junior and subordinate to
all Liens granted to any Term Agent and the Term Secured Parties in such Term Priority Collateral to secure all or any portion
of the Term Obligations; and
(4) any
Lien in respect of all or any portion of the Term Priority Collateral now or hereafter held by or on behalf of any Term Agent or
any Term Secured Party that secures all or any portion of the Term Obligations shall in all respects be senior and prior to all
Liens granted to the ABL Agent or any ABL Secured Party in such Term Priority Collateral to secure all or any portion of the ABL
Obligations.
(b) Notwithstanding
any failure by any ABL Secured Party or Term Secured Party to perfect its security interests in the Collateral or any avoidance,
invalidation, priming or subordination by any third party or court of competent jurisdiction of the security interests in the Collateral
granted to the ABL Secured Parties or the Term Secured Parties (but, for the avoidance of doubt, subject to the order of application
of proceeds set forth in sub-clauses (b) and (c) of Section 4.1 hereof), the priority and rights as between the ABL
Secured Parties and the Term Secured Parties with respect to the Collateral shall be as set forth herein.
(c) Each
Term Agent, for and on behalf of itself and the Term Secured Parties represented by such Term Agent, acknowledges and agrees that,
concurrently herewith, the ABL Agent, for the benefit of itself and the ABL Secured Parties, has been, or may be, granted Liens
upon all of the Collateral (other than any Term Exclusive Collateral) in which the Term Agents have been granted Liens and the
Term Agents hereby consent thereto. The ABL Agent, for and on behalf of itself and the ABL Secured Parties, acknowledges and agrees
that, concurrently herewith, each Term Agent, for the benefit of itself and the Term Secured Parties represented by such Term Agent,
has been, or may be, granted Liens upon all of the Collateral (other than any ABL Exclusive Collateral) in which the ABL Agent
has been granted Liens and the ABL Agent hereby consents thereto. The subordination of Liens by the Term Agents and the ABL Agent
in favor of one another as set forth herein shall not be deemed to subordinate any Term Agent’s or the ABL Agent’s
Liens to the Liens of any other Person, nor shall such subordination be affected by the subordination of such Liens to any Lien
of any other Person.
Section 2.2 Waiver
of Right to Contest Liens.
(a) Each
Term Agent, for and on behalf of itself and the Term Secured Parties represented by such Term Agent, agrees that it and the
Term Secured Parties represented by it shall not (and hereby waive any right to) take any action to contest or challenge (or
assist or support any other Person in contesting or challenging), directly or indirectly, whether or not in any proceeding
(including in any Insolvency Proceeding), the validity, priority, enforceability, or perfection of the Liens of the ABL Agent
and the ABL Secured Parties in respect of the Collateral, the allowability of the claims asserted by the ABL Secured Parties
with respect to the ABL Obligations in any Insolvency Proceeding, or the provisions of this Agreement. Each Term Agent, for
itself and on behalf of the Term Secured Parties represented by such Term Agent, agrees that neither it nor the Term Secured
Parties represented by it will take any action that would hinder or interfere with any Exercise of Secured Creditor Remedies
undertaken by the ABL Agent or any ABL Secured Party under the ABL Documents with respect to the ABL Priority Collateral.
Each Term Agent, for itself and on behalf of the Term Secured Parties represented by such Term Agent, hereby waives any and
all rights it or the Term Secured Parties represented by it may have as a junior lien creditor or otherwise to contest,
protest, object to, or interfere with the manner in which the ABL Agent or any ABL Lender seeks to enforce its Liens in any
ABL Priority Collateral. The foregoing shall not be construed to prohibit any Term Agent from enforcing the provisions of
this Agreement.
(b) The
ABL Agent, for and on behalf of itself and the ABL Secured Parties, agrees that it and they shall not (and hereby waives any right
to) take any action to contest or challenge (or assist or support any other Person in contesting or challenging), directly or indirectly,
whether or not in any proceeding (including in any Insolvency Proceeding), the validity, priority, enforceability, or perfection
of the Liens of the Term Agents or the Term Secured Parties in respect of the Collateral, the allowability of the claims asserted
by the Term Secured Parties with respect to the Term Obligations in any Insolvency Proceeding, or the provisions of this Agreement.
Except to the extent expressly set forth in Section 3.6 of this Agreement, the ABL Agent, for itself and on behalf of the
ABL Secured Parties, agrees that none of the ABL Agent or the ABL Secured Parties will take any action that would hinder or interfere
with any Exercise of Secured Creditor Remedies undertaken by any Term Agent or any Term Secured Party under the Term Documents
with respect to the Term Priority Collateral. The ABL Agent, for itself and on behalf of the ABL Secured Parties, hereby waives
any and all rights it or the ABL Secured Parties may have as a junior lien creditor or otherwise to contest, protest, object to,
or interfere with the manner in which either Term Agent or any Term Secured Party seeks to enforce its Liens in any Term Priority
Collateral. The foregoing shall not be construed to prohibit the ABL Agent from enforcing the provisions of this Agreement.
(c) For
the avoidance of doubt, the assertion of priority rights established under the terms of this Agreement shall not be considered
a challenge to, or contesting of, the Lien priority of any Party prohibited by this Section 2.2.
Section 2.3 Remedies
Standstill.
(a) Each
Term Agent, on behalf of itself and the Term Secured Parties represented by such Term Agent, agrees that, from the date
hereof until the date upon which the Discharge of ABL Obligations shall have occurred, no Term Agent nor any Term Secured
Party will Exercise Any Secured Creditor Remedies with respect to any of the ABL Priority Collateral without the written
consent of the ABL Agent, and, subject to Section 3.7, will not take, receive or accept any Proceeds of ABL Priority
Collateral, it being understood and agreed that the temporary deposit of Proceeds of ABL Priority Collateral in a Deposit
Account controlled by any Term Agent shall not constitute a breach of this Agreement so long as such Proceeds are treated in
accordance with the provisions of Section 3.7 and Section 4.1(a). From and after the date upon which the
Discharge of ABL Obligations shall have occurred (or prior thereto upon obtaining the written consent of the ABL Agent) and
prior to the date upon which the Discharge of Term Obligations shall have occurred, the Controlling Term Agent on behalf of
the Term Secured Parties may Exercise Any Secured Creditor Remedies under the Term Documents or applicable law as to any ABL
Priority Collateral; provided, however, that any Exercise of Secured Creditor Remedies with respect to any
Collateral by the Controlling Term Agent or the Term Secured Parties is at all times subject to the provisions of this
Agreement.
(b) The
ABL Agent, on behalf of itself and the ABL Secured Parties, agrees that, from the date hereof until the date upon which the Discharge
of Term Obligations shall have occurred, neither the ABL Agent nor any ABL Secured Party will Exercise Any Secured Creditor Remedies
with respect to the Term Priority Collateral without the written consent of the Controlling Term Agent, and, subject to Section
3.7, will not take, receive or accept any Proceeds of the Term Priority Collateral, it being understood and agreed that the
temporary deposit of Proceeds of Term Priority Collateral in a Deposit Account controlled by the ABL Agent shall not constitute
a breach of this Agreement so long as such Proceeds are treated in accordance with the provisions of Section 3.7 and Section
4.1(a). From and after the date upon which the Discharge of Term Obligations (or prior thereto upon obtaining the written consent
of the Controlling Term Agent) and prior to the date upon which the Discharge of ABL Obligations shall have occurred, the ABL Agent
or any ABL Secured Party may Exercise Any Secured Creditor Remedies under the ABL Documents or applicable law as to any Term Priority
Collateral; provided, however, that any Exercise of Secured Creditor Remedies with respect to any Collateral by the
ABL Agent or the ABL Secured Parties is at all times subject to the provisions of this Agreement.
(c) Notwithstanding
the provisions of Sections 2.3(a), 2.3(b) or any other provision of this Agreement, nothing contained herein shall
be construed to prevent any Agent or any Secured Party from (i) filing a claim or statement of interest with respect to the ABL
Obligations or Term Obligations owed to it in any Insolvency Proceeding commenced by or against any Credit Party, (ii) taking any
action (not adverse to the priority status of the Liens of the other Agents or other Secured Parties on the Collateral in which
such other Agent or other Secured Party has a priority Lien or the rights of the other Agents or any of the other Secured Parties
to Exercise Any Secured Creditor Remedies in respect thereof) in order to create, perfect, preserve or protect (but not enforce)
its Lien on any Collateral, (iii) filing any necessary or appropriate responsive or defensive pleadings in opposition to any motion,
adversary proceeding or other pleading filed by any Person objecting to or otherwise seeking disallowance of the claim or Lien
of such Agent or Secured Party or (iv) voting on any plan of reorganization, proposal or plan of compromise or arrangement or filing
any proof of claim in any Insolvency Proceeding of any Credit Party, in each case under clauses (i) through (iv) above to the extent
not inconsistent with the express terms of this Agreement.
Section 2.4 Exercise
of Rights.
(a) No
Other Restrictions. Except as otherwise set forth in this Agreement (including any provisions prohibiting or restricting
any party from taking various actions or making various objections), each Term Secured Party and each ABL Secured Party shall
have any and all rights and remedies it may have as an unsecured creditor or a secured creditor under applicable law,
including the right to the Exercise of Secured Creditor Remedies, in each case to the extent not inconsistent with or
contrary to the provisions of this Agreement; provided, however, that the Exercise of Secured Creditor Remedies
with respect to the Collateral shall be subject to the Lien Priority and to the provisions of this Agreement. The ABL Agent
may enforce the provisions of the ABL Documents, the Term Agents may enforce the provisions of the Term Documents and each
may Exercise Any Secured Creditor Remedies, all in such order and in such manner as each may determine in the exercise of its
sole discretion, consistent with the terms of this Agreement, and mandatory provisions of applicable law and, in the case of
the Term Agents, any intercreditor agreement between the Term Agents; provided, however, that each of the ABL
Agent and the Controlling Term Agent agrees to provide to each other (x) an Enforcement Notice prior to the commencement of
an Exercise of Any Secured Creditor Remedies and (y) copies of any notices that it is required under applicable law to
deliver to any Credit Party; provided, further, however, that the ABL Agent’s failure to provide
the Enforcement Notice (other than in connection with Section 3.6 hereof) or any such copies to any of the Term Agents
shall not impair any of the ABL Agent’s rights hereunder or under any of the ABL Documents and the Controlling Term
Agent’s failure to provide the Enforcement Notice or any such copies to the ABL Agent shall not impair any Term
Agent’s rights hereunder or under any of the Term Documents. Each of the Term Agents, each Term Secured Party, the ABL
Agent and each ABL Secured Party agrees that it will not institute any suit or other proceeding or assert in any suit,
Insolvency Proceeding or other proceeding any claim, in the case of each Term Agent and each Term Secured Party, against
either the ABL Agent or any other ABL Secured Party, and in the case of the ABL Agent and each other ABL Secured Party,
against any Term Agent or any other Term Secured Party, seeking damages from or other relief by way of specific performance,
instructions or otherwise, with respect to any action taken or omitted to be taken by such Person with respect to the
Collateral which is consistent with the terms of this Agreement, and none of such Parties shall be liable for any such action
taken or omitted to be taken.
In the event any ABL Secured Party becomes
a judgment lien creditor in respect of Term Priority Collateral as a result of its enforcement of its rights as an unsecured creditor,
such judgment lien shall be subordinated to the Liens thereon securing Term Obligations, in each case, on the same basis as the
other Liens on the Term Priority Collateral securing the ABL Obligations are so subordinated to the Term Obligations under this
Agreement. In the event any Term Secured Party becomes a judgment lien creditor in respect of ABL Priority Collateral as a result
of its enforcement of its rights as an unsecured creditor, such judgment lien shall be subordinated to the Liens thereon securing
ABL Obligations, in each case, on the same basis as the other Liens on the ABL Priority Collateral securing the Term Obligations
are so subordinated to such ABL Obligations under this Agreement.
(b) Release
of Liens.
(i) In
the event of (A) any private or public sale of all or any portion of the ABL Priority Collateral in connection with any
Exercise of Secured Creditor Remedies by or with the consent of the ABL Agent, or (B) any sale, transfer or other disposition
of all or any portion of the ABL Priority Collateral (other than in connection with a refinancing as described in Section
5.2(c) hereof), so long as such sale, transfer or other disposition is then permitted by the ABL Documents or consented
to by the requisite ABL Lenders, each Term Agent agrees, on behalf of itself and the Term Secured Parties represented by such
Term Agent, that, so long as such Term Agent, for the benefit of the relevant Term Secured Parties, shall retain a Lien on
the proceeds of such sale, transfer or other disposition (to the extent that such proceeds are not applied to the ABL
Obligations as provided in Section 4.1(b) hereof), such sale, transfer or other disposition will be free and clear of
the Liens on such ABL Priority Collateral (but not the proceeds thereof) securing the Term Obligations, and each of the Term
Agents’ and the Term Secured Parties’ Liens with respect to the ABL Priority Collateral (but not the proceeds
thereof) so sold, transferred, or disposed shall terminate and be automatically released without further action concurrently
with, and to the same extent as, the release of the ABL Secured Parties’ Liens on such ABL Priority Collateral. In
furtherance of, and subject to, the foregoing, each of the Term Agents agrees that it will promptly execute any and all Lien
releases or other documents reasonably requested by the ABL Agent in connection therewith. The Term Agents each hereby
appoint the ABL Agent and any officer or duly authorized person of the ABL Agent, with full power of substitution, as its
true and lawful attorney-in-fact with full irrevocable power of attorney in the place and stead of such Term Agent
and in the name of such Term Agent or in the ABL Agent’s own name, from time to time, in the ABL Agent’s sole
discretion, for the purposes of carrying out the terms of this paragraph, to take any and all appropriate action and to
execute and deliver any and all documents and instruments as may be necessary or desirable to accomplish the purposes of this
paragraph, including any financing statements, endorsements, assignments, releases or other documents or instruments of
transfer (which appointment, being coupled with an interest, is irrevocable).
(ii) In
the event of (A) any private or public sale of all or any portion of the Term Priority Collateral in connection with any Exercise
of Secured Creditor Remedies by or with the consent of the Controlling Term Agent, or (B) any sale, transfer or other disposition
of all or any portion of the Term Priority Collateral (other than in connection with a refinancing as described in Section 5.2(c)
hereof), so long as such sale, transfer or other disposition is then permitted by the Term Documents or consented to by the requisite
Term Lenders, the ABL Agent agrees, on behalf of itself and the ABL Secured Parties, that, so long as the ABL Agent, for the benefit
of the ABL Secured Parties, shall retain a Lien on the proceeds of such sale, transfer or other disposition (to the extent that
such proceeds are not applied to the Term Obligations as provided in Section 4.1(c) hereof), such sale, transfer or disposition
will be free and clear of the Liens on such Term Priority Collateral (but not the proceeds thereof) securing the ABL Obligations
and the ABL Agent’s and the ABL Secured Parties’ Liens with respect to the Term Priority Collateral (but not the proceeds
thereof) so sold, transferred, or disposed shall terminate and be automatically released without further action concurrently with,
and to the same extent as, the release of the Term Secured Parties’ Liens on such Term Priority Collateral. In furtherance
of, and subject to, the foregoing, the ABL Agent agrees that it will promptly execute any and all Lien releases or other documents
reasonably requested by the Controlling Term Agent in connection therewith. The ABL Agent hereby appoints the Controlling Term
Agent and any officer or duly authorized person of the Controlling Term Agent, with full power of substitution, as its true and
lawful attorney-in-fact with full irrevocable power of attorney in the place and stead of the ABL Agent and in the name
of the ABL Agent or in the Controlling Term Agent’s own name, from time to time, in the Controlling Term Agent’s sole
discretion, for the purposes of carrying out the terms of this paragraph, to take any and all appropriate action and to execute
and deliver any and all documents and instruments as may be necessary or desirable to accomplish the purposes of this paragraph,
including any financing statements, endorsements, assignments, releases or other documents or instruments of transfer (which appointment,
being coupled with an interest, is irrevocable).
Section 2.5 No
New Liens.
(a) It
is the anticipation of the parties, that until the date upon which the Discharge of ABL Obligations shall have occurred, no
Term Secured Party shall acquire or hold any consensual Lien on any assets of any Credit Party securing any Term Obligation
(other than any Term Exclusive Collateral) which assets are not also subject to the Lien of the ABL Agent under the ABL
Documents. If any Term Secured Party shall (nonetheless and in breach hereof) acquire or hold any such Lien on any assets of
any Credit Party securing any Term Obligation (other than any Term Exclusive Collateral or any Liens on Real Property) which
assets are not also subject to the Lien of the ABL Agent under the ABL Documents, then the Controlling Term Agent shall,
without the need for any further consent of any other Term Secured Party, the Borrower or any Term Credit Party and
notwithstanding anything to the contrary in any other Term Document, be deemed to also hold and have held such Lien as agent
or bailee for the benefit of the ABL Agent as security for the ABL Obligations (subject to the Lien Priority and other terms
hereof) and shall promptly notify the ABL Agent in writing of the existence of such Lien upon becoming aware thereof.
(b) It
is the anticipation of the parties, that until the date upon which the Discharge of Term Obligations shall have occurred, no ABL
Secured Party shall acquire or hold any consensual Lien on any assets of any Credit Party securing any ABL Obligation (other than
any ABL Exclusive Collateral) which assets are not also subject to the Lien of the Term Agents under the Term Documents. If any
ABL Secured Party shall (nonetheless and in breach hereof) acquire or hold any such Lien on any assets of any Credit Party securing
any ABL Obligation (other than any ABL Exclusive Collateral) which assets are not also subject to the Lien of the Term Agents under
the Term Documents, then the ABL Agent shall, without the need for any further consent of any other ABL Secured Party, the Borrower
or any ABL Credit Party and notwithstanding anything to the contrary in any other ABL Document be deemed to also hold and have
held such Lien as agent or bailee for the benefit of the relevant Term Agents as security for the Term Obligations (subject to
the Lien Priority and other terms hereof) and shall promptly notify the relevant Term Agent in writing of the existence of such
Lien upon becoming aware thereof.
(c) The
Term Secured Parties and ABL Secured Parties agree that any amounts received or distributed to any of them as a result of Liens
granted in contravention of this Section 2.5 shall be subject to Section 3.9.
Section 2.6 Waiver
of Marshalling.
(a) Until
the Discharge of ABL Obligations, each Term Agent, on behalf of itself and the Term Secured Parties represented by such Term Agent,
agrees not to assert and hereby waives, to the fullest extent permitted by law, any right to demand, request, plead or otherwise
assert or otherwise claim the benefit of, any marshalling, appraisal, valuation or other similar right that may otherwise be available
under applicable law with respect to the ABL Priority Collateral or any other similar rights a junior secured creditor may have
under applicable law.
(b) Until
the Discharge of Term Obligations, the ABL Agent, on behalf of itself and the ABL Secured Parties, agrees not to assert and hereby
waives, to the fullest extent permitted by law, any right to demand, request, plead or otherwise assert or otherwise claim the
benefit of, any marshalling, appraisal, valuation or other similar right that may otherwise be available under applicable law with
respect to the Term Priority Collateral or any other similar rights a junior secured creditor may have under applicable law.
ARTICLE 3
ACTIONS OF THE PARTIES
Section 3.1 Certain
Actions Permitted. The Term Agents and the ABL Agent may make such demands or file such claims in respect of the Term Obligations
or the ABL Obligations, as applicable, as are necessary to prevent the waiver or bar of such claims under applicable statutes of
limitations or other statutes, court orders, or rules of procedure at any time. Nothing in this Agreement shall prohibit the receipt
by any Term Agent or any Term Secured Party of the required payments of interest, principal and other amounts owed in respect of
the Term Obligations so long as such receipt is not the direct or indirect result of the exercise by such Term Agent or any Term
Secured Party of rights or remedies as a secured creditor (including set-off) with respect to ABL Priority Collateral or enforcement
in contravention of this Agreement of any Lien held by any of them. Nothing in this Agreement shall prohibit the receipt by the
ABL Agent or any ABL Secured Party of the required payments of interest, principal and other amounts owed in respect of the ABL
Obligations so long as such receipt is not the direct or indirect result of the exercise by the ABL Agent or any ABL Secured Party
of rights or remedies as a secured creditor (including set-off) with respect to Term Priority Collateral or enforcement in
contravention of this Agreement of any Lien held by any of them.
Section 3.2 Agent
for Perfection. The ABL Agent, for and on behalf of itself and each ABL Secured Party, and each Term Agent, for and
on behalf of itself and each Term Secured Party each agree to hold all Collateral (other than any ABL Exclusive Collateral or
any Term Exclusive Collateral, as applicable) in its possession, custody, or control (including as defined in Sections
9-104, 9-105, 9-106, 9-107 and 8-106 of the UCC and similar provisions of other applicable law) (or in
the possession, custody, or control of agents or bailees for either) as gratuitous bailee for the other (provided that
no Term Agent or other Term Secured Party shall hold any Real Property as gratuitous bailee for any ABL Agent or any other
ABL Secured Party) solely for the purpose of perfecting or maintaining the perfection of the security interest granted to
each in such Collateral, subject to the terms and conditions of this Section 3.2. None of the ABL Agent, the ABL
Secured Parties, the Term Agents, or the Term Secured Parties, as applicable, shall have any obligation whatsoever to the
others to assure that the Collateral is genuine or owned by the Borrower, any other Credit Party, or any other Person or to
preserve rights or benefits of any Person. The duties or responsibilities of the ABL Agent and the Term Agents under this Section
3.2 are and shall be limited solely to holding or maintaining control of the Control Collateral as gratuitous bailee
and/or agent for the other Party for purposes of perfecting the Lien held by the Term Agents or the ABL Agent, as applicable.
The ABL Agent is not and shall not be deemed to be a fiduciary of any kind for the Term Secured Parties or any other Person.
Without limiting the generality of the foregoing, the ABL Secured Parties shall not be obligated to see to the application of
any Proceeds of the Term Priority Collateral deposited into any Deposit Account or be answerable in any way for the
misapplication thereof. The Term Agents are not and shall not be deemed to be fiduciaries of any kind for the ABL Secured
Parties, or any other Person. Without limiting the generality of the foregoing, the Term Secured Parties shall not be
obligated to see to the application of any Proceeds of the ABL Priority Collateral deposited into any Deposit Account or be
answerable in any way for the misapplication thereof. In addition, the Term Agents, on behalf of the relevant Term Secured
Parties, hereby agree and acknowledge that other than with respect to ABL Priority Collateral that may be perfected through
the filing of a UCC financing statement or similar financing statement under other applicable law, the ABL Agent’s
Liens may be perfected on certain items of ABL Priority Collateral with respect to which such Term Agent’s Liens would
not be perfected but for the provisions of this Section 3.2, and such Term Agent, on behalf of the relevant Term
Secured Parties, hereby further agrees that the foregoing described in this sentence shall not be deemed a breach of this
Agreement or any Term Document.
Section 3.3 Sharing
of Information and Access. In the event that the ABL Agent shall, in the exercise of its rights under the ABL Collateral
Documents or otherwise, receive possession or control of any books and records of any Term Credit Party which contain information
identifying or pertaining to the Term Priority Collateral, the ABL Agent shall, upon request from the Controlling Term Agent and
as promptly as practicable thereafter, either make available to the Controlling Term Agent such books and records for inspection
and duplication or provide to the Controlling Term Agent copies thereof. In the event that any Term Agent shall, in the exercise
of its rights under the Term Collateral Documents or otherwise, receive possession or control of any books and records of any ABL
Credit Party which contain information identifying or pertaining to any of the ABL Priority Collateral, such Term Agent shall,
upon request from the ABL Agent and as promptly as practicable thereafter, either make available to the ABL Agent such books and
records for inspection and duplication or provide the ABL Agent copies thereof.
Section
3.4 Insurance. Proceeds of Collateral include insurance proceeds and,
therefore, the Lien Priority shall govern the ultimate disposition of casualty insurance proceeds. The ABL Agent and the Term
Agents shall each be named as additional insured or loss payee, as applicable, with respect to all insurance policies
relating to the Collateral as set forth in the Term Credit Agreements or the ABL Credit Agreement, as applicable. The ABL
Agent shall have the sole and exclusive right, as against the Term Agents, to adjust settlement of insurance claims in the
event of any covered loss, theft or destruction of ABL Priority Collateral. The Controlling Term Agent shall have the sole
and exclusive right, as against the ABL Agent, to adjust settlement of insurance claims in the event of any covered loss,
theft or destruction of Term Priority Collateral. If any insurance claim includes both ABL Priority Collateral and Term
Priority Collateral, the insurer will not settle such claim separately with respect to ABL Priority Collateral and Term
Priority Collateral, and if the Parties are unable after negotiating in good faith to agree on the settlement for such claim,
either Party may apply to a court of competent jurisdiction to make a determination as to the settlement of such claim, and
the court’s determination shall be binding upon the Parties. All proceeds of such insurance shall be remitted to the
ABL Agent or the Controlling Term Agent, as the case may be, and each of the Term Agents and ABL Agent shall cooperate (if
necessary) in a reasonable manner in effecting the payment of insurance proceeds in accordance with Section 4.1
hereof. Any proceeds of such insurance received by the ABL Agent or the Controlling Agent, as the case may be, in
contravention of this Section 3.4 shall be paid over to the ABL Agent or the Controlling Term Agent, as the case may
be, in accordance with Section 3.9 hereof.
Section 3.5 No
Additional Rights For the Credit Parties Hereunder. Except as provided in Section 3.6 hereof, if any ABL Secured
Party or Term Secured Party shall enforce its rights or remedies in violation of the terms of this Agreement, the Credit Parties
shall not be entitled to use such violation as a defense to any action by any ABL Secured Party or Term Secured Party, nor to assert
such violation as a counterclaim or basis for set off or recoupment against any ABL Secured Party or Term Secured Party.
Section 3.6 Inspection
and Access Rights. (a) Without limiting any rights the ABL Agent or any other ABL Secured Party may otherwise have under
applicable law or by agreement, in the event of any liquidation of the ABL Priority Collateral (or any other Exercise of Any Secured
Creditor Remedies by the ABL Agent) and whether or not the Term Agents or any other Term Secured Party has commenced and is continuing
to Exercise Any Secured Creditor Remedies, the ABL Agent or any other Person (including any ABL Credit Party) acting with the consent,
or on behalf, of the ABL Agent, shall have the right (i) during the Use Period during normal business hours on any Business Day,
to access ABL Priority Collateral that (A) is stored or located in or on, (B) has become an accession with respect to (within the
meaning of Section 9-335 of the Uniform Commercial Code), or (C) has been commingled with (within the meaning of Section 9-336
of the Uniform Commercial Code) Term Priority Collateral (collectively, the “ABL Joint Collateral”),
and (ii) during the Use Period, shall have the irrevocable right to use the Term Priority Collateral (including, without limitation,
Equipment, Fixtures, Intellectual Property, General Intangibles and Real Property) on a rent-free, royalty-free basis,
each of the foregoing solely for the limited purposes of assembling, inspecting, copying or downloading information stored on,
taking actions to perfect its Lien on, completing a production run of Inventory involving, taking possession of, moving, preparing
and advertising for sale, selling (by public auction, private sale or a “going out of business” or similar sale, whether
in bulk, in lots or to customers in the ordinary course of business or otherwise and which sale may include augmented Inventory
of the same type sold in any ABL Credit Party’s business), storing or otherwise dealing with the ABL Priority Collateral,
in each case without the involvement of or interference by any Term Secured Party or liability to any Term Secured Party, but with
reasonable advance notice to each Term Agent and at the sole cost and expense of the ABL Agent or such other Person acting with
the consent, or on behalf, of the ABL Agent; provided, however, that the expiration of the Use Period shall be without
prejudice to the sale or other disposition of the ABL Priority Collateral in accordance with this Agreement and applicable law.
In the event that any ABL Secured Party has commenced and is continuing the Exercise of Any Secured Creditor Remedies with respect
to any ABL Joint Collateral or any other sale or liquidation of the ABL Joint Collateral has been commenced by an ABL Credit Party
(with the consent of the ABL Agent), the Term Agents may not sell, assign or otherwise transfer the related Term Priority Collateral
prior to the expiration of the Use Period, unless the purchaser, assignee or transferee thereof agrees in writing to be bound by
the provisions of this Section 3.6. If the ABL Agent or any other Person acting with the consent, or on behalf, of the ABL
Agent conducts a public auction or private sale of the ABL Priority Collateral at any of the Real Property included within the
Term Priority Collateral, the ABL Agent or such other Person shall use reasonable efforts to hold such auction or sale in a manner
which would not unduly disrupt any Term Agent’s use of such Real Property for the benefit of the Term Secured Parties.
(b) During
the period of actual occupation, use and/or control by the ABL Secured Parties and/or the ABL Agent (or their respective
employees, agents, advisers and representatives) of any Term Priority Collateral, the ABL Secured Parties and the ABL Agent
shall be obligated to repair at their expense any physical damage (but not any diminution in value resulting from ordinary
wear and tear) to such Term Priority Collateral resulting from such occupancy, use or control, and to leave such Term
Priority Collateral in substantially the same condition as it was at the commencement of such occupancy, use or control,
ordinary wear and tear excepted. Notwithstanding the foregoing, in no event shall the ABL Secured Parties or the ABL Agent
have any liability to the Term Secured Parties and/or to the Term Agents pursuant to this Section 3.6 as a result of
any condition (including any environmental condition, claim or liability) on or with respect to the Term Priority Collateral
existing prior to the date of the exercise by the ABL Secured Parties (or the ABL Agent, as the case may be) of their rights
under this Section 3.6 and the ABL Secured Parties shall have no duty or liability to maintain the Term Priority
Collateral in a condition or manner better than that in which it was maintained prior to the use thereof by the ABL Secured
Parties, or for any diminution in the value of the Term Priority Collateral that results from ordinary wear and tear
resulting from the use of the Term Priority Collateral by the ABL Secured Parties in the manner and for the time periods
specified under this Section 3.6. Without limiting the rights granted in this Section 3.6, the ABL Secured
Parties and the ABL Agent shall reasonably cooperate with the Controlling Term Agent in connection with any efforts made by
the Controlling Term Agent, on behalf of the Term Secured Parties, to sell the Term Priority Collateral, at the expense of
the Credit Parties.
(c) Other
than as set forth in clauses (ii) and (iii) of Section 3.6(d) below, the ABL Agent and the ABL Secured Parties shall not
be obligated to pay any amounts to the Term Agents or the Term Secured Parties (or any person claiming by, through or under the
Term Secured Parties, including any purchaser of the Term Priority Collateral) or to the ABL Credit Parties, for or in respect
of the use by the ABL Agent and the ABL Secured Parties of the Term Priority Collateral.
(d) The
ABL Secured Parties shall (i) use the Term Priority Collateral in accordance with applicable law; (ii) insure for damage to property
and liability to persons, including property and liability insurance for the benefit of the Term Secured Parties; and (iii) reimburse
the Term Secured Parties for any injury or damage to Persons or property (ordinary wear-and-tear excepted) caused by the
acts or omissions of Persons under their control (except for those arising from the gross negligence or willful misconduct of any
Term Secured Party); provided, however, that the ABL Secured Parties will not be liable for any diminution in the
value of the Term Priority Collateral caused by the absence of the ABL Priority Collateral therefrom.
(e) The
Term Agents and the other Term Secured Parties shall use commercially reasonable efforts to not hinder or obstruct the ABL Agent
and the other ABL Secured Parties from exercising the rights described in Section 3.6(a) hereof.
(f) Subject
to the terms hereof, the Controlling Term Agent may advertise and conduct public auctions or private sales of the Term Priority
Collateral without notice (except as required by applicable law) to any ABL Secured Party, the involvement of or interference by
any ABL Secured Party or liability to any ABL Secured Party as long as, in the case of an actual sale, the respective purchaser
assumes and agrees to the obligations of the Term Agents and the Term Secured Parties under this Section 3.6.
(g) In
furtherance of the foregoing in this Section 3.6, the Term Agents, in their capacities as secured parties (or as a
purchaser, assignee or transferee, as applicable), and to the extent of its interest therein, hereby grants to the ABL Agent
a nonexclusive, irrevocable, royalty-free, worldwide license to use, license or sublicense any and all Intellectual
Property now owned or hereafter acquired by the Credit Parties (except to the extent such grant is prohibited by any rule of
law, statute or regulation), included as part of the Term Priority Collateral (and including in such license access to all
media in which any of the licensed items may be recorded or stored and to all computer software and programs used for the
compilation or printout thereof) as is or may be necessary or advisable in the ABL Agent’s reasonable judgment for the
ABL Agent to process, ship, produce, store, supply, lease, complete, sell, liquidate or otherwise deal with the ABL Priority
Collateral, or to collect or otherwise realize upon any Accounts (as defined in the ABL Credit Agreement) comprising ABL
Priority Collateral, in each case solely in connection with any Exercise of Secured Creditor Remedies; provided that
(i) any such license shall terminate upon the sale of the applicable ABL Priority Collateral and shall not extend or transfer
to the purchaser of such ABL Priority Collateral, (ii) the ABL Agent’s use of such Intellectual Property shall be
reasonable and lawful, and (iii) any such license is granted on an “AS IS” basis, without any representation or
warranty whatsoever; provided, further, however, any license granted by the ABL Agent to a third party
shall include reasonable and customary terms and restrictions necessary to preserve the existence, validity and value of the
affected Intellectual Property. The Term Agents (i) acknowledge and consent to the grant to the ABL Agent by the Credit
Parties of the license referred to in Section 5.03 of the US Security Agreement (as defined in the ABL Credit Agreement) and
(ii) agree that its Liens in the Term Priority Collateral shall be subject in all respects to such license. Furthermore, the
Term Agents agree that, in connection with any Exercise of Secured Creditor Remedies conducted by any Term Agent in respect
of Term Priority Collateral, (x) any notice required to be given by such Term Agent in connection with such Exercise of
Secured Creditor Remedies shall contain an acknowledgement of the existence of such license and (y) such Term Agent shall
provide written notice to any purchaser, assignee or transferee pursuant to an Exercise of Secured Creditor Remedies that the
applicable assets are subject to such license.
Section 3.7 Tracing
of and Priorities in Proceeds. The ABL Agent, for itself and on behalf of the ABL Secured Parties, and each Term Agent,
for itself and on behalf of the Term Secured Parties represented by it, further agrees that prior to an issuance of any notice
of Exercise of Any Secured Creditor Remedies by such Secured Party (unless a bankruptcy or insolvency Event of Default then exists),
any proceeds of Collateral, whether or not deposited under control agreements, which are used by any Credit Party to acquire other
property which is Collateral shall not (solely as between the Agents and the Lenders) be treated as Proceeds of Collateral for
purposes of determining the relative priorities in the Collateral which was so acquired.
Section 3.8 Mixed
Collateral Proceeds. Notwithstanding anything to the contrary contained in this Agreement (including in the
definitions of ABL Priority Collateral and Term Priority Collateral), in the event that proceeds of Collateral are received
from (or are otherwise attributable to the value of) a sale or other disposition of Collateral that involves a combination of
ABL Priority Collateral and Term Priority Collateral, the portion of such proceeds that shall be allocated as proceeds of ABL
Priority Collateral for purposes of this Agreement shall be an amount equal to the net book value of such ABL Priority
Collateral (except in the case of Accounts and cash, which amount shall be equal to the face amount of such Accounts and
cash). In addition, notwithstanding anything to the contrary contained in this Agreement (including in the definitions of ABL
Priority Collateral and Term Priority Collateral), to the extent proceeds of Collateral are proceeds received from (or are
otherwise attributable to the value of) the sale or disposition of all or substantially all of the Equity Interests of any of
the Subsidiaries of Holdings which is a Credit Party, or all or substantially all of the assets of any such Subsidiary, such
proceeds shall constitute (1) first, in an amount equal to the face amount of the Accounts and cash (other than to the extent
constituting identifiable proceeds of Term Priority Collateral) and the net book value of the Inventory owned by such
Subsidiary at the time of such sale or disposition, ABL Priority Collateral and (2) second, to the extent in excess of the
amounts described in preceding clause (1), Term Priority Collateral. In the event that amounts are received in respect
of Equity Interests of or intercompany loans issued to any Credit Party in an Insolvency Proceeding, such amounts shall be
deemed to be proceeds received from a sale or disposition of ABL Priority Collateral and Term Priority Collateral and shall
be, subject to the last sentence of Section 6.4, allocated as proceeds of ABL Priority Collateral and Term Priority
Collateral in proportion to the ABL Priority Collateral and Term Priority Collateral owned at such time by the issuer of such
Equity Interests.
Section 3.9 Payments
Over.
(a) So
long as the Discharge of Term Obligations has not occurred, subject to the provisions of Section 3.7 and Section 4.1(a)
hereof, any Term Priority Collateral or Proceeds thereof not constituting ABL Priority Collateral received by the ABL Agent or
any other ABL Secured Party in connection with the exercise of any right or remedy (including set off) relating to the Term Priority
Collateral in contravention of this Agreement shall be segregated and held in trust and forthwith paid over to the Controlling
Term Agent for the benefit of the Term Secured Parties in the same form as received, with any necessary endorsements or as a court
of competent jurisdiction may otherwise direct. The Controlling Term Agent is hereby authorized to make any such endorsements as
agent for the ABL Agent or any such other ABL Secured Parties. This authorization is coupled with an interest and is irrevocable
until such time as this Agreement is terminated in accordance with its terms.
(b) So
long as the Discharge of ABL Obligations has not occurred, subject to the provisions of Section 3.7, any ABL Priority Collateral
or Proceeds thereof not constituting Term Priority Collateral received by any Term Agent or any Term Secured Parties in connection
with the exercise of any right or remedy (including set off) relating to the ABL Priority Collateral in contravention of this Agreement
shall be segregated and held in trust and forthwith paid over to the ABL Agent for the benefit of the ABL Secured Parties in the
same form as received, with any necessary endorsements or as a court of competent jurisdiction may otherwise direct. The ABL Agent
is hereby authorized to make any such endorsements as agent for the Term Agents or any such Term Secured Parties. This authorization
is coupled with an interest and is irrevocable until such time as this Agreement is terminated in accordance with its terms.
ARTICLE 4
APPLICATION OF PROCEEDS
Section 4.1 Application
of Proceeds.
(a) Revolving
Nature of ABL Obligations and Certain Term Obligations. Each Term Agent, for and on behalf of itself and the Term Secured
Parties represented by it, expressly acknowledges and agrees that (i) the ABL Credit Agreement includes a revolving
commitment, that in the ordinary course of business the ABL Agent and the ABL Lenders will apply payments and make advances
thereunder, and that no application of any ABL Priority Collateral or the release of any Lien by the ABL Agent upon any
portion of the Collateral in connection with a permitted disposition by the ABL Credit Parties under any ABL Credit Agreement
shall constitute the Exercise of Secured Creditor Remedies under this Agreement; (ii) the amount of the ABL Obligations that
may be outstanding at any time or from time to time may be increased or reduced and subsequently reborrowed, and that,
subject to Section 5.2, the terms of the ABL Obligations may be modified, extended or amended from time to time, and that the
aggregate amount of the ABL Obligations may be increased, replaced or refinanced, in each event, without notice to or consent
by the Term Secured Parties and without affecting the provisions hereof; and (iii) all ABL Priority Collateral received by
the ABL Agent may be applied, reversed, reapplied, credited, or reborrowed, in whole or in part, to the ABL Obligations at
any time; provided, however, that from and after the date on which the ABL Agent (or any ABL Secured Party) or
any Term Agent (or any Term Secured Party) commences the Exercise of Any Secured Creditor Remedies, all amounts received by
the ABL Agent or any ABL Lender shall be applied as specified in this Section 4.1. The ABL Agent, for and on behalf of
the ABL Secured Parties, expressly acknowledges and agrees that (i) any First Lien Term Credit Agreement may include a
revolving commitment, that in the ordinary course of business the applicable First Lien Term Agent and applicable First Lien
Term Lenders will apply payments and make advances thereunder, and that no application of any Term Priority Collateral or the
release of any Lien by the applicable First Lien Term Agent upon any portion of the Collateral in connection with a permitted
disposition by the Term Credit Parties under any such First Lien Term Credit Agreement shall constitute the Exercise of
Secured Creditor Remedies under this Agreement; (ii) the amount of the First Lien Term Obligations under any facility with
respect to any Incremental Revolving Commitments (as defined in any applicable First Lien Term Credit Agreement), or any
other revolving credit facility under any First Lien Term Credit Agreement, that may be outstanding at any time or from time
to time may be increased or reduced and subsequently reborrowed, and that, subject to Section 5.2, the terms of the First
Lien Term Obligations under any facility with respect to any Incremental Revolving Commitments (as defined in any applicable
First Lien Term Credit Agreement), or any other revolving credit facility under any First Lien Term Credit Agreement, may be
modified, extended or amended from time to time, and that the aggregate amount of the First Lien Term Obligations under any
facility with respect to any Incremental Revolving Commitments (as defined in any applicable First Lien Term Credit
Agreement), or any other revolving credit facility under any First Lien Term Credit Agreement, may be increased, replaced or
refinanced, in each event, without notice to or consent by the ABL Secured Parties and without affecting the provisions
hereof; and (iii) all Term Priority Collateral received by the applicable First Lien Term Agent may be applied,
reversed, reapplied, credited, or reborrowed, in whole or in part, to the First Lien Term Obligations under any facility with
respect to any Incremental Revolving Commitments (as defined in any applicable First Lien Term Credit Agreement), or any
other revolving credit facility under any First Lien Term Credit Agreement, at any time; provided, however,
that from and after the date on which any First Lien Term Agent (or any First Lien Term Secured Party) or the ABL Agent (or
any ABL Secured Party) commences the Exercise of Any Secured Creditor Remedies, all amounts received by the First Lien Term
Agent or any First Lien Term Lender shall be applied as specified in this Section 4.1. The Lien Priority shall not be
altered or otherwise affected by any such amendment, modification, supplement, extension, repayment, reborrowing, increase,
replacement, renewal, restatement or refinancing of either the ABL Obligations or the Term Obligations, or any portion
thereof. Notwithstanding anything to the contrary contained in this Agreement, any Term Document or any ABL Document, each
Credit Party and each Term Agent, for itself and on behalf of the Term Secured Parties represented by it, agrees that, until
the Discharge of ABL Obligations occurs, (i) only Term Priority Collateral or proceeds of the Term Priority Collateral shall
be deposited in the Term Loan Priority Accounts and (ii) prior to the receipt of a Term Cash Proceeds Notice, the ABL Secured
Parties are hereby permitted to treat all cash, cash equivalents, Money, collections and payments deposited in any ABL
Deposit and Securities Account or otherwise received by any ABL Secured Parties as ABL Priority Collateral, and no such
amounts credited to any such ABL Deposit and Securities Account or received by any ABL Secured Parties or applied to the ABL
Obligations shall be subject to disgorgement or deemed to be held in trust for the benefit of the Term Secured Parties (and
all claims of the Term Agents or any other Term Secured Party to such amounts are hereby waived).
(b) Application
of Proceeds of ABL Priority Collateral. The ABL Agent and each of the Term Agents hereby agree that all ABL Priority Collateral,
ABL Priority Proceeds and all other Proceeds thereof, received by either of them in connection with any Exercise of Secured Creditor
Remedies with respect to the ABL Priority Collateral shall be applied,
first, to the
payment of costs and expenses of the ABL Agent in connection with such Exercise of Secured Creditor Remedies,
second, to the
payment, discharge or cash collateralization of the ABL Obligations in accordance with the ABL Documents until the Discharge of
ABL Obligations shall have occurred,
third, to the
payment of the Term Obligations in accordance with the Term Documents until the Discharge of Term Obligations shall have occurred
(provided that no Proceeds of ABL Exclusive Collateral shall be applied under this clause third), and
fourth, the
balance, if any, to the Credit Parties or as a court of competent jurisdiction may direct.
(c) Application
of Proceeds of Term Priority Collateral. The ABL Agent and each of the Term Agents hereby agree that all Term Priority Collateral,
Term Priority Proceeds and all other Proceeds thereof, received by either of them in connection with any Exercise of Secured Creditor
Remedies with respect to the Term Priority Collateral shall be applied,
first, to the
payment of costs and expenses of each Term Agent in connection with such Exercise of Secured Creditor Remedies,
second, to the
payment, discharge or cash collateralization of the Term Obligations in accordance with the Term Documents until the Discharge
of Term Obligations shall have occurred,
third, to the
payment of the ABL Obligations in accordance with the ABL Documents until the Discharge of ABL Obligations shall have occurred
(provided that no Proceeds of Term Exclusive Collateral shall be applied under this clause third), and
fourth, the
balance, if any, to the Credit Parties or as a court of competent jurisdiction may direct.
(d) Limited
Obligation or Liability. In exercising remedies, whether as a secured creditor or otherwise, the ABL Agent shall have no obligation
or liability to the Term Agents or to any Term Secured Party, and the Term Agents shall have no obligation or liability to the
ABL Agent or any ABL Secured Party, regarding the adequacy of any Proceeds or for any action or omission, except solely for an
action or omission that breaches the express obligations undertaken by each Party under the terms of this Agreement.
(e) Turnover
of Collateral After Discharge. Upon the Discharge of ABL Obligations, the ABL Agent shall deliver to the Controlling Term Agent
or shall execute such documents as the Controlling Term Agent may reasonably request to enable such Term Agent to have control
over any Control Collateral still in the ABL Agent’s possession, custody, or control in the same form as received with any
necessary endorsements, or as a court of competent jurisdiction may otherwise direct. Upon the Discharge of Term Obligations, the
Term Agents shall deliver to the ABL Agent or shall execute such documents as the ABL Agent may reasonably request to enable the
ABL Agent to have control over any Control Collateral still in any Term Agent’s possession, custody or control in the same
form as received with any necessary endorsements, or as a court of competent jurisdiction may otherwise direct.
Section 4.2 Specific
Performance. Each of the ABL Agent and each of the Term Agents is hereby authorized to demand specific performance of this
Agreement, whether or not the Borrower or any other Credit Party shall have complied with any of the provisions of any of the Credit
Documents, at any time when the other Party shall have failed to comply with any of the provisions of this Agreement applicable
to it. Each of the ABL Agent, for and on behalf of itself and the ABL Secured Parties, and each of the Term Agents, for and on
behalf of itself and the Term Secured Parties represented by such Term Agent, hereby irrevocably waives any defense based on the
adequacy of a remedy at law that might be asserted as a bar to such remedy of specific performance.
ARTICLE 5
INTERCREDITOR ACKNOWLEDGEMENTS AND WAIVERS
Section 5.1 Notice
of Acceptance and Other Waivers.
(a) All
ABL Obligations at any time made or incurred by the Borrower or any other Credit Party shall be deemed to have been made or incurred
in reliance upon this Agreement, and each Term Agent, on behalf of itself and the Term Secured Parties represented by it, hereby
waives notice of acceptance, or proof of reliance by the ABL Agent or any ABL Secured Party of this Agreement, and notice of the
existence, increase, renewal, extension, accrual, creation, or non-payment of all or any part of the ABL Obligations. All Term
Obligations at any time made or incurred by the Borrower or any other Credit Party shall be deemed to have been made or incurred
in reliance upon this Agreement, and the ABL Agent, on behalf of itself and the ABL Secured Parties, hereby waives notice of acceptance,
or proof of reliance, by any Term Agent or any Term Secured Party of this Agreement, and notice of the existence, increase, renewal,
extension, accrual, creation, or non-payment of all or any part of the Term Obligations.
(b) None
of the ABL Agent, any ABL Secured Party, or any of their respective Affiliates, directors, officers, employees, or agents
shall be liable for failure to demand, collect, or realize upon any of the Collateral or any Proceeds, or for any delay in
doing so, or shall be under any obligation to sell or otherwise dispose of any Collateral or Proceeds thereof or to take any
other action whatsoever with regard to the Collateral or any part or Proceeds thereof, except as specifically provided in
this Agreement. If the ABL Agent or any ABL Secured Party honors (or fails to honor) a request by the Borrower for an
extension of credit pursuant to any ABL Credit Agreement or any of the other ABL Documents, whether the ABL Agent or any ABL
Secured Party has knowledge that the honoring of (or failure to honor) any such request would constitute a default under the
terms of any Term Credit Agreement or any other Term Document or an act, condition, or event that, with the giving of notice
or the passage of time, or both, would constitute such a default, or if the ABL Agent or any ABL Secured Party otherwise
should exercise any of its contractual rights or remedies under any ABL Documents (subject to the express terms and
conditions hereof), neither the ABL Agent nor any ABL Secured Party shall have any liability whatsoever to any Term Agent or
any Term Secured Party as a result of such action, omission, or exercise (so long as any such exercise does not breach the
express terms and provisions of this Agreement). The ABL Agent and the ABL Secured Parties shall be entitled to manage and
supervise their loans and extensions of credit under any ABL Credit Agreement and any of the other ABL Documents as they may,
in their sole discretion, deem appropriate, and may manage their loans and extensions of credit without regard to any rights
or interests that any Term Agent or any of the Term Secured Parties have in the Collateral, except as otherwise expressly set
forth in this Agreement. Each Term Agent, on behalf of itself and the Term Secured Parties represented by it, agrees that
neither the ABL Agent nor any ABL Secured Party shall incur any liability as a result of a sale, lease, license, application,
or other disposition of all or any portion of the Collateral or Proceeds thereof, pursuant to the ABL Documents, so long as
such disposition is conducted in accordance with mandatory provisions of applicable law and does not breach the provisions of
this Agreement.
(c) None
of the Term Agents, any Term Secured Party or any of their respective Affiliates, directors, officers, employees, or agents shall
be liable for failure to demand, collect, or realize upon any of the Collateral or any Proceeds, or for any delay in doing so,
or shall be under any obligation to sell or otherwise dispose of any Collateral or Proceeds thereof or to take any other action
whatsoever with regard to the Collateral or any part or Proceeds thereof, except as specifically provided in this Agreement. If
any Term Agent or any Term Secured Party honors (or fails to honor) a request by the Borrower for an extension of credit pursuant
to any Term Credit Agreement or any of the other Term Documents, whether any Term Agent or any Term Secured Party has knowledge
that the honoring of (or failure to honor) any such request would constitute a default under the terms of any ABL Credit Agreement
or any other ABL Document or an act, condition, or event that, with the giving of notice or the passage of time, or both, would
constitute such a default, or if any Term Agent or any Term Secured Party otherwise should exercise any of its contractual rights
or remedies under the Term Documents (subject to the express terms and conditions hereof), neither any Term Agent nor any Term
Secured Party shall have any liability whatsoever to the ABL Agent or any ABL Secured Party as a result of such action, omission,
or exercise (so long as any such exercise does not breach the express terms and provisions of this Agreement). The Term Agents
and the Term Secured Parties shall be entitled to manage and supervise their loans and extensions of credit under the Term Documents
as they may, in their sole discretion, deem appropriate, and may manage their loans and extensions of credit without regard to
any rights or interests that the ABL Agent or any ABL Secured Party has in the Collateral, except as otherwise expressly set forth
in this Agreement. The ABL Agent, on behalf of itself and the ABL Secured Parties, agrees that none of the Term Agents or the Term
Secured Parties shall incur any liability as a result of a sale, lease, license, application, or other disposition of the Collateral
or any part or Proceeds thereof, pursuant to the Term Documents, so long as such disposition is conducted in accordance with mandatory
provisions of applicable law and does not breach the provisions of this Agreement.
Section 5.2 Modifications
to ABL Documents and Term Documents
(a) Each
Term Agent, on behalf of itself and the Term Secured Parties represented by it, hereby agrees that, without affecting the obligations
of the Term Agents and the Term Secured Parties hereunder, the ABL Agent and the ABL Secured Parties may, at any time and from
time to time, in their sole discretion without the consent of or notice to any Term Agent or any Term Secured Party (except to
the extent such notice or consent is required pursuant to the express provisions of this Agreement), and without incurring any
liability to any Term Agent or any Term Secured Party or impairing or releasing the subordination provided for herein, amend, restate,
supplement, replace, refinance, extend, consolidate, restructure, or otherwise modify any of the ABL Documents in any manner whatsoever
(other than in a manner which would contravene the provisions of this Agreement), including, without limitation, to:
(i) change
the manner, place, time, or terms of payment or renew, alter or increase, all or any of the ABL Obligations or otherwise amend,
restate, supplement, or otherwise modify in any manner, or grant any waiver or release with respect to, all or any part of the
ABL Obligations or any of the ABL Documents;
(ii) subject
to Section 2.5 hereof, retain or obtain a Lien on any Property of any Person to secure any of the ABL Obligations, and in
connection therewith to enter into any additional ABL Documents;
(iii) amend,
or grant any waiver, compromise, or release with respect to, or consent to any departure from, any guaranty or other obligations
of any Person obligated in any manner under or in respect of the ABL Obligations;
(iv) release
its Lien on any Collateral or other Property;
(v) exercise
or refrain from exercising any rights against the Borrower, any other Credit Party, or any other Person;
(vi) subject
to Section 2.5 hereof, retain or obtain the primary or secondary obligation of any other Person with respect to any of the
ABL Obligations; and
(vii) otherwise
manage and supervise the ABL Obligations as the ABL Agent shall deem appropriate.
(b) The
ABL Agent, on behalf of itself and the ABL Secured Parties, hereby agrees that, without affecting the obligations of the ABL Agent
and the ABL Secured Parties hereunder, the Term Agents and the Term Secured Parties may, at any time and from time to time, in
their sole discretion without the consent of or notice to the ABL Agent or any ABL Secured Party (except to the extent such notice
or consent is required pursuant to the express provisions of this Agreement), and without incurring any liability to the ABL Agent
or any ABL Secured Party or impairing or releasing the subordination provided for herein, amend, restate, supplement, replace,
refinance, extend, consolidate, restructure, or otherwise modify any of the Term Documents in any manner whatsoever (other than
in a manner which would contravene the provisions of this Agreement), including, without limitation, to:
(i)
change the manner, place, time, or terms of payment or renew, alter or increase, all or
any of the Term Obligations or otherwise amend, restate, supplement, or otherwise modify in any manner, or grant any waiver
or release with respect to, all or any part of the Term Obligations or any of the Term Documents;
(ii) subject
to Section 2.5 hereof, retain or obtain a Lien on any Property of any Person to secure any of the Term Obligations, and
in connection therewith to enter into any additional Term Documents;
(iii) amend,
or grant any waiver, compromise, or release with respect to, or consent to any departure from, any guaranty or other obligations
of any Person obligated in any manner under or in respect of the Term Obligations;
(iv) release
its Lien on any Collateral or other Property;
(v) exercise
or refrain from exercising any rights against the Borrower, any other Credit Party, or any other Person;
(vi) subject
to Section 2.5 hereof, retain or obtain the primary or secondary obligation of any other Person with respect to any of the
Term Obligations; and
(vii) otherwise
manage and supervise the Term Obligations as each Term Agent shall deem appropriate.
(c) The
ABL Obligations and the Term Obligations may be refunded, replaced or refinanced (including (without limitation), by means of any
Refinancing Indebtedness (as defined in the ABL Credit Agreement and each Term Credit Agreement, as applicable)), in whole or in
part, from time to time, in each case, without notice to, or the consent (except to the extent a consent is required to permit
such refinancing transaction under any ABL Document or any Term Document) of the ABL Agent, the ABL Secured Parties, the Term Agents
or the Term Secured Parties, as the case may be, all without affecting the Lien Priorities provided for herein or the other provisions
hereof, provided, however, that the holders of any class or series of such Refinancing Indebtedness (or an authorized
agent or trustee on their behalf) bind themselves in writing to the terms of this Agreement pursuant to such documents or agreements
(including amendments or supplements to this Agreement) as the ABL Agent or any Term Agent, as the case may be, shall reasonably
request and in form and substance reasonably acceptable to the Borrower, the ABL Agent or such Term Agent, as the case may be,
and any such refinancing transaction shall be in accordance with any applicable provisions of both the ABL Documents and the Term
Documents (to the extent such documents survive the refinancing).
Section 5.3 Reinstatement
and Continuation of Agreement.
(a) If
the ABL Agent or any ABL Secured Party is required in any Insolvency Proceeding or otherwise to turn over or otherwise pay to
the estate of the Borrower, any other Credit Party, or any other Person any payment made in satisfaction of all or any
portion of the ABL Obligations (an “ABL Recovery”), then the ABL Obligations shall be reinstated to
the extent of such ABL Recovery. If this Agreement shall have been terminated prior to such ABL Recovery, this Agreement
shall be reinstated in full force and effect in the event of such ABL Recovery, and such prior termination shall not
diminish, release, discharge, impair, or otherwise affect the obligations of the Parties from such date of reinstatement. All
rights, interests, agreements, and obligations of the ABL Agent, the Term Agents, the ABL Secured Parties, and the Term
Secured Parties under this Agreement shall remain in full force and effect and shall continue irrespective of the
commencement of, or any discharge, confirmation, conversion, or dismissal of, any Insolvency Proceeding by or against the
Borrower or any other Credit Party or any other circumstance which otherwise might constitute a defense available to, or a
discharge of the Borrower or any other Credit Party in respect of the ABL Obligations or the Term Obligations. No priority or
right of the ABL Agent or any ABL Secured Party shall at any time be prejudiced or impaired in any way by any act or failure
to act on the part of the Borrower or any Guarantor or by the noncompliance by any Person with the terms, provisions, or
covenants of any of the ABL Documents, regardless of any knowledge thereof which the ABL Agent or any ABL Secured Party may
have.
(b) If
any Term Agent or any Term Secured Party is required in any Insolvency Proceeding or otherwise to turn over or otherwise pay to
the estate of the Borrower, any other Credit Party, or any other Person any payment made in satisfaction of all or any portion
of the Term Obligations (a “Term Recovery”), then the Term Obligations shall be reinstated to the extent
of such Term Recovery. If this Agreement shall have been terminated prior to such Term Recovery, this Agreement shall be reinstated
in full force and effect in the event of such Term Recovery, and such prior termination shall not diminish, release, discharge,
impair, or otherwise affect the obligations of the Parties from such date of reinstatement. All rights, interests, agreements,
and obligations of the ABL Agent, the Term Agents, the ABL Secured Parties, and the Term Secured Parties under this Agreement shall
remain in full force and effect and shall continue irrespective of the commencement of, or any discharge, confirmation, conversion,
or dismissal of, any Insolvency Proceeding by or against the Borrower or any other Credit Party or any other circumstance which
otherwise might constitute a defense available to, or a discharge of the Borrower or any other Credit Party in respect of the ABL
Obligations or the Term Obligations. No priority or right of any Term Agent or any Term Secured Party shall at any time be prejudiced
or impaired in any way by any act or failure to act on the part of the Borrower or any other Credit Party or by the noncompliance
by any Person with the terms, provisions, or covenants of any of the Term Documents, regardless of any knowledge thereof which
any Term Agent or any Term Secured Party may have.
ARTICLE
6
INSOLVENCY PROCEEDINGS
Section 6.1 DIP
Financing.
(a) If
the Borrower or any other Credit Party shall be subject to any Insolvency Proceeding at any time prior to the Discharge of
ABL Obligations, and the ABL Agent or the ABL Secured Parties shall seek to provide the Borrower or any other Credit Party
with, or consent to a third party providing, any financing under Section 364 of the Bankruptcy Code (or any similar provision
in or order made under any foreign Debtor Relief Laws) or consent to any order for the use of cash collateral constituting
ABL Priority Collateral under Section 363 of the Bankruptcy Code (or any similar provision of any foreign Debtor Relief Laws
or under a court order in respect of measures granted with similar effect under any foreign Debtor Relief Laws) (each, an
“ABL DIP Financing”), with such ABL DIP Financing to be secured at least in part by all or any
portion of the ABL Priority Collateral (including assets that, but for the application of Section 552 of the Bankruptcy Code
(or any similar provision of any foreign Debtor Relief Laws) would be ABL Priority Collateral), then each Term Agent, on
behalf of itself and the Term Secured Parties represented by such Term Agent, agrees that it will raise no objection and will
not support any objection to such ABL DIP Financing or use of cash collateral or to the Liens securing the same on the
grounds of a failure to provide “adequate protection” for the Liens of the Term Agents securing the Term
Obligations or on any other grounds (and will not request any adequate protection solely as a result of such ABL DIP
Financing or use of cash collateral that is ABL Priority Collateral except as permitted by Section 6.3(c)(i) hereof),
so long as (i) the relevant Term Agent retains its Lien on the Collateral to secure the Term Obligations (in each case,
including Proceeds thereof arising after the commencement of the case under any Debtor Relief Laws) and, as to the Term
Priority Collateral only, such Lien has the same priority as existed prior to the commencement of the case under the subject
Debtor Relief Laws and any Lien on the Term Priority Collateral securing such ABL DIP Financing is junior and subordinate to
the Lien of the Term Agents on the Term Priority Collateral, (ii) all Liens on ABL Priority Collateral securing any such ABL
DIP Financing shall be senior to or on a parity with the Liens of the ABL Agent and the ABL Secured Parties securing the ABL
Obligations on ABL Priority Collateral, (iii) any proceeds of the Term Priority Collateral are applied to the Term
Obligations or as otherwise agreed by the Controlling Term Agent and (iv) the foregoing provisions of this Section
6.1(a) shall not prevent the Term Agents and the Term Secured Parties from objecting to any provision in any ABL DIP
Financing relating to any provision or content of a plan of reorganization or other plan of similar effect under any Debtor
Relief Laws. The Term Agents agree that they shall not, and nor shall any of the Term Secured Parties, directly or
indirectly, provide, offer to provide, or support any debtor in possession financing or use of cash collateral secured by a
Lien on the ABL Priority Collateral senior to or pari passu with the Liens securing the ABL Obligations. If, in connection
with any ABL DIP Financing, any Liens on the ABL Priority Collateral held by the ABL Secured Parties to secure the ABL
Obligations are subject to a surcharge or are subordinated to an administrative priority claim, a professional fee
“carve-out,” or fees owed to the United States Trustee, then the Liens on the ABL Priority Collateral of the
Term Secured Parties securing the Term Obligations shall also be subordinated to such interest or claim and shall remain
subordinated to the Liens on the ABL Priority Collateral of the ABL Secured Parties consistent with this Agreement.
(b) If
the Borrower or any other Credit Party shall be subject to any Insolvency Proceeding at any time prior to the Discharge of
Term Obligations, and any Term Agents or any Term Secured Parties shall seek to provide the Borrower or any other Credit
Party with, or consent to a third party providing, any financing under Section 364 of the Bankruptcy Code or consent to any
order for the use of cash collateral constituting Term Priority Collateral under Section 363 of the Bankruptcy Code (or any
similar provision of any foreign Debtor Relief Laws or under a court order in respect of measures granted with similar effect
under any foreign Debtor Relief Laws) (each, a “Term DIP Financing”), with such Term DIP Financing
to be secured at least in part by all or any portion of the Term Priority Collateral (including assets that, but for the
application of Section 552 of the Bankruptcy Code (or any similar provision of any foreign Debtor Relief Laws) would be Term
Priority Collateral), then the ABL Agent, on behalf of itself and the ABL Secured Parties, agrees that it will raise no
objection and will not support any objection to such Term DIP Financing or to the Liens securing the same on the grounds of a
failure to provide “adequate protection” for the Liens of the ABL Agent securing the ABL Obligations or on any
other grounds (and will not request any adequate protection solely as a result of such Term DIP Financing), so long as (i)
the ABL Agent retains its Lien on the Collateral to secure the ABL Obligations (in each case, including Proceeds thereof
arising after the commencement of the case under any Debtor Relief Law) and, as to the ABL Priority Collateral only, such
Lien has the same priority as existed prior to the commencement of the case under the subject Debtor Relief Laws and any Lien
on ABL Priority Collateral securing such Term DIP Financing furnished by the Term Agents or Term Secured Parties is junior
and subordinate to the Lien of the ABL Agent on the ABL Priority Collateral, (ii) all Liens on Term Priority Collateral
securing any such Term DIP Financing furnished by the Term Agents or Term Secured Parties shall be senior to or on a parity
with the Liens of the Term Agents and the Term Secured Parties securing the Term Obligations on Term Priority Collateral,
(iii) any proceeds of the ABL Priority Collateral are applied to the ABL Obligations or as otherwise agreed by the ABL Agent
and (iv) the foregoing provisions of this Section 6.1(b) hereof shall not prevent the ABL Agent and the ABL Secured
Parties from objecting to any provision in any Term DIP Financing relating to any provision or content of a plan of
reorganization or other plan of similar effect under any Debtor Relief Laws. The ABL Agent agrees that it shall not, and nor
shall any of the ABL Secured Parties, directly or indirectly, provide, offer to provide, or support any debtor in possession
financing or use of cash collateral secured by a Lien on the Term Priority Collateral senior to or pari passu with the Liens
securing the Term Obligations. If, in connection with any Term DIP Financing, any Liens on the Term Priority Collateral held
by the Term Secured Parties to secure the Term Obligations are subject to a surcharge or are subordinated to an
administrative priority claim, a professional fee “carve-out,” or fees owed to the United States Trustee,
then the Liens on the Term Priority Collateral of the ABL Secured Parties securing the ABL Obligations shall also be
subordinated to such interest or claim and shall remain subordinated to the Liens on the Term Priority Collateral of the Term
Secured Parties consistent with this Agreement.
(c) All
Liens granted to the ABL Agent or any Term Agent in any Insolvency Proceeding, whether as adequate protection or otherwise, are
intended by the Parties to be and shall be deemed to be subject to the Lien Priority and the other terms and conditions of this
Agreement.
Section 6.2 Relief
From Stay. Until the Discharge of ABL Obligations has occurred, each Term Agent, on behalf of itself and the Term Secured
Parties represented by it, agrees not to seek relief from the automatic stay or any other stay in any Insolvency Proceeding in
respect of any portion of the ABL Priority Collateral without the ABL Agent’s express written consent. Until the Discharge
of Term Obligations has occurred, the ABL Agent, on behalf of itself and the ABL Secured Parties, agrees not to seek relief from
the automatic stay or any other stay in any Insolvency Proceeding in respect of any portion of the Term Priority Collateral without
the Controlling Term Agent’s express written consent. In addition, none of the Term Agents or the ABL Agent shall seek any
relief from the automatic stay with respect to any Collateral without providing three (3) days’ prior written notice to the
others, unless such period is agreed by the ABL Agent and the Term Agents to be modified or unless the ABL Agent or Term Agents,
as applicable, make a good faith determination that either (A) the ABL Priority Collateral or the Term Priority Collateral, as
applicable, will decline speedily in value or (B) the failure to take any action will have a reasonable likelihood of endangering
the ABL Agent’s or the Term Agents’ ability to realize upon its Collateral.
Section 6.3 No
Contest; Adequate Protection.
(a) The
Term Agents, on behalf of themselves and the relevant Term Secured Parties, agree that, prior to the Discharge of ABL Obligations,
none of them shall seek or accept any form of adequate protection under any or all of §361, §362, §363 or §364
of the Bankruptcy Code with respect to the ABL Priority Collateral, except as set forth in Section 6.1 hereof and this
Section 6.3 or as may otherwise be consented to in writing by the ABL Agent in its sole and absolute discretion. The Term
Agents, on behalf of themselves and the relevant Term Secured Parties, agree that, prior to the Discharge of ABL Obligations, none
of them shall contest (or support any other Person contesting) (i) any request by the ABL Agent or any ABL Secured Party for adequate
protection of its interest in the Collateral (unless in contravention of Section 6.1(b) above or the other provisions of
this Section 6.3), (ii) any proposed provision of ABL DIP Financing by the ABL Agent and the ABL Secured Parties (or any
other Person proposing to provide an ABL DIP Financing with the consent of the ABL Agent) (unless in contravention of Section
6.1(a) above) or (iii) any objection by the ABL Agent or any ABL Secured Party to any motion, relief, action, or proceeding
based on a claim by the ABL Agent or any ABL Secured Party that its interests in the Collateral (unless in contravention of Section
6.1(b) above or the other provisions of this Section 6.3)) are not adequately protected (or any other similar request
under any law applicable to an Insolvency Proceeding), so long as any Liens granted to the ABL Agent as adequate protection of
its interests are subject to this Agreement.
(b) The
ABL Agent, on behalf of itself and the ABL Secured Parties, agrees that, prior to the Discharge of Term Obligations, none of them
shall seek or accept any form of adequate protection under any or all of §361, §362, §363 or §364 of the Bankruptcy
Code with respect to the Term Priority Collateral, except as set forth in Section 6.1 hereof and this Section 6.3
or as may otherwise be consented to in writing by any Term Agent in its sole and absolute discretion. The ABL Agent, on behalf
of itself and the ABL Secured Parties, agrees that, prior to the Discharge of Term Obligations, none of them shall contest (or
support any other Person contesting) (i) any request by any Term Agent or any Term Secured Party for adequate protection of its
interest in the Collateral (unless in contravention of Section 6.1(a) above or the other provisions of this Section 6.3),
(ii) any proposed provision of Term DIP Financing by any Term Agent or any Term Secured Parties (or any other Person proposing
to provide a Term DIP Financing with the consent of any Term Agent) (unless in contravention of Section 6.1(b) above) or
(iii) any objection by any Term Agent or any Term Secured Party to any motion, relief, action or proceeding based on a claim by
any Term Agent or any Term Secured Party that its interests in the Collateral (unless in contravention of Section 6.1(a)
above or the other provisions of this Section 6.3) are not adequately protected (or any other similar request under any
law applicable to an Insolvency Proceeding), so long as any Liens granted to such Term Agent as adequate protection of its interests
are subject to this Agreement.
(c) Notwithstanding
the foregoing provisions in this Section 6.3, in any Insolvency Proceeding:
(i) if
the ABL Secured Parties (or any subset thereof) are granted adequate protection with respect to the ABL Priority Collateral
in the form of a Lien on additional or replacement collateral (even if such collateral is not of a type which would otherwise
have constituted ABL Priority Collateral), then the ABL Agent, on behalf of itself and the ABL Secured Parties, agrees that
any Term Agent, on behalf of itself or any of the Term Secured Parties represented by it, may seek or request (and the ABL
Secured Parties will not oppose such request) adequate protection with respect to their interests in such Collateral in the
form of a Lien on the same additional or replacement collateral, which Lien will be subordinated to the Liens securing and
providing adequate protection with respect to the ABL Obligations on the same basis as the other Liens of the Term
Agents’ on ABL Priority Collateral; and
(ii) in
the event any Term Agent, on behalf of itself or any of the Term Secured Parties represented by it, are granted adequate protection
in respect of Term Priority Collateral in the form of a Lien on additional or replacement collateral (even if such collateral is
not of a type which would otherwise have constituted Term Priority Collateral), then the Term Agents, on behalf of themselves and
any of the Term Secured Parties, agree that the ABL Agent on behalf of itself or any of the ABL Secured Parties, may seek or request
(and the Term Secured Parties will not oppose such request) adequate protection with respect to its interests in such Collateral
in the form of a Lien on the same additional or replacement collateral, which Lien will be subordinated to the Liens securing and
providing adequate protection with respect to the Term Obligations on the same basis as the other Liens of the ABL Agent on Term
Priority Collateral.
(iii) Except
as otherwise expressly set forth in Section 6.1 hereof or in connection with the exercise of remedies with respect to the
ABL Priority Collateral, nothing herein shall limit the rights of any Term Agent or the Term Secured Parties from seeking adequate
protection with respect to their rights in the Term Priority Collateral in any Insolvency Proceeding (including adequate protection
in the form of a cash payment, periodic cash payments or otherwise, provided that such cash payments do not come from the Proceeds
of ABL Priority Collateral). Except as otherwise expressly set forth in Section 6.1 hereof or in connection with the exercise
of remedies with respect to the Term Priority Collateral, nothing herein shall limit the rights of the ABL Agent or the ABL Secured
Parties from seeking adequate protection with respect to their rights in the ABL Priority Collateral in any Insolvency Proceeding
(including adequate protection in the form of a cash payment, periodic cash payments or otherwise, provided that such cash payments
do not come from the Proceeds of Term Priority Collateral).
Section 6.4 Asset
Sales. The Term Agents agree, on behalf of themselves and the Term Secured Parties, that they will not oppose (and
will not support any other Person in opposing), and hereby consent to, any sale consented to by the ABL Agent of any ABL
Priority Collateral pursuant to Sections 363(f) or 1129 of the Bankruptcy Code (or any similar provision under the law
applicable to any Insolvency Proceeding or under a court order in respect of measures granted with similar effect under any
foreign Debtor Relief Laws) (each an “ABL Bankruptcy Sale”) or any motion seeking approval for
proposed bidding procedures in respect of any such ABL Bankruptcy Sale, so long as (i) the Term Agents, for the benefit of
the Term Secured Parties, shall retain a Lien on the proceeds of such sale (to the extent such proceeds are not applied to
the ABL Obligations in accordance with Section 4.1(b) hereof) subject to the priorities set forth in this Agreement,
and (ii) the applicable motion to approve such sale does not impair, subject to the priorities set forth in this Agreement,
the rights of the Term Secured Parties to credit bid their Liens on the ABL Priority Collateral under Section 363(k) of the
Bankruptcy Code (so long as the Discharge of ABL Obligations would occur in connection therewith). The ABL Agent agrees, on
behalf of itself and the ABL Secured Parties, that it will not oppose (and will not support any other Person in opposing),
and hereby consents to, any sale consented to by any Term Agent of any Term Priority Collateral pursuant to Sections 363(f)
or 1129 of the Bankruptcy Code (or any similar provision under the law applicable to any Insolvency Proceeding or under a
court order in respect of measures granted with similar effect under any foreign Debtor Relief Laws) (each a
“Term Bankruptcy Sale”) or any motion seeking approval for proposed bidding procedures in respect
of any such Term Bankruptcy Sale, so long as (i) any such sale is made in accordance with Section 3.6 hereof, (ii) the
ABL Agent, for the benefit of the ABL Secured Parties, shall retain a Lien on the proceeds of such sale (to the extent such
proceeds are not applied to the Term Obligations in accordance with Section 4.1(c) hereof) subject to the priorities
set forth in this Agreement, and (iii) the applicable motion to approve such sale does not impair, subject to the priorities
set forth in this Agreement, the rights of the ABL Secured Parties to credit bid their Liens on the Term Priority Collateral
under Section 363(k) of the Bankruptcy Code (so long as the Discharge of Term Obligations would occur in connection
therewith). If such sale of Collateral includes both ABL Priority Collateral and Term Priority Collateral and the Parties are
unable after negotiating in good faith to agree on the allocation of the purchase price between the ABL Priority Collateral
and Term Priority Collateral, either Party may apply to the court in such Insolvency Proceeding to make a determination of
such allocation, and the court’s determination shall be binding upon the Parties.
Section 6.5 Separate
Grants of Security and Separate Classification. Each Term Secured Party and each ABL Secured Party acknowledges and
agrees that (i) the grants of Liens pursuant to the ABL Collateral Documents and the Term Collateral Documents constitute two
separate and distinct grants of Liens and (ii) because of, among other things, their differing rights in the Collateral, the
Term Obligations are fundamentally different from the ABL Obligations and must be separately classified in any plan of
reorganization (or other plan of similar effect under any Debtor Relief Laws) proposed, confirmed, or adopted in an
Insolvency Proceeding. To further effectuate the intent of the parties as provided in the immediately preceding sentence, if
it is held that the claims of the ABL Secured Parties and the Term Secured Parties in respect of the Collateral constitute
only one secured claim (rather than separate classes of secured claims subject to the priorities set forth herein), then the
ABL Secured Parties and the Term Secured Parties hereby acknowledge and agree that all distributions from the Collateral
shall be made as if there were separate classes of ABL Obligation claims and Term Obligation claims against the Credit
Parties, with the effect being that (a) to the extent that the aggregate value of the ABL Priority Collateral is sufficient
(for this purpose ignoring all claims held by the Term Secured Parties), the ABL Secured Parties shall be entitled to
receive, in addition to amounts distributed to them in respect of principal, pre-petition interest and other claims, all
amounts owing in respect of post-petition interest, fees and expenses (regardless of whether any claim therefor is
allowed or allowable in any such Insolvency Proceeding) that is available from the ABL Priority Collateral for the ABL
Secured Parties, before any distribution is made in respect of the claims held by the Term Secured Parties from the ABL
Priority Collateral, with the Term Secured Parties hereby acknowledging and agreeing to turn over to the ABL Secured Parties
amounts otherwise received or receivable by them from the ABL Priority Collateral to the extent necessary to effectuate the
intent of this sentence, even if such turnover has the effect of reducing their aggregate recovery, and (b) to the extent
that the aggregate value of the Term Priority Collateral is sufficient (for this purpose ignoring all claims held by the ABL
Secured Parties), the Term Secured Parties shall be entitled to receive, in addition to amounts distributed to them in
respect of principal, pre-petition interest and other claims, all amounts owing in respect of postpetition interest, fees
and expenses (regardless of whether any claim therefor is allowed or allowable in any such Insolvency Proceeding) that is
available from the Term Priority Collateral for the Term Secured Parties, before any distribution is made in respect of the
claims held by the ABL Secured Parties from the Term Priority Collateral, with the ABL Secured Parties hereby acknowledging
and agreeing to turn over to the Term Secured Parties amounts otherwise received or receivable by them from the Term Priority
Collateral to the extent necessary to effectuate the intent of this sentence, even if such turnover has the effect of
reducing their aggregate recovery.
Section 6.6 Enforceability.
This Agreement shall be applicable both before and after the commencement of any Insolvency Proceeding and all converted or succeeding
cases in respect thereof. Notwithstanding the provisions of Section 1129(b)(1) (or any other applicable provision) of the Bankruptcy
Code, the relative rights of Secured Parties in or to any distributions from or in respect of any Collateral or Proceeds of Collateral
shall continue after the commencement of any Insolvency Proceeding. Accordingly, the provisions of this Agreement (including, without
limitation, Section 2.1 hereof) are intended to be and shall be enforceable as a “subordination agreement” within
the meaning of Section 510(a) of the Bankruptcy Code or any applicable personal property security law.
Section 6.7 ABL
Obligations Unconditional. All rights of the ABL Agent hereunder, and all agreements and obligations of the Term Agents
and the Credit Parties (to the extent applicable) hereunder, shall remain in full force and effect irrespective of:
(a) any
lack of validity or enforceability of any ABL Document;
(b) any
change in the time, place or manner of payment of, or in any other term of, all or any portion of the ABL Obligations, or any amendment,
waiver or other modification, whether by course of conduct or otherwise, or any refinancing, replacement, refunding or restatement
of any ABL Document;
(c) any
exchange, release, voiding, avoidance or non-perfection of any security interest in any Collateral or any other collateral,
or any release, amendment, waiver or other modification, whether by course of conduct or otherwise, or any refinancing, replacement,
refunding, restatement or increase of all or any portion of the ABL Obligations or any guarantee or guaranty thereof; or
(d) any
other circumstances that otherwise might constitute a defense available to, or a discharge of, any Credit Party in respect of the
ABL Obligations, or of any of the Term Agents or any Credit Party, to the extent applicable, in respect of this Agreement.
Section 6.8 Term
Obligations Unconditional. All rights of the Term Agents hereunder, and all agreements and obligations of the ABL Agent
and the Credit Parties (to the extent applicable) hereunder, shall remain in full force and effect irrespective of:
(a) any
lack of validity or enforceability of any Term Document;
(b) any
change in the time, place or manner of payment of, or in any other term of, all or any portion of the Term Obligations, or any
amendment, waiver or other modification, whether by course of conduct or otherwise, or any refinancing, replacement, refunding
or restatement of any Term Document;
(c) any
exchange, release, voiding, avoidance or non-perfection of any security interest in any Collateral, or any other
collateral, or any release, amendment, waiver or other modification, whether by course of conduct or otherwise, or any
refinancing, replacement, refunding, restatement or increase of all or any portion of the Term Obligations or any guarantee
or guaranty thereof; or
(d) any
other circumstances that otherwise might constitute a defense available to, or a discharge of, any Credit Party in respect of the
Term Obligations, or of any of the ABL Agent or any Credit Party, to the extent applicable, in respect of this Agreement.
Section 6.9 Plan
of Reorganization.
(a) If,
in any Insolvency Proceeding, debt obligations of the reorganized debtor secured by Liens upon any property of the reorganized
debtor are distributed (in whole or in part) pursuant to a plan of reorganization, proposal or plan of compromise or arrangement
or similar dispositive restructuring plan, both on account of ABL Obligations and on account of Term Obligations, then, to the
extent the debt obligations distributed on account of the ABL Obligations and on account of the Term Obligations are secured by
Liens upon the same property, the provisions of this Agreement will survive the distribution of such debt obligations pursuant
to such plan and will apply with like effect to the Liens securing such debt obligations.
(b) Each
Term Agent, for itself and on behalf of the applicable Term Secured Parties, and the ABL Agent, for itself and on behalf of the
ABL Secured Parties, acknowledges and agrees that no ABL Secured Party nor any Term Secured Party shall propose, vote for, or otherwise
support directly or indirectly any plan of reorganization, proposal or plan of compromise or arrangement or other dispositive restructuring
plan that is inconsistent with the priorities or other provisions of this Agreement.
Section 6.10 Certain
Waivers as to Sections 506(c) and 1111(b)(2) of the Bankruptcy Code.
(a) No
Term Agent nor Term Secured Party will object to, or oppose the right of, the ABL Secured Parties to make an election under Section
1111(b)(2) of the Bankruptcy Code (or any similar provision in or order made under any Debtor Relief Law) with respect to the ABL
Priority Collateral. The ABL Agent and the ABL Secured Parties will not object to, or oppose the right of, the Term Secured Parties
to make an election under Section 1111(b)(2) of the Bankruptcy Code (or any similar provision in or order made under any Debtor
Relief Law) with respect to the Term Priority Collateral.
(b) Until
the Discharge of ABL Obligations has occurred, no Term Agent, on behalf of itself and the other Term Secured Parties represented
by it, will assert or enforce any claim under Section 506(c) of the Bankruptcy Code (or any similar provision in or order made
under any Debtor Relief Law) senior to or on a parity with the Liens on ABL Priority Collateral securing the ABL Obligations for
costs or expenses of preserving or disposing of any ABL Priority Collateral. Until the Discharge of Term Obligations has occurred,
the ABL Agent, on behalf of itself and the other ABL Secured Parties, will not assert or enforce any claim under Section 506(c)
of the Bankruptcy Code (or any similar provision in or order made under any Debtor Relief Law) senior to or on a parity with the
Liens on Term Priority Collateral securing the Term Obligations for costs or expenses of preserving or disposing of any Term Priority
Collateral.
Section 6.11 Post-Petition
Interest.
(a) No
Term Agent nor any Term Secured Party shall oppose or seek to challenge any claim by the ABL Agent or any ABL Secured Party for
allowance in any Insolvency Proceeding of ABL Obligations consisting of post-petition interest, fees or expenses to the extent
of the value of the Lien on the Collateral securing any ABL Secured Party’s claim, without regard to the existence of the
Lien of the Term Agents on behalf of the Term Secured Parties on the ABL Priority Collateral (but after taking into account the
Lien of the Term Agents on the Term Priority Collateral).
(b) Neither
the ABL Agent nor any other ABL Secured Party shall oppose or seek to challenge any claim by any Term Agent or any Term Secured
Party for allowance in any Insolvency Proceeding of Term Obligations consisting of post-petition interest, fees or expenses
to the extent of the value of the Lien on the Collateral securing any Term Secured Party’s claim, without regard to the existence
of the Lien of any ABL Agent on behalf of the ABL Secured Parties on the Term Priority Collateral (but after taking into account
the Lien of the ABL Agent on the ABL Priority Collateral).
ARTICLE
7
MISCELLANEOUS
Section 7.1 Rights
of Subrogation. Each Term Agent, for and on behalf of itself and the Term Secured Parties represented by it, agrees that
no payment to the ABL Agent or any ABL Secured Party pursuant to the provisions of this Agreement shall entitle any Term Agent
or any Term Secured Party to exercise any rights of subrogation in respect thereof until the Discharge of ABL Obligations shall
have occurred. Following the Discharge of ABL Obligations, the ABL Agent agrees to execute such documents, agreements, and instruments
as the Controlling Term Agent may reasonably request to evidence the transfer by subrogation to any such Person of an interest
in the ABL Obligations resulting from payments to the ABL Agent by such Person, so long as all costs and expenses (including all
reasonable legal fees and disbursements) incurred in connection therewith by the ABL Agent are paid by such Person upon request
for payment thereof. The ABL Agent, for and on behalf of itself and the ABL Secured Parties, agrees that no payment to the Term
Agents or any Term Secured Party pursuant to the provisions of this Agreement shall entitle the ABL Agent or any ABL Secured Party
to exercise any rights of subrogation in respect thereof until the Discharge of Term Obligations shall have occurred. Following
the Discharge of Term Obligations, the Term Agents agree to execute such documents, agreements, and instruments as the ABL Agent
or any ABL Secured Party may reasonably request to evidence the transfer by subrogation to any such Person of an interest in the
Term Obligations resulting from payments to the relevant Term Agent by such Person, so long as all costs and expenses (including
all reasonable legal fees and disbursements) incurred in connection therewith by the relevant Term Agent are paid by such Person
upon request for payment thereof.
Section 7.2 Further
Assurances. The Parties will, at their own expense and at any time and from time to time, promptly execute and
deliver all further instruments and documents, and take all further action, that may be necessary or desirable, or that
either Party may reasonably request, in order to protect any right or interest granted or purported to be granted hereby or
to enable the ABL Agent or the Term Agents to exercise and enforce its rights and remedies hereunder; provided, however,
that no Party shall be required to pay over any payment or distribution, execute any instruments or documents, or take any
other action referred to in this Section 7.2, to the extent that such action would contravene any law, order or other
legal requirement or any of the terms or provisions of this Agreement, and in the event of a controversy or dispute, such
Party may interplead any payment or distribution in any court of competent jurisdiction, without further responsibility in
respect of such payment or distribution under this Section 7.2.
Section 7.3 Representations.
Each Term Agent represents and warrants to the ABL Agent that it has the requisite power and authority under the Term Documents
to enter into, execute, deliver, and carry out the terms of this Agreement on behalf of itself and the relevant Term Secured Parties
and that this Agreement shall be binding obligations of such Term Agent and such Term Secured Parties enforceable against such
Term Agent and the respective Term Secured Parties in accordance with its terms. The ABL Agent represents and warrants to the Term
Agents that it has the requisite power and authority under the ABL Documents to enter into, execute, deliver, and carry out the
terms of this Agreement on behalf of itself and the ABL Secured Parties and that this Agreement shall be binding obligations of
the ABL Agent and the ABL Secured Parties, enforceable against the ABL Agent and the ABL Secured Parties in accordance with its
terms.
Section 7.4 Amendments.
No amendment or waiver of any provision of this Agreement nor consent to any departure by any Party hereto shall be effective unless
it is in a written agreement executed by each Term Agent, the ABL Agent and the Borrower, and then such amendment, waiver or consent
shall be effective only in the specific instance and for the specific purpose for which given; provided that the consent
of the Borrower to any such amendment or waiver of, or consent to departure from, any provision of this Agreement shall only be
required if the provisions of such amendment, waiver or consent materially and adversely impact the rights or obligations of any
Credit Party under the ABL Documents or the Term Documents; provided, further, that the Borrower shall be given notice
of any amendment or waiver of, or consent to departure from, any provision of this Agreement promptly after effectiveness thereof.
Notwithstanding the foregoing, without the consent of any ABL Secured Party, any Person may become a party hereto by execution
and delivery of a joinder agreement in accordance with Section 7.20 of this Agreement and upon such execution and delivery,
such Person and the “Secured Parties” and Term Obligations for which such Person is acting shall be subject to the
terms hereof.
Section 7.5 Addresses
for Notices. Unless otherwise specifically provided herein, any notice or other communication herein required or permitted
to be given shall be in writing and may be personally served, telecopied, emailed, or sent by overnight express courier service
or United States mail and shall be deemed to have been given when delivered in person or by courier service, upon receipt of a
telecopy, upon delivery of an email or five (5) days after deposit in the United States mail (certified, with postage prepaid and
properly addressed). For the purposes hereof, the addresses of the parties hereto (until notice of a change thereof is delivered
as provided in this Section 7.5) shall be as set forth below or, as to each party, at such other address as may be designated
by such party in a written notice to all of the other parties.
ABL Agent:
Bank of America, N.A.
Four Penn Center
1600 JFK Blvd.
Philadelphia,
PA 19103
Attention: Christy
Bowen
Email:Christy.kuklinski@baml.com
Facsimile: 267-675-0175
with a copy
(which shall not constitute notice) to:
Davis Polk
& Wardwell LLP
Attention: John
(JW) Perry
Telephone: (212) 450-4949
Facsimile: (212) 701-5949
Email:john.perry@davispolk.com
First Lien Term Agent: Bank of America,
N.A.
135 S. LaSalle Street
Mail Code: IL4-135-09-61
Attention: Denise Jones
Email:denise.j.jones@baml.com
Telephone: 312.828.1846
Facsimile: 877.206.8413
with a copy (which shall not constitute
notice) to:
Davis Polk & Wardwell LLP
Attention: John (JW)
Perry
Telephone: (212) 450-4949
Facsimile: (212) 701-5949
Email:john.perry@davispolk.com
Second Lien Term Agent: Bank of America,
N.A.
135 S. LaSalle Street
Mail Code: IL4-135-09-61
Attention: Denise Jones
Email:denise.j.jones@baml.com
Telephone: 312.828.1846
Facsimile: 877.206.8413
with a copy (which shall not constitute
notice) to:
Davis Polk & Wardwell LLP
Attention: John (JW)
Perry
Telephone: (212) 450-4949
Facsimile: (212) 701-5949
Email:john.perry@davispolk.com
The Borrower or any other Credit Party: to
such Credit Party in the care of the Borrower at:
620 Division Street Elizabeth, New Jersey 07207
Attention: Co-Chairman
of the Board
Facsimile: (908) 351-4492
Email:rdavis@hayward.com
with a copy (which will not constitute notice) to:
c/o CCMP Capital Advisors, LLC 277 Park Avenue, 37th
Floor New York, New York 10172
Attention: Richard Jansen, Esq.
Fax No.: (212) 599-3481
Email:richard.jansen@ccmpcapital.com
and
c/o MSD Partners, L.P.
645 Fifth Avenue, 21st Floor
New York, New York 10022
Attention: Marcello Liguori
Fax No.: (212) 303-1772
Email:mliguori@msdcapital.com
and
c/o Alberta Investment Management
Corporation
First Canadian Place
100 King Street West
Suite 5120, P.O. Box 51
Toronto, Ontario M5X 1B1, Canada
Attention: Jason Peters
and
c/o Alberta Investment Management Corporation 1100
- 10830 Jasper Avenue Edmonton, Alberta T5J 2B3, Canada
Attention: Christina Luison
with a copy to:
Ropes & Gray LLP
1211 Avenue of the Americas
New York, New York 10036
Attention: Jay Kim
Fax No.: (212) 497-3626
Email:jay.kim@ropesgray.com
and
Dechert LLP 2929 Arch Street Philadelphia, Pennsylvania
19104
Attention: Geraldine Sinatra and Eric Siegel
Fax No.: (215)
994-2222
Email:geraldine.sinatra@dechert.com
eric.siegel@dechert.com
and
Torys LLP
The Grace Building
1114 Avenue
of the Americas
New York, New
York 10036
Attention: Jared
Fontaine
Fax No.: (212)
682-0200
Email:jfontaine@torys.com
Section 7.6 No
Waiver; Remedies. No failure on the part of any Party to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any right hereunder preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided
by law.
Section 7.7 Continuing
Agreement; Transfer of Secured Obligations. This Agreement is a continuing agreement and shall (a) remain in full force
and effect until the earlier of the Discharge of ABL Obligations or the Discharge of Term Obligations shall have occurred, (b)
be binding upon the Parties and their successors and assigns, and (c) inure to the benefit of and be enforceable by the Parties
and their respective successors, transferees and assigns. Except as set forth in Section 7.4 hereof, nothing herein is intended,
or shall be construed to give, any other Person any right, remedy or claim under, to or in respect of this Agreement or any Collateral.
All references to any Credit Party shall include any Credit Party as debtor-in-possession and any receiver or trustee for
such Credit Party in any Insolvency Proceeding. Without limiting the generality of the foregoing clause (c), the ABL Agent, any
ABL Secured Party, any Term Agent, or any Term Secured Party may assign or otherwise transfer all or any portion of the ABL Obligations
or the Term Obligations in accordance with the ABL Credit Agreement or the Term Credit Agreement, in each case, as applicable,
to any other Person (in each case, except as otherwise provided in such ABL Credit Agreement or such Term Credit Agreement, as
applicable), and such other Person shall thereupon become vested with all the rights and obligations in respect thereof granted
to the ABL Agent, any Term Agent, any ABL Secured Party, or any Term Secured Party, as the case may be, herein or otherwise. The
ABL Secured Parties and the Term Secured Parties may continue, at any time and without notice to the other parties hereto, to extend
credit and other financial accommodations, lend monies and provide Indebtedness to, or for the benefit of, any Credit Party on
the faith hereof.
Section 7.8 GOVERNING
LAW; ENTIRE AGREEMENT. THIS AGREEMENT AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS
AGREEMENT, WHETHER IN TORT, CONTRACT (AT LAW OR IN EQUITY) OR OTHERWISE, SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. This Agreement constitutes the entire agreement and understanding
among the Parties with respect to the subject matter hereof and supersedes any prior agreements, written or oral, with
respect thereto.
Section 7.9 Counterparts.
This Agreement may be executed in any number of counterparts, and it is not necessary that the signatures of all Parties be contained
on any one counterpart hereof, each counterpart will be deemed to be an original, and all together shall constitute one and the
same document. Delivery of an executed signature page to this Agreement by facsimile or other electronic transmission (in .pdf
or similar format) shall be as effective as delivery of a manually signed counterpart of this Agreement.
Section 7.10 No
Third Party Beneficiaries. This Agreement is solely for the benefit of the ABL Agent, ABL Secured Parties, Term Agents
and Term Secured Parties, the Borrower and the other Credit Parties. Except as set forth in Section 7.4 hereof, no other
Person shall be deemed to be a third party beneficiary of this Agreement.
Section 7.11 Headings.
The headings of the articles and sections of this Agreement are inserted for purposes of convenience only and shall not be construed
to affect the meaning or construction of any of the provisions hereof.
Section 7.12 Severability.
To the extent permitted by law, any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting
the validity, legality and enforceability of the remaining provisions thereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other jurisdiction.
Section 7.13 Attorneys’
Fees. The Parties agree that if any dispute, arbitration, litigation, or other proceeding is brought with respect to the
enforcement of this Agreement or any provision hereof, the prevailing party in such dispute, arbitration, litigation, or other
proceeding shall be entitled to recover its reasonable attorneys’ fees and all other costs and expenses incurred in the enforcement
of this Agreement, irrespective of whether suit is brought.
Section 7.14 VENUE;
JURY TRIAL WAIVER.
(a) EACH
PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION
(SUBJECT TO THE LAST SENTENCE OF THIS PARAGRAPH (a)) OF ANY U.S. FEDERAL OR NEW YORK STATE COURT SITTING IN THE
BOROUGH OF MANHATTAN, IN THE CITY OF NEW YORK (OR ANY APPELLATE COURT THEREFROM) OVER ANY SUIT, ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT AND AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING SHALL (EXCEPT AS
PERMITTED BELOW) BE HEARD AND DETERMINED IN SUCH NEW YORK STATE OR, TO THE EXTENT PERMITTED BY LAW, FEDERAL COURT. EACH PARTY
HERETO AGREES THAT SERVICE OF ANY PROCESS, SUMMONS, NOTICE OR DOCUMENT BY REGISTERED MAIL ADDRESSED TO SUCH PERSON SHALL BE
EFFECTIVE SERVICE OF PROCESS AGAINST SUCH PERSON FOR ANY SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT. EACH PARTY
HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE
JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. EACH PARTY HERETO AGREES THAT THE ADMINISTRATIVE AGENT AND THE SECURED
PARTIES RETAIN THE RIGHT TO BRING PROCEEDINGS AGAINST ANY LOAN PARTY IN THE COURTS OF ANY OTHER JURISDICTION SOLELY IN
CONNECTION WITH THE EXERCISE OF ANY RIGHTS UNDER ANY COLLATERAL DOCUMENT.
(b) EACH
PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT IN ANY COURT REFERRED TO IN PARAGRAPH (a) OF THIS SECTION 7.14. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY LAW, ANY CLAIM OR DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION, SUIT OR
PROCEEDING IN ANY SUCH COURT.
(c) TO
THE EXTENT PERMITTED BY LAW, EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND AGREES
THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY REGISTERED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL) DIRECTED TO IT AT ITS
ADDRESS FOR NOTICES AS PROVIDED FOR IN SECTION 7.5.
(d) EACH
PARTY HERETO HEREBY WAIVES ANY OBJECTION TO SUCH SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM
IN ANY ACTION OR PROCEEDING COMMENCED HEREUNDER THAT SERVICE OF PROCESS WAS INVALID AND INEFFECTIVE. NOTHING IN THIS AGREEMENT
WILL AFFECT THE RIGHT OF ANY PARTY TO THIS AGREEMENT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
(e) EACH
PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY SUIT, ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY) DIRECTLY OR INDIRECTLY
ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH
PARTY HERETO (i) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (ii) ACKNOWLEDGES THAT
IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS
IN THIS SECTION 7.14.
Section 7.15 Intercreditor
Agreement. This Agreement is the “ABL Intercreditor Agreement” referred to in the ABL Credit Agreement
and this Agreement is the “ABL Intercreditor Agreement” referred to in the Term Credit Agreements. Nothing in
this Agreement shall be deemed to subordinate the obligations due to (i) any ABL Secured Party to the obligations due to any
Term Secured Party or (ii) any Term Secured Party to the obligations due to any ABL Secured Party (in each case, whether
before or after the occurrence of an Insolvency Proceeding), it being the intent of the Parties that this Agreement shall
effectuate a subordination of Liens but not a subordination of Indebtedness. Nothing in this Agreement shall be deemed to
modify the rights, remedies and obligations as between the First Lien Term Agent and the First Lien Secured Parties, on the
one hand, and the Second Lien Term Agent and the Second Lien Term Secured Parties, on the other hand, as set forth in the
Term Loan Intercreditor Agreement. Nothing in this Agreement shall be deemed to modify the rights, remedies and obligations
as among the First Lien Secured Parties set forth in any Pari Passu Intercreditor Agreement (as defined in the First Lien
Term Credit Agreement). Nothing in this Agreement shall be deemed to modify the rights, remedies and obligations as among the
Second Lien Secured Parties set forth in any Pari Passu Intercreditor Agreement (as defined in the Second Lien Term Credit
Agreement).
Section 7.16 No
Warranties or Liability. Each Term Agent and the ABL Agent acknowledge and agree that none have made any representation
or warranty with respect to the execution, validity, legality, completeness, collectability or enforceability of any other ABL
Document or any Term Document. Except as otherwise provided in this Agreement, the Term Agents and the ABL Agent will be entitled
to manage and supervise their respective extensions of credit to any Credit Party in accordance with law and their usual practices,
modified from time to time as they deem appropriate.
Section 7.17 Conflicts.
In the event of any conflict between the provisions of this Agreement and the provisions of any ABL Document or any Term Document,
the provisions of this Agreement shall govern.
Section 7.18 Costs
and Expenses. All costs and expenses incurred by the Term Agent and the ABL Agent, including, without limitation pursuant
to Section 4.1(e), hereunder shall be reimbursed by the Borrower and the other Credit Parties as provided in Section 9.03
of the Term Credit Agreements (or any similar provision) and Section 9.03 (or any similar provision) of the ABL Credit Agreement.
Section 7.19 Information
Concerning Financial Condition of the Credit Parties. Each of the Term Agents and the ABL Agent hereby assumes
responsibility for keeping itself informed of the financial condition of the Credit Parties and all other circumstances
bearing upon the risk of nonpayment of the ABL Obligations or the Term Obligations. Each Term Agent and the ABL Agent hereby
agree that no party shall have any duty to advise any other party of information known to it regarding such condition or any
such circumstances. In the event any Term Agent or the ABL Agent, in its sole discretion, undertakes at any time or from time
to time to provide any information to any other party to this Agreement, (a) it shall be under no obligation (i) to provide
any such information to such other party or any other party on any subsequent occasion, (ii) to undertake any investigation
not a part of its regular business routine, or (iii) to disclose any other information, (b) it makes no representation as to
the accuracy or completeness of any such information and shall not be liable for any information contained therein, and (c)
the Party receiving such information hereby agrees to hold the other Party harmless from any action the receiving Party may
take or conclusion the receiving Party may reach or draw from any such information, as well as from and against any and all
losses, claims, damages, liabilities, and expenses to which such receiving Party may become subject arising out of or in
connection with the use of such information.
Section 7.20 Additional
Debt Facilities. To the extent, but only to the extent, permitted by the provisions of each of the then extant ABL Documents
and Term Documents, the Credit Parties may incur or issue and sell one or more series or classes of Term Obligations. Any such
additional class or series of Term Obligations (the “Term Class Debt”) may be secured by (i) a junior
priority, subordinated Lien on ABL Priority Collateral, (ii) a Lien on Term Priority Collateral that is pari passu with,
or junior in priority to, the Lien securing the then outstanding First Lien Term Obligations and (iii) a Lien on Term Priority
Collateral that is senior to, pari passu with, or junior in priority to, the Lien securing the then outstanding Second Lien
Term Obligations, in each case under and pursuant to the relevant Term Collateral Documents for such Term Class Debt, if and subject
to the condition that the representative or agent of any such Term Class Debt (each, a “Term Class Debt Representative”),
acting on behalf of the holders of such Term Class Debt (such representative or agent and holders in respect of any Term Class
Debt being referred to as the “Term Class Debt Parties”), becomes a party to this Agreement by satisfying
conditions (a) through (c), as applicable of this Section 7.20. In order for a Term Class Debt Representative to become
a party to this Agreement:
(a) such
Term Class Debt Representative shall have executed and delivered a joinder agreement pursuant to which it becomes a “Term
Agent” hereunder, and the Term Class Debt in respect of which such Term Class Debt Representative is the Term Agent and the
related Term Class Debt Parties become subject hereto and bound hereby, and specifying whether the Term Class Debt in respect of
which such Term Class Debt Representative is the Term Agent constitutes First Lien Term Obligations or Second Lien Term Obligations;
(b) the
Borrower shall have delivered to the ABL Agent and the Controlling Term Agent an officer’s certificate stating that the conditions
set forth in this Section 7.20 are satisfied (or waived in accordance with the terms of the ABL Documents and Term Documents)
with respect to such Term Class Debt and, if requested, true and complete copies of each of the material Term Documents, relating
to such Term Class Debt, certified as being true and correct in all material respects by an Responsible Officer (as defined in
the ABL Credit Agreement) of the Borrower; and
(c) the
Term Debt Documents relating to such Term Class Debt shall provide that each Term Class Debt Party with respect to such Term Class
Debt will be subject to and bound by the provisions of this Agreement in its capacity as a holder of such Term Class Debt.
Section 7.21 Additional
Credit Parties. The Borrower and each other Credit Party agrees that if, after the date hereof, any Subsidiary of the
Borrower becomes a party to (a) any ABL Credit Agreement or any ABL Guaranty (in each case, other than any ABL Exclusive
Credit Party) or (b) any Term Credit Agreement or any Term Guaranty (in each case, other than any Term Exclusive Credit
Party), it will promptly cause such Subsidiary to become party hereto by such Subsidiary executing and delivering an
instrument in a form reasonably acceptable to each of the ABL Agent and the Term Agents and the Borrower. Upon such execution
and delivery, such Subsidiary will become a Credit Party hereunder with the same force and effect as if originally named as a
Credit Party herein. The execution and delivery of such instrument shall not require the consent of any other party
hereunder. The rights and obligations of each Credit Party hereunder shall remain in full force and effect notwithstanding
the addition of any new Credit Party as a party to this Agreement.
[SIGNATURE PAGES FOLLOW]
IN WITNESS WHEREOF,
the ABL Agent, for and on behalf of itself and the ABL Secured Parties, and the Term Agents, in each case, for and on behalf of
itself and the Term Secured Parties represented by such Term Agent, have caused this Agreement to be duly executed and delivered
as of the date first above written.
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BANK OF AMERICA, N.A.,
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in its capacity as the ABL Agent
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By:
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Name:
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Title:
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BANK OF AMERICA, N.A.,
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in its capacity as the First Lien Term Agent
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By:
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Name:
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Title:
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BANK OF AMERICA, N.A.,
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in its capacity as the Second Lien Term Agent
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By:
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Name:
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Title:
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[Signature Page to ABL Intercreditor Agreement]
ACKNOWLEDGMENT
The Borrower and each
Credit Party hereby acknowledges that it has received a copy of this Agreement as in effect on the date hereof and consents thereto,
agrees to recognize all rights granted thereby to the ABL Agent, the ABL Secured Parties, the Term Agents, and the Term Secured
Parties (including pursuant to Section 7.18 hereof) and will not do any act or perform any obligation which is not in accordance
with the agreements set forth in this Agreement as in effect on the date hereof. The Borrower and each Credit Party further acknowledge
and agree that (i) as between the ABL Secured Parties, the Borrower and the other Credit Parties, the ABL Documents remain in full
force and effect as written and are in no way modified hereby, and (ii) as between the Term Secured Parties, the Borrower and the
other Credit Parties, the Term Documents remain in full force and effect as written and are in no way modified hereby.
Without limiting the
foregoing or any rights or remedies the Borrower and the other Credit Parties may have, Holdings, the Borrower and the other Credit
Parties consent to the performance by each Term Agent of the obligations set forth in Section 3.6 of this Agreement, waive
the provisions of Section 9-615(a) of the UCC (or similar provisions under any other applicable law) in connection with the
application of proceeds of Collateral in accordance with the provisions of this Agreement, and acknowledge and agree that neither
any Term Agent nor any other Term Secured Party shall ever be accountable or liable for any action taken or omitted by the ABL
Agent or any other ABL Secured Party or its or any of their officers, employees, agents successors or assigns in connection therewith
or incidental thereto or in consequence thereof, including any improper use or disclosure of any proprietary information or other
Intellectual Property by the ABL Agent or any other ABL Secured Party or its or any of their officers, employees, agents, successors
or assigns or any other damage to or misuse or loss of any property of the Credit Parties as a result of any action taken or omitted
by the ABL Agent or its officers, employees, agents, successors or assigns pursuant to, and in accordance with, Section 3.6
of this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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CREDIT PARTIES:
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HAYWARD INTERMEDIATE, INC.,
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as Holdings
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By:
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Name:
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Title:
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HAYWARD ACQUISITION CORP.,
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as the Initial Borrower
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By:
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Name:
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Title:
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HAYWARD INDUSTRIES, INC.,
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as the Borrower
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By:
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Name:
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Title:
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Signature Page to ABL Intercreditor Agreement
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HAYWARD
INDUSTRIAL PRODUCTS, INC.
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By:
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Name:
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Title:
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GOLDLINE PROPERTIES LLC,
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By:
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Name:
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Title:
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HAYWARD/WRIGHT-AUSTIN, INC.,
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By:
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Name:
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Title:
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WEBSTER PUMPS, INC.,
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By:
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Name:
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Title:
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Signature Page to ABL Intercreditor Agreement
EXHIBIT
M
[FORM OF]
TERM INTERCREDITOR AGREEMENT
[ATTACHED]
Execution
Version
TERM INTERCREDITOR
AGREEMENT
Term Intercreditor
Agreement (this “Agreement”), dated as of August 4, 2017, among BANK OF AMERICA, N.A., as administrative agent and
collateral agent (in such capacities, with its successors and assigns, and as more specifically defined below, the “Existing
First Priority Representative”) for the Existing First Priority Secured Creditors (as defined below) secured pursuant to
the Existing First Priority Agreement, BANK OF AMERICA, N.A., as administrative agent and collateral agent (in such capacities,
with its successors and assigns, and as more specifically defined below, the “Existing Second Priority Representative”)
for the Existing Second Priority Secured Creditors (as defined below) secured pursuant to the Existing Second Priority Agreement,
and each other First Priority Representative and Second Priority Representative that from time to time becomes a party hereto pursuant
to the terms hereof, and acknowledged and agreed to by, HAYWARD INTERMEDIATE, INC. (“Holdings”), HAYWARD ACQUISITION
CORP., as the initial borrower, to be merged with and into HAYWARD INDUSTRIES, INC. pursuant to the Merger (as defined in the Existing
First Priority Agreement) (the “Borrower”) and each of the other Loan Parties (as defined below) party hereto.
WHEREAS, Holdings,
the Borrower, the other Loan Parties, the Existing First Priority Representative and certain financial institutions and other entities
are parties to the first lien senior secured First Lien Credit Agreement dated as of the date hereof (the “Existing First
Priority Agreement”), pursuant to which such financial institutions and other entities have agreed to make loans and extend
other financial accommodations to the Borrower; and
WHEREAS, Holdings,
the Borrower, the other Loan Parties, the Existing Second Priority Representative and certain financial institutions and other
entities are parties to the second lien senior secured Second Lien Credit Agreement dated as of the date hereof (the “Existing
Second Priority Agreement”), pursuant to which such financial institutions and other entities have agreed to make loans to
the Borrower; and
WHEREAS, the Borrower
and the other Loan Parties have granted to the Existing First Priority Representative senior security interests in the Common Collateral
(as defined below) as security for payment and performance of the First Priority Obligations under the Existing First Priority
Agreement; and
WHEREAS, the Borrower
and the other Loan Parties have granted to the Existing Second Priority Representative junior security interests in the Common
Collateral as security for payment and performance of the Second Priority Obligations under the Existing Second Priority Agreement;
and
WHEREAS, from time
to time, the Borrower may, subject to the terms and conditions hereof, designate additional Indebtedness as First Priority Obligations
or Second Priority Obligations.
NOW THEREFORE, in consideration
of the foregoing and the mutual covenants herein contained and other good and valuable consideration, the existence and sufficiency
of which are expressly recognized by all of the parties hereto, the parties agree as follows:
SECTION 1. Definitions.
1.1. Defined Terms.
The following terms, as used herein, have the following meanings:
“ABL Intercreditor
Agreement” means the ABL Intercreditor Agreement, dated as of the date hereof, by and among Bank of America, N.A. as
administrative agent and collateral agent for the ABL Secured Parties (as defined therein), the Existing First Priority Representative
for the Existing First Priority Secured Creditors and the Existing Second Priority Representative for the Existing Second Priority
Secured Creditors, as amended, restated, amended and restated, extended, supplemented or otherwise modified.
“Additional
Debt” has the meaning set forth in Section 9.4(a).
“Additional
First Priority Agreement” means any agreement evidencing Additional First Priority Debt designated as such in writing
by the Borrower to the extent permitted to be so designated under each then extant First Priority Agreement and Second Priority
Agreement.
“Additional
First Priority Debt” has the meaning set forth in Section 9.4(a).
“Additional
First Priority Representative” has the meaning set forth in the definition of First Priority Representative.
“Additional
First Priority Secured Parties” means, with respect to any Series of Additional First Priority Debt, the First Priority
Secured Parties in respect thereof.
“Additional
Representative” means, as the case may be, an Additional First Priority Representative and/or an Additional Second Priority
Representative.
“Additional
Second Priority Agreement” means any agreement evidencing Additional Second Priority Debt designated as such in writing
by the Borrower to the extent permitted to be so designated under each then extant First Priority Agreement and Second Priority
Agreement.
“Additional
Second Priority Debt” has the meaning set forth in Section 9.4(a).
“Additional
Second Priority Representative” has the meaning set forth in the definition of Second Priority Representative.
“Additional
Second Priority Secured Parties” means, with respect to any Series of Additional Second Priority Debt, the Second Priority
Secured Parties in respect thereof.
“Agreement”
has the meaning set forth in the introductory paragraph hereof.
“Bankruptcy
Code” means the United States Bankruptcy Code (11 U.S.C. §101 et seq.), as amended from time to time.
“Business
Day” means any day other than a Saturday, Sunday or day on which banks in New York City are authorized or required by
law or other governmental action to close.
“Borrower”
has the meaning set forth in the introductory paragraph hereof.
“Cash Collateral”
has the meaning set forth in Section 3.7.
“Common Collateral”
means all assets that are both First Priority Collateral and Second Priority Collateral.
“Comparable
Second Priority Collateral Document” means, in relation to any Common Collateral subject to any First Priority Collateral
Document, that Second Priority Collateral Document that creates a security interest in the same Common Collateral, granted by the
same Loan Party, as applicable.
“Designated
First Priority Representative” means (i) if at any time there is only one Series of First Priority Obligations then extant,
the First Priority Representative for the First Priority Secured Parties in such Series and (ii) at any time when clause (i) does
not apply, the “Applicable Authorized Representative” (as defined in the First Priority Pari Passu Intercreditor Agreement)
at such time.
“Designated
Second Priority Representative” means (i) if at any time there is only one Series of Second Priority Obligations then
extant, the Second Priority Representative for the Second Priority Secured Parties in such Series and (ii) at any time when clause
(i) does not apply, the “Applicable Authorized Representative” (as defined in the Second Priority Pari Passu Intercreditor
Agreement) at such time.
“DIP Financing”
has the meaning set forth in Section 5.2.
“Enforcement
Action” means, with respect to the First Priority Obligations or the Second Priority Obligations, the exercise of any
rights and remedies with respect to any Common Collateral securing such obligations or the commencement or prosecution of enforcement
of any of the rights and remedies with respect to the Common Collateral under, as applicable, the First Priority Documents or the
Second Priority Documents, or applicable law, including the exercise of any rights of set-off or recoupment, and the exercise
of any rights or remedies of a secured creditor under the Uniform Commercial Code of any applicable jurisdiction or under the Bankruptcy
Code and including, without limitation, any action to (i) foreclose, execute, levy, or collect on, take possession or control of
(other than for purposes of perfection), sell or otherwise realize upon (judicially or non-judicially), or lease, license,
or otherwise dispose of (whether publicly or privately), Common Collateral or (ii) receive a transfer of Common Collateral in satisfaction
of Indebtedness or any other obligation secured thereby.
“Existing
First Priority Agreement” has the meaning set forth in the first WHEREAS clause of this Agreement.
“Existing
First Priority Representative” has the meaning set forth in the introductory paragraph hereof.
“Existing
First Priority Secured Creditors” means the “Secured Parties” as defined in the Existing First Priority Agreement
(or any equivalent term in any Refinancing thereof).
“Existing
Second Priority Agreement” has the meaning set forth in the second WHEREAS clause of this Agreement.
“Existing
Second Priority Representative” has the meaning set forth in the introductory paragraph hereof.
“Existing
Second Priority Secured Creditors” means the “Secured Parties” as defined in the Existing Second Priority
Agreement (or any equivalent term in any Refinancing thereof).
“First Priority
Agreement” means the collective reference to (a) the Existing First Priority Agreement, (b) each Additional First Priority
Agreement and (c) any secured credit agreement, loan agreement, note agreement, promissory note, indenture or other agreement that
Refinances any other then extant First Priority Agreement pursuant to Section 9.6 hereof. Unless the context otherwise requires,
any reference to the First Priority Agreement hereunder shall be deemed a reference to each First Priority Agreement then extant.
“First Priority
Collateral” means all assets, whether now owned or hereafter acquired by the Borrower or any other Loan Party, in which
a Lien is granted or purported to be granted to any First Priority Secured Party as security for any First Priority Obligation.
“First Priority
Collateral Documents” means the “Collateral Documents” or “Security Documents” (or equivalent
term) as defined in any First Priority Agreement, and any other documents that are designated under any First Priority Agreement
as “First Priority Collateral Documents” for purposes of this Agreement.
“First Priority
Creditors” means each “Secured Party” (or equivalent term) as defined in any First Priority Collateral Documents
or any First Priority Agreement, the First Priority Representatives and any other Persons to whom First Priority Obligations are
owing.
“First Priority
Documents” means each First Priority Agreement, each First Priority Collateral Document and each First Priority Guarantee.
“First Priority
Guarantee” means any guarantee by any Loan Party of any or all of the First Priority Obligations.
“First Priority
Lien” means any Lien created by any First Priority Collateral Documents.
“First
Priority Obligations” means (a) with respect to the Existing First Priority Agreement, all
“Obligations” of each Loan Party as defined in the Existing First Priority Agreement (or any equivalent term in
any Refinancing thereof) and (b) with respect to each other First Priority Agreement, (i) all principal of and interest
(including any Post-Petition Interest) and premium (if any) on all loans made or other indebtedness issued or incurred
pursuant to such First Priority Agreement, (ii) all reimbursement obligations (if any) and interest thereon (including any
Post-Petition Interest) with respect to any letter of credit or similar instruments issued pursuant to such First
Priority Agreement, (iii) all Specified Swap Agreements, (iv) all Specified Cash Management Agreements and (v) all guarantee
obligations, fees, expenses and other amounts payable from time to time pursuant to the applicable First Priority Documents,
in each case whether or not allowed or allowable in an Insolvency Proceeding. To the extent any payment with respect to any
First Priority Obligation (whether by or on behalf of any Loan Party, as proceeds of security, enforcement of any right of
setoff or otherwise) is declared to be a fraudulent conveyance or a preference in any respect, set aside or required to be
paid to a debtor in possession, any Second Priority Secured Party, receiver or similar Person, then the obligation or part
thereof originally intended to be satisfied shall, for the purposes of this Agreement and the rights and obligations of the
First Priority Secured Parties and the Second Priority Secured Parties, be deemed to be reinstated and outstanding as if such
payment had not occurred.
“First Priority
Obligations Series Payment Date” means, with respect to each Series of First Priority Obligations, the date on which
(a) the First Priority Obligations of that Series (other than those that constitute Unasserted Contingent Obligations) have been
paid in full (or cash collateralized or defeased in accordance with the terms of the First Priority Documents), (b) all commitments
to extend credit under the First Priority Documents for that Series have been terminated and (c) there are no outstanding letters
of credit or similar instruments issued under the First Priority Documents for that Series (other than such as have been cash collateralized
or defeased in accordance with the terms of the First Priority Documents). Upon the written request by any Second Priority Representative
or the Borrower, the applicable First Priority Representative for that Series shall promptly deliver a written notice to each Second
Priority Representative and the Borrower stating that (to the extent such events have occurred) the events described in clauses
(a), (b) and (c) have occurred.
“First Priority
Obligations Payment Date” means the date on which the First Priority Obligations Series Payment Date has occurred for
each Series of First Priority Obligations.
“First Priority
Pari Passu Intercreditor Agreement” means an agreement among each First Priority Representative allocating rights among
the various Series of First Priority Obligations, in the form set forth on Exhibit N to the Existing First Priority Agreement.
“First Priority
Representative” means (i) in the case of the First Priority Obligations or First Priority Secured Parties secured pursuant
to the Existing First Priority Agreement, the Existing First Priority Representative, and (ii) in the case of any Additional First
Priority Debt or any Additional First Priority Secured Parties of any Series, the trustee, administrative agent, collateral or
similar agent named as the First Priority Representative for such Series in the applicable Joinder Agreement (each, in the case
of this clause (ii), together with its successors and assigns in such capacity, an “Additional First Priority Representative”).
“First Priority
Secured Parties” means each First Priority Representative, each First Priority Creditor and any other holders of the
First Priority Obligations.
“Insolvency
Proceeding” means any voluntary or involuntary case or proceeding of which any Loan Party is the subject and in respect
of bankruptcy, insolvency, winding up, receivership, dissolution, liquidation, reorganization or assignment for the benefit of
creditors, in each of the foregoing events whether under the Bankruptcy Code or any similar federal, state or foreign bankruptcy,
insolvency, reorganization, receivership or similar law.
“Joinder Agreement”
means a supplement to this Agreement in the form of Exhibit A hereto, required to be delivered by an Additional Representative
to each other then-existing First Priority Representative and Second Priority Representative pursuant to Section 9.4 hereof.
“Lien”
means any mortgage, deed of trust, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or
other), charge, or preference, priority or other security interest or preferential arrangement of any kind or nature
whatsoever (including any conditional sale or other title retention agreement, any easement, right of way or other
encumbrance on title to real property, and any capital lease having substantially the same economic effect as any of the
foregoing), in each case in the nature of security; provided that in no event shall an operating lease in and of
itself be deemed to constitute a Lien on any asset.
“Loan Party”
means Holdings, the Borrower and each of its Subsidiaries that is a party, or which at any time becomes a party, to any First Priority
Document or Second Priority Document as a guarantor. All references in this Agreement to any Loan Party shall include such Loan
Party as a debtor-in-possession and any receiver or trustee for such Loan Party in any Insolvency Proceeding.
“Maximum First
Priority Obligations Amount” means an amount equal to the aggregate principal amount of debt for borrowed money permitted
to be incurred as First Priority Obligations pursuant to the terms of the Existing Second Priority Agreement as in effect on the
Closing Date, as amended, restated, modified, supplemented, substituted, renewed, replaced or Refinanced in accordance with the
terms hereof, but without giving effect to any such amendment, restatement, modification, supplement, substitution, renewal, replacement
or Refinancing that has the effect, directly or indirectly, of reducing the amount of such debt for borrowed money permitted to
be incurred as First Priority Obligations pursuant to the terms of the Existing Second Priority Agreement without the prior written
consent of the Borrower and each First Priority Representative.
“Maximum Second
Priority Obligations Amount” means an amount equal to the aggregate principal amount of debt for borrowed money permitted
to be incurred as Second Priority Obligations pursuant to the terms of the Existing First Priority Agreement as in effect on the
Closing Date, as amended, restated, modified, supplemented, substituted, renewed, replaced or Refinanced in accordance with the
terms hereof, but without giving effect to any such amendment, restatement, modification, supplement, substitution, renewal, replacement
or Refinancing that has the effect, directly or indirectly, of reducing the amount of such debt for borrowed money permitted to
be incurred as Second Priority Obligations pursuant to the terms of the Existing First Priority Agreement without the prior written
consent of the Borrower and each Second Priority Representative.
“Person”
means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, governmental
authority or other entity.
“Post-Petition
Interest” means any interest or entitlement to fees or expenses or other charges that accrues after the commencement
of any Insolvency Proceeding, whether or not allowed or allowable in any such Insolvency Proceeding.
“Purchase”
has the meaning set forth in Section 3.7.
“Purchase
Notice” has the meaning set forth in Section 3.7.
“Purchase
Price” has the meaning set forth in Section 3.7.
“Purchasing
Parties” has the meaning set forth in Section 3.7.
“Recovery”
has the meaning set forth in Section 5.5.
“Refinance”
means, in respect of any indebtedness, to refinance, extend, renew, defease, amend, increase, modify, supplement, restructure,
refund, replace or repay, or to issue other indebtedness or enter into alternative financing arrangements, in exchange or replacement
for such indebtedness (in whole or in part), including by adding or replacing lenders, creditors, agents, borrowers and/or guarantors,
and including in each case, but not limited to, after the original instrument giving rise to such indebtedness has been terminated
and including, in each case, through any credit agreement, indenture or other agreement. “Refinanced” and “Refinancing”
have correlative meanings.
“Second Priority
Agreement” means the collective reference to (a) the Existing Second Priority Agreement, (b) each Additional Second Priority
Agreement and (c) any secured credit agreement, loan agreement, note agreement, promissory note, indenture or other agreement that
Refinances any other then extant Second Priority Agreement pursuant to Section 9.6 hereof. Unless the context otherwise requires,
any reference to the Second Priority Agreement hereunder shall be deemed a reference to each Second Priority Agreement then extant.
“Second Priority
Collateral” means all assets, whether now owned or hereafter acquired by the Borrower or any Loan Party, in which a Lien
is granted or purported to be granted to any Second Priority Secured Party as security for any Second Priority Obligation.
“Second Priority
Collateral Documents” means the “Collateral Documents” or “Security Documents” (or equivalent
term) as defined in any Second Priority Agreement and any documents that are designated under any Second Priority Agreement as
“Second Priority Collateral Documents” for purposes of this Agreement.
“Second Priority
Creditors” means the “Secured Parties” (or equivalent term) as defined in any Second Priority Collateral
Documents or any Second Priority Agreement, the Second Priority Representatives and any other Persons to whom Second Priority Obligations
are owing.
“Second Priority
Documents” means each Second Priority Agreement, each Second Priority Collateral Document and each Second Priority Guarantee.
“Second Priority
Guarantee” means any guarantee by any Loan Party of any or all of the Second Priority Obligations.
“Second Priority
Lien” means any Lien created by any Second Priority Collateral Documents.
“Second
Priority Obligations” means (a) all “Obligations” of each Loan Party as defined in the Existing Second
Priority Agreement (or any equivalent term in any Refinancing thereof) and (b) with respect to each other Second Priority
Agreement, (i) all principal of and interest (including any Post-Petition Interest) and premium (if any) on all loans made or
other indebtedness issued or incurred pursuant to such Second Priority Agreement, (ii) all reimbursement obligations (if any)
and interest thereon (including any Post-Petition Interest) with respect to any letter of credit or similar instruments
issued pursuant to such Second Priority Agreement and (iii) all guarantee obligations, fees, expenses and other amounts
payable from time to time pursuant to the applicable Second Priority Documents, in each case whether or not allowed or
allowable in an Insolvency Proceeding. To the extent any payment with respect to any Second Priority Obligation (whether by
or on behalf of any Loan Party, as proceeds of security, enforcement of any right of setoff or otherwise) is declared to be a
fraudulent conveyance or a preference in any respect, set aside or required to be paid to a debtor in possession, any First
Priority Secured Party, receiver or similar Person, then the obligation or part thereof originally intended to be satisfied
shall, for the purposes of this Agreement and the rights and obligations of the First Priority Secured Parties and the Second
Priority Secured Parties hereunder, be deemed to be reinstated and outstanding as if such payment had not occurred.
“Second Priority
Pari Passu Intercreditor Agreement” means an agreement among each Second Priority Representative allocating rights among
the various Series of Second Priority Obligations, substantially in the form set forth on Exhibit N to the Existing First Priority
Agreement (but modified to reflect the second priority nature of the obligations subject thereto).
“Second Priority
Representative” means (i) in the case of the Second Priority Obligations or the Second Priority Secured Parties secured
pursuant to the Existing Second Priority Agreement, the Existing Second Priority Representative, and (ii) in the case of any Additional
Second Priority Debt or any Additional Second Priority Secured Parties of any Series, the trustee, administrative agent, collateral
or similar agent named as the Second Priority Representative for such Series in the applicable Joinder Agreement (each, in the
case of this clause (ii), together with its successors and assigns in such capacity, an “Additional Second Priority Representative”).
“Second Priority
Secured Parties” means each Second Priority Representative, each Second Priority Creditor and any other holders of the
Second Priority Obligations.
“Secured Parties”
means the First Priority Secured Parties and the Second Priority Secured Parties.
“Series”
means, (i) with respect to First Priority Debt or Second Priority Debt, all First Priority Debt or Second Priority Debt, as applicable,
represented by the same First Priority Representative or Second Priority Representative acting in the same capacity and (ii) with
respect to First Priority Obligations or Second Priority Obligations, all such obligations secured by the same First Priority Collateral
Documents or same Second Priority Collateral Documents, as the case may be.
“Specified
Cash Management Agreement” means any agreement providing for treasury, depositary or cash management services or any
similar transactions, including overdraft, credit card processing, credit or debit cards, purchase cards, electronic funds transfers
and other cash management services between any Loan Party and any holder of First Priority Obligations (other than solely as a
result of such Specified Cash Management Agreement), or an affiliate thereof, as permitted under the First Priority Documents at
the time such Specified Cash Management Agreement is entered into.
“Specified
Swap Agreement” means any Swap Agreement in respect of interest rates, currency exchange rates or commodity prices
entered into by any Loan Party and any Person that is holder of First Priority Obligations (other than solely as a result of
such Specified Swap Agreement) or an affiliate thereof, as permitted under the First Priority Documents at the time such Swap
Agreement is entered into.
“Standstill
Period” has the meaning set forth in Section 3.2.
“Surviving
Obligations” has the meaning set forth in Section 3.7.
“Swap Agreement”
means any (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity
swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index
swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign
exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency
rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing
(including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any
master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc.,
any International Foreign Exchange Master Agreement, or any other master agreement, including any such obligations or liabilities
under any such master agreement.
“Unasserted
Contingent Obligations” shall mean, at any time, First Priority Obligations for taxes, costs, indemnifications, reimbursements,
damages and other liabilities (excluding (a) the principal of, and interest and premium (if any) on, and fees and expenses relating
to, any First Priority Obligation and (b) contingent reimbursement obligations in respect of amounts that may be drawn under outstanding
letters of credit) in respect of which no assertion of liability (whether oral or written) and no claim or demand for payment (whether
oral or written) has been made (and, in the case of First Priority Obligations for indemnification, no notice for indemnification
has been issued by the indemnitee) at such time.
“Uniform Commercial
Code” shall mean the Uniform Commercial Code as in effect from time to time in the applicable jurisdiction.
1.2 Terms
Generally. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words
“include”, “includes” and “including” shall be deemed to be followed by the phrase
“without limitation”. The word “will” shall be construed to have the same meaning and effect as the
word “shall”. Unless the context requires otherwise (i) any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from
time to time amended, restated, supplemented or otherwise modified, (ii) any reference herein to any Person shall be
construed to include such Person’s successors or permitted assigns, (iii) the words “herein”,
“hereof’ and “hereunder”, and words of similar import, shall be construed to refer to this Agreement
in its entirety and not to any particular provision hereof, (iv) all references herein to Sections shall be construed to
refer to Sections of this Agreement and (v) the words “asset” and “property” shall be construed to
have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash,
securities, accounts and contract rights.
SECTION 2. Lien
Priorities.
2.1 Subordination
of Liens. (a) Subject to the order of application of proceeds set forth in Section 4.1, any and all Liens now existing or hereafter
created or arising in favor of any Second Priority Secured Party securing the Second Priority Obligations, regardless of how or
when acquired, whether by grant, statute, operation of law, subrogation or otherwise are expressly junior in priority, operation
and effect to any and all Liens on the Common Collateral now existing or hereafter created or arising in favor of the First Priority
Secured Parties securing the First Priority Obligations, notwithstanding (i) anything to the contrary contained in any agreement
or filing to which any Second Priority Secured Party may now or hereafter be a party, and regardless of the time, order or method
of grant, attachment, recording or perfection of any financing statements or other security interests, assignments, pledges, deeds,
mortgages and other Liens, or any defect or deficiency or alleged defect or deficiency in any of the foregoing, (ii) any provision
of the Uniform Commercial Code or any applicable law or any First Priority Document or Second Priority Document or any other circumstance
whatsoever and (iii) the fact that any such Liens in favor of any First Priority Secured Party securing any of the First Priority
Obligations are (x) subordinated to any Lien securing any obligation of any Loan Party other than the Second Priority Obligations
or (y) otherwise subordinated, voided, avoided, invalidated or lapsed.
(b) No
First Priority Secured Party or Second Priority Secured Party shall object to or contest, or support any other Person in contesting
or objecting to, in any proceeding (including any Insolvency Proceeding), the validity, extent, perfection, priority or enforceability
of any security interest in the Common Collateral granted to the other. Notwithstanding any failure by any First Priority Secured
Party or Second Priority Secured Party to perfect its security interests in the Common Collateral or any avoidance, invalidation
or subordination by any third party or court of competent jurisdiction of the security interests in the Common Collateral granted
to the First Priority Secured Parties or the Second Priority Secured Parties (but, for the avoidance of doubt, subject to the order
of application of proceeds set forth in Section 4.1), the priority and rights as between the First Priority Secured Parties and
the Second Priority Secured Parties with respect to the Common Collateral shall be as set forth herein.
2.2 Nature
of First Priority Obligations. Each Second Priority Representative on behalf of itself and the other Second Priority Secured
Parties represented by it acknowledges that a portion of the First Priority Obligations may represent debt that is revolving in
nature and that the amount thereof that may be outstanding at any time or from time to time may be increased or reduced and subsequently
reborrowed, and that, subject to Section 6, the terms of the First Priority Obligations may be modified, extended or amended from
time to time, and that the aggregate amount of the First Priority Obligations may be increased, replaced or refinanced, in each
event, without notice to or consent by the Second Priority Secured Parties and without affecting the provisions hereof, but only
so long as, except in the case of any DIP Financing, any such obligations are permitted to be incurred pursuant to the Second Priority
Documents. The lien priorities provided in Section 2.1 shall not be altered or otherwise affected by any such amendment, modification,
supplement, extension, repayment, reborrowing, increase, replacement, renewal, restatement or refinancing of either the First Priority
Obligations or the Second Priority Obligations, or any portion thereof.
2.3 Agreements
Regarding Actions to Perfect Liens. (a) Each Second Priority Representative on behalf of itself and the other Second Priority
Secured Parties represented by it agrees that UCC-1 financing statements, patent, trademark or copyright filings or other filings
or recordings filed or recorded by or on behalf of the Second Priority Representative with respect to the Common Collateral shall
be in form reasonably satisfactory to the Designated First Priority Representative.
(b) Each
Second Priority Representative agrees on behalf of itself and the other Second Priority Secured Parties represented by it that
each Second Priority Collateral Document securing Common Collateral in favor of or for the benefit of such Second Priority Representative
and the other Second Priority Secured Parties represented by it shall, unless otherwise agreed to by the Designated First Priority
Representative, contain the following notation (or language to similar effect approved by the Designated First Priority Representative):
“Notwithstanding anything herein to the contrary, the lien and security interest created by this agreement on the property
described herein and the exercise of any right or remedy by the collateral agent hereunder is subject to the provisions of the
Term Intercreditor Agreement dated as of August 4, 2017 among Bank of America, N.A., as administrative agent and collateral agent
for the Existing First Priority Secured Creditors, Bank of America, N.A., as administrative agent and collateral agent for the
Existing Second Priority Secured Creditors, and each other First Priority Representative and Second Priority Representative from
time to time party thereto, and acknowledged and agreed to by Hayward Industries, Inc., a New Jersey corporation, as Borrower,
and the Loan Parties referred to therein, as amended, modified or supplemented from time to time.”
(c) Each
First Priority Representative hereby acknowledges that, to the extent that it holds, or a third party holds on its behalf, physical
possession of or “control” (as defined in the Uniform Commercial Code) over Common Collateral pursuant to the First
Priority Collateral Documents, such possession or control is also for the benefit of and on behalf of, and the First Priority Representative
or such third party holds such possession or control as bailee and agent for, the Second Priority Representative and the other
Second Priority Secured Parties solely to the extent required to perfect their security interest in such Common Collateral (such
bailment and agency for perfection being intended, among other things, to satisfy the requirements of Sections 8-301(a)(2)
and 9-313(c) of the Uniform Commercial Code). Nothing in the preceding sentence shall be construed to impose any duty on any
First Priority Representative (or any third party acting on its behalf) with respect to such Common Collateral or provide the Second
Priority Representative or any other Second Priority Secured Party with any rights with respect to such Common Collateral beyond
those specified in this Agreement; provided that subsequent to the occurrence of the First Priority Obligations Payment
Date, the First Priority Representative shall (i) deliver to the Second Priority Representative, at the Borrower’s sole cost
and expense, the Common Collateral in its possession or control together with any necessary endorsements to the extent required
by the Second Priority Documents (and to the extent not so required, such delivery shall be made to the Borrower) or (ii) direct
and deliver such Common Collateral as a court of competent jurisdiction otherwise directs, and provided, further,
that the provisions of this Agreement are intended solely to govern the respective Lien priorities as between the First Priority
Secured Parties on the one hand and the Second Priority Secured Parties on the other hand and shall not impose on the First Priority
Secured Parties any obligations in respect of the disposition of any Common Collateral (or any proceeds thereof) that would conflict
with prior perfected Liens or any claims thereon in favor of any other Person that is not a Secured Party.
2.4 No
New Liens; Release of Liens. So long as the First Priority Obligations Payment Date has not occurred, the parties hereto agree
that (i) there shall be no Lien, and no Loan Party shall have any right to create any Lien, on any assets of any Loan Party securing
any Second Priority Obligation if these same assets are not subject to, and do not become subject to, one or more Liens securing
each of the First Priority Obligations (including as a result of the release of any Lien securing the First Priority Obligations)
and (ii) if any Second Priority Secured Party shall acquire or hold any Lien on any assets of any Loan Party securing any Second
Priority Obligation which assets are not also subject to the first-priority Lien of each First Priority Representative under
the respective First Priority Documents (including as a result of the release of any Lien securing the First Priority Obligations),
then such Second Priority Representative, upon demand by any First Priority Representative, will without the need for any further
consent of any other Second Priority Secured Party, notwithstanding anything to the contrary in any other Second Priority Document
either (x) release such Lien or (y) assign it to such First Priority Representative as security for the applicable First Priority
Obligations (in which case the Second Priority Representative may retain a junior Lien on such assets subject to the terms hereof).
To the extent that the foregoing provisions are not complied with for any reason, without limiting any other rights and remedies
available to the First Priority Secured Parties, the Second Priority Representative and the other Second Priority Secured Parties
agree that any amounts received by or distributed to any of them pursuant to or as a result of Liens granted in contravention of
this Section 2.4 shall be subject to Section 4.1.
3.1 Exclusive
Enforcement. Until the First Priority Obligations Payment Date has occurred, whether or not an Insolvency Proceeding has been
commenced by or against any Loan Party, the First Priority Secured Parties shall have the exclusive right to take and continue
any Enforcement Action with respect to the Common Collateral, without any consultation with or consent of any Second Priority Secured
Party, but subject to the provisos set forth in Sections 3.2 and 5.1. Upon the occurrence and during the continuance of an “Event
of Default” under and as defined in the First Priority Documents, the First Priority Representative and the other First Priority
Secured Parties may (except as otherwise agreed amongst themselves in the First Priority Pari Passu Intercreditor Agreement) take
and continue any Enforcement Action with respect to the First Priority Obligations and the Common Collateral permitted under the
First Priority Documents in such order and manner as they may determine in their sole discretion.
3.2 Standstill
and Waivers. Each Second Priority Representative, on behalf of itself and the other Second Priority Secured Parties represented
by it, agrees that, until the First Priority Obligations Payment Date has occurred, subject to the proviso set forth in Section
5.1:
(a) they
will not take or cause to be taken any Enforcement Action;
(b) they
will not take or cause to be taken any action, the purpose or effect of which is to make any Lien in respect of any Second Priority
Obligation pari passu with or senior to, or to give any Second Priority Secured Party any preference or priority relative to, the
Liens with respect to the First Priority Obligations or the First Priority Secured Parties;
(c) they
will not contest, oppose, object to, interfere with, hinder or delay, in any manner, whether by judicial proceedings
(including the filing or commencement of, or the joining in the filing or commencement of, an Insolvency Proceeding) or
otherwise, any foreclosure, sale, lease, exchange, transfer or other disposition of the Common Collateral by any First
Priority Secured Party or any other Enforcement Action taken (or any forbearance from taking any Enforcement Action) by or on
behalf of any First Priority Secured Party;
(d) they
have no right to (i) direct either any First Priority Representative or any other First Priority Secured Party to exercise any
right, remedy or power with respect to the Common Collateral or pursuant to the First Priority Collateral Documents or (ii) consent
or object to the exercise by any First Priority Representative or any other First Priority Secured Party of any right, remedy or
power with respect to the Common Collateral or pursuant to the First Priority Collateral Documents or to the timing or manner in
which any such right is exercised or not exercised (or, to the extent they may have any such right described in this clause (d),
whether as a junior lien creditor or otherwise, they hereby irrevocably waive such right);
(e) they
will not institute any suit or other proceeding or assert in any suit, Insolvency Proceeding or other proceeding any claim against
any First Priority Secured Party seeking damages from or other relief by way of specific performance, injunction or otherwise,
with respect to, and no First Priority Secured Party shall be liable for, any action taken or omitted to be taken by any First
Priority Secured Party with respect to the Common Collateral or pursuant to the First Priority Documents; and
(f) they
will not seek, and hereby waive any right, to have the Common Collateral or any part thereof marshaled upon, or in connection with,
any foreclosure or other disposition of the Common Collateral;
provided that, notwithstanding the
foregoing, any Second Priority Secured Party may exercise its rights and remedies in respect of the Common Collateral, including
taking any Enforcement Actions, under, and to the extent provided for in, the Second Priority Collateral Documents or applicable
law after the passage of a period of 180 days (the “Standstill Period”) from the date of delivery of a notice
in writing by the applicable Second Priority Representative to each First Priority Representative of its intention to exercise
such rights and remedies, which notice may only be delivered following the occurrence of and during the continuation of an “Event
of Default” under and as defined in the applicable Second Priority Agreement and the applicable Second Priority Representative
has demanded repayment of all the principal amount of any Second Priority Obligations thereunder; provided, further,
however, that, notwithstanding the foregoing, in no event shall any Second Priority Secured Party exercise or continue to exercise
any such rights or remedies if, notwithstanding the expiration of the Standstill Period, (i) any First Priority Secured Party shall
have commenced and be diligently pursuing the exercise of any of its rights and remedies with respect to all or any material portion
of the Common Collateral (prompt notice of such exercise to be given to each Second Priority Representative) or (ii) an Insolvency
Proceeding in respect of any Loan Party shall have been commenced; and provided, further, that in any Insolvency
Proceeding commenced by or against any Loan Party, each Second Priority Representative and the other Second Priority Secured Parties
may take any action expressly permitted by Section 5.1.
Notwithstanding the
foregoing, the Second Priority Representative and the Second Priority Secured Parties may:
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(1)
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file a claim or statement of interest with respect to the Second Priority Obligations; provided
that an Insolvency Proceeding has been commenced by or against the Loan Parties;
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(2)
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take any action (not adverse to the priority status of the Liens on the First Priority Collateral,
or the rights of any First Priority Representative or the First Priority Secured Parties to exercise remedies in respect thereof)
in order to create, perfect, preserve or protect its Lien on the Common Collateral;
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(3)
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file any necessary or appropriate responsive or defensive pleadings in opposition to any motion,
claim, adversary proceeding or other pleading made by any Person objecting to or otherwise seeking the disallowance of the claims
of the Second Priority Secured Parties, including any claims secured by the Common Collateral, if any, in each case in accordance
with the terms of this Agreement;
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(4)
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file any pleadings, objections, motions or agreements or take any positions that assert rights
or interests available to unsecured creditors of the Loan Parties arising under either any Insolvency Proceeding or applicable
non-bankruptcy law, in each case not inconsistent with the terms of this Agreement;
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(5)
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vote on any plan of reorganization, file any proof of claim, make other filings and make any arguments
and motions that are, in each case, in accordance with the terms of this Agreement, with respect to the Second Priority Obligations
and the Common Collateral;
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(6)
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exercise any of its rights or remedies with respect to the Common Collateral after the termination
of the Standstill Period to the extent permitted by this Section 3.2;
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(7)
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present a cash or credit bid (in each case, so long as such bid provides for payment in full in
cash of the First Priority Obligations) at any Section 363 hearing or with respect to any other Common Collateral disposition;
and
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(8)
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bid for or purchase Common Collateral at any private or judicial foreclosure upon such Common Collateral
initiated by the First Priority Representative and the First Priority Secured Parties, so long as the cash proceeds of such bid
are sufficient to cause the First Priority Obligations Payment Date to occur.
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3.3 Judgment
Creditors. In the event that any Second Priority Secured Party becomes a judgment lien creditor as a result of its enforcement
of its rights as an unsecured creditor, any such judgment lien shall be subject to the terms of this Agreement for all purposes
(including in relation to the First Priority Liens and the First Priority Obligations) to the same extent as other Liens securing
the Second Priority Obligations are subject to the terms of this Agreement.
3.4 Cooperation.
Each Second Priority Representative, on behalf of itself and the other Second Priority Secured Parties represented by it,
agrees that each of them shall take such actions as any First Priority Representative shall reasonably request in writing in
connection with the exercise by the First Priority Secured Parties of their rights set forth herein.
3.5 No
Additional Rights For the Loan Parties Hereunder. Except as provided in Section 3.6, if any First Priority Secured Party or
Second Priority Secured Party shall enforce its rights or remedies in violation of the terms of this Agreement, no Loan Party shall
be entitled to use such violation as a defense to any action by any First Priority Secured Party or Second Priority Secured Party,
nor to assert such violation as a counterclaim or basis for set off or recoupment against any First Priority Secured Party or Second
Priority Secured Party.
3.6 Actions
Upon Breach. (a) If any Second Priority Secured Party, contrary to this Agreement, commences or participates in any action
or proceeding against any Loan Party or the Common Collateral, then unless the First Priority Representative shall object in writing,
such Loan Party may interpose as a defense or dilatory plea the making of this Agreement, and any First Priority Secured Party
may intervene and interpose such defense or plea in its or their name or in the name of such Loan Party.
(b) Should
any Second Priority Secured Party, contrary to this Agreement, in any way take, attempt to or threaten to take any action with
respect to the Common Collateral (including any attempt to realize upon or enforce any remedy with respect to this Agreement in
a manner contrary to this Agreement), or fail to take any action expressly required by this Agreement to be taken by such Second
Priority Secured Party, any First Priority Secured Party (in its own name or in the name of the relevant Loan Party) or the relevant
Loan Party may obtain relief against such Second Priority Secured Party by injunction, specific performance and/or other appropriate
equitable relief, it being understood and agreed by the Second Priority Representative on behalf of each Second Priority Secured
Party that (i) the First Priority Secured Parties’ damages from its actions may at that time be difficult to ascertain and
may be irreparable, and (ii) each Second Priority Representative, on behalf of itself and the other Second Priority Secured Parties
represented by it, hereby waives (to the extent it may lawfully do so) any defense any Second Priority Secured Party may have that
the Loan Parties and/or the First Priority Secured Parties cannot demonstrate damage and/or be made whole by the awarding of damages.
3.7 Option
to Purchase. (a) Each First Priority Representative agrees that it will give each Second Priority Representative written
notice within five Business Days of: (i) the commencement of an Enforcement Action or the institution of any Insolvency
Proceeding or (ii) the acceleration of the First Priority Obligations. Upon receipt of such notice by each Second Priority
Representative, any Second Priority Secured Party shall have the option, but in no event the obligation, by irrevocable
written notice (the “Purchase Notice”) delivered by such Second Priority Representative to each First
Priority Representative no later than ten Business Days after receipt by such Second Priority Representative of such notice,
to purchase all (but not less than all) of the First Priority Obligations from the First Priority Secured Parties. If any
Second Priority Representative so delivers the Purchase Notice, the First Priority Representative shall terminate any
existing Enforcement Actions and shall not take any further Enforcement Actions, provided, that the Purchase (as
defined below) shall have been consummated on the date specified in the Purchase Notice in accordance with this Section 3.7.
If more than one Second Priority Representative exercises its purchase option, the purchase shall be allocated among such
purchasing Second Priority Representatives pro rata by principal amount of Second Priority Obligations.
(b) On
the date specified by the Second Priority Representative in the Purchase Notice (which shall be a Business Day not less than five
Business Days, nor more than ten Business Days, after receipt by the First Priority Representative of the Purchase Notice), the
First Priority Secured Parties shall, subject to any required approval of any court or other governmental authority then in effect,
sell to the Second Priority Secured Parties electing to purchase pursuant to Section 3.7(a) (the “Purchasing Parties”),
and the Purchasing Parties shall purchase (the “Purchase”) from the First Priority Secured Parties, the First Priority
Obligations; provided, that the First Priority Obligations purchased shall not include any rights of First Priority Secured
Parties with respect to indemnification and other obligations of the Loan Parties under the First Priority Documents that are expressly
stated to survive the termination of the First Priority Documents (the “Surviving Obligations”).
(c) Without
limiting the obligations of the Loan Parties under the First Priority Documents to the First Priority Secured Parties with respect
to the Surviving Obligations (which shall not be transferred in connection with the Purchase), on the date of the Purchase, the
Purchasing Parties shall (i) pay to the First Priority Secured Parties as the purchase price (the “Purchase Price”)
therefor the full amount of all First Priority Obligations then outstanding and unpaid at par (including principal, accrued and
unpaid interest at the contract rate, fees, breakage costs, attorneys’ fees and expenses, and, in the case of any Specified
Swap Agreements, the amount that would be payable by the relevant Loan Party thereunder if it were to terminate such Specified
Swap Agreements on the date of the Purchase or, if not terminated, an amount determined by the relevant First Priority Secured
Party to be reasonably necessary to collateralize its credit risk arising out of such Specified Swap Agreements), (ii) furnish
cash collateral (the “Cash Collateral”) to the First Priority Secured Parties in such amounts as the relevant First
Priority Secured Parties determine is reasonably necessary to secure such First Priority Secured Parties in connection with any
outstanding letters of credit (not to exceed 103% of the aggregate undrawn face amount of such letters of credit), (iii) agree
to reimburse the First Priority Secured Parties for any loss, cost, damage or expense (including attorneys’ fees and expenses)
in connection with any fees, costs or expenses related to any checks or other payments provisionally credited to the First Priority
Obligations or as to which the First Priority Secured Parties have not yet received final payment and (iv) agree, after written
request from the First Priority Representative, to reimburse the First Priority Secured Parties in respect of indemnification obligations
of the Loan Parties under the First Priority Documents as to matters or circumstances known to the Purchasing Parties at the time
of the Purchase which could reasonably be expected to result in any loss, cost, damage or expense to any of the First Priority
Secured Parties, provided that, in no event shall any Purchasing Party have any liability for such amounts in excess of
proceeds of Common Collateral actually received by the Purchasing Parties.
(d) The
Purchase Price and Cash Collateral shall be remitted by wire transfer in immediately available funds to such account(s) of
each applicable First Priority Representative as it shall designate to the Purchasing Parties. Each First Priority
Representative shall, promptly following its receipt thereof, distribute the amounts received by it in respect of the
Purchase Price to the First Priority Secured Parties represented by it in accordance with the respective First Priority
Agreement (subject to the First Priority Pari Passu Intercreditor Agreement). Interest shall be calculated to but excluding
the day on which the Purchase occurs if the amounts so paid by the Purchasing Parties to the account designated by the First
Priority Representative are received in such account prior to 12:00 noon, New York City time, and interest shall be
calculated to and including such day if the amounts so paid by the Purchasing Parties to the account designated by the First
Priority Representative are received in such account later than 12:00 noon, New York City time.
(e) The
Purchase shall be made without representation or warranty of any kind by the First Priority Secured Parties as to the First Priority
Obligations, the Common Collateral or otherwise and without recourse to the First Priority Secured Parties, except that the First
Priority Secured Parties shall represent and warrant: (i) the amount of the First Priority Obligations being purchased, (ii) that
the First Priority Secured Parties own the First Priority Obligations being purchased free and clear of any Liens and (iii) that
the First Priority Secured Parties have the right to assign the First Priority Obligations being assigned and the assignment is
duly authorized.
(f) For
the avoidance of doubt, the parties hereto hereby acknowledge and agree that in no event shall the Second Priority Representative
(i) be deemed to be a Purchasing Party for purposes of this Section 3.7, (ii) be subject to or liable for any obligations of a
Purchasing Party pursuant to this Section 3.7 or (iii) incur any liability to any First Priority Secured Party or any other Person
in connection with any Purchase pursuant to this Section 3.7.
(g) To
the extent that any First Priority Secured Party is in breach of the provisions of this Section 3.7, a Purchasing Party may, but
shall not be obligated to, extend the date of the proposed Purchase on a day for day basis during the period of any breach by such
First Priority Secured Party.
3.8 Rights
as Unsecured Creditors. Except as specifically set forth in this Agreement, the Second Priority Representative and the Second
Priority Secured Parties may exercise rights and remedies available to unsecured creditors against the Loan Parties, in each case
not inconsistent with the terms of this Agreement; provided that in the event that any Second Priority Secured Party becomes
a judgment Lien creditor in respect of the Common Collateral as a result of its enforcement of its rights as an unsecured creditor
with respect to the Second Priority Obligations, such judgment Lien shall be subject to the terms of this Agreement for all purposes
(including in relation to the First Priority Obligations) as the other Liens securing the Second Priority Obligations are subject
to this Agreement.
3.9 Second
Lien Interest, Principal, Etc. Except as otherwise provided in Section 3.2 hereof, nothing in this Agreement shall prohibit
the receipt by the Second Priority Representative or any Second Priority Secured Parties of the required payments of interest,
principal and other amounts owed in respect of the Second Priority Obligations so long as such receipt is not the direct or indirect
result of the exercise by the Second Priority Representative or any Second Priority Secured Parties of rights or remedies as a
secured creditor (including set off) or enforcement in contravention of this Agreement of any Lien held by any of them. Nothing
in this Agreement impairs or otherwise adversely affects any rights or remedies the First Priority Representative or the First
Priority Secured Parties may have with respect to the Common Collateral.
SECTION 4. Application
of Proceeds of Common Collateral; Dispositions and Releases of Common Collateral; Inspection and Insurance.
4.1 Application
of Proceeds; Turnover Provisions. Until the First Priority Obligations Payment Date has occurred, all Common Collateral and
proceeds of Common Collateral (including any interest earned thereon) received in connection with an Enforcement Action, whether
or not pursuant to an Insolvency Proceeding, shall be distributed as follows: first to the respective First Priority Representatives
for application to the respective First Priority Obligations in accordance with the terms of the respective First Priority Documents
(and, if then in effect, the First Priority Pari Passu Intercreditor Agreement); provided that the aggregate principal amount
of First Priority Obligations constituting debt for borrowed money eligible for application under this clause “first”
shall not exceed the Maximum First Priority Obligations Amount (it being understood that the foregoing shall not limit the application
to First Priority Obligations constituting accrued and unpaid interest (including interest accruing at the default rate and any
Post-Petition Interest), premiums (including tender premiums and prepayment premiums), underwriting discounts, fees, commissions
and expenses (including original issue discount, upfront fees or initial yield payments), attorneys’ fees, costs, expenses
and indemnities), second, to the respective Second Priority Representatives for application to the respective Second Priority
Obligations in accordance with the terms of the respective Second Priority Documents (and, if then in effect, the Second Priority
Pari Passu Intercreditor Agreement); provided that the aggregate principal amount of Second Priority Obligations constituting
debt for borrowed money eligible for application under this clause “second” shall not exceed the Maximum Second Priority
Obligations Amount (it being understood that the foregoing shall not limit the application to Second Priority Obligations constituting
accrued and unpaid interest (including interest accruing at the default rate and any Post-Petition Interest), premiums (including
tender premiums and prepayment premiums), underwriting discounts, fees, commissions and expenses (including original issue discount,
upfront fees or initial yield payments), attorneys’ fees, costs, expenses and indemnities), third to the respective
First Priority Representatives for application to all remaining respective First Priority Obligations in accordance with the terms
of the respective First Priority Documents (and, if then in effect, the First Priority Pari Passu Intercreditor Agreement), until
the First Priority Obligations Payment Date has occurred and fourth, to the respective Second Priority Representatives for
application to all remaining respective Second Priority Obligations in accordance with the terms of the respective Second Priority
Documents (and, if then in effect, the Second Priority Pari Passu Intercreditor Agreement). Until the occurrence of the First Priority
Obligations Payment Date, any Common Collateral, including any such Common Collateral constituting proceeds, that may be received
by any Second Priority Secured Party in violation of this Agreement shall be segregated and held in trust and promptly paid over
to the Designated First Priority Representative, for the benefit of the First Priority Secured Parties, in the same form as received,
with any necessary endorsements, and each Second Priority Secured Party hereby authorizes the Designated First Priority Representative
to make any such endorsements as agent for the Second Priority Representative (which authorization, being coupled with an interest,
is irrevocable).
4.2 Releases
of Second Priority Lien. (a) Upon any release, sale or disposition of Common Collateral permitted pursuant to the terms
of the First Priority Documents that results in the release of the First Priority Lien on any Common Collateral (excluding
any sale or other disposition that is expressly prohibited by the Second Priority Agreement as in effect on the date hereof
(except to the extent more restrictive than the Second Priority Agreement) unless such sale or disposition is consummated (x)
in connection with an Enforcement Action or (y) after the institution of any Insolvency Proceeding), (i) the Second Priority
Lien on such Common Collateral (excluding any portion of the proceeds of such Common Collateral remaining after the First
Priority Obligations Payment Date occurs), (and in the case of any release, sale or disposition of all or substantially all
of the equity interests or assets of any Loan Party that has guaranteed any Second Priority Obligations, such Loan
Party’s liability in respect of the Second Priority Obligations) shall be automatically and unconditionally released to
the same extent as so released by the First Priority Secured Parties with no further consent or action of any Person, and
(ii) the Second Priority Creditors shall be deemed to have consented under the Second Priority Documents to such release,
sale or disposition of such Common Collateral (and in the case of any release, sale or disposition of all or substantially
all of the equity interests or assets of any Loan Party that has guaranteed any Second Priority Obligations, the release of
such Loan Party’s liability in respect of the Second Priority Obligations), and to have waived the provisions of the
Second Priority Documents to the extent necessary to permit such release, sale or disposition (and in the case of any
release, sale or disposition of all or substantially all of the equity interests or assets of any Loan Party that has
guaranteed any Second Priority Obligations, the release of such Loan Party’s liability in respect of the Second
Priority Obligations).
(b) Upon
delivery to each Second Priority Representative of a notice from the applicable First Priority Representative or the Borrower,
which notice states that any release of Liens securing or supporting any First Priority Obligations has become effective (or shall
become effective upon the satisfaction of any condition or occurrence of any event, including the release by each Second Priority
Representative), each Second Priority Representative shall, at the sole cost of the Borrower, promptly execute and deliver such
release documents and instruments and shall take such further actions as any First Priority Representative shall reasonably request
in writing to evidence any release of the Second Priority Lien or any release of the applicable Loan Party guarantor of the Second
Priority Obligations (which shall be subject to identical conditions or contingencies, if applicable), in each case as provided
in paragraph (a) of this Section 4.2. Each Second Priority Representative hereby appoints each First Priority Representative and
any officer or duly authorized person of the First Priority Representative, with full power of substitution, as its true and lawful
attorney-in-fact with full irrevocable power of attorney in the place and stead of the Second Priority Representative and
in the name of the Second Priority Representative or in such First Priority Representative’s own name, from time to time,
in such First Priority Representative’s sole discretion, for the purposes of carrying out the terms of this Section 4.2,
to take any and all appropriate action and to execute and deliver any and all documents and instruments as may be necessary or
desirable to accomplish the purposes of this Section 4.2, including any financing statements, endorsements, assignments, releases
or other documents or instruments of transfer (which appointment, being coupled with an interest, is irrevocable).
4.3 Inspection
Rights and Insurance. (a) Until the First Priority Obligations Payment Date has occurred, any First Priority Secured
Party and its representatives may at any time inspect, repossess, remove and otherwise deal with the Common Collateral to the
extent permitted in accordance with the terms of the First Priority Documents, and the First Priority Representative may
advertise and conduct public auctions or private sales of the Common Collateral, in each case without the involvement of or
interference by any Second Priority Secured Party or liability to any Second Priority Secured Party, but with a prior written
notice to the Designated Second Priority Representative.
(b) Proceeds
of Common Collateral include insurance proceeds in respect of such Common Collateral and therefore the lien priorities provided
in Section 2.1 shall govern the ultimate disposition of casualty insurance proceeds. The First Priority Representative and Second
Priority Representative are to be named as additional insureds and loss payees with respect to all insurance policies relating
to Common Collateral to the extent required in the First Priority Documents and the Second Priority Documents, as applicable. Until
the First Priority Obligations Payment Date has occurred, the Designated First Priority Representative shall have the sole and
exclusive right, as against the Second Priority Representative, to adjust or settle any insurance claims in the event of any covered
loss, theft or destruction of Common Collateral to the extent provided for, and in accordance with, the First Priority Agreements.
To the extent provided in the applicable First Priority Documents or Second Priority Documents, as the case may be, all proceeds
of such insurance shall be remitted to the Designated First Priority Representative or the Designated Second Priority Representative,
as the case may be, and each of the Second Priority Representatives and First Priority Representatives shall cooperate (if necessary)
in a reasonable manner in effecting the payment of insurance proceeds in accordance with Section 4.1.
SECTION 5. Insolvency
Proceedings.
5.1 Filing
of Motions. Until the First Priority Obligations Payment Date has occurred, each Second Priority Representative agrees on behalf
of itself and the other Second Priority Secured Parties represented by it that no Second Priority Secured Party shall, in or in
connection with any Insolvency Proceeding, file any pleadings or motions, take any position at any hearing or proceeding of any
nature, or otherwise take any action whatsoever, in each case that (a) violates, or is prohibited by, this Agreement, (b) asserts
any right, benefit or privilege that arises in favor of the Second Priority Secured Parties, in whole or in part, as a result of
their interest in the Common Collateral (unless the assertion of such right is expressly permitted by this Agreement) or (c) challenges
the validity, priority, enforceability or voidability of any Liens or claims held by any First Priority Representative or any other
First Priority Secured Party with respect to the Common Collateral, or the extent to which the First Priority Obligations constitute
secured claims or the value thereof under Section 506(a) of the Bankruptcy Code or otherwise; provided that the Second Priority
Representative may (i) file a proof of claim in an Insolvency Proceeding and (ii) file any necessary responsive or defensive pleadings
in opposition to any motion or other pleadings made by any Person objecting to or otherwise seeking the disallowance of any claims
of the Second Priority Secured Parties on the Common Collateral, subject to the limitations contained in this Agreement and only
if consistent with the terms and the limitations on the Second Priority Representative imposed hereby. Each First Priority Representative
agrees on behalf of itself and the other First Priority Secured Parties represented by it that no First Priority Secured Party
shall, in or in connection with any Insolvency Proceeding, file any pleadings or motions, take any position at any hearing or proceeding
of any nature, or otherwise take any action whatsoever, in each case that challenges the validity, priority, enforceability or
voidability of any Liens or claims held by any Second Priority Representative or any other Second Priority Secured Party, or the
extent to which the Second Priority Obligations constitute secured claims under Section 506(a) of the Bankruptcy Code or otherwise.
5.2 Financing
Matters. If any Loan Party becomes subject to any Insolvency Proceeding at any time prior to the First Priority Obligations
Payment Date, and if any First Priority Representative or the other First Priority Secured Parties desire to consent (or not object)
to the use of cash collateral under the Bankruptcy Code or to provide financing to any Loan Party under the Bankruptcy Code or
to consent (or not object) to the provision of such financing to any Loan Party by any third party (any such financing, “DIP
Financing”), then each Second Priority Representative agrees, on behalf of itself and the other Second Priority Secured
Parties represented by it, that each Second Priority Secured Party (a) will be deemed to have consented to, will raise no objection
to, nor support any other Person objecting to, the use of such cash collateral or to such DIP Financing, (b) will not request or
accept adequate protection or any other relief in connection with the use of such cash collateral or such DIP Financing except
as set forth in Section 5.4 below, (c) will subordinate (and will be deemed hereunder to have subordinated) the Second Priority
Liens (i) to such DIP Financing on the same terms as the First Priority Liens are subordinated thereto (and such subordination
will not alter in any manner the terms of this Agreement), (ii) to any adequate protection provided to the First Priority Secured
Parties and (iii) to any “carve-out” agreed to by the First Priority Representative or the other First Priority
Secured Parties, and (d) agrees that notice received two calendar days prior to the entry of an order approving such usage of cash
collateral or approving such financing shall be adequate notice and that notice received 15 calendar days prior to a hearing to
approve DIP Financing or use of cash collateral on a final basis shall be adequate; provided that (i) the Second Priority
Representative retains the right to object to any ancillary agreements or arrangements regarding the cash collateral use or the
DIP Financing that are materially prejudicial to their interests and (ii) (A) the DIP Financing does not compel the Borrower to
seek confirmation of a specific plan of reorganization for which all or substantially all of the material terms are set forth in
the DIP Financing documentation or a related document or (B) the DIP Financing documentation or cash collateral order does not
expressly require the sale or other liquidation of the Common Collateral prior to a default under the DIP Financing documentation
or cash collateral order.
No Second Priority
Creditor may propose or provide any DIP Financing which (i) rolls-up or otherwise includes or refinances all or any portion
of any pre-petition Second Priority Obligations, (ii) compels the Borrower to seek confirmation of a specific plan of reorganization
for which all or substantially all of the material terms are set forth in the DIP Financing documentation or a related document,
(iii) expressly requires the sale or other liquidation of the Common Collateral prior to a default under such DIP Financing documentation
or (iv) is otherwise inconsistent with any provision of this Agreement.
5.3 Relief
From the Automatic Stay. Each Second Priority Representative agrees, on behalf of itself and the other Second Priority Secured
Parties represented by it, that none of them will seek relief from the automatic stay or from any other stay in any Insolvency
Proceeding or take any action in derogation thereof, in each case in respect of any Common Collateral, without the prior written
consent of each First Priority Representative unless each First Priority Representative have concurrently sought relief from the
automatic stay or from any other stay in any Insolvency Proceeding and the Second Priority Representative and/or the other Second
Priority Secured Parties are not seeking relief from the automatic stay or from any other stay in any Insolvency Proceeding in
order to take any Enforcement Action in any manner in violation of or otherwise inconsistent with the provisions of this Agreement.
5.4 Adequate
Protection. Each Second Priority Representative, on behalf of itself and the other Second Priority Secured Parties
represented by it, agrees that, prior to the First Priority Obligations Payment Date, none of them shall object, contest, or
support any other Person objecting to or contesting, (a) any request by any First Priority Representative or the other First
Priority Secured Parties for adequate protection of its interest in the Common Collateral or any adequate protection provided
to such First Priority Representative or the other First Priority Secured Parties, (b) any objection by any First Priority
Representative or any other First Priority Secured Parties to any motion, relief, action or proceeding based on a claim of a
lack of adequate protection in the Common Collateral or (c) the payment of interest, fees, expenses or other amounts to any
First Priority Representative or any other First Priority Secured Party under Section 506(b) or 506(c) of the Bankruptcy Code
or otherwise. Each Second Priority Representative, on behalf of itself and the other Second Priority Secured Parties
represented by it, further agrees that, prior to the First Priority Obligations Payment Date, none of them shall assert or
enforce any claim under Section 506(b) or 506(c) of the Bankruptcy Code or otherwise that is senior to or on a parity with
the First Priority Liens for costs or expenses of preserving or disposing of any Common Collateral. Notwithstanding anything
to the contrary set forth in this Section and in Section 5.2(c)(ii), but subject to all other provisions of this Agreement
(including Section 5.2(c)(i) and Section 5.3), in any Insolvency Proceeding, (i) if the First Priority Secured Parties (or
any subset thereof) are granted adequate protection consisting of additional collateral (with replacement Liens on such
additional collateral) and/or superpriority claims in connection with any DIP Financing or use of cash collateral with
respect to the Common Collateral, and the Second Priority Secured Parties do not object to the adequate protection being
provided to the First Priority Secured Parties, then in connection with any such DIP Financing or use of cash collateral each
Second Priority Representative, on behalf of itself and any of the Second Priority Secured Parties, may, as adequate
protection of their interests in the Common Collateral, seek or accept (and the First Priority Representative and the First
Priority Secured Parties shall not object to) adequate protection consisting solely of (x) a replacement Lien on the same
additional collateral, subordinated to the Liens securing the First Priority Obligations and such DIP Financing on the same
basis as the other Second Priority Liens on the Common Collateral are so subordinated to the First Priority Obligations under
this Agreement and/or (y) superpriority claims junior in all respects to the superpriority claims granted to the First
Priority Secured Parties; provided, however, that the inability of the Second Priority Secured Parties to receive any
such junior replacement Lien or junior superpriority claims shall not affect the agreements and waivers set forth in this
Section 5.4; provided, further, that each Second Priority Representative shall have irrevocably agreed, pursuant to
Section 1129(a)(9) of the Bankruptcy Code, on behalf of itself and the Second Priority Secured Parties represented by it, in
any stipulation and/or order granting such adequate protection, that such junior superpriority claims may be paid under any
plan of reorganization in any combination of cash, debt, equity or other property having a value on the effective date of
such plan equal to the allowed amount of such claims; (ii) if the First Priority Secured Parties are granted, as adequate
protection or otherwise, post-petition interest (in an amount that is equal to or exceeds the pre-default rate) and
reasonable fees and expenses of counsel and financial advisors and consultants of any First Priority Representative, then
each Second Priority Representative, on behalf of itself and any of the Second Priority Secured Parties represented by it,
may seek or accept, whether as adequate protection or otherwise, and the First Priority Secured Parties shall consent to, and
shall not object, contest or support any other Person objecting to or contesting, (x) the payment of post-petition
interest (in an amount that is equal to or exceeds the pre-default rate) and (y) the reasonable fees and expenses of
counsel and financial advisors and consultants for the Second Priority Representative; (iii) if the First Priority Secured
Parties (or any subset thereof) are granted any other adequate protection not described in clauses (i) or (ii) above, then
each Second Priority Representative, on behalf of itself and any of the Second Priority Secured Parties represented by it,
may seek or accept, and the First Priority Secured Parties shall consent to and not object, contest or support any other
Person objecting to or contesting, the same adequate protection (which, if applicable, shall be junior in all respects to
such adequate protection granted to the First Priority Secured Parties); provided, however, in the event any Second
Priority Representative, on behalf of itself and the Second Priority Secured Parties represented by it, seeks or accepts
adequate protection in accordance with clause (i) above and such adequate protection is granted in the form of additional
collateral, then such Second Priority Representative, on behalf of itself or any of the Second Priority Secured Parties
represented by it, agrees that each First Priority Representative shall also be granted a senior Lien on such additional
collateral as security for the applicable First Priority Obligations and any such DIP Financing and that any Lien on such
additional collateral securing the Second Priority Obligations shall be subordinated to the Liens on such collateral securing
the First Priority Obligations and any such DIP Financing (and all Obligations relating thereto) and any other Liens granted
to the First Priority Secured Parties as adequate protection, with such subordination to be on the same terms that the other
Liens securing the Second Priority Obligations are subordinated to such First Priority Obligations under this Agreement. Each
Second Priority Representative, on behalf of itself and the other Second Priority Secured Parties represented by it, agrees
that except as expressly set forth in this Section none of them shall seek or accept adequate protection with respect to
their interests in the Common Collateral or any payments of post-petition interest, expenses or other amounts in respect
of the Second Priority Obligations, in each case, without the prior written consent of the Designated First Priority
Representative. None of the Second Priority Representatives or Second Priority Secured Parties shall oppose or seek to
challenge any claim by any First Priority Representative or any other First Priority Secured Party for allowance in any
Insolvency Proceeding of First Lien Obligations consisting of Post-Petition Interest to the extent of the value of the
Lien of the First Priority Representatives on behalf of the First Priority Secured Parties on the Common Collateral or any
other First Priority Secured Party’s Lien on the Common Collateral, without regard to the existence of the Liens of the
Second Priority Representatives or the other Second Priority Secured Parties on the Common Collateral. None of the First
Priority Representatives or First Priority Secured Parties shall oppose or seek to challenge any claim by any Second Priority
Representative or any other Second Priority Secured Party for allowance in any Insolvency Proceeding of Second Lien
Obligations consisting of Post-Petition Interest to the extent of the value of the Lien of the Second Priority
Representatives on behalf of the Second Priority Secured Parties on the Common Collateral or any other Second Priority
Secured Party’s Lien on the Common Collateral, after taking into account the First Priority Obligations.
5.5 Avoidance
Issues. If any First Priority Secured Party is required in any Insolvency Proceeding or otherwise to disgorge, turn over
or otherwise pay to the estate of any Loan Party any amount (a “Recovery”), whether received as proceeds
of security, enforcement of any right of set-off or otherwise, because such amount was avoided or ordered to be paid or
disgorged for any reason, including because it was found to be a fraudulent or preferential transfer, then the First Priority
Obligations shall be reinstated to the extent of such Recovery and deemed to be outstanding as if such payment had not
occurred and the First Priority Obligations Payment Date shall be deemed not to have occurred. If this Agreement shall have
been terminated prior to such Recovery, this Agreement shall be reinstated in full force and effect, and such prior
termination shall not diminish, release, discharge, impair or otherwise affect the obligations of the parties hereto. Each
Second Priority Representative, on behalf of itself and each of the other Second Priority Secured Parties represented by it,
agrees that none of them shall be entitled to benefit from any avoidance action affecting or otherwise relating to any
distribution or allocation made in accordance with this Agreement, whether by preference or otherwise, it being understood
and agreed that the benefit of such avoidance action otherwise allocable to them shall instead be allocated and turned over
for application in accordance with the priorities set forth in this Agreement.
5.6 Asset
Dispositions in an Insolvency Proceeding. In an Insolvency Proceeding, neither the Second Priority Representative nor any other
Second Priority Secured Party shall oppose any sale or disposition of any assets of any Loan Party that is supported by any First
Priority Representative and the Second Priority Representative and each other Second Priority Secured Party will be deemed to have
consented under Section 363 of the Bankruptcy Code (and otherwise) to any sale or disposition supported by the First Priority Secured
Parties and to have released their Liens on such assets.
5.7 Separate
Grants of Security and Separate Classification. Each Secured Party acknowledges and agrees that (a) the grants of Liens pursuant
to the First Priority Collateral Documents and the Second Priority Collateral Documents constitute separate and distinct grants
of Liens and (b) because of, among other things, their differing rights in the Common Collateral, the First Priority Obligations
and the Second Priority Obligations are fundamentally different from each other and must be separately classified in any plan of
reorganization proposed or adopted in an Insolvency Proceeding. To further effectuate the intent of the parties as provided in
the immediately preceding sentence, if it is held that the claims of the First Priority Secured Parties and Second Priority Secured
Parties in respect of the Common Collateral constitute only one secured claim (rather than separate classes of senior and junior
secured claims), then each Second Priority Representative, on behalf of itself and the other Second Priority Secured Parties represented
by it, hereby acknowledges and agrees that all distributions shall be made as if there were separate classes of senior and junior
secured claims against the Loan Parties in respect of the Common Collateral, with the effect being that, to the extent that the
aggregate value of the Common Collateral is sufficient (for this purpose ignoring all claims held by the Second Priority Secured
Parties), the First Priority Secured Parties shall be entitled to receive, in addition to amounts distributed to them in respect
of principal, pre-petition interest and other claims, all amounts owing in respect of Post-Petition Interest before any distribution
is made in respect of the claims held by the Second Priority Secured Parties. Each Second Priority Representative, on behalf of
itself and the other Second Priority Secured Parties represented by it, hereby acknowledges and agrees to turn over to the Designated
First Priority Representative amounts otherwise received or receivable by them to the extent necessary to effectuate the intent
of the preceding sentence, even if such turnover has the effect of reducing the claim or recovery of the Second Priority Secured
Parties.
5.8 No
Waivers of Rights of First Priority Secured Parties. Nothing contained herein shall prohibit or in any way limit any
First Priority Representative or any other First Priority Secured Party from objecting in any Insolvency Proceeding or
otherwise to any action taken by any Second Priority Secured Party not expressly permitted hereunder, including the seeking
by any Second Priority Secured Party of adequate protection (except as provided in Section 5.4).
5.9 Other
Matters. To the extent that any Second Priority Representative or any Second Priority Secured Party has or acquires rights
under Section 363 or Section 364 of the Bankruptcy Code with respect to any of the Common Collateral, the Second Priority Representative
agrees, on behalf of itself and the other Second Priority Secured Parties not to assert any of such rights without the prior written
consent of the Designated First Priority Representative unless expressly permitted to do so hereunder.
5.10 Effectiveness
in Insolvency Proceedings. This Agreement, which the parties hereto expressly acknowledge is a “subordination agreement”
under section 510(a) of the Bankruptcy Code, shall be effective before, during and after the commencement of an Insolvency Proceeding.
5.11 Reorganization
Securities. If, in any Insolvency Proceeding, debt obligations of the reorganized debtor secured by Liens upon any property
of the reorganized debtor are distributed pursuant to a plan of reorganization or similar dispositive restructuring plan, both
on account of First Priority Obligations and on account of Second Priority Obligations, then, to the extent the debt obligations
distributed on account of the First Priority Obligations and on account of the Second Priority Obligations are secured by Liens
upon the same property, the provisions of this Agreement will survive the distribution of such debt obligations pursuant to such
plan and will apply with like effect to the Liens securing such debt obligations, provided that this provision shall not
affect the relative rankings of the First Priority Obligations and the Second Priority Obligations in such Insolvency Proceeding.
SECTION 6. Security
Documents.
(a) Each
Loan Party and each Second Priority Representative, on behalf of itself and the Second Priority Secured Parties represented by
it, agrees that it shall not at any time execute or deliver any amendment or other modification to any of the Second Priority Documents
in violation of this Agreement.
(b) Each
Loan Party and the First Priority Representative, on behalf of itself and the First Priority Secured Parties represented by it,
agrees that it shall not at any time execute or deliver any amendment or other modification to any of the First Priority Documents
in violation of this Agreement.
(c) In
the event any First Priority Representative enters into any amendment, waiver or consent in respect of any of its First
Priority Collateral Documents for the purpose of adding to, or deleting from, or waiving or consenting to any departures from
any provisions of, any First Priority Collateral Document or changing in any manner the rights of any parties thereunder, in
each case solely with respect to any Common Collateral, then such amendment, waiver or consent shall apply automatically to
any comparable provision of the Comparable Second Priority Collateral Document without the consent of or action by any Second
Priority Secured Party (with all such amendments, waivers and modifications subject to the terms hereof); provided
that (i) no such amendment, waiver or consent shall have the effect of releasing assets subject to the Lien of any Second
Priority Collateral Document, except to the extent that a release of such Lien is permitted or required by Section 4.2, (ii)
any such amendment, waiver or consent that materially and adversely affects the rights of the Second Priority Secured Parties
and does not affect the First Priority Secured Parties in a like or similar manner shall not apply to the Second Priority
Collateral Documents without the consent of the Second Priority Representative, (iii) no such amendment, waiver or consent
with respect to any provision applicable to the rights, interests or obligations of the Second Priority Representative under
the Second Priority Documents shall be made without the prior written consent of such Second Priority Representative and (iv)
notice of such amendment, waiver or consent shall be given to the Second Priority Representative no later than ten Business
Days after its effectiveness, provided that the failure to give such notice shall not affect the effectiveness and
validity thereof.
SECTION 7. Reliance;
Waivers; etc.
7.1 Reliance.
All extensions of credit under the First Priority Documents made after the date hereof are deemed to have been made or incurred,
in reliance upon this Agreement. Each Second Priority Representative, on behalf of itself and the Second Priority Secured Parties
represented by it, expressly waives all notice of the acceptance of and reliance on this Agreement by the First Priority Secured
Parties. The Second Priority Documents are deemed to have been executed and delivered and all extensions of credit thereunder are
deemed to have been made or incurred, in reliance upon this Agreement. Each First Priority Representative, on behalf of itself
and the other First Priority Secured Parties represented by it, expressly waives all notices of the acceptance of and reliance
on this Agreement by the Second Priority Representative and the other Second Priority Secured Parties.
7.2 No
Warranties or Liability. Each Second Priority Representative and the each First Priority Representative acknowledges and agrees
that it has not made any representation or warranty with respect to the execution, validity, legality, completeness, collectability
or enforceability of any First Priority Document or any Second Priority Document. Except as otherwise provided in this Agreement
(and except as separately agreed among the First Priority Representatives in the First Priority Pari Passu Intercreditor Agreement
or as separately agreed among the Second Priority Representatives in the Second Priority Pari Passu Intercreditor Agreement), each
Second Priority Representative and each First Priority Representative will be entitled to manage and supervise their respective
extensions of credit to any Loan Party in accordance with law and their usual practices, modified from time to time as they deem
appropriate.
7.3 No
Waivers. No right or benefit of any party hereunder shall at any time in any way be prejudiced or impaired by any act or failure
to act on the part of such party or any other party hereto or by any noncompliance by any Loan Party with the terms and conditions
of any of the First Priority Documents or the Second Priority Documents.
SECTION 8. Obligations
Unconditional.
8.1 First
Priority Obligations Unconditional. All rights and interests of the First Priority Secured Parties hereunder, and all agreements
and obligations of the Second Priority Secured Parties (and, to the extent applicable, the Loan Parties) hereunder, shall remain
in full force and effect irrespective of:
(a) any
lack of validity or enforceability of any First Priority Document;
(b) any
change in the time, place or manner of payment of, or in any other term of, all or any portion of the First Priority Obligations,
or any amendment, waiver or other modification, whether by course of conduct or otherwise, or any refinancing, replacement, refunding
or restatement of any First Priority Document;
(c) prior
to the First Priority Obligations Payment Date, any exchange, release, voiding, avoidance or non-perfection of any security
interest in any Common Collateral or any other collateral, or any release, amendment, waiver or other modification, whether by
course of conduct or otherwise, or any refinancing, replacement, refunding or restatement of all or any portion of the First Priority
Obligations or any guarantee or guaranty thereof; or
(d) any
other circumstances that otherwise might constitute a defense available to, or a discharge of, any Loan Party in respect of the
First Priority Obligations, or of any of the Second Priority Representative or any other Second Priority Secured Party, or any
Loan Party, to the extent applicable, in respect of this Agreement (other than the occurrence of the First Priority Obligations
Payment Date).
8.2 Second
Priority Obligations Unconditional. All rights and interests of the Second Priority Secured Parties hereunder, and all agreements
and obligations of the First Priority Secured Parties (and, to the extent applicable, the Loan Parties) hereunder, shall remain
in full force and effect irrespective of:
(a) any
lack of validity or enforceability of any Second Priority Document;
(b) any
change in the time, place or manner of payment of, or in any other term of, all or any portion of the Second Priority Obligations,
or any amendment, waiver or other modification, whether by course of conduct or otherwise, or any refinancing, replacement, refunding
or restatement of any Second Priority Document;
(c) any
exchange, release, voiding, avoidance or non-perfection of any security interest in any Common Collateral or any other collateral,
or any release, amendment, waiver or other modification, whether by course of conduct or otherwise, or any refinancing, replacement,
refunding or restatement of all or any portion of the Second Priority Obligations or any guarantee or guaranty thereof; or
(d) any
other circumstances that otherwise might constitute a defense available to, or a discharge of, any Loan Party in respect of the
Second Priority Obligations or any First Priority Secured Party in respect of this Agreement other than payment in full of the
Second Priority Obligations.
SECTION 9. Miscellaneous.
9.1 Conflicts.
In the event of any conflict between the provisions of this Agreement and the provisions of any First Priority Document or
any Second Priority Document, the provisions of this Agreement shall govern. Notwithstanding the foregoing, the parties
hereto acknowledge that the terms of this Agreement are not intended to and shall not, as between the Loan Parties and the
Secured Parties, negate, impair, waive or cancel any rights granted to, or create any liability or obligation of, any Loan
Party in the First Priority Documents and the Second Priority Documents or impose any additional obligations on the Loan
Parties (other than as expressly set forth herein). Notwithstanding the foregoing, solely as among the First Priority
Representatives and First Priority Secured Parties, in the event of any conflict between this Agreement and the First
Priority Pari Passu Intercreditor Agreement, the provisions of the First Priority Pari Passu Intercreditor Agreement shall
govern and control. Notwithstanding the foregoing, solely as among the Second Priority Representatives and Second Priority
Secured Parties, in the event of any conflict between this Agreement and the Second Priority Pari Passu Intercreditor
Agreement, the provisions of the Second Priority Pari Passu Intercreditor Agreement shall govern and control. Notwithstanding
the foregoing, solely in respect of the relative rights between the ABL Secured Parties on the one hand and the First
Priority Secured Parties and Second Priority Secured Parties, collectively, on the other hand, and not to any rights or
obligations between the First Priority Secured Parties and the Second Priority Secured Parties, in the event of any conflict
between this Agreement and the ABL Intercreditor Agreement, the provisions of the ABL Intercreditor Agreement shall
govern.
9.2 Continuing
Nature of Provisions. This Agreement shall continue to be effective, and shall not be revocable by any party hereto, until
the First Priority Obligation Payment Date shall have occurred subject to the reinstatement as expressly set forth herein. This
is a continuing agreement and the First Priority Secured Parties and the Second Priority Secured Parties may continue, at any time
and without notice to the other parties hereto, to extend credit and other financial accommodations, lend monies and provide indebtedness
to, or for the benefit of, Borrower or any other Loan Party on the faith hereof.
9.3 Amendments;
Waivers. (a) No amendment or modification of any of the provisions of this Agreement shall be effective unless the same shall
be in writing and signed by (i) each First Priority Representative (in accordance with the applicable First Priority Agreement)
and each Second Priority Representative (in accordance with the applicable Second Priority Agreement) with respect to any amendment
or modification, and (ii) the Loan Parties, solely with respect to (x) any amendments or modifications of Sections 3.6, 5.2, 5.4,
5.10, 6(a), 6(b), 6(c), 9.1, 9.2, 9.3, 9.4, 9.5, 9.6, 9.7, 9.8, 9.9, 9.10, 9.11, 9.12, 9.13, 9.14 or 9.15, or (y) any amendments
or modifications that (I) adversely affect any obligation or right of the Loan Parties hereunder or under the First Priority Documents
or the Second Priority Documents or that would impose any additional obligations on the Loan Parties or (II) change the rights
of the Loan Parties to refinance the First Priority Obligations or the Second Priority Obligations. In addition, each waiver, if
any, with respect to any aspect of this Agreement shall be a waiver only with respect to the specific instance involved and shall
in no way impair the rights of the parties making such waiver or the obligations of the other parties to such party in any other
respect or at any other time.
9.4 Additional
Debt Facilities.
(a) To
the extent, but only to the extent, permitted by the provisions of each then extant First Priority Agreement and Second
Priority Agreement (including, in each case, pursuant to any consent or waiver thereto or thereunder), the Borrower may incur
or issue and sell one or more series or classes of Indebtedness that the Borrower designates as Additional First Priority
Debt (“Additional First Priority Debt”) and/or one or more series or classes of Indebtedness that the Borrower
designates as Additional Second Priority Debt (“Additional Second Priority Debt” and, together with Additional
First Priority Debt, “Additional Debt”).
Any such series or
class of Additional First Priority Debt may be secured by a first-priority, senior Lien on the Common Collateral, in each case
under and pursuant to the First Priority Collateral Documents for such Series of Additional First Priority Debt, if and subject
to the condition that, unless such Indebtedness is part of an existing Series of Additional First Priority Debt represented by
a First Priority Representative already party to this Agreement and the First Priority Pari Passu Intercreditor Agreement, the
Additional First Priority Representative with respect to any such Additional First Priority Debt becomes a party to this Agreement
and the First Priority Pari Passu Intercreditor Agreement by satisfying the conditions set forth in this Section 9.4. Upon any
Additional First Priority Representative so becoming a party hereto and becoming a party to the First Priority Pari Passu Intercreditor
Agreement in accordance with the terms thereof, all First Priority Obligations of such Series shall also be entitled to be so secured
by a senior Lien on the Common Collateral in accordance with the terms hereof and thereof.
Any such series or
class of Additional Second Priority Debt may be secured by a junior-priority, subordinated Lien on the Common Collateral, in
each case under and pursuant to the relevant Second Priority Collateral Documents for such Series of Additional Second Priority
Debt, if and subject to the condition, unless such Indebtedness is part of an existing Series of Additional Second Priority Debt
represented by a Second Priority Representative already party to this Agreement and the Second Priority Pari Passu Intercreditor
Agreement, the Additional Second Priority Representative with respect to any such Additional Second Priority Debt becomes a party
to this Agreement and the Second Priority Pari Passu Intercreditor Agreement by satisfying the conditions set forth in this Section
9.4. Upon any Additional Second Priority Representative so becoming a party hereto and becoming a party to the Second Priority
Pari Passu Intercreditor Agreement in accordance with the terms thereof, all Second Priority Obligations of such Series shall also
be entitled to be so secured by a subordinated Lien on the Common Collateral in accordance with the terms hereof and thereof.
(b) In
order for an Additional Representative to become a party to this Agreement:
(i) such
Additional Representative shall have executed and delivered to each other then-existing First Priority Representative and Second
Priority Representative a Joinder Agreement substantially in the form of Exhibit A hereto (with such changes as may be reasonably
approved by the Designated First Priority Representative and such Additional Representative) pursuant to which such Additional
Representative becomes an Additional First Priority Representative or Additional Second Priority Representative hereunder and the
related First Priority Secured Parties or Second Priority Secured Parties, as applicable, become subject hereto and bound hereby;
(ii) the
Borrower shall have delivered a designation to each other then-existing First Priority Representative and Second Priority
Representative substantially in the form of Exhibit B hereto, pursuant to which an officer of the Borrower shall (A) identify
the Indebtedness to be designated as Additional First Priority Debt or Additional Second Priority Debt, as applicable, and
the initial aggregate principal amount of such Indebtedness, (B) identify the Additional First Priority Agreement or
Additional Second Priority Agreement as applicable, (C) specify the name and address of the applicable Additional
Representative, (D) certify that such Additional Debt, is permitted to be incurred, secured and guaranteed by each then
extant First Priority Agreement and Second Priority Agreement and (D) attach to such designation true and complete copies of
each of the First Priority Agreement or Second Priority Agreement, as applicable, relating to such Additional First Priority
Debt or Additional Second Priority Debt, as applicable.
(iii) Upon
the execution and delivery of a Joinder Agreement by an Additional First Priority Representative or an Additional Second Priority
Representative, as the case may be, in each case in accordance with this Section 9.4, each other First Priority Representative
and Second Priority Representative shall acknowledge receipt thereof by countersigning a copy thereof and returning the same to
such Additional Representative; provided that the failure of any First Priority Representative or Second Priority Representative
to so acknowledge or return the same shall not affect the status of such Additional Debt as Additional First Priority Debt or Additional
Second Priority Debt, as the case may be, if the other requirements of this Section 9.4 are complied with.
(c) With
respect to any incurrence, issuance or sale of Indebtedness after the date hereof under any Additional First Priority Agreement
or Additional Second Priority Agreement, in each case, of a Series of Additional First Priority Debt or Series of Additional Second
Priority Debt whose Representative is already a party to each of this Agreement and the First Priority Pari Passu Intercreditor
Agreement or Second Priority Pari Passu Intercreditor Agreement, as applicable, the requirements of Section 9.4 shall not be applicable
and such Indebtedness shall automatically constitute Additional First Priority Debt or Additional Second Priority Debt so long
as such Indebtedness is permitted to be incurred, secured and guaranteed by each First Priority Agreement and Second Priority Agreement.
9.5 Information
Concerning Financial Condition of the Borrower and the Loan Parties. Neither any Second Priority Representative nor any First
Priority Representative hereby assumes responsibility for keeping each other informed of the financial condition of the Borrower
and of any of the Loan Parties and all other circumstances bearing upon the risk of nonpayment of the First Priority Obligations
or the Second Priority Obligations. Each Second Priority Representative and each First Priority Representative hereby agree that
no party shall have any duty to advise any other party of information known to it regarding such condition or any such circumstances.
In the event any Second Priority Representative or any First Priority Representative, in its sole discretion, undertakes at any
time or from time to time to provide any information to any other party to this Agreement, it shall be under no obligation (a)
to provide or update any such information to such other party or any other party on any subsequent occasion, (b) to undertake any
investigation not a part of its regular business routine, or (c) to disclose any other information. Neither any First Priority
Representative nor any Second Priority Representative shall have any responsibility to monitor or verify the financial condition
of the Borrower or of any of the Loan Parties.
9.6 Refinancings.
The First Priority Obligations and the Second Priority Obligations may be Refinanced, in whole or in part, in each case,
without notice to, or the consent (except to the extent a consent is otherwise required to permit the refinancing transaction
under any First Priority Agreement or any Second Priority Agreement) of, any First Priority Representative or Second Priority
Representative or any Secured Party, all without affecting the Lien priorities provided for herein or the other provisions
hereof; provided, that (i) such Refinancing is permitted pursuant to the terms of each then extant First Priority
Agreement and Second Priority Agreement and (ii) the Representative for the holders of obligations in respect of such
Refinancing shall have become party to this Agreement pursuant to, and by satisfying the conditions set forth in, Section 9.4
hereof.
9.7 Governing
Law. THIS AGREEMENT AND ANY CLAIMS, CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE)
BASED UPON, ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
9.8 Submission
to Jurisdiction. (a) Each First Priority Representative, on behalf of itself and the other First Priority Secured Parties represented
by it, and each Second Priority Representative, on behalf of itself and the other Second Priority Secured Parties represented by
it, and the Loan Parties hereby agree that each First Priority Secured Party, each Second Priority Secured Party and each Loan
Party shall irrevocably and unconditionally submit, for itself and its property, to the exclusive general jurisdiction of the Supreme
Court of the State of New York and of the United States District Court of the Southern District of New York, sitting in the Borough
of Manhattan in the City of New York, and any appellate court from any thereof (except that, (x) in the case of any Mortgage or
other Security Document, proceedings may also be brought by the applicable First Priority Representative or Second Priority Representative
in the state in which the respective mortgaged property or Common Collateral is located or any other relevant jurisdiction and
(y) in the case of any Insolvency Proceedings with respect to any Loan Party, actions or proceedings related to this Agreement
and the other First Priority Documents or Second Priority Documents may be brought in such court holding such Insolvency Proceedings),
in any action or proceeding arising out of or relating to this Agreement, or for recognition or enforcement of any judgment with
respect to this Agreement, and each First Priority Representative, on behalf of itself and the other First Priority Secured Parties
represented by it, and each Second Priority Representative, on behalf of itself and the other Second Priority Secured Parties represented
by it, and the Loan Parties hereby irrevocably and unconditionally agree that all of their respective claims in respect of any
such action or proceeding may be heard and determined in such New York State court or, to the extent permitted by law, in such
Federal court. Each First Priority Representative, on behalf of itself and the other First Priority Secured Parties represented
by it, and each Second Priority Representative, on behalf of itself and the other Second Priority Secured Parties represented by
it, and the Loan Parties hereby further agree 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 applicable law.
(b) Each
First Priority Representative, on behalf of itself and the other First Priority Secured Parties represented by it, each Second
Priority Representative, on behalf of itself and the other Second Priority Secured Parties represented by it, and the Loan Parties
hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so (i) any objection it
may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement
in any court referred to in the first sentence of paragraph (a) of this Section and (ii) the defense of an inconvenient forum to
the maintenance of such action or proceeding in any such court.
(c) Each
First Priority Representative, on behalf of itself and the other First Priority Secured Parties represented by it, each Second
Priority Representative, on behalf of itself and the other Second Priority Secured Parties represented by it, and the Loan Parties
hereby irrevocably consents to service of process in the manner provided for notices (other than facsimile or email) in Section
9.9. Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted
by applicable law.
9.9 Notices.
(a) Unless
otherwise specifically provided herein, all notices and other communications given to any party hereto in accordance with the provisions
of this Agreement shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered
mail or sent by facsimile or email.
(b) All
such notices and other communications (i) sent by hand or overnight courier service, or mailed by certified or registered mail,
shall be deemed to have been given when delivered in person or by courier service and signed for against receipt thereof or three
Business Days after dispatch if sent by certified or registered mail, in each case, delivered, sent or mailed (properly addressed)
to the relevant party as provided in this Section 9.9 or in accordance with the latest unrevoked direction from such party given
in accordance with this Section 9.9 or (ii) sent by facsimile shall be deemed to have been given when sent and when receipt has
been confirmed by telephone; provided that received notices and other communications sent by telecopier shall be deemed
to have been given when sent (except that, if not given during normal business hours for the recipient, such notices or other communications
shall be deemed to have been given at the opening of business on the next Business Day for the recipient). Notices and other communications
delivered through electronic communications to the extent provided in clause (c) below shall be effective as provided in such clause
(c).
(c) Notices
and other communications hereunder may be delivered or furnished by electronic communications (including e-mail and Internet
or Intranet websites) pursuant to procedures set forth herein or otherwise approved by the parties hereto. Each party hereto may,
in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures
set forth herein or otherwise approved by it; provided that approval of such procedures may be limited to particular notices
or communications. All such notices and other communications (i) sent to an e-mail address shall be deemed received upon the
sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested”
function, as available, return e-mail or other written acknowledgement); provided that if not given during the normal
business hours of the recipient, such notice or communication shall be deemed to have been given at the opening of business on
the next Business Day for the recipient, and (ii) posted to an Internet or Intranet website shall be deemed received upon the deemed
receipt by the intended recipient at its e-mail address as described in the foregoing clause (b)(i) of notification that such
notice or communication is available and identifying the website address therefor.
(d) For
the purposes hereof, the addresses of the parties hereto (until notice of a change thereof is delivered as provided in this
Section) shall be as set forth below each party’s name on the signature pages hereof, or, as to each party, at such
other address as may be designated by such party in a written notice to all of the other parties.
9.10 Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of each of the parties hereto and each of the First
Priority Secured Parties and Second Priority Secured Parties and their respective successors and permitted assigns, and nothing
herein is intended, or shall be construed to give, any other Person any right, remedy or claim under, to or in respect of this
Agreement or any Common Collateral.
9.11 Headings.
Section headings used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction
of, or be taken into consideration in interpreting, this Agreement.
9.12 Severability.
To the extent permitted by law, any provision of this Agreement that is held to be invalid, illegal or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting
the validity, legality and enforceability of the remaining provisions hereof, and the invalidity of a particular provision in a
particular jurisdiction shall not invalidate such provision in any other jurisdiction.
9.13 Counterparts;
Integration; Effectiveness. This Agreement may be executed by one or more of the parties to this Agreement on any number of
separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. Delivery
of an executed signature page of this Agreement by e-mail or facsimile transmission shall be effective as delivery of a manually
executed counterpart hereof. A set of the copies of this Agreement signed by all the parties shall be lodged with the Borrower,
each First Priority Representative and each Second Priority Representative. This Agreement shall become effective when it shall
have been executed by each party hereto.
9.14 WAIVER
OF JURY TRIAL. EACH FIRST PRIORITY REPRESENTATIVE, ON BEHALF OF ITSELF AND THE OTHER FIRST PRIORITY SECURED PARTIES REPRESENTED
BY IT, EACH SECOND PRIORITY REPRESENTATIVE, ON BEHALF OF ITSELF AND THE OTHER SECOND PRIORITY SECURED PARTIES REPRESENTED BY IT,
THE LOAN PARTIES, AND EACH OTHER PARTY HERETO, HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY SUIT, ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY) DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS
IN THIS SECTION 9.14.
9.15 Additional
Loan Parties. Each Person that becomes a Loan Party after the date hereof shall become a party to this Agreement upon execution
and delivery by such Person of an Assumption Agreement in the form of Exhibit C hereto.
[Remainder of page intentionally left
blank]
IN WITNESS WHEREOF,
the parties hereto have executed this Agreement as of the date first written above.
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BANK
OF AMERICA, N.A., as Existing First Priority Representative for and on behalf of the Existing First Priority Secured Creditors
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By:
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Name:
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Title:
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Address
for Notices:
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Attention
of Account Officer - Hayward Industries
Address: 135 S. LaSalle Street,
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Mail
Code: IL4-135-09-61
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Fax
No. 877.206.8413
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Tel.
No. 312.828.1846
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BANK
OF AMERICA, N.A., as Existing Second Priority Representative for and on behalf of the Existing Second Priority Secured
Creditors
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By:
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Name:
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Title:
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Address
for Notices:
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Attention
of Account Officer - Hayward Industries
Address: 135 S. LaSalle Street,
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Mail
Code: IL4-135-09-61
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Fax
No. 877.206.8413
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Tel.
No. 312.828.1846
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[Signature Page to Term Intercreditor Agreement]
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HOLDINGS
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HAYWARD INTERMEDIATE, INC.
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By:
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Name:
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Title:
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BORROWER
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HAYWARD ACQUISITION CORP., as the Borrower immediately prior to the Merger
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By:
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Name:
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Title:
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HAYWARD INDUSTRIES, INC., as the Borrower immediately prior to the Merger
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By:
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Name:
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Title:
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[Signature Page to Term Intercreditor Agreement]
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SUBSIDIARY GUARANTORS
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HAYWARD INDUSTRIAL PRODUCTS, INC.
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HAYWARD ACQUISITION CORP., as the Borrower immediately prior to the Merger
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By:
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Name:
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Title:
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GOLDLINE PROPERTIES LLC
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By:
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Name:
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Title:
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HAYWARD/WRIGHT-AUSTIN, INC.
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By:
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Name:
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Title:
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WEBSTER PUMPS, INC.
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By:
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Name:
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Title:
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[Signature Page to Term Intercreditor Agreement]
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Address for Notices of all Loan Parties:
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620 Division Street
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Elizabeth, New Jersey 07207
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Attention: Co-Chairman of the Board
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Facsimile: (908) 351-4492
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Email:rdavis@hayward.com
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with copy to:
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c/o CCMP Capital Advisors, LLC 277 Park
Avenue, 37th Floor
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New York, New York 10172
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Attention: Richard Jansen, Esq.
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Fax No.: (212) 599-3481
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Email : richard.jansen@ccmpcapital.com
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and
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c/o MSD Partners, L.P.
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645 Fifth Avenue, 21st Floor
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New York, New York 10022
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Attention: Marcello Liguori
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Fax No.: (212) 303-1772
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Email: mliguori@msdcapital.com
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and
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c/o Alberta Investment Management Corporation
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First Canadian Place
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100 King Street West
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Suite 5120, P.O. Box 51
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Toronto, Ontario M5X 1B1, Canada
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Attention: Jason Peters
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and
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c/o Alberta Investment Management Corporation
1100 - 10830 Jasper Avenue
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Edmonton, Alberta T5J 2B3, Canada
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Attention: Christina Luison
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[Signature Page to Term Intercreditor Agreement]
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with a copy to:
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Ropes & Gray LLP
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1211 Avenue of the Americas
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New York, New York 10036
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Attention: Jay Kim
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Fax No.: (212) 497-3626
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Email: jay.kim@ropesgray.com
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and
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Dechert LLP
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2929 Arch Street
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Philadelphia, Pennsylvania 19104
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Attention: Geraldine Sinatra and Eric Siegel
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Fax No.: (215) 994-2222
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Email:
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geraldine.sinatra@dechert.com
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eric.siegel@dechert.com
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and
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Torys LLP
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The Grace Building
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1114 Avenue of the Americas
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New York, New York 10036
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Attention: Jared Fontaine
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Fax No.: (212) 682-0200
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Email: jfontaine@torys.com
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[Signature Page to Term Intercreditor Agreement]
Exhibit A to the
Intercreditor Agreement
[FORM OF] JOINDER AGREEMENT
NO. [ ] dated as of [ ], 20[ ] to the TERM INTERCREDITOR AGREEMENT dated as of August 4, 2017 (the “Intercreditor Agreement”),
among BANK OF AMERICA, N.A., as Existing First Priority Representative, and BANK OF AMERICA, N.A., as Existing Second Priority
Representative, and each other First Priority Representative and Second Priority Representative that from time to time becomes
a party thereto pursuant to the terms thereof, and acknowledged and agreed to by, HAYWARD INTERMEDIATE, INC. (“Holdings”),
HAYWARD ACQUISITION CORP., as the initial borrower, merged with and into HAYWARD INDUSTRIES, INC., pursuant to the Merger (as defined
in the Existing First Priority Agreement) (the “Borrower”) and each of the other Loan Parties party thereto.
Capitalized terms used
herein but not otherwise defined herein shall have the meanings assigned to such terms in the Intercreditor Agreement.
As a condition to the
ability of the Borrower to incur [Additional First Priority Debt] [Additional Second Priority Debt] after the date of the Intercreditor
Agreement and to secure such [Additional First Priority Debt] [Additional Second Priority Debt] and related [First Priority Obligations]
[Second Priority Obligations] with a lien on the Common Collateral and to have such [Additional First Priority Debt] [Additional
Second Priority Debt] and related [First Priority Obligations] [Second Priority Obligations] guaranteed by the Loan Parties, in
each case under and pursuant to the applicable [First Priority Documents] [Second Priority Documents], each of the [Additional
First Priority Representative] [Additional Second Priority Representative] in respect of such [Additional First Priority Debt]
[Additional Second Priority Debt] and related [First Priority Obligations] [Second Priority Obligations] is required to become
an [Additional First Priority Representative] [Additional Second Priority Representative], under, and the related [First Priority
Secured Parties] [Second Priority Secured Parties] in respect thereof are required to become subject to and bound by, the Intercreditor
Agreement. Section 9.4 of the Intercreditor Agreement provides that such [Additional First Priority Representative] [Additional
Second Priority Representative] may become an [Additional First Priority Representative] [Additional Second Priority Representative]
under, and the related [First Priority Secured Parties] [Second Priority Secured Parties] may become subject to and bound by, the
Intercreditor Agreement pursuant to the execution and delivery by the [Additional First Priority Representative] [Additional Second
Priority Representative] of an instrument in the form of this Joinder Agreement and the satisfaction of the other conditions set
forth in Section 9.4 of the Intercreditor Agreement. The undersigned [Additional First Priority Representative] [Additional Second
Priority Representative] (the “New Representative”) is executing this Joinder Agreement in accordance with the
requirements of the Intercreditor Agreement.
Accordingly, the New
Representative agrees as follows:
In accordance
with Section 9.4 of the Intercreditor Agreement, the New Representative by its signatures below become a [First Priority
Representative] [Second Priority Representative] under, and the related [Additional First Priority Secured Parties]
[Additional Second Priority Secured Parties] represented by it become subject to and bound by, the Intercreditor Agreement
with the same force and effect as if the New Representative had originally been named therein as a [First Priority
Representative] [Second Priority Representative] and each of the New Representative, on behalf of itself and each other
[Additional First Priority Secured Party] [Additional Second Priority Secured Party] represented by it, hereby agrees to all
the terms and provisions of the Intercreditor Agreement applicable to it as a [First Priority Representative] [Second
Priority Representative] and to the [Additional First Priority Secured Parties] [Additional Second Priority Secured Parties]
represented by it as [First Priority Secured Parties] [Second Priority Secured Parties]. Each reference to a [“First
Priority Representative”] [“Second Priority Representative”] in the Intercreditor Agreement
shall be deemed to include the New Representative and each reference to [“First Priority Secured Parties”]
[“Second Priority Secured Parties”] shall include the [Additional First Priority Secured Parties] [Additional
Second Priority Secured Parties] represented by such New Representative. The Intercreditor Agreement is hereby incorporated
herein by reference.
Each of the New Representative
represents and warrants to the other First Priority Representatives and Second Priority Representatives and the other Secured Parties
that (i) it has full power and authority to enter into this Joinder Agreement, in its capacity as [agent][trustee], (ii) this Joinder
Agreement has been duly authorized, executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable
against it in accordance with its terms and the terms of the Intercreditor Agreement and (iii) the [First Priority Documents] [Second
Priority Documents] relating to such [Additional First Priority Debt] [Additional Second Priority Debt] provides that, upon the
New Representative’s entry into this Agreement, the [Additional First Priority Secured Parties] [Additional Second Priority
Secured Parties] in respect of such [Additional First Priority Debt] [Additional Second Priority Debt] will be subject to and bound
by the provisions of the Intercreditor Agreement as [First Priority Secured Parties] [Second Priority Secured Parties].
This Joinder Agreement
may be executed by one or more of the parties to this Agreement on any number of separate counterparts, and all of said counterparts
taken together shall be deemed to constitute one and the same instrument. Delivery of an executed signature page of this Agreement
by e-mail or facsimile transmission shall be effective as delivery of a manually executed counterpart hereof.
Except as expressly
supplemented hereby, the Intercreditor Agreement shall remain in full force and effect.
THIS JOINDER AGREEMENT,
AND ANY CLAIMS, CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE) BASED UPON, ARISING OUT
OF OR RELATING TO THIS JOINDER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.
Any provision of this
Joinder Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
All communications
and notices hereunder shall be in writing and given as provided in Section 9.9 of the Intercreditor Agreement. All communications
and notices hereunder to the New Representative shall be given to it at the address set forth below its signature hereto.
[Remainder of this page intentionally left
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[NAME OF NEW REPRESENTATIVE],
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as [ ] for the holders of [ ]
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By:
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Name:
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Title:
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Address for notices:
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attention of:
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Telecopy:
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Receipt of the foregoing acknowledged:
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[NAME OF APPLICABLE FIRST PRIORITY REPRESENTATIVE],
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as [Insert title of Representative]
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By:
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Name:
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Title:
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Receipt of the foregoing acknowledged:
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[NAME OF APPLICABLE SECOND PRIORITY REPRESENTATIVE],
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as [Insert title of Representative]
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By:
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Name:
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Title:
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Exhibit B to the
Intercreditor Agreement
[FORM OF] DEBT DESIGNATION
NO. [ ] (this “Designation”) dated as of [ ], 20[ ] with respect to the TERM INTERCREDITOR AGREEMENT dated
as of August 4, 2017 (the “Intercreditor Agreement”), among BANK OF AMERICA, N.A., as Existing First Priority Representative,
and BANK OF AMERICA, N.A., as Existing Second Priority Representative, and each other First Priority Representative and Second
Priority Representative that from time to time becomes a party thereto pursuant to the terms thereof, and acknowledged and agreed
to by, HAYWARD INTERMEDIATE, INC. (“Holdings”), HAYWARD ACQUISITION CORP., as the initial borrower, merged with and
into HAYWARD INDUSTRIES, INC., pursuant to the Merger (as defined in the Existing First Priority Agreement) (the “Borrower”)
and each of the other Loan Parties party thereto.
Capitalized terms used
herein but not otherwise defined herein shall have the meanings assigned to such terms in the Intercreditor Agreement.
This Designation is
being executed and delivered in order to designate additional secured Obligations of the Borrower and the Loan Parties as [Additional
First Priority Debt] [Additional Second Priority Debt] entitled to the benefit of and subject to the terms of the Intercreditor
Agreement.
The undersigned, the
duly appointed [specify title of Responsible Officer] of the Borrower hereby certifies on behalf of the Borrower that:
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1.
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Borrower intends to incur Indebtedness (the “Designated Obligations”) in the initial
aggregate principal amount of [ ] pursuant to the following agreement: [describe credit/loan agreement indenture or other
agreement giving rise to Additional First Priority Debt or Additional Second Priority Debt, as the case may be] (the “Designated
Agreement”) which will be [Additional First Priority Debt] [Additional Second Priority Debt].
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2.
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The incurrence of the Designated Obligations is permitted to be incurred, secured and guaranteed
by each extant First Priority Document and Second Priority Document.
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3.
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The name and address of the Additional Representative for such Designated Obligations is:
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[Insert name
and all capacities; Address]
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4.
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Attached hereto are true and complete copies of each of the [First/Second] Priority Agreement relating
to such Additional [First/Second] Priority Debt.
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IN WITNESS WHEREOF,
the Borrower has caused this Designation to be duly executed by the undersigned Responsible Officer as of the day and year first
above written.
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HAYWARD INDUSTRIES, INC.
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By:
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Name:
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Title:
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Exhibit C to the
Intercreditor Agreement
[FORM OF] LOAN PARTY
JOINDER AGREEMENT NO. [ ] dated as of [ ], 20[ ] (the “Loan Party Joinder Agreement”)
to the TERM INTERCREDITOR AGREEMENT dated as of August 4, 2017 (the “Intercreditor Agreement”), among BANK OF AMERICA,
N.A., as Existing First Priority Representative, and BANK OF AMERICA, N.A., as Existing Second Priority Representative, and each
other First Priority Representative and Second Priority Representative that from time to time becomes a party thereto pursuant
to the terms thereof, and acknowledged and agreed to by, HAYWARD INTERMEDIATE, INC. (“Holdings”), HAYWARD ACQUISITION
CORP., as the initial borrower, merged with and into HAYWARD INDUSTRIES, INC., pursuant to the Merger (as defined in the Existing
First Priority Agreement) (the “Borrower”) and each of the other Loan Parties party thereto.
Capitalized terms used
herein but not otherwise defined herein shall have the meanings assigned to such terms in the Intercreditor Agreement.
The undersigned, [ ],
a [ ], (the “New Loan Party”) wishes to acknowledge and agree to the Intercreditor Agreement and become a party
thereto and to acquire and undertake the rights and obligations of a Loan Party thereunder.
Accordingly, the New
Loan Party agrees as follows for the benefit of the First Priority Representatives, Second Priority Representatives and the other
Secured Parties:
The New Loan Party
(a) acknowledges and agrees to, and becomes a party to the Intercreditor Agreement as a Loan Party, (b) agrees to all the terms
and provisions of the Intercreditor Agreement and (c) shall have all the rights and obligations of a Loan Party under the Intercreditor
Agreement. This Loan Party Joinder Agreement supplements the Intercreditor Agreement and is being executed and delivered by the
New Loan Party pursuant to Section 9.15 of the Intercreditor Agreement.
The New Loan Party
represents and warrants to each First Priority Representative, each Second Priority Representative and to the other Secured Parties
that (a) it has full power and authority to enter into this Loan Party Joinder Agreement, in its capacity as a Loan Party and (b)
this Loan Party Joinder Agreement has been duly authorized, executed and delivered by it and constitutes its legal, valid and binding
obligation, enforceable against it in accordance with the terms of this Loan Party Joinder Agreement.
This Loan Party Joinder
Agreement may be executed by one or more of the parties to this Loan Party Joinder Agreement on any number of separate counterparts,
and all of said counterparts taken together shall be deemed to constitute one and the same instrument. Delivery of an executed
signature page of this Loan Party Joinder Agreement by e-mail or facsimile transmission shall be effective as delivery of a
manually executed counterpart hereof.
Except as expressly
supplemented hereby, the Intercreditor Agreement shall remain in full force and effect.
THIS LOAN PARTY
JOINDER AGREEMENT, AND ANY CLAIMS, CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE)
BASED UPON, ARISING OUT OF OR RELATING TO THIS LOAN PARTY JOINDER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
Any provision of this
Loan Party Joinder Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition
or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
All communications
and notices hereunder shall be in writing and given as provided in Section 9.9 of the Intercreditor Agreement.
IN WITNESS WHEREOF,
the New Loan Party has duly executed this Loan Party Joinder Agreement to the Intercreditor Agreement as of the day and year first
above written.
EXHIBIT N
[FORM OF]
PARI PASSU INTERCREDITOR AGREEMENT
[ATTACHED]
[Form of]
PARI INTERCREDITOR AGREEMENT
among
HAYWARD INDUSTRIES,
INC.
the other Grantors party hereto,
BANK OF AMERICA. N.A.,
as Collateral Agent for the Credit Agreement Secured Parties,
BANK OF AMERICA, N.A.,
as Administrative Agent for the Credit Agreement Secured Parties,
[__]
as the Initial Additional Authorized Representative
and Initial Additional Pari Collateral Agent,
and
each additional Authorized Representative
and additional Collateral Agent from time to time party hereto
dated as of [__]
PARI INTERCREDITOR
AGREEMENT, dated as of [ ], 20[ ] (as the same may be amended, restated, amended and restated, supplemented or otherwise modified
from time to time, this “Agreement”), among HAYWARD INTERMEDIATE, INC., a Delaware corporation (“Holdings”),
HAYWARD INDUSTRIES, INC., a New Jersey corporation (the “Company”) (the successor entity to the merger of HAYWARD
ACQUISITION CORP. with and into HAYWARD INDUSTRIES, INC.), the other Grantors (as defined below) from time to time party hereto,
BANK OF AMERICA, N.A., as collateral agent for the Credit Agreement Secured Parties (as defined below) (in such capacity and together
with its successors in such capacity, the “Credit Agreement Collateral Agent”), BANK OF AMERICA, N.A., as Administrative
Agent for the Credit Agreement Secured Parties (as defined below) (in such capacity and together with its successors in such capacity,
the “Administrative Agent”), [ ], as the Collateral Agent (in such capacity and together with its successors
in such capacity, the “Initial Additional Pari Collateral Agent”) and Authorized Representative for the Initial
Additional Pari Secured Parties (as defined below) (in such capacity and together with its successors in such capacity, the “Initial
Additional Authorized Representative”), and each additional Collateral Agent and Authorized Representative from time
to time party hereto for the other Additional Pari Secured Parties of the Series (as defined below) with respect to which it is
acting in such capacity.
In consideration of
the mutual agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Credit Agreement Collateral Agent, the Administrative Agent (for itself and on behalf of the Credit Agreement
Secured Parties), the Initial Additional Authorized Representative (in each case, for itself and on behalf of the Initial Additional
Pari Secured Parties), the Initial Additional Pari Collateral Agent, the Grantors, and each additional Collateral Agent and Authorized
Representative (for itself and on behalf of the Additional Pari Secured Parties of the applicable Series) agree as follows:
ARTICLE I
Definitions
SECTION 1.01 Certain
Defined Terms. Capitalized terms used but not otherwise defined herein have the meanings set forth in the Credit Agreement
or, if defined in the New York UCC, the meanings specified therein. As used in this Agreement, the following terms have the meanings
specified below:
“ABL Intercreditor
Agreement” means the “ABL Intercreditor Agreement” as such term is defined in the Credit Agreement (or any
similar term in any Refinancing thereof).
“Additional
Pari Collateral Agent” means (x) in the case of the Initial Additional Pari Obligations, the Initial Additional Pari
Collateral Agent and (y) in the case of any other Series of Additional Pari Obligations that becomes subject to this Agreement
after the date hereof, the Additional Senior Class Debt Collateral Agent for such Series named in the applicable Joinder Agreement.
“Additional
Pari Documents” means, with respect to the Initial Additional Pari Obligations or any Series of Additional Senior
Class Debt, the notes, indentures, credit agreements, security documents and other operative agreements evidencing or
governing such indebtedness and liens securing such indebtedness, including the Initial Additional Pari Documents and the
Additional Pari Security Documents and each other agreement entered into for the purpose of securing the Initial Additional
Pari Obligations or any Series of Additional Senior Class Debt; provided that, in each case, the Indebtedness
thereunder (other than the Initial Additional Pari Obligations) has been designated as Additional Senior Class Debt pursuant
to Section 5.12 hereto.
“Additional
Pari Obligations” means (a) all amounts owing pursuant to the terms of any Additional Pari Document (including the Initial
Additional Pari Documents), including, without limitation, all amounts in respect of any principal, premium, interest (including
any interest, fees and expenses accruing subsequent to the commencement of a Bankruptcy Case at the rate provided for in the respective
Additional Pari Document, whether or not such interest, fees and expenses is an allowed claim under any such proceeding or under
applicable state, federal or foreign law), penalties, fees, expenses, indemnifications, reimbursements, damages and other liabilities,
and guarantees of the foregoing amounts, (b) any Secured Hedge Obligations secured under the Additional Pari Security Documents
securing the related Series of Additional Pari Obligations, (c) any Secured Banking Services Obligations secured under the Additional
Pari Security Documents securing the related Series of Additional Pari Obligations and (d) any renewals or extensions of the foregoing.
“Additional
Pari Secured Parties” means the holders of any Additional Pari Obligations and each Authorized Representative and Collateral
Agent with respect thereto, and shall include the Initial Additional Pari Secured Parties and the Additional Senior Class Debt
Parties.
“Additional
Pari Security Documents” means any collateral agreement, security agreement or any other document now existing or entered
into after the date hereof that create Liens on any assets or properties of any Grantor to secure any Additional Pari Obligations.
“Additional
Senior Class Debt” has the meaning assigned to such term in Section 5.12.
“Additional
Senior Class Debt Collateral Agent” has the meaning assigned to such term in Section 5.12.
“Additional
Senior Class Debt Parties” has the meaning assigned to such term in Section 5.12.
“Additional
Senior Class Debt Representative” has the meaning assigned to such term in Section 5.12.
“Administrative
Agent” has the meaning assigned to such term in the definition of Credit Agreement and shall include any successor administrative
agent as provided in Section 8 of the Credit Agreement; provided, however, that if the Credit Agreement is Refinanced,
then all references herein to the Administrative Agent shall refer to the administrative agent (or trustee) under the Refinancing.
“Agreement”
has the meaning assigned to such term in the introductory paragraph of this Agreement.
“Applicable
Authorized Representative” means with respect to any Shared Collateral, (i) until the earlier of (x) the Discharge of
Credit Agreement Obligations and (y) the Non-Controlling Authorized Representative Enforcement Date, the Administrative Agent
and (ii) from and after the earlier of (x) the Discharge of Credit Agreement Obligations and (y) the Non-Controlling Authorized
Representative Enforcement Date, the Major Non-Controlling Authorized Representative.
“Authorized
Representative” means, at any time, (i) in the case of any Credit Agreement Obligations or the Credit Agreement Secured
Parties, the Administrative Agent, (ii) in the case of the Initial Additional Pari Obligations or the Initial Additional Pari Secured
Parties, the Initial Additional Authorized Representative, and (iii) in the case of any other Series of Additional Pari Obligations
or Additional Pari Secured Parties that become subject to this Agreement after the date hereof, the Additional Senior Class Debt
Representative for such Series named in the applicable Joinder Agreement.
“Banking Services”
has the meaning assigned to such term in the Credit Agreement (or any similar term in any Refinancing thereof).
“Bankruptcy
Case” has the meaning assigned to such term in Section 2.06(b).
“Bankruptcy
Code” means Title 11 of the United States Code, as amended, or any similar federal or state law for the relief of debtors.
“Bankruptcy
Law” means the Bankruptcy Code and any similar federal, state or foreign law for the relief of debtors.
“Borrower”
means the Company or any Successor Borrower (as defined in the Credit Agreement).
“Collateral”
means any “Collateral” (as defined in the Credit Agreement or any other Credit Agreement Collateral Documents) or any
other assets and properties subject to Liens created pursuant to any Pari Security Document to secure one or more Series of Pari
Obligations.
“Collateral
Agent” means (i) in the case of any Credit Agreement Obligations, the Credit Agreement Collateral Agent, (ii) in the
case of the Initial Additional Pari Obligations, the Initial Additional Pari Collateral Agent, and (iii) in the case of any other
Series of Additional Pari Obligations that become subject to this Agreement after the date hereof, the Additional Senior Class
Debt Collateral Agent for such Series named in the applicable Joinder Agreement.
“Company”
has the meaning assigned to such term in the introductory paragraph of this Agreement.
“Controlling
Collateral Agent” means, with respect to any Shared Collateral, (i) until the earlier of (x) the Discharge of
Credit Agreement Obligations and (y) the Non-Controlling Authorized Representative Enforcement Date with respect to such
Shared Collateral, the Credit Agreement Collateral Agent and (ii) from and after the earlier of (x) the Discharge of Credit
Agreement Obligations and (y) the Non-Controlling Authorized Representative Enforcement Date with respect to such Shared
Collateral, the Collateral Agent for the Controlling Secured Parties (acting on the instructions of the Applicable Authorized
Representative).
“Controlling
Secured Parties” means, with respect to any Shared Collateral, (i) at any time when the Credit Agreement Collateral Agent
is the Controlling Collateral Agent with respect to such Shared Collateral, the Credit Agreement Secured Parties and (ii) at any
other time, the Series of Pari Secured Parties whose Authorized Representative is the Applicable Authorized Representative for
such Shared Collateral.
“Credit Agreement”
means that certain Credit Agreement, dated as of August 4, 2017, among Holdings, the Company, Hayward Acquisition Corp., the lenders
from time to time party thereto and Bank of America, N.A., as administrative agent and collateral agent (as such agreement may
be amended, restated, amended and restated, supplemented, waived or otherwise modified from time to time or refunded, refinanced,
restructured, replaced, renewed, repaid, increased or extended from time to time (whether in whole or in part, whether with the
original administrative agent and lenders or other agents and lenders or otherwise, and whether provided under the original Credit
Agreement or one or more other credit agreements or otherwise, including any agreement extending the maturity thereof or otherwise
restructuring all or any portion of the Indebtedness thereunder or increasing the amount loaned or issued thereunder or altering
the maturity thereof, in each case as and to the extent permitted by the Credit Agreement unless such agreement, instrument or
document expressly provides that it is not intended to be and is not a Credit Agreement)).
“Credit Agreement
Collateral Agent” has the meaning assigned to such term in the introductory paragraph of this Agreement.
“Credit Agreement
Collateral Documents” means the Collateral Documents (as defined in the Credit Agreement, or any similar term in any
Refinancing thereof) and each other agreement entered into in favor of the Credit Agreement Collateral Agent for the purpose of
securing any Credit Agreement Obligations, in each case as amended, restated, amended and restated, extended, supplemented or otherwise
modified from time to time.
“Credit Agreement
Obligations” means all “Obligations” as defined in the Credit Agreement (or any similar term in any Refinancing
thereof).
“Credit Agreement
Secured Parties” means the “Secured Parties” as defined in the Credit Agreement (or any similar term in any
Refinancing thereof).
“DIP Financing”
has the meaning assigned to such term in Section 2.06(b).
“DIP Financing
Liens” has the meaning assigned to such term in Section 2.06(b).
“DIP Lenders”
has the meaning assigned to such term in Section 2.06(b).
“Discharge”
means, with respect to any Shared Collateral and any Series of Pari Obligations, the date on which (i) such Series of Pari
Obligations is paid in full and is no longer secured, and no longer required to be secured, by such Shared Collateral
pursuant to the terms of the documentation governing such Series of Pari Obligations or, with respect to any Secured Hedge
Obligations or Secured Banking Services Obligations secured by the Pari Security Documents for such Series of Pari
Obligations, either (x) such Secured Hedge Obligations or Secured Banking Services Obligations have either been paid in full
and are no longer secured by the Shared Collateral pursuant to the terms of the documentation governing such Series of Pari
Obligations, (y) such Secured Hedge Obligations or Secured Banking Services Obligations shall have been cash collateralized
on terms satisfactory to each applicable counterparty (or other arrangements satisfactory to the applicable counterparty
shall have been made) or (z) such Secured Hedge Obligations or Secured Banking Services Obligations are no longer secured,
and no longer required to be secured, by the Shared Collateral pursuant to the terms of the documentation governing such
Series of Pari Obligations, (ii) any letters of credit issued under the Secured Credit Documents governing such Series of
Pari Obligations have terminated or been cash collateralized or backstopped (in the amount and form required under the
applicable Secured Credit Documents) and (iii) all commitments of the Pari Secured Parties of such Series under their
respective Secured Credit Documents have terminated. The term “Discharged” shall have a corresponding
meaning.
“Discharge
of Credit Agreement Obligations” means, with respect to any Shared Collateral, the Discharge of the Credit Agreement
Obligations with respect to such Shared Collateral; provided that the Discharge of Credit Agreement Obligations shall not
be deemed to have occurred in connection with a Refinancing of such Credit Agreement Obligations with additional Pari Obligations
secured by such Shared Collateral under an Additional Pari Document which has been designated in writing by the Administrative
Agent (under the Credit Agreement so Refinanced) to the Additional Pari Collateral
“Event of
Default” means an “Event of Default” (or similarly defined term) as defined in any Secured Credit Document.
“Grantors”
means Holdings, the Borrower and each Subsidiary or direct or indirect parent company of Holdings which has granted a security
interest pursuant to any Pari Security Document to secure any Series of Pari Obligations. The Grantors existing on the date hereof
are set forth in Annex I hereto.
“Holdings”
has the meaning assigned to such term in the introductory paragraph to this Agreement.
“Impairment”
has the meaning assigned to such term in Section 1.03.
“Initial Additional
Authorized Representative” has the meaning assigned to such term in the introductory paragraph of this Agreement.
“Initial
Additional Pari Agreement” mean that certain [Agreement], dated as of [ ],
20[ ], among the Borrower, [the Grantors identified therein,] and
[ ], as [description of capacity].
“Initial Additional
Pari Collateral Agent” has the meaning assigned to such term in the introductory paragraph to this Agreement.
“Initial
Additional Pari Documents” means the Initial Additional Pari Agreement, the loans, debt securities or promissory
notes issued thereunder, the Initial Additional Pari Security Agreement and any security documents and other operative
agreements evidencing or governing the Indebtedness thereunder, and the Liens securing such Indebtedness, including any
agreement entered into for the purpose of securing the Initial Additional Pari Obligations.
“Initial Additional
Pari Obligations” means the “[Obligations]” as such term is defined in the Initial Additional Pari Security
Agreement (or similar term in any Refinancing thereof).
“Initial Additional
Pari Secured Parties” means the Initial Additional Pari Collateral Agent, the Initial Additional Authorized Representative
and the holders of the Initial Additional Pari Obligations issued pursuant to the Initial Additional Pari Agreement.
“Initial Additional
Pari Security Agreement” means the [security] agreement, dated as of the date hereof, among the Borrower, the Grantors,
the Initial Additional Pari Collateral Agent and the other parties thereto, as amended, restated, amended and restated, extended,
supplemented or otherwise modified from time to time.
“Insolvency
or Liquidation Proceeding” means:
(1) any
case commenced by or against the Borrower or any other Grantor under any Bankruptcy Law, any other proceeding for the reorganization,
recapitalization or adjustment or marshalling of the assets or liabilities of the Borrower or any other Grantor, any receivership
or assignment for the benefit of creditors relating to the Company or any other Grantor or any similar case or proceeding relative
to the Borrower or any other Grantor or its creditors, as such, in each case whether or not voluntary;
(2) any
liquidation, dissolution, marshalling of assets or liabilities or other winding up of or relating to the Borrower or any other
Grantor, in each case whether or not voluntary and whether or not involving bankruptcy or insolvency; or
(3) any
other proceeding of any type or nature in which substantially all claims of creditors of the Borrower or any other Grantor are
determined and any payment or distribution is or may be made on account of such claims.
“Intervening
Creditor” has the meaning assigned to such term in Section 2.01(a).
“Joinder Agreement”
means a joinder to this Agreement substantially in the form of Annex II hereto required to be delivered by an Additional
Senior Class Debt Representative and the related Additional Senior Class Debt Collateral Agent pursuant to Section 5.12
hereof in order to establish an additional Series of Additional Senior Class Debt and add Additional Senior Class Debt Parties
hereunder.
“Junior Lien
Intercreditor Agreement” means the “Term Intercreditor Agreement” as such term is defined in the Credit Agreement
(or any similar term in any Refinancing thereof).
“Lien”
has the meaning assigned to such term in the Credit Agreement.
“Major
Non-Controlling Authorized Representative” means, with respect to any Shared Collateral, the Authorized
Representative of the Series of Additional Pari Obligations that constitutes the largest outstanding principal amount of any
then outstanding Series of Additional Pari Obligations with respect to such Shared Collateral.
“New York
UCC” means the Uniform Commercial Code as from time to time in effect in the State of New York.
“Non-Controlling
Authorized Representative” means, at any time with respect to any Shared Collateral, any Authorized Representative that
is not the Applicable Authorized Representative at such time with respect to such Shared Collateral.
“Non-Controlling
Authorized Representative Enforcement Date” means, with respect to any Non-Controlling Authorized Representative, the
date which is 180 consecutive days (throughout which consecutive 180 day period such Non-Controlling Authorized Representative
was the Major Non-Controlling Authorized Representative) after the occurrence of both (i) an Event of Default (under and as defined
in the Additional Pari Document under which such Non-Controlling Authorized Representative is the Authorized Representative)
and (ii) each Collateral Agent’s and each other Authorized Representative’s receipt of written notice from such Non-Controlling
Authorized Representative certifying that (x) such Non-Controlling Authorized Representative is the Major Non-Controlling
Authorized Representative and that an Event of Default (under and as defined in the Additional Pari Document under which such Non-Controlling
Authorized Representative is the Authorized Representative) has occurred and is continuing and (y) the Additional Pari Obligations
of the Series with respect to which such Non-Controlling Authorized Representative is the Authorized Representative are currently
due and payable in full (whether as a result of acceleration thereof or otherwise) in accordance with the terms of the applicable
Additional Pari Document; provided that the Non-Controlling Authorized Representative Enforcement Date shall be stayed
and shall not occur and shall be deemed not to have occurred with respect to any Shared Collateral (1) at any time the Administrative
Agent, the Applicable Authorized Representative or the Controlling Collateral Agent has commenced and is diligently pursuing any
enforcement action with respect to all or a material portion of the Shared Collateral or (2) at any time the Grantor which has
granted a security interest in such Shared Collateral is then a debtor under or with respect to (or otherwise subject to) any Insolvency
or Liquidation Proceeding. If the Non-Controlling Authorized Representative or any other Non-Controlling Secured Party
exercises any rights or remedies with respect to the Shared Collateral in accordance with the immediately preceding sentence of
this paragraph and thereafter the Controlling Collateral Agent or any other Controlling Secured Party commences (or attempts to
commence) the exercise of any of its rights or remedies with respect to the Shared Collateral (including seeking relief from the
automatic stay or any other stay in any Insolvency or Liquidation Proceeding), the Non-Controlling Authorized Representative
Enforcement Date shall be deemed not to have occurred and the Non-Controlling Authorized Representative or any other Non-Controlling
Secured Party shall stop exercising any such rights or remedies with respect to the Shared Collateral.
“Non-Controlling
Secured Parties” means, with respect to any Shared Collateral, the Pari Secured Parties which are not Controlling Secured
Parties with respect to such Shared Collateral.
“Pari Obligations”
means, collectively, (i) the Credit Agreement Obligations and (ii) each Series of Additional Pari Obligations.
“Pari Secured
Parties” means (i) the Credit Agreement Secured Parties and (ii) the Additional Pari Secured Parties with respect to
each Series of Additional Pari Obligations.
“Pari Security
Documents” means, collectively, (i) the Credit Agreement Collateral Documents and (ii) the Additional Pari Security Documents.
“Person”
shall mean any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership,
governmental authority or other entity.
“Possessory
Collateral” means any Shared Collateral in the possession of a Collateral Agent (or its agents or bailees), to the extent
that possession thereof perfects a Lien thereon under the Uniform Commercial Code of any jurisdiction. Possessory Collateral includes,
without limitation, any Certificated Securities, Promissory Notes, Instruments, and Chattel Paper, in each case, delivered to or
in the possession of the Collateral Agent under the terms of the Pari Security Documents.
“Proceeds”
has the meaning assigned to such term in Section 2.01(a).
“Refinance”
means, in respect of any indebtedness, to refinance, extend, renew, defease, amend, increase, modify, supplement, restructure,
refund, replace or repay such indebtedness, or to issue other indebtedness or enter alternative financing arrangements, in exchange
or replacement for such indebtedness (in whole or in part), including by adding or replacing lenders, creditors, agents, borrowers
and/or guarantors, and including in each case, but not limited to, after the original instrument giving rise to such indebtedness
has been terminated and including, in each case, through any credit agreement, indenture or other agreement. “Refinanced”
and “Refinancing” have correlative meanings.
“Secured Banking
Services Obligations” shall mean obligations under Banking Services Agreements that are intended under the applicable
Pari Security Document to be secured by Shared Collateral.
“Secured Hedge
Obligations” shall mean obligations under Hedge Agreements (as defined in the Credit Agreement, or similar term in any
Refinancing thereof) that are intended under the applicable Pari Security Document to be secured by Shared Collateral.
“Secured Credit
Document” means (i) the Credit Agreement and each Loan Document (as defined in the Credit Agreement, or any similar term
in any Refinancing thereof), (ii) each Initial Additional Pari Document, and (iii) each Additional Pari Document.
“Series”
means (a) with respect to the Pari Secured Parties, each of (i) the Credit Agreement Secured Parties (in their capacities as such),
(ii) the Initial Additional Pari Secured Parties (in their capacities as such), and (iii) the Additional Pari Secured Parties that
become subject to this Agreement after the date hereof that are represented by a common Authorized Representative (in its capacity
as such for such Additional Pari Secured Parties) and (b) with respect to any Pari Obligations, each of (i) the Credit Agreement
Obligations, (ii) the Initial Additional Pari Obligations, and (iii) the Additional Pari Obligations incurred pursuant to any Additional
Pari Document, which pursuant to any Joinder Agreement, are to be represented hereunder by a common Authorized Representative (in
its capacity as such for such Additional Pari Obligations).
“Shared Collateral”
means, at any time, Collateral in which the holders (or their Collateral Agent) of two or more Series of Pari Obligations hold
or purport to hold a valid security interest at such time. If more than two Series of Pari Obligations are outstanding at any time
and the holders of less than all Series of Pari Obligations hold or purport to hold a valid security interest in any Collateral
at such time, then such Collateral shall constitute Shared Collateral for those Series of Pari Obligations that hold or purport
to hold a valid security interest in such Collateral at such time and shall not constitute Shared Collateral for any Series which
does not have a valid and perfected security interest in such Collateral at such time.
SECTION 1.02 Interpretive
Provision. The interpretive provisions contained in Article I of the Credit Agreement as in effect on the date hereof are incorporated
herein, mutatis mutandis, as if a part hereof.
SECTION 1.03 Impairments.
It is the intention of the Pari Secured Parties of each Series that the holders of Pari Obligations of such Series (and not the
Pari Secured Parties of any other Series) bear the risk of (i) any determination by a court of competent jurisdiction that (x)
any of the Pari Obligations of such Series are unenforceable under applicable law or are subordinated to any other obligations
(other than another Series of Pari Obligations), (y) any of the Pari Obligations of such Series do not have a valid and perfected
security interest in any of the Collateral securing any other Series of Pari Obligations and/or (z) any intervening security interest
exists securing any other obligations (other than another Series of Pari Obligations) on a basis ranking prior to the security
interest of such Series of Pari Obligations but junior to the security interest of any other Series of Pari Obligations or (ii)
the existence of any Collateral for any other Series of Pari Obligations that is not Shared Collateral for such Series (any such
condition referred to in the foregoing clauses (i) or (ii) with respect to any Series of Pari Obligations, an “Impairment”
of such Series). In the event of any Impairment with respect to any Series of Pari Obligations, the results of such Impairment
shall be borne solely by the holders of such Series of Pari Obligations, and the rights of the holders of such Series of Pari Obligations
(including, without limitation, the right to receive distributions in respect of such Series of Pari Obligations pursuant to Section
2.01) set forth herein shall be modified to the extent necessary so that the effects of such Impairment are borne solely by
the holders of the Series of such Pari Obligations subject to such Impairment. Additionally, in the event the Pari Obligations
of any Series are modified pursuant to applicable law (including, without limitation, pursuant to Section 1129 of the Bankruptcy
Code), any reference to such Pari Obligations or the Pari Security Documents governing such Pari Obligations shall refer to such
obligations or such documents as so modified.
ARTICLE II
Priorities and Agreements with Respect
to Shared Collateral
SECTION 2.01 Priority
of Claims.
(a) Anything
contained herein or in any of the Secured Credit Documents to the contrary notwithstanding (but subject to Section
1.03), if an Event of Default has occurred and is continuing, and the Controlling Collateral Agent or any Pari Secured
Party is taking action to enforce rights in respect of any Shared Collateral, or any distribution is made in respect of any
Shared Collateral in any Bankruptcy Case of the Borrower or any other Grantor or any Pari Secured Party receives any payment
pursuant to any intercreditor agreement (other than this Agreement) with respect to any Shared Collateral, the proceeds of
any sale, collection or other liquidation of any such Shared Collateral by any Pari Secured Party or received by the
Controlling Collateral Agent or any Pari Secured Party pursuant to any such intercreditor agreement with respect to such
Shared Collateral and proceeds of any such distribution (subject, in the case of any such distribution, to the sentence
immediately following) to which the Pari Obligations are entitled under any intercreditor agreement (other than this
Agreement) (all proceeds of any sale, collection or other liquidation of any Shared Collateral and any payment or
distribution made in respect of Shared Collateral pursuant to any intercreditor agreement or in an Insolvency or Liquidation
Proceeding being collectively referred to as “Proceeds”), shall be applied (i) FIRST, to the payment of
all amounts owing to each Collateral Agent and each Authorized Representative (in its capacity as such) pursuant to the terms
of any Secured Credit Document, (ii) SECOND, subject to Section 1.03, to the payment in full of the Pari Obligations
of each Series on a ratable basis, with such Proceeds to be applied to the Pari Obligations of a given Series in accordance
with the terms of the applicable Secured Credit Documents and (iii) THIRD, after payment of all Pari Obligations, to the
Borrower and the other Grantors or their successors or assigns, as their interests may appear, or to whomsoever may be
lawfully entitled to receive the same, or as a court of competent jurisdiction may direct. If, despite the provisions of this Section
2.01(a), any Pari Secured Party shall receive any payment or other recovery in excess of its portion of payments on
account of the Pari Obligations to which it is then entitled in accordance with this Section 2.01(a), such Pari
Secured Party shall hold such payment or recovery in trust for the benefit of all Pari Secured Parties for distribution in
accordance with this Section 2.01(a). Notwithstanding the foregoing, with respect to any Shared Collateral for which a
third party (other than a Pari Secured Party) has a lien or security interest that is junior in priority to the security
interest of any Series of Pari Obligations but senior (as determined by appropriate legal proceedings in the case of any
dispute) to the security interest of any other Series of Pari Obligations (such third party, an “Intervening
Creditor”), the value of any Shared Collateral or Proceeds allocated to such Intervening Creditor shall be deducted
on a ratable basis solely from the Shared Collateral or Proceeds to be distributed in respect of the Series of Pari
Obligations with respect to which such Impairment exists.
(b) It
is acknowledged that the Pari Obligations of any Series may, subject to the limitations set forth in the then extant Secured Credit
Documents, be increased, extended, renewed, replaced, restated, supplemented, restructured, repaid, refunded, Refinanced or otherwise
amended or modified from time to time, all without affecting the priorities set forth in Section 2.01(a) or the provisions
of this Agreement defining the relative rights of the Pari Secured Parties of any Series.
(c) Notwithstanding
the date, time, method, manner or order of grant, attachment or perfection of any Liens securing any Series of Pari Obligations
granted on the Shared Collateral and notwithstanding any provision of the Uniform Commercial Code of any jurisdiction, or any other
applicable law or the Secured Credit Documents or any defect or deficiencies in the Liens securing the Pari Obligations of any
Series or any other circumstance whatsoever (but, in each case, subject to Section
(d) Notwithstanding
anything in this Agreement or any other Pari Security Document to the contrary, prior to the Discharge of Credit Agreement
Obligations, collateral consisting of cash and cash equivalents pledged to secure Credit Agreement Obligations consisting of
reimbursement obligations in respect of letters of credit pursuant to the Credit Agreement shall be applied as specified in
the Credit Agreement and will not constitute Shared Collateral.
SECTION 2.02 [Reserved].
SECTION 2.03 Actions
with Respect to Shared Collateral; Prohibition on Contesting Liens.
(a) Only
the Controlling Collateral Agent shall act or refrain from acting with respect to any Shared Collateral (including with respect
to any intercreditor agreement with respect to any Shared Collateral). At any time when the Credit Agreement Collateral Agent is
the Controlling Collateral Agent, no Additional Pari Secured Party shall or shall instruct any Collateral Agent to, and neither
the Initial Additional Pari Collateral Agent nor any other Collateral Agent that is not the Controlling Collateral Agent shall,
commence any judicial or nonjudicial foreclosure proceedings with respect to, seek to have a trustee, receiver, liquidator or similar
official appointed for or over, attempt any action to take possession of, exercise any right, remedy or power with respect to,
or otherwise take any action to enforce its security interest in or realize upon, or take any other action available to it in respect
of, any Shared Collateral (including with respect to any intercreditor agreement with respect to any Shared Collateral), whether
under any Additional Pari Security Document, applicable law or otherwise, it being agreed that only the Credit Agreement Collateral
Agent (or a person authorized by it), acting in accordance with the Credit Agreement Collateral Documents, shall be entitled to
take any such actions or exercise any such remedies with respect to Shared Collateral at such time.
(b) With
respect to any Shared Collateral at any time when the Credit Agreement Collateral Agent is not the Controlling Collateral Agent
with respect thereto, (i) the Controlling Collateral Agent shall act only on the instructions of the Applicable Authorized Representative,
(ii) the Controlling Collateral Agent shall not follow any instructions with respect to such Shared Collateral (including with
respect to any intercreditor agreement with respect to any Shared Collateral) from any Non-Controlling Authorized Representative
(or any other Pari Secured Party other than the Applicable Authorized Representative) and (iii) no Non-Controlling Authorized
Representative or other Pari Secured Party (other than the Applicable Authorized Representative) shall or shall instruct the Controlling
Collateral Agent to, commence any judicial or non-judicial foreclosure proceedings with respect to, seek to have a trustee,
receiver, liquidator or similar official appointed for or over, attempt any action to take possession of, exercise any right, remedy
or power with respect to, or otherwise take any action to enforce its security interest in or realize upon, or take any other action
available to it in respect of, any Shared Collateral (including with respect to any intercreditor agreement with respect to any
Shared Collateral), whether under any Pari Security Document, applicable law or otherwise, it being agreed that only the Controlling
Collateral Agent (or a person authorized by it), acting on the instructions of the Applicable Authorized Representative and in
accordance with the applicable Additional Pari Security Documents, shall be entitled to take any such actions or exercise any such
remedies with respect to such Shared Collateral.
(c) Notwithstanding
the equal priority of the Liens securing each Series of Pari Obligations with respect to any Shared Collateral, the
Controlling Collateral Agent with respect thereto (acting on the instructions of the Applicable Authorized Representative if
it is not the Credit Agreement Collateral Agent) may deal with such Shared Collateral as if such Controlling Collateral Agent
had a senior and exclusive Lien on such Collateral. No Non-Controlling Authorized Representative or Non-Controlling
Secured Party in respect of any Shared Collateral will contest, protest or object to any foreclosure proceeding or action
brought by the Controlling Collateral Agent, the Applicable Authorized Representative or any Controlling Secured Party or any
other exercise by the Controlling Collateral Agent, the Applicable Authorized Representative or a Controlling Secured Party
of any rights and remedies relating to such Shared Collateral, or to cause the Controlling Collateral Agent to do so. The
foregoing shall not be construed to limit the rights and priorities of any Pari Secured Party, Collateral Agent or any
Authorized Representative with respect to any Collateral not constituting Shared Collateral.
(d) Each
of the Pari Secured Parties agrees that it will not (and hereby waives any right to) question or contest or support any other Person
in contesting, in any proceeding (including any Insolvency or Liquidation Proceeding), the perfection, priority, validity, attachment
or enforceability of a Lien held by or on behalf of any of the Pari Secured Parties in all or any part of the Collateral, or the
provisions of this Agreement; provided that nothing in this Agreement shall be construed to prevent or impair the rights
of any Collateral Agent or any Authorized Representative to enforce this Agreement.
SECTION 2.04 No
Interference; Payment Over.
(a) Each
Pari Secured Party agrees that (i) it will not challenge or question in any proceeding the validity or enforceability of any Pari
Obligations of any Series or any Pari Security Document or the validity, attachment, perfection or priority of any Lien under any
Pari Security Document or the validity or enforceability of the priorities, rights or duties established by or other provisions
of this Agreement; (ii) it will not take or cause to be taken any action the purpose or intent of which is, or could be, to interfere,
hinder or delay, in any manner, whether by judicial proceedings or otherwise, any sale, transfer or other disposition of any Shared
Collateral by the Controlling Collateral Agent, (iii) except as provided in Section 2.03, it shall have no right to (A)
direct the Controlling Collateral Agent or any other Pari Secured Party to exercise, and shall not exercise, any right, remedy
or power with respect to any Shared Collateral (including pursuant to any intercreditor agreement) or (B) consent to the exercise
by, or object to the forbearance of exercise by, the Controlling Collateral Agent or any other Pari Secured Party of any right,
remedy or power with respect to any Shared Collateral, (iv) it will not institute any suit or assert in any suit, bankruptcy, insolvency
or other proceeding any claim against the Controlling Collateral Agent or any other Pari Secured Party seeking damages from or
other relief by way of specific performance, instructions or otherwise with respect to any Shared Collateral, and none of the Controlling
Collateral Agent, any Applicable Authorized Representative or any other Pari Secured Party shall be liable for any action taken
or omitted to be taken by the Controlling Collateral Agent, such Applicable Authorized Representative or other Pari Secured Party
with respect to any Shared Collateral in accordance with the provisions of this Agreement, (v) if not the Controlling Collateral
Agent, it will not seek, and hereby waives any right, to have any Shared Collateral or any part thereof marshaled upon any foreclosure
or other disposition of such Collateral and (vi) it will not attempt, directly or indirectly, whether by judicial proceedings or
otherwise, to challenge the enforceability of any provision of this Agreement; provided that nothing in this Agreement shall
be construed to prevent or impair the rights of any of the Controlling Collateral Agent or any other Pari Secured Party to enforce
this Agreement.
(b) Each
Pari Secured Party hereby agrees that if it shall obtain possession of any Shared Collateral or shall realize any Proceeds or payment
in respect of any such Shared Collateral, pursuant to any Pari Security Document or by the exercise of any rights available to
it under applicable law or in any Insolvency or Liquidation Proceeding or through any other exercise of remedies (including pursuant
to any intercreditor agreement), at any time prior to the Discharge of each of the Pari Obligations, then it shall hold such Shared
Collateral, Proceeds or payment in trust for the other Pari Secured Parties and promptly transfer such Shared Collateral, Proceeds
or payment, as the case may be, to the Controlling Collateral Agent, to be distributed in accordance with the provisions of Section
2.01 hereof.
SECTION 2.05 Automatic
Release of Liens; Power of Attorney.
(a) If,
at any time the Controlling Collateral Agent forecloses upon or otherwise exercises remedies against any Shared Collateral resulting
in a sale or disposition thereof, then (whether or not any Insolvency or Liquidation Proceeding is pending at the time) the Liens
in favor of each other Collateral Agent for the benefit of each Series of Pari Secured Parties upon such Shared Collateral will
automatically be released and discharged as and when, but only to the extent, such Liens of the Controlling Collateral Agent on
such Shared Collateral are released and discharged; provided that any Proceeds of any Shared Collateral realized therefrom
shall be allocated and applied pursuant to Section 2.01.
(b) Each
Collateral Agent and Authorized Representative agrees to execute and deliver (at the sole cost and expense of the Grantors) all
such authorizations and other instruments as shall reasonably be requested by the Controlling Collateral Agent to evidence and
confirm any release of Shared Collateral provided for in this Section.
(c) Each
Non-Controlling Authorized Representative and each Collateral Agent that is not the Controlling Collateral Agent, for itself
and on behalf of the Pari Secured Parties of the Series for whom it is acting, hereby irrevocably appoints the Controlling Collateral
Agent and any officer or agent of the Controlling Collateral Agent, which appointment is coupled with an interest with full power
of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead
of such Non-Controlling Authorized Representative, Collateral Agent or Pari Secured Party, to take any and all appropriate
action and to execute any and all documents and instruments which may be necessary to accomplish the purposes of this Agreement,
including the exercise of any and all remedies under each Pari Security Document with respect to Shared Collateral and to evidence
and confirm any release of Shared Collateral provided for in this Section 2.05.
SECTION 2.06 Certain
Agreements with Respect to Bankruptcy or Insolvency Proceedings.
(a) This
Agreement shall continue in full force and effect notwithstanding the commencement of any proceeding under the Bankruptcy Code
or any other Bankruptcy Law by or against Holdings, the Borrower or any of their respective Subsidiaries. The parties hereto acknowledge
that the provisions of this Agreement are intended to be and shall be enforceable as contemplated by Section 510(a) of the Bankruptcy
Code.
(b) If
the Borrower and/or any other Grantor shall become subject to a case (a “Bankruptcy Case”) under the Bankruptcy
Law and shall, as debtor(s)-in-possession, move for approval of financing (the “DIP Financing”) to be
provided by one or more lenders (the “DIP Lenders”) under Section 364 of the Bankruptcy Code or any equivalent
provision of any other Bankruptcy Law or the use of cash collateral under Section 363 of the Bankruptcy Code or any equivalent
provision of any other Bankruptcy Law, each Pari Secured Party (other than any Controlling Secured Party or the Authorized Representative
of any Controlling Secured Party) agrees that it will raise no objection to any such financing or to the Liens on the Shared Collateral
securing the same (“DIP Financing Liens”) or to any use of cash collateral that constitutes Shared Collateral,
unless the Controlling Collateral Agent (in the case of any Collateral Agent other than the Credit Agreement Collateral Agent,
acting on the instructions of the Applicable Authorized Representative) shall then oppose or object to such DIP Financing or such
DIP Financing Liens or use of cash collateral (and (i) to the extent that such DIP Financing Liens are senior to the Liens on any
such Shared Collateral for the benefit of the Controlling Secured Parties, each Non-Controlling Secured Party will subordinate
its Liens with respect to such Shared Collateral on the same terms as the Liens of the Controlling Secured Parties (other than
any Liens of any Pari Secured Parties constituting DIP Financing Liens) are subordinated thereto, and (ii) to the extent that such
DIP Financing Liens rank pari passu with the Liens on any such Shared Collateral granted to secure the Pari Obligations of the
Controlling Secured Parties, each Non-Controlling Secured Party will confirm the priorities with respect to such Shared Collateral
as set forth herein), in each case so long as (A) the Pari Secured Parties of each Series retain the benefit of their Liens on
all such Shared Collateral pledged to the DIP Lenders, including proceeds thereof arising after the commencement of such proceeding,
with the same priority vis-à-vis all the other Pari Secured Parties (other than any Liens of the Pari Secured Parties
constituting DIP Financing Liens) as existed prior to the commencement of the Bankruptcy Case, (B) the Pari Secured Parties of
each Series are granted Liens on any additional collateral pledged to any Pari Secured Parties as adequate protection or otherwise
in connection with such DIP Financing or use of cash collateral (in each case, except to the extent a Lien on additional collateral
is granted to one Series in consideration of Collateral of such Series that is not Shared Collateral for a Series that does not
receive a Lien on such additional collateral), with the same priority vis-à-vis the Pari Secured Parties as set
forth in this Agreement, (C) if any amount of such DIP Financing or cash collateral is applied to repay any of the Pari Obligations,
such amount is applied pursuant to Section 2.01 (in each case, except to the extent a payment is made to one Series in consideration
of Collateral of such Series that is not Shared Collateral for a Series that does not receive such payment), and (D) if any Pari
Secured Parties are granted adequate protection, including in the form of periodic payments, in connection with such DIP Financing
or use of cash collateral, the proceeds of such adequate protection are applied pursuant to Section 2.01 (in each case,
except to the extent such adequate protection is granted to one Series in consideration of Collateral of such Series that is not
Shared Collateral for a Series that does not receive such adequate protection); provided that the Pari Secured Parties of
each Series shall have a right to object to the grant of a Lien to secure the DIP Financing over any Collateral subject to Liens
in favor of the Pari Secured Parties of such Series or its Authorized Representative that shall not constitute Shared Collateral;
and provided, further, that the Pari Secured Parties receiving adequate protection shall not object to any other
Pari Secured Party receiving adequate protection comparable to any adequate protection granted to such Pari Secured Parties (other
than as a provider of DIP Financing) in connection with a DIP Financing or use of cash collateral.
SECTION 2.07 Reinstatement.
In the event that any of the Pari Obligations shall be paid in full and such payment or any part thereof shall subsequently, for
whatever reason (including an order or judgment for disgorgement of a preference under the Bankruptcy Code, or any similar law,
or the settlement of any claim in respect thereof), be required to be returned or repaid, the terms and conditions of this Article
II shall be fully applicable thereto until all such Pari Obligations shall again have been paid in full in cash.
SECTION 2.08 Insurance.
As between the Pari Secured Parties, the Controlling Collateral Agent shall have the right to adjust or settle any insurance policy
or claim covering or constituting Shared Collateral in the event of any loss thereunder and to approve any award granted in any
condemnation or similar proceeding affecting the Shared Collateral.
SECTION 2.09 Refinancings.
The Pari Obligations of any Series may be Refinanced, in whole or in part, in each case, without notice to, or the consent (except
to the extent a consent is otherwise required to permit the Refinancing transaction under any Secured Credit Document) of any Pari
Secured Party of any other Series, all without affecting the priorities provided for herein or the other provisions hereof; provided
that the Authorized Representative and Collateral Agent of the holders of any such Refinancing indebtedness shall have executed
a Joinder Agreement on behalf of the holders of such Refinancing indebtedness.
SECTION 2.10 Possessory
Collateral Agent as Bailee and Agent for Perfection.
(a) Possessory
Collateral shall be delivered to the Controlling Collateral Agent and the Controlling Collateral Agent agrees to hold all Possessory
Collateral that is in its possession or control (or in the possession or control of its agents or bailees) as bailee and agent
(such bailment and agency being intended, among other things, to satisfy the requirements of Section 8-301(a)(2) and 9-313(c)
of the Uniform Commercial Code, to the extent applicable) for the benefit of each other Pari Secured Party for which such Possessory
Collateral is Shared Collateral and any assignee solely for the purpose of perfecting the security interest granted in such Possessory
Collateral, if any, pursuant to the applicable Pari Security Documents, in each case, subject to the terms and conditions of this
Section 2.10; provided that at any time a Collateral Agent ceases to be Controlling Collateral Agent with respect to any
Possessory Collateral, such former Controlling Collateral Agent shall, at the request of the new Controlling Collateral Agent,
promptly deliver all such Possessory Collateral to such new Controlling Collateral Agent together with any necessary endorsements
(or otherwise allow such new Controlling Collateral Agent to obtain control of such Possessory Collateral). The Borrower shall
take such further action as is reasonably requested to effectuate the transfer contemplated hereby.
(b) The
Controlling Collateral Agent agrees to hold any Shared Collateral constituting Possessory Collateral, from time to time in its
possession, as gratuitous bailee (such bailment being intended, among other things, to satisfy the requirements of Section 8-301(a)(2)
and 9-313(c) of the Uniform Commercial Code, to the extent applicable) for the benefit of each other Pari Secured Party and
any assignee, solely for the purpose of perfecting the security interest granted in such Possessory Collateral, if any, pursuant
to the applicable Pari Security Documents, in each case, subject to the terms and conditions of this Section 2.10.
(c) The
duties or responsibilities of each Collateral Agent under this Section 2.10 shall be limited solely to holding any Shared
Collateral constituting Possessory Collateral as gratuitous bailee (such bailment being intended, among other things, to satisfy
the requirements of Section 8-301(a)(2) and 9-313(c) of the Uniform Commercial Code, to the extent applicable) for the
benefit of each other Pari Secured Party for purposes of perfecting the Lien held by such Pari Secured Parties thereon.
SECTION 2.11 Amendments
to Security Documents.
(a) Without
the prior written consent of the Credit Agreement Collateral Agent, each Additional Pari Secured Party agrees that no Additional
Pari Security Document may be amended, restated, amended and restated, supplemented or otherwise modified or entered into to the
extent such amendment, restatement, amendment and restatement, supplement or modification, or the terms of any new Additional Pari
Security Document would contravene any of the terms of this Agreement.
(b) Without
the prior written consent of the Additional Pari Collateral Agents, the Credit Agreement Collateral Agent agrees that no Credit
Agreement Collateral Document may be amended, restated, amended and restated, supplemented or otherwise modified or entered into
to the extent such amendment, restatement, amendment and restatement, supplement or modification, or the terms of any new Credit
Agreement Collateral Document would contravene any of the terms of this Agreement.
ARTICLE III
Existence and Amounts of Liens and Obligations
SECTION 3.01 Determinations
with Respect to Amounts of Liens and Obligations. Whenever a Collateral Agent or any Authorized Representative shall be required,
in connection with the exercise of its rights or the performance of its obligations hereunder, to determine the existence or amount
of any Pari Obligations of any Series, or the Shared Collateral subject to any Lien securing the Pari Obligations of any Series,
it may request that such information be furnished to it in writing by each other Authorized Representative or Collateral Agent
and shall be entitled to make such determination or not make any determination on the basis of the information so furnished; provided,
however, that if an Authorized Representative or a Collateral Agent shall fail or refuse reasonably promptly to provide
the requested information. the requesting Collateral Agent or Authorized Representative shall be entitled to make any such determination
by such method as it may. in the exercise of its good faith judgment. determine. including by reliance upon a certificate of the
Borrower. Each Collateral Agent and each Authorized Representative may rely conclusively. and shall be fully protected in so relying.
on any determination made by it in accordance with the provisions of the preceding sentence (or as otherwise directed by a court
of competent jurisdiction) and shall have no liability to any Grantor. any Pari Secured Party or any other Person as a result of
such determination.
ARTICLE IV
The Controlling Collateral Agent
SECTION 4.01 Authority.
(a) Notwithstanding
any other provision of this Agreement, nothing herein shall be construed to impose any fiduciary or other duty on the Controlling
Collateral Agent to any Non-Controlling Secured Party or give any Non-Controlling Secured Party the right to direct the
Controlling Collateral Agent. except that the Controlling Collateral Agent shall be obligated to distribute Proceeds of any Shared
Collateral in accordance with Section 2.01 hereof.
(b) In
furtherance of the foregoing. each Non-Controlling Secured Party acknowledges and agrees that the Controlling Collateral Agent
shall be entitled, for the benefit of the Pari Secured Parties, to sell, transfer or otherwise dispose of or deal with any Shared
Collateral as provided herein and in the Pari Security Documents. as applicable. pursuant to which the Controlling Collateral Agent
is the collateral agent for such Shared Collateral. without regard to any rights to which the Non-Controlling Secured Parties
would otherwise be entitled as a result of the Pari Obligations held by such Non-Controlling Secured Parties. Without limiting
the foregoing. each Non-Controlling Secured Party agrees that none of the Controlling Collateral Agent. the Applicable Authorized
Representative or any other Pari Secured Party shall have any duty or obligation first to marshal or realize upon any type of Shared
Collateral (or any other Collateral securing any of the Pari Obligations). or to sell. dispose of or otherwise liquidate all or
any portion of such Shared Collateral (or any other Collateral securing any Pari Obligations). in any manner that would maximize
the return to the Non-Controlling Secured Parties. notwithstanding that the order and timing of any such realization. sale.
disposition or liquidation may affect the amount of Proceeds actually received by the Non-Controlling Secured Parties from
such realization. sale. disposition or liquidation. Each of the Pari Secured Parties waives any claim it may now or hereafter have
against any Collateral Agent or the Authorized Representative of any other Series of Pari Obligations or any other Pari Secured
Party of any other Series arising out of (i) any actions in accordance with this Agreement which any Collateral Agent. Authorized
Representative or the Pari Secured Parties take or omit to take (including. actions with respect to the creation. perfection or
continuation of Liens on any Collateral. actions with respect to the foreclosure upon. sale. release or depreciation of. or failure
to realize upon. any of the Collateral and actions with respect to the collection of any claim for all or any part of the Pari
Obligations from any account debtor. guarantor or any other party) in accordance with the Pari Security Documents or any other
agreement related thereto or to the collection of the Pari Obligations or the valuation. use. protection or release of any security
for the Pari Obligations. (ii) any election in accordance with this Agreement by any Applicable Authorized Representative or any
holders of Pari Obligations. in any proceeding instituted under the Bankruptcy Code. of the application of Section 1111(b) of the
Bankruptcy Code or (iii) subject to Section 2.06. any borrowing by. or grant of a security interest or administrative expense
priority under Section 364 of the Bankruptcy Code or any equivalent provision of any other Bankruptcy Law. by the Borrower or any
of its Subsidiaries. as debtor-in-possession. Notwithstanding any other provision of this Agreement, the Controlling Collateral
Agent shall not accept any Shared Collateral in full or partial satisfaction of any Pari Obligations pursuant to Section 9-620
of the Uniform Commercial Code of any jurisdiction, without the consent of each Authorized Representative representing holders
of Pari Obligations for whom such Collateral constitutes Shared Collateral.
ARTICLE V
Miscellaneous
SECTION 5.01 Notices.
All notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier
service, mailed by certified or registered mail or sent by facsimile, as follows:
(a) if
to the Borrower or any Grantor, to the Borrower, at its address at:
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620 Division Street
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Elizabeth, New Jersey 07207
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Attention:
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Co-Chairman of the Board
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Facsimile:
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(908) 351-4492
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Email:
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rdavis@hayward.com
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with copy to (which shall not constitute notice to any Loan Party):
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CCMP Capital Advisors, LLC
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277 Park Avenue, 37th Floor
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New York, NY 10172
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Attention:
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Richard Jansen, Esq.
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Facsimile:
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(212) 599-3481
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Email:
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richard.jansen@ccmpcapital.com
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and
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c/o MSD Partners, L.P.
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645 Fifth Avenue, 21st Floor
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New York, New York 10022
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Attention:
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Marcello Liguori
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Fax No.:
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(212) 303-1772
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Email:
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mliguori@msdcapital.com
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and
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c/o Alberta Investment Management Corporation
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First Canadian Place
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100 King Street West
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Suite 5120, P.O. Box 51
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Toronto, Ontario M5X 1B1, Canada
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Attention: Jason Peters
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and
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c/o Alberta Investment Management Corporation
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1100 - 10830 Jasper Avenue
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Edmonton, Alberta T5J 2B3, Canada
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Attention: Christina Luison
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and
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Ropes & Gray LLP
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1211 Avenue of the Americas
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New York, NY 10036
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Attention:
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Jay Kim
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Telephone:
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(212) 497-3626
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Facsimile:
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(646) 728-1667
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Email:
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Jay.Kim@ropesgray.com
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and
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Dechert LLP
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2929 Arch Street
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Philadelphia, Pennsylvania 19104
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Attention:
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Geraldine Sinatra and Eric Siegel
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Facsimile:
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(215) 994-2222
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Email:
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geraldine.sinatra@dechert.com
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eric.siegel@dechert.com
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and
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Torys LLP
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The Grace Building
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1114 Avenue of the Americas
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New York, New York 10036
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Attention:
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Jared Fontaine
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Facsimile:
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(212) 682-0200
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Email:
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jfontaine@torys.com
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(b) if to the Credit Agreement Collateral Agent or the Administrative Agent, to it at:
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Bank of America, N.A.
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135 S. LaSalle Street
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Mail Code: IL4-135-09-61
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Chicago, Illinois 60603
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Attention:
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Denise Jones
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Telephone:
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312.828.1846
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Telecopier:
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877.206.8413
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Electronic Mail: denise.i.jones@baml.com
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with a copy to:
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Davis Polk & Wardwell
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Attention:
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John (JW) Perry
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Telephone:
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(212) 450-4949
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Facsimile:
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(212) 701-5949
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Email:
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john.perry@davispolk.com
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(c) if
to the Initial Additional Authorized Representative or the Initial Additional Pari Collateral Agent, to it at:
[ ],
Attention of [ ] (Fax No. [ ]);or
(d) if
to any other Authorized Representative or Collateral Agent, to it at the address set forth in the applicable Joinder Agreement.
Any party hereto may change its address
or facsimile number for notices and other communications hereunder by notice to the other parties hereto. All notices and other
communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given
on the date of receipt (if a Business Day) and on the next Business Day thereafter (in all other cases) if delivered by hand or
overnight courier service or sent by facsimile or on the date three Business Days after dispatch by certified or registered mail
if mailed, in each case delivered, sent or mailed (properly addressed) to such party as provided in this Section 5.01 or
in accordance with the latest unrevoked direction from such party given in accordance with this Section 5.01. As agreed
to in writing among each Collateral Agent and each Authorized Representative from time to time, notices and other communications
may also be delivered by e-mail to the e-mail address of a representative of the applicable Person provided from time to
time by such Person.
SECTION 5.02 Waivers;
Amendment; Joinder Agreements.
(a) No
failure or delay on the part of any party hereto in exercising any right, remedy, privilege or power hereunder shall operate as
a waiver thereof, nor shall any single or partial exercise of any such right, remedy, privilege or power, or any abandonment or
discontinuance of steps to enforce such a right, remedy, privilege or power, preclude any other or further exercise thereof or
the exercise of any other right, remedy, privilege or power. The rights, powers, privileges and remedies of the parties hereto
are cumulative and are not exclusive of any rights, powers, privileges or remedies that they would otherwise have. No waiver of
any provision of this Agreement or consent to any departure by any party therefrom shall in any event be effective unless the same
shall be permitted by Section 5.02(b), and then such waiver or consent shall be effective only in the specific instance
and for the purpose for which given. No notice or demand on any party hereto in any case shall entitle such party to any other
or further notice or demand in similar or other circumstances.
(b) Neither
this Agreement nor any provision hereof may be terminated, waived, amended or modified (other than pursuant to any Joinder
Agreement) except pursuant to an agreement or agreements in writing entered into by (i) each Authorized Representative and
each Collateral Agent and (ii) the Grantors, solely with respect to (x) any amendments or modifications of Sections 2.06 or
2.11 or Sections 5.01 through 5.15 or (y) any amendments or modifications that (I) adversely affect any obligation or right
of the Grantors hereunder or under the Secured Credit Documents or that would impose any additional obligations on the
Grantors or (II) change the rights of the Grantors to refinance the Credit Agreement Obligations, the Initial Additional
Priority Obligations or the Additional Pari Obligations.
(c) Notwithstanding
the foregoing, without the consent of any Pari Secured Party, any Authorized Representative may become a party hereto by execution
and delivery of a Joinder Agreement in accordance with Section 5.12 and upon such execution and delivery, such Authorized
Representative and the Additional Pari Secured Parties and Additional Pari Obligations of the Series for which such Authorized
Representative is acting shall be subject to the terms hereof.
(d) Notwithstanding
the foregoing, in connection with any Refinancing of Pari Obligations of any Series, or the incurrence of Additional Pari Obligations
of any Series, the Collateral Agents and the Authorized Representatives then party hereto shall enter (and are hereby authorized
to enter without the consent of any other Pari Secured Party or any Grantor), at the request of any Collateral Agent, any Authorized
Representative or the Borrower, into such amendments or modifications of this Agreement as are reasonably necessary to reflect
such Refinancing or such incurrence and are reasonably satisfactory to each such Collateral Agent and each such Authorized Representative,
provided that any Collateral Agent or Authorized Representative may condition its execution and delivery of any such amendment
or modification on a receipt of a certificate from an Authorized Officer of the Borrower to the effect that such Refinancing or
incurrence is permitted by the then existing Secured Credit Documents.
SECTION 5.03
Parties in Interest. This Agreement and the rights and benefits hereof shall inure to the benefit of each of the parties
hereto and their respective successors and assigns and shall inure to the benefit of and bind each of the Pari Secured Parties.
Nothing in this Agreement is intended to or shall impair the obligations of any Grantor, which are absolute and unconditional,
to pay the Pari Obligations as and when the same shall become due and payable in accordance with their terms.
SECTION 5.04 Survival
of Agreement. All covenants, agreements, representations and warranties made by any party in this Agreement shall be considered
to have been relied upon by the other parties hereto and shall survive the execution and delivery of this Agreement.
SECTION 5.05 Counterparts.
This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts (including
by facsimile or other electronic transmission), and all of said counterparts taken together shall be deemed to constitute one and
the same instrument.
SECTION 5.06 Severability.
Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall not invalidate the remaining provisions
hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision
in any other jurisdiction.
SECTION 5.07 GOVERNING
LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
SECTION 5.08 Submission
to Jurisdiction Waivers; Consent to Service of Process. Each Collateral Agent and each Authorized Representative, on behalf
of itself and the Pari Secured Parties of the Series for whom it is acting, irrevocably and unconditionally:
(a) submits
for itself and its property in any legal action or proceeding relating to this Agreement to which it is a party to the exclusive
general jurisdiction of the courts of the State of New York or the courts of the United States for the Southern District of New
York, in each case sitting in New York City in the Borough of Manhattan, and appellate courts from any thereof;
(b) consents
that any such action or proceeding may be brought in such courts and waives (to the extent permitted by applicable law) any objection
that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding
was brought in an inconvenient court and agrees not to plead or claim the same or to commence or support any such action or proceeding
in any other courts;
(c) agrees
that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to such Person at its address set forth in Section 5.01;
(d) agrees
that nothing herein shall affect the right of any other party hereto (or any Secured Party) to effect service of process in any
other manner permitted by law or to commence legal proceedings or otherwise proceed against Holdings or the Borrower or any other
Credit Party in any other jurisdiction; and
(e) waives,
to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceeding referred
to in this Section 5.08 any special, exemplary, punitive or consequential damages.
SECTION 5.09 WAIVER
OF JURY TRIAL. EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES (TO THE EXTENT PERMITTED BY APPLICABLE LAW) TRIAL BY
JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR FOR ANY COUNTERCLAIM THEREIN.
SECTION 5.10 Headings.
Article, Section and Annex headings used herein are included for convenience of reference only and shall not affect the interpretation
of this Agreement.
SECTION 5.11 Conflicts.
In the event of any conflict or inconsistency between the provisions of this Agreement and the provisions of any of the Pari
Security Documents or any of the other Secured Credit Documents, the provisions of this Agreement shall control.
Notwithstanding the foregoing, (i) the relative rights and obligations of the Pari Secured Parties on the one hand, and the
Second Priority Secured Parties (as defined in the Junior Lien Intercreditor Agreement) on the other hand, with respect to
any Collateral shall be governed by the terms of the Junior Lien Intercreditor Agreement and in the event of any conflict
between this Agreement and the Junior Lien Intercreditor Agreement with respect to such rights and obligations, the
provisions of the Junior Lien Intercreditor Agreement shall control and (ii) the relative rights and obligations of the Pari
Secured Parties on the one hand, and the ABL Secured Parties (as defined in the ABL Intercreditor Agreement) on the other
hand, with respect to any Collateral shall be governed by the terms of the ABL Intercreditor Agreement and in the event of
any conflict between this Agreement and the ABL Intercreditor Agreement with respect to such rights and obligations, the
provisions of the ABL Intercreditor Agreement shall control.
SECTION 5.12 Additional
Senior Debt. To the extent, but only to the extent, permitted by the provisions of the Credit Agreement and the Additional
Pari Documents, the Borrower may incur additional indebtedness after the date hereof that is permitted by the Credit Agreement
and the Additional Pari Documents to be incurred and secured on an equal and ratable basis by the Liens securing the Pari Obligations
(such indebtedness referred to as “Additional Senior Class Debt”). Any such Additional Senior Class Debt, together
with obligations relating thereto, may be secured by such Liens if and subject to the condition that the trustee, administrative
agent or similar representative for the holders of such Additional Senior Class Debt (each, an “Additional Senior Class
Debt Representative”), and the collateral agent, collateral trustee or similar representative for the holders of such
Additional Senior Class Debt (each, an “Additional Senior Class Debt Collateral Agent” and, together with the
holders of such Additional Senior Class Debt and the related Additional Senior Class Debt Representative, the “Additional
Senior Class Debt Parties”), in each case acting on behalf of the holders of such Additional Senior Class Debt, become
a party to this Agreement by satisfying the conditions set forth in clauses (i) through (iv) of the immediately succeeding paragraph
and by becoming a party to each of the Junior Lien Intercreditor Agreement (if then in effect) and the ABL Intercreditor Agreement
(if then in effect), in each case in accordance with the terms thereof.
In order, with
respect to any additional Senior Class Debt, for an Additional Senior Class Debt Representative and the related Additional Senior
Class Debt Collateral Agent to become a party to this Agreement,
(i) such
Additional Senior Class Debt Representative and Additional Senior Class Debt Collateral Agent, each Collateral Agent, each Authorized
Representative and each Grantor shall have executed and delivered a Joinder Agreement (with such changes as may be reasonably approved
by such Authorized Representatives and such Additional Senior Class Debt Representative) pursuant to which such Additional Senior
Class Debt Representative becomes an “Authorized Representative” hereunder, such Additional Senior Class Debt Collateral
Agent becomes a “Collateral Agent” hereunder and such Additional Senior Class Debt and the related Additional Senior
Class Debt Parties become subject hereto and bound hereby;
(ii) the
Borrower shall have (x) delivered to each Authorized Representative true and complete copies of each of the Additional Pari Documents
relating to such Additional Senior Class Debt, certified as being true and correct by an Authorized Officer of the Borrower and
(y) identified in a certificate of an Authorized Officer of the Borrower such Additional Senior Class Debt, stating the initial
aggregate principal amount or face amount thereof, and the obligations to be designated as Additional Pari Obligations and certified
that such obligations are permitted to be incurred and secured on a pari passu basis with the then-extant Pari Obligations
and by the terms of the then-extant Secured Credit Documents;
(iii) all
filings, recordations and/or amendments or supplements to the Pari Security Documents necessary or desirable in the reasonable
judgment of such Additional Senior Class Debt Representative to confirm and perfect the Liens securing the relevant obligations
relating to such Additional Senior Class Debt shall have been made, executed and/or delivered (or, with respect to any such filings
or recordations, acceptable provisions to perform such filings or recordations shall have been taken in the reasonable judgment
of such Additional Senior Class Debt Representative), and all fees and taxes in connection therewith shall have been paid (or acceptable
provisions to make such payments have been taken in the reasonable judgment of such Additional Senior Class Debt Representative);
and
(iv) the
Additional Pari Documents, as applicable, relating to such Additional Senior Class Debt shall provide, in a manner reasonably satisfactory
to each Collateral Agent, that each Additional Senior Class Debt Party with respect to such Additional Senior Class Debt will be
subject to and bound by the provisions of this Agreement in its capacity as a holder of such Additional Senior Class Debt.
SECTION 5.13 Agent
Capacities. Except as expressly provided herein or in the Credit Agreement Collateral Documents, Bank of America, N.A. is acting
in the capacities of Administrative Agent and Credit Agreement Collateral Agent solely for the Credit Agreement Secured Parties.
Except as expressly provided herein or in the Additional Pari Security Documents, [ ]
is acting in the capacity of Initial Additional Pari Collateral Agent and Initial Additional Authorized Representative solely for
the Initial Additional Pari Secured Parties. Except as expressly set forth herein, none of the Administrative Agent, the Credit
Agreement Collateral Agent, the Initial Additional Authorized Representative or the Initial Additional Pari Collateral Agent shall
have any duties or obligations in respect of any of the Collateral, all of such duties and obligations, if any, being subject to
and governed by the applicable Secured Credit Documents. The Administrative Agent and the Credit Agreement Collateral Agent shall
have no liability for any actions in any role under this Agreement to anyone other than the Credit Agreement Secured Parties and
only then in accordance with the Credit Agreement Collateral Documents.
SECTION 5.14 Additional
Grantors. In the event any Subsidiary of a Grantor shall have granted a Lien on any of its assets to secure any Pari Obligations,
such Grantor shall cause such Subsidiary, if not already a party hereto, to become a party hereto as a “Grantor”. Upon
the execution and delivery by any Subsidiary of a Grantor of a Grantor Joinder Agreement in substantially the form of Annex
III hereof, any such Subsidiary shall become a party hereto and a Grantor hereunder with the same force and effect as if originally
named as such herein. The execution and delivery of any such instrument shall not require the consent of any other party hereto
(except to the extent obtained on or prior to such date). The rights and obligations of each party hereto shall remain in full
force and effect notwithstanding the addition of any new Grantor as a party to this Agreement.
SECTION 5.15 Integration.
This Agreement together with the other Secured Credit Documents and the Pari Security Documents represents the agreement of
each of the Grantors and the Pari Secured Parties with respect to the subject matter hereof and there are no promises,
undertakings, representations or warranties by any Grantor, the Credit Agreement Collateral Agent, or any other Pari Secured
Party relative to the subject matter hereof not expressly set forth or referred to herein or in the other Secured Credit
Documents or the Pari Security Documents.
IN WITNESS WHEREOF,
the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year
first above written.
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BANK OF AMERICA, N.A.,
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as Administrative Agent and
as Credit Agreement
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Collateral Agent
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By:
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Name:
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Title:
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[ ],
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as Initial Additional Pari
Collateral Agent and as Initial Additional Authorized Representative
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By:
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Name:
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Title:
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IN WITNESS WHEREOF,
we have hereunto signed this Agreement as of the date first written above.
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HAYWARD INTERMEDIATES, INC.
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By:
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Name:
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Title:
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HAYWARD INDUSTRIES, INC.
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By:
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Name:
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Title:
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[GRANTORS]
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By:
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Name:
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Title:
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ANNEX I
Grantors
Schedule
1
[ ]
ANNEX II
[FORM OF] JOINDER AGREEMENT
NO. [__] dated as of [__], 20[__] (this “Joinder Agreement”) to the PARI INTERCREDITOR AGREEMENT dated as of
[__], 20[__] (the “Pari Intercreditor Agreement”), among HAYWARD INTERMEDIATE, INC., a Delaware corporation
(“Holdings”), HAYWARD INDUSTRIES, INC., a New Jersey corporation (the “Borrower”), certain subsidiaries
and affiliates of the Borrower (each, a “Grantor”), BANK OF AMERICA, N.A., as Credit Agreement Collateral Agent
for the Credit Agreement Secured Parties under the Credit Agreement Collateral Documents (in such capacity, the “Credit
Agreement Collateral Agent”), BANK OF AMERICA, N.A., as Administrative Agent for the Credit Agreement Secured Parties
(in such capacity, the “Administrative Agent”), [ ], as Initial Additional
Authorized Representative and Initial Additional Pari Collateral Agent, and the additional Authorized Representatives and Collateral
Agents from time to time a party thereto.1
A. Capitalized
terms used herein but not otherwise defined herein shall have the meanings assigned to such terms in the Pari Intercreditor Agreement.
Section 1.02 contained in the Pari Intercreditor Agreement is incorporated herein, mutatis mutandis, as if a part hereof.
B. As
a condition to the ability of the Borrower to incur Additional Pari Obligations and to secure such Additional Senior Class Debt
with the liens and security interests created by the Additional Pari Security Documents, the Additional Senior Class Debt Representative
in respect of such Additional Senior Class Debt is required to become an Authorized Representative, the Additional Senior Class
Debt Collateral Agent in respect of such Additional Senior Class Debt is required to become a Collateral Agent, and such Additional
Senior Class Debt and the Additional Senior Class Debt Parties in respect thereof are required to become subject to and bound by,
the Pari Intercreditor Agreement. Section 5.12 of the Pari Intercreditor Agreement provides that such Additional Senior Class Debt
Representative may become an Authorized Representative, such Additional Senior Class Debt Collateral Agent may become a Collateral
Agent, and such Additional Senior Class Debt and such Additional Senior Class Debt Parties may become subject to and bound by the
Pari Intercreditor Agreement upon the execution and delivery by the Additional Senior Debt Class Representative and the Additional
Senior Debt Class Collateral Agent of an instrument in the form of this Joinder Agreement and the satisfaction of the other conditions
set forth in Section 5.12 of the Pari Intercreditor Agreement. The undersigned Additional Senior Class Debt Representative (the
“New Representative”) and Additional Senior Class Debt Collateral Agent (the “New Collateral Agent”)
are executing this Joinder Agreement in accordance with the requirements of the Pari Intercreditor Agreement and the Pari Security
Documents and shall have, substantially contemporaneously herewith, joined each of the Junior Lien Intercreditor Agreement (if
then in effect) and the ABL Intercreditor Agreement (if then in effect), in each case in accordance with the terms thereof.
1 In the
event of the Refinancing of the Credit Agreement Obligations, revise to reflect joinder by a new Credit Agreement Collateral Agent.
Accordingly, each Collateral
Agent, each Authorized Representative, the New Representative and the New Collateral Agent agree as follows:
SECTION 1. In accordance
with Section 5.12 of the Pari Intercreditor Agreement, the New Representative by its signature below becomes an Authorized Representative
under, the New Collateral Agent by its signature below becomes a Collateral Agent under, and the related Additional Senior Class
Debt and Additional Senior Class Debt Parties become subject to and bound by, the Pari Intercreditor Agreement with the same force
and effect as if the New Representative had originally been named therein as an Authorized Representative and the New Collateral
Agent had originally been named therein as a Collateral Agent, and each of the New Representative and the new Collateral Agent,
on its behalf and on behalf of such Additional Senior Class Debt Parties, hereby agrees to all the terms and provisions of the
Pari Intercreditor Agreement applicable to it as Authorized Representative or Collateral Agent, as applicable, and to the Additional
Senior Class Debt Parties that it represents as Additional Pari Secured Parties. Each reference to an “Authorized Representative”
in the Pari Intercreditor Agreement shall be deemed to include the New Representative. Each reference to a “Collateral
Agent” in the Pari Intercreditor Agreement shall be deemed to include the New Collateral Agent. The Pari Intercreditor
Agreement is hereby incorporated herein by reference.
SECTION 2. Each of
the New Representative and the New Collateral Agent represents and warrants to each Collateral Agent, each Authorized Representative
and the other Pari Secured Parties, individually, that (i) it has full power and authority to enter into this Joinder Agreement,
in its capacity as [trustee/administrative agent/collateral agent] under [describe new facility], (ii) this Joinder Agreement has
been duly authorized, executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against
it in accordance with its terms and (iii) the Additional Pari Documents relating to such Additional Senior Class Debt provide that,
upon its entry into this Joinder Agreement, the Additional Senior Class Debt Parties in respect of such Additional Senior Class
Debt will be subject to and bound by the provisions of the Pari Intercreditor Agreement as Additional Pari Secured Parties.
SECTION 3. This Joinder
Agreement may be executed in counterparts, each of which shall constitute an original, but all of which when taken together shall
constitute a single contract. This Joinder Agreement shall become effective when each Collateral Agent shall have received a counterpart
of this Joinder Agreement that bears the signatures of the New Representative and the New Collateral Agent. Delivery of an executed
signature page to this Joinder Agreement by facsimile or other electronic transmission shall be effective as delivery of a manually
signed counterpart of this Joinder Agreement.
SECTION 4. Except as
expressly supplemented hereby, the Pari Intercreditor Agreement shall remain in full force and effect.
SECTION 5. THIS JOINDER
AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.
SECTION 6. In case
any one or more of the provisions contained in this Joinder Agreement should be held invalid, illegal or unenforceable in any
respect, no party hereto shall be required to comply with such provision for so long as such provision is held to be invalid,
illegal or unenforceable, but the validity, legality and enforceability of the remaining provisions contained herein and in the
Pari Intercreditor Agreement shall not in any way be affected or impaired. The parties hereto shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes
as close as possible to that of the invalid, illegal or unenforceable provisions.
SECTION 7. All communications
and notices hereunder shall be in writing and given as provided in Section 5.01 of the Pari Intercreditor Agreement. All communications
and notices hereunder to the New Representative or the New Collateral Agent shall be given to it at its address set forth below
its signature hereto.
SECTION 8. Holdings
and the Borrower agree to reimburse each Collateral Agent and each Authorized Representative for its reasonable and documented
out-of-pocket expenses in connection with this Joinder Agreement, including the reasonable documented fees, other charges
and disbursements of counsel to the extent reimbursable under the Secured Credit Documents of the applicable Series.
[Remainder of this
page intentionally left blank - signature pages follow]
IN WITNESS WHEREOF,
the New Representative and New Collateral Agent have duly executed this Joinder Agreement as of the day and year first above written.
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[NAME OF NEW REPRESENTATIVE],
as New Representative,
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By:
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Name:
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Title:
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Address for notices:
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[NAME OF NEW COLLATERAL
AGENT], as New Collateral Agent,
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By:
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Name:
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Title:
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Address for notices:
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Acknowledged by:
BANK OF AMERICA, N.A.,
as the Credit Agreement Collateral Agent and as the Administrative
Agent
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By:
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Name:
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Title:
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[__],
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as the Initial Additional Authorized Representative and the Initial Additional Pari Collateral Agent
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By:
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Name:
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Title:
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[OTHER AUTHORIZED REPRESENTATIVES]
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HAYWARD INTERMEDIATES, INC.
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By:
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Name:
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Title:
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HAYWARD INDUSTRIES, INC.
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By:
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Name:
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Title:
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THE OTHER GRANTORS
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LISTED ON SCHEDULE I HERETO
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By:
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Name:
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Title:
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Schedule I to the
Joinder Agreement
Grantors
[__]
ANNEX III
[FORM OF] GRANTOR JOINDER
AGREEMENT NO. [__] dated as of [__] (this “Joinder Agreement”) to the PARI INTERCREDITOR AGREEMENT dated as
of [__], 20[__] (the “Intercreditor Agreement”), among HAYWARD INTERMEDIATE, INC., a Delaware corporation (“Holdings”),
HAYWARD INDUSTRIES, INC., a New Jersey corporation (the “Company”), certain subsidiaries and affiliates of the Company
(each, a “Grantor”), BANK OF AMERICA, N.A., as Credit Agreement Collateral Agent for the Credit Agreement Secured
Parties under the Credit Agreement Collateral Documents (in such capacity, the “Credit Agreement Collateral Agent”),
BANK OF AMERICA, N.A., as Administrative Agent for the Credit Agreement Secured Parties (in such capacity, the “Administrative
Agent”), [ ], as Initial Additional Authorized Representative and Initial Additional Pari
Collateral Agent, and the additional Authorized Representatives and Collateral Agents from time to time a party thereto.
Capitalized terms used
herein but not otherwise defined herein shall have the meanings assigned to such terms in the Intercreditor Agreement.
[__], a [__] [corporation]
[limited liability company] and a Subsidiary of Holdings (the “Additional Grantor”), has granted a Lien on all
or a portion of its assets to secure Pari Obligations and such Additional Grantor is not a party to the Intercreditor Agreement.
The Additional Grantor
wishes to become a party to the Pari Intercreditor Agreement and to acquire and undertake the rights and obligations of a Grantor
thereunder. The Additional Grantor is entering into this Joinder Agreement in accordance with the provisions of the Intercreditor
Agreement in order to become a Grantor thereunder.
Accordingly, the Additional
Grantor agrees as follows, for the benefit of the Collateral Agents, the Authorized Representatives and the Pari Secured Parties:
SECTION 1.01 Accession
to the Intercreditor Agreement. The Additional Grantor (a) hereby accedes and becomes a party to the Intercreditor
Agreement as a “Grantor”, (b) agrees to all the terms and provisions of the Intercreditor Agreement and (c)
acknowledges and agrees that the Additional Grantor shall have the rights and obligations specified under the Intercreditor
Agreement with respect to a “Grantor”, and shall be subject to and bound by the provisions of the Intercreditor
Agreement.
SECTION 1.02 Representations
and Warranties of the Additional Grantor. The Additional Grantor represents and warrants to the Collateral Agents, the
Authorized Representatives and the Pari Secured Parties on the date hereof that this Joinder Agreement has been duly
authorized, executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in
accordance with its terms.
SECTION 1.03 Parties
in Interest. This Joinder Agreement shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, as well as the other Pari Secured Parties, all of whom are intended to be bound by, and to
be third party beneficiaries of, this Agreement.
SECTION 1.04 Counterparts.
This Joinder Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be
deemed an original, but all such counterparts together shall constitute but one and the same instrument. This Joinder
Agreement shall become effective when the Authorized Representatives shall have received a counterpart of this Joinder
Agreement that bears the signature of the Additional Grantor. Delivery of an executed signature page to this Agreement by
facsimile or other electronic transmission shall be as effective as delivery of a manually signed counterpart of this Joinder
Agreement.
SECTION 1.05 Governing
Law. THIS JOINDER AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
SECTION 1.06 Notices.
Any notice or other communications herein required or permitted shall be in writing and given as provided in Section 5.01 of the
Intercreditor Agreement.
SECTION 1.07 Expenses.
The Grantor agrees to pay promptly the Collateral Agents and each of the Authorized Representatives for its reasonable and documented
costs and expenses incurred in connection with this Joinder Agreement, including the reasonable documented fees, expenses and disbursements
of counsel for the Collateral Agents and any of the Authorized Representatives to the extent reimbursable under Secured Credit
Documents of the applicable Series.
SECTION 1.08 Incorporation
by Reference. The provisions of Sections 1.02, 5.04, 5.05, 5.06, 5.08, 5.09, 5.10 and 5.11 of the Intercreditor Agreement are
hereby incorporated by reference, mutatis mutandis, as if set forth in full herein.
IN WITNESS WHEREOF,
the Additional Grantor has duly executed this Joinder Agreement to the Intercreditor Agreement as of the day and year first above
written.
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[ADDITIONAL GRANTOR]
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By:
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Name:
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Title:
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Exhibit 10.2
EXECUTION VERSION
AMENDMENT NO. 1 TO FIRST LIEN CREDIT
AGREEMENT
This AMENDMENT NO. 1
TO FIRST LIEN CREDIT AGREEMENT, dated as of September 28, 2018
(this “Amendment”), is entered into by and among Hayward Industries, Inc., a New Jersey corporation (the “Borrower”),
Bank of America, N.A., as administrative agent and collateral agent (in such capacities, the “Administrative Agent”),
and the undersigned 2018 Incremental Term Lenders (as defined below).
PRELIMINARY STATEMENTS:
WHEREAS, the Borrower,
Hayward Intermediate, Inc., a Delaware corporation (“Holdings”), the Administrative Agent and the lenders from
time to time party thereto are party to that certain First Lien Credit Agreement, dated as of August 4, 2017 (as amended, supplemented
or otherwise modified prior to the date hereof, the “Credit Agreement”; capitalized terms not otherwise defined
in this Amendment have the same meanings as specified in the Credit Agreement);
WHEREAS, the Borrower
is party to that certain Agreement of Purchase and Sale, dated as of August 20, 2018 (the “Paramount Acquisition Agreement”),
by and among the Borrower, LDAG Acquisition Corp., a Delaware corporation (the “Hayward Purchaser”), as purchaser,
LDAG Holdings, Inc., an Arizona corporation (“LDAG”), as target, and the Company Parties (as defined therein),
as sellers, pursuant to which the Borrower has indirectly acquired (the “Paramount Acquisition”) all of the
issued and outstanding shares of LDAG, the sole shareholder of Paramount Leisure Industries, Inc., an Arizona corporation (“Paramount”);
WHEREAS,
(i) pursuant to Section 2.22(a) of the Credit Agreement, the Borrower has delivered a written request for an Incremental
Term Facility to the Administrative Agent in an aggregate principal amount of $150,000,000, (ii) the Borrower has
requested that each financial institution signatory hereto as an Additional Lender (in such capacity, each a “2018
Incremental Term Lender”) provide, pursuant to Section 2.22(a) and clause (c) of the definition of
“Incremental Cap”, an Additional Term Commitment (each, a “2018 Incremental Term Loan
Commitment”) under the Amended Credit Agreement (as defined below), and make Incremental Term Loans (with respect
to each 2018 Incremental Term Lender, its “2018 Incremental Term Loans”) as an Incremental Term Facility,
which 2018 Incremental Term Loans will be of the same Class as the Initial Term Loans outstanding immediately prior to giving
effect to this Amendment (the “Existing Term Loans”), in an aggregate principal amount equal to
$150,000,000 on the First Amendment Effective Date (as defined below), the proceeds of which will be used by the Borrower,
directly or indirectly, to (a) replenish cash on the Borrower’s balance sheet and/or prepay Revolving Loans (as
defined in the ABL Credit Agreement) in an aggregate amount no greater than the consideration paid under the Paramount
Acquisition Agreement to consummate the Paramount Acquisition and to pay fees, costs and expenses in connection therewith,
(b) prepay term loans outstanding under the Second Lien Facility in an aggregate principal amount of approximately
$80,000,000 (the “2018 Second Lien Prepayment”) and (c) without duplication, pay fees, costs and
expenses in connection with the 2018 Incremental Term Loans, this Amendment, the 2018 Second Lien Prepayment and the other
transactions contemplated by this Amendment, and (iii) each 2018 Incremental Term Lender is prepared to provide its 2018
Incremental Term Loan Commitment and to make its 2018 Incremental Term Loans pursuant to the Amended Credit Agreement in the
principal amount set forth opposite such 2018 Incremental Term Lender’s name under the heading “2018 Incremental
Term Loan Commitments” on Schedule 1.01(b) to the Credit Agreement (as amended by this Amendment, the
“Amended Credit Agreement”), in each case subject to the other terms and conditions set forth herein;
WHEREAS, the Borrower,
the 2018 Incremental Term Lenders and the Administrative Agent are entering into this Amendment in order to evidence such 2018
Incremental Term Loan Commitments and such 2018 Incremental Term Loans in accordance with Section 2.22(e) of the Credit Agreement;
WHEREAS, in furtherance
of the foregoing, the Borrower, the undersigned 2018 Incremental Term Lenders and the Administrative Agent (pursuant to its authority
under Section 2.22(e) and 9.02(d)(ii) of the Credit Agreement) have agreed to amend the Credit Agreement pursuant to Section 2.22(e)
and 9.02(d)(ii) of the Credit Agreement as hereinafter set forth;
NOW, THEREFORE, in consideration
of the premises and for other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the
parties hereto hereby agree as follows:
SECTION 1.
Amendments to Credit Agreement. The Credit Agreement is, effective as of the First Amendment Effective Date (as hereinafter
defined) and subject to the satisfaction of the conditions precedent set forth in Section 4 hereof, hereby amended
as follows:
(a)
The following shall be added to the Credit Agreement as Schedule 1.01(b) thereof:
2018 Incremental Term Loan Commitments:
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Lender
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Pro Rata Share
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2018 Incremental
Term Loan Commitment
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Bank of America, N.A.
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100.00
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%
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$
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150,000,000
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Total
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100.00
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%
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$
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150,000,000
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(b)
Section 1.01 of the Credit Agreement is hereby amended by adding the following new definitions thereto in the proper alphabetical
order:
“2018
Incremental Term Lender” means, at any time, any Lender that has a 2018 Incremental Term Loan Commitment or a 2018 Incremental
Term Loan at such time.
“2018
Incremental Term Loan Commitment” means, as to each 2018 Incremental Term Lender, its obligation to make a 2018
Incremental Term Loan to the Borrower on the First Amendment Effective Date in an aggregate amount not to exceed the amount
specified opposite such 2018 Incremental Term Lender’s name on Schedule 1.01(b) under the caption
“2018 Incremental Term Loan Commitment”.
“2018
Incremental Term Loans” means the Term Loans made by each 2018 Incremental Term Lender on the First Amendment Effective
Date to the Borrower pursuant to Section 2.01(b).
“First
Amendment” means that certain Amendment No. 1 to First Lien Credit Agreement, dated as of September 28, 2018, among the
Borrower, the Administrative Agent and the 2018 Incremental Term Lenders party thereto.
“First
Amendment Amortization Percentage” means the percentage equal to the product of (x) 0.25% multiplied by (y) the result
of $850,000,000 divided by $841,500,000.
“First
Amendment Effective Date” means September 28, 2018.
“Paramount”
means Paramount Leisure Industries, Inc., an Arizona corporation.
“Paramount
Acquisition” means the acquisition, pursuant to the Paramount Acquisition Agreement, of all of the issued and outstanding
shares of LDAG Holdings, Inc., an Arizona corporation and sole shareholder of Paramount, by the Borrower, indirectly through its
wholly-owned subsidiary, LDAG Acquisition Corp., a Delaware corporation.
“Paramount
Acquisition Agreement” means that certain Agreement of Purchase and Sale, dated as of August 20, 2018, by and among the
Borrower, LDAG Acquisition Corp., a Delaware corporation and wholly-owned subsidiary of the Borrower, as purchaser, LDAG Holdings,
Inc., an Arizona corporation, as the target, and the Company Parties (as defined therein), as sellers.
(c)
The definition of the term “Initial Term Loans” in Section 1.01 of the Credit Agreement is hereby amended
and restated in its entirety to read as follows:
“Initial
Term Loans” means (a) prior to the First Amendment Effective Date, the Term Loans made by the Term Lenders on the
Closing Date to the Borrower pursuant to Section 2.01(a), and (b) from and after the First Amendment Effective
Date, the Term Loans referred to in clause (a) above together with the 2018 Incremental Term Loans made by the Term
Lenders to the Borrower pursuant to Section 2.01(b).
(d)
Section 2.09 of the Credit Agreement is hereby amended by adding the following sentence immediately after the only sentence
thereof:
Unless previously terminated, the
2018 Incremental Term Loan Commitments shall automatically terminate upon the making of the 2018 Incremental Term Loans on the
First Amendment Effective Date.
(e)
Section 2.10(a) of the Credit Agreement is hereby amended and restated in its entirety to read as follows:
(a) The
Borrower hereby unconditionally promises to repay Initial Term Loans to the Administrative Agent for the account of each Term Lender
(i) commencing December 31, 2017, on the last Business Day of each March, June, September and December on or prior to the
First Amendment Effective Date (each such date being referred to as a “Pre-Amendment Loan Installment Date”),
in each case in an amount equal to 0.25% of the original principal amount of the Initial Term Loans made to the Borrower on the
Closing Date, (ii) commencing December 31, 2018, on the last Business Day of each March, June, September and December prior
to the Initial Term Loan Maturity Date (together with each Pre-Amendment Loan Installment Date, each a “Loan Installment
Date”), in each case in an amount equal to the First Amendment Amortization Percentage of the aggregate principal amount
of all Initial Term Loans outstanding on the First Amendment Effective Date (after giving effect to the 2018 Incremental Term Loans
made pursuant to the First Amendment) (as such payments, in the case of clause (i) and (ii), may be reduced from
time to time as a result of the application of prepayments in accordance with Section 2.11 and repurchases in accordance
with Section 9.05(h) or increased as a result of any increase in the amount of such Initial Term Loans pursuant to Section 2.22(a)),
and (iii) on the Initial Term Loan Maturity Date, in an amount equal to the remainder of the principal amount of the Initial
Term Loans outstanding on such date, together in each case with accrued and unpaid interest on the principal amount to be paid
to, but excluding, the date of such payment.
(f)
Section 2.12(c) of the Credit Agreement is hereby amended by replacing each instance of the term “Closing Date”
therein with the term “First Amendment Effective Date”.
(g)
Section 5.11 of the Credit Agreement is hereby amended by replacing the first sentence thereof in its entirety with the
following sentence:
The
Borrower shall (a) use the proceeds of the Initial Term Loans made to the Borrower on the Closing Date solely to finance
a portion of the Transactions (including working capital and/or purchase price adjustments and the payment of Transaction
Costs) and (b) notwithstanding anything to the contrary in Section 2.22(a)(xii), use the proceeds of the 2018
Incremental Term Loans made to the Borrower on the First Amendment Effective Date solely to (i) replenish cash on the
Borrower’s balance sheet and/or prepay Revolving Loans (as defined in the ABL Credit Agreement) in an aggregate amount
no greater than the consideration paid under the Paramount Acquisition Agreement to consummate the Paramount Acquisition and
to pay fees, costs and expenses in connection therewith, (ii) prepay term loans outstanding under the Second Lien
Facility on the First Amendment Effective Date in an aggregate principal amount of approximately $80,000,000 (the
“2018 Second Lien Prepayment”) and (iii) without duplication, pay fees, costs and expenses in connection
with the 2018 Incremental Term Loans, the First Amendment, the 2018 Second Lien Prepayment and the other transactions
contemplated by the First Amendment.
SECTION 2.
The 2018 Incremental Term Loan Commitment and the 2018 Incremental Term Loans.
(a) In
accordance with Section 2.22 of the Credit Agreement, and subject to the satisfaction of the conditions set forth in Section
4 hereof, on and as of the First Amendment Effective Date (as hereinafter defined), each 2018 Incremental Term Lender hereby
agrees that such 2018 Incremental Term Lender (i) shall have, as contemplated by this Amendment and the Amended Credit Agreement,
a 2018 Incremental Term Loan Commitment under the Amended Credit Agreement in an amount equal to the amount set forth opposite
such 2018 Incremental Term Lender’s name under the heading “2018 Incremental Term Loan Commitments” on Schedule 1.01(b)
to the Amended Credit Agreement, (ii) shall make 2018 Incremental Term Loans to the Borrower pursuant to Section 2.01(b)
of the Amended Credit Agreement on the First Amendment Effective Date in a principal amount not to exceed its 2018 Incremental
Term Loan Commitment under the Amendment Credit Agreement, and (iii) shall be deemed to be, and shall become, a “2018
Incremental Term Lender”, an “Additional Lender”, a “Term Lender”, a “Lender” and a
“Secured Party” for all purposes of, and subject to all the obligations of a “2018 Incremental Term Lender”,
an “Additional Lender”, a “Term Lender”, a “Lender” and a “Secured Party” under,
the Amended Credit Agreement and the other Loan Documents.
(b) The
Borrower and the Administrative Agent hereby agree that from and after the First Amendment Effective Date, each 2018 Incremental
Term Lender shall be deemed to be, and shall become, a “2018 Incremental Term Lender”, an “Additional Lender”,
a “Term Lender”, a “Lender” and a “Secured Party” for all purposes of, and with all the rights
and remedies of a “2018 Incremental Term Lender”, an “Additional Lender”, a “Term Lender”,
a “Lender” and a “Secured Party” under, the Amended Credit Agreement and the other Loan Documents.
(c) The
Borrower hereby designates that the 2018 Incremental Term Loans are being incurred in reliance on clause (c) of the definition
of “Incremental Cap” in the Credit Agreement.
(d) The
2018 Incremental Term Loans shall constitute an Incremental Term Facility and shall be of the same Class as the Existing Term
Loans. The terms, provisions and documentation of the 2018 Incremental Term Loans shall be identical (other than with respect
to upfront fees, OID or similar fees) (including call protection, interest rate margins and interest rate floors) to the Existing
Term Loans and are in compliance with Sections 2.22(a) of the Credit Agreement. Unless applicable law otherwise requires, for
U.S. federal income tax purposes, the parties hereto intend to treat the 2018 Incremental Term Loans as a “qualified reopening”
(within the meaning of Treasury Regulations Section 1.1275-2(k)) of the Existing Term Loans.
(e) Each
of the parties hereto hereby agrees that, in accordance with Section 2.22(a)(xiii) of the Credit Agreement, all 2018 Incremental
Term Loans, when originally made, shall be added to the Existing Term Loans for all purposes under the Credit Agreement and the
other Loan Documents and shall be added to (and constitute a part of) each borrowing of Existing Term Loans of the same type with
the same Interest Period as the Existing Term Loans on a pro rata basis (based on the relative sizes of the various outstanding
Borrowings), so that each Term Lender providing such 2018 Incremental Term Loans will participate proportionately in each then
outstanding borrowing of Existing Term Loans of the same type with the same Interest Period as the Existing Term Loans, it being
acknowledged that the effect thereof may result in the 2018 Incremental Term Loans having shorter Interest Periods than the Existing
Term Loans included in the Borrowing of which they are a part (and notwithstanding any other provision of the Credit Agreement
that would prohibit such an initial Interest Period). The 2018 Incremental Term Loans shall not accrue interest for any period
prior to the funding thereof on the First Amendment Effective Date and the Borrower shall not be required to pay interest on the
2018 Incremental Term Loans pursuant to Section 2.13 of the Credit Agreement for any period prior to the First Amendment
Effective Date.
(f) As
of the First Amendment Effective Date, after giving effect to the making of the 2018 Incremental Term Loans, the aggregate principal
amount of Initial Term Loans outstanding pursuant to the Amended Credit Agreement shall be $991,500,000.
SECTION 3.
Reference to and Effect on the Loan Documents. On and after the First Amendment Effective Date (as hereinafter defined),
each reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof” or words
of like import referring to the Credit Agreement, and each reference in the other Loan Documents to “the Credit Agreement”,
“thereunder”, “thereof” or words of like import referring to the “Credit Agreement”, shall
mean and be a reference to the Amended Credit Agreement, and any reference to “Obligations” shall mean and be a reference
to the “Obligations” under the Amended Credit Agreement.
(a) On
and after the First Amendment Effective Date, the Credit Agreement, as specifically amended by this Amendment, and the other Loan
Documents are, and shall continue to be, in full force and effect, and are hereby in all respects ratified and confirmed.
(b) From
and after the First Amendment Effective Date, this Amendment shall be deemed a Loan Document for all purposes under the Amended
Credit Agreement and the other Loan Documents.
(c) The
parties hereto acknowledge and agree that the amendment of the Credit Agreement pursuant to this Amendment and all other Loan
Documents amended and/or executed and delivered in connection herewith shall not constitute a novation of the Credit Agreement
and the other Loan Documents as in effect prior to the First Amendment Effective Date.
SECTION 4.
Conditions of Effectiveness. The obligations of the 2018 Incremental Term Lenders to make 2018 Incremental Term Loans
under the Amended Credit Agreement, and the amendments to the Credit Agreement contained in Section 1 hereof, shall become
effective as of the first date (the “First Amendment Effective Date”) on which the following conditions shall
have been satisfied (or waived by the 2018 Incremental Term Lenders):
(a) The
Administrative Agent and the 2018 Incremental Term Lenders shall have received counterparts of (i) this Amendment executed by
the Borrower, the Administrative Agent and the 2018 Incremental Term Lenders and (ii) the Guarantor Consent and Reaffirmation
attached hereto as Exhibit A (the “Guarantor Consent”) executed by Holdings and each Subsidiary Guarantor
(collectively, the “Guarantors” and each, a “Guarantor”);
(b)
The Administrative Agent on behalf of itself and the 2018 Incremental Term Lenders shall have received a customary legal
opinion from (i) Ropes & Gray LLP, counsel to the Loan Parties and (ii) each local counsel to the Loan Parties listed on Schedule
4(b) to this Amendment;
(c)
The Administrative Agent on behalf of itself and the 2018 Incremental Term Lenders shall have received, with respect to
each Loan Party, certificates of good standing from the secretary of state of the state of organization of each Loan Party (to
the extent such concept exists in such jurisdiction), customary certificates of resolutions or other action, incumbency certificates
or other certificates of Responsible Officers of each Loan Party certifying true and complete copies of the Organizational Documents
attached thereto and evidencing the identity, authority and capacity of each Responsible Officer thereof authorized to act as a
Responsible Officer in connection with this Amendment and the Guarantor Consent;
(d)
The Administrative Agent and the 2018 Incremental Term Lenders shall have received a certificate of a Responsible Officer
of the Borrower certifying that the conditions in clauses (f) and (g) of this Section 4 have been satisfied;
(e)
The Administrative Agent and the 2018 Incremental Term Lenders shall have received a solvency certificate from a Responsible
Officer of the Borrower (after giving effect to the transactions contemplated by this Amendment) based on and consistent with the
form attached to the Credit Agreement as Exhibit K;
(f)
The representations and warranties of the Borrower contained in Article III of the Credit Agreement and Section 5 of this
Amendment shall be true and correct in all material respects on and as of the First Amendment Effective Date; provided that,
in the case of any representation and warranty which expressly relates to a specific date or period, such representation and warranty
shall be true and correct in all material respects as of the respective date or for the respective period, as the case may be;
provided, further, that, if any representation and warranty is qualified by or subject to a “material adverse
effect”, “material adverse change” or similar term or qualification, such representation and warranty shall be
true and correct (after giving effect to any qualification therein) in all respects on such respective dates;
(g)
No Event of Default shall exist immediately prior to or after giving effect to this Amendment and the making of the 2018
Incremental Term Loans;
(h)
The Administrative Agent on behalf of itself and the 2018 Incremental Term Lenders shall have received a Committed Loan
Notice no later than 2:00 p.m. (New York time) at least three Business Days prior to the requested date of the Borrowing in respect
of the 2018 Incremental Term Loans;
(i) The
Borrower shall have paid all reasonable and documented out-of-pocket expenses of the Administrative Agent and the Lead
Arranger (as defined in the engagement letter, dated as September 4, 2018 (the “Engagement Letter”), by
and among the Borrower, Merrill Lynch, Pierce, Fenner & Smith Incorporated (“MLPFS”), Jefferies
Finance LLC (“Jefferies”), Morgan Stanley Senior Funding, Inc. (“Morgan Stanley”) and
Nomura Securities International, Inc. (together with MLPFS, Jefferies and Morgan Stanley, collectively, the
“Arrangers”) (including, without limitation, the actual reasonable and documented out-of-pocket fees,
disbursements and other charges of one firm of outside counsel to all such Persons taken as a whole and, if reasonably
necessary, of one local counsel in any relevant jurisdiction to all such Persons, taken as a whole, to the extent provided
for in Section 9.03 of the Credit Agreement or Section 5 of the Engagement Letter) and the 2018 Incremental Term Lenders in
connection with this Amendment invoiced at least three (3) Business Days (unless otherwise agreed by the Borrower) prior to
the First Amendment Effective Date;
(j)
The Borrower shall have paid all fees required to be paid pursuant to the fee letter, dated as of September 4, 2018, by
and between the Borrower and MLPFS (the “Fee Letter”);
(k)
The Administrative Agent shall have received (i) at least two (2) Business Days prior to the First Amendment Effective
Date all documentation and other information about the Borrower and the Guarantors (including the Hayward Purchaser and its subsidiaries
(other than any Excluded Subsidiary)) required under applicable “know your customer” and anti-money laundering rules
and regulations (including the USA PATRIOT Act) that has been reasonably requested in writing at least ten (10) Business Days prior
to the First Amendment Effective Date and (ii) one (1) Business Day prior to the First Amendment Effective Date all documentation
and other information about the Borrower required by regulatory authorities under 31 C.F.R. § 1010.230 (the “Beneficial
Ownership Regulation”) that has been reasonably requested in writing at least ten (10) Business Days prior to the First
Amendment Effective Date;
(l)
On or prior to the date hereof, the Hayward Purchaser, LDAG, Paramount and each other direct and indirect subsidiary of
LDAG that is required to become a Loan Party pursuant to the Loan Documents shall have complied with the requirements set forth
in clause (a) of the definition of “Collateral and Guarantee Requirement” under each of the Credit Agreement,
the ABL Credit Agreement and the Second Lien Credit Agreement, and with Section 5.12 thereof, in each case notwithstanding
any applicable time periods or grace periods set forth therein; and
(m)
Substantially concurrently with the Borrowing of the 2018 Incremental Term Loans on the First Amendment Effective Date,
the Borrower shall have completed the 2018 Second Lien Prepayment to the extent of any remaining proceeds of the 2018 Incremental
Term Loans.
For purposes of determining
compliance with the conditions specified in this Section 4, the 2018 Incremental Term Lenders shall be deemed to have consented
to, approved or accepted or to be satisfied with, each document or other matter required hereunder to be consented to or approved
by or acceptable or satisfactory to the 2018 Incremental Term Lenders from and after the making by the 2018 Incremental Term Lenders
of the 2018 Incremental Term Loans pursuant to Section 2.01(b) of the Amended Credit Agreement. The 2018 Incremental Term Lenders
and the Borrower shall promptly notify the Administrative Agent of the occurrence of the First Amendment Effective Date.
SECTION 5.
Representations and Warranties. The Borrower hereby represents and warrants to the Administrative Agent and the 2018 Incremental
Term Lenders as of the First Amendment Effective Date that:
(a)
The execution, delivery and performance by the Borrower of this Amendment and the execution, delivery and performance by
each Guarantor of the Guarantor Consent are within each applicable Loan Party’s corporate or other organizational power and
have been duly authorized by all necessary corporate or other organizational action of such Loan Party;
(b)
None of the execution, delivery or performance by the Borrower of this Amendment or the execution, delivery or performance
by any Guarantor of the Guarantor Consent (i) require any consent or approval of, registration or filing with, or any other action
by, any Governmental Authority, except (A) such as have been obtained or made and are in full force and effect, (B) in
connection with the Perfection Requirements and (C) such consents, approvals, registrations, filings, or other actions the
failure to obtain or make which would not be reasonably expected to have a Material Adverse Effect, (ii) will violate any
(A) of such Loan Party’s Organizational Documents or (B) Requirements of Law applicable to such Loan Party which
violation, in the case of this clause (ii)(B), would reasonably be expected to have a Material Adverse Effect or (iii)
will violate or result in a Default (as defined in the ABL Credit Agreement and the Second Lien Credit Agreement) under (A) the
ABL Credit Agreement, (B) the Second Lien Credit Agreement or (C) any other material Contractual Obligation to which such
Loan Party is a party which violation, in the case of this clause (iii), would reasonably be expected to result in
a Material Adverse Effect;
(c)
This Amendment has been duly executed and delivered by the Borrower, and the Guarantor Consent has been duly executed and
delivered by each Guarantor. This Amendment constitutes a legal, valid and binding obligation of the Borrower, and the Guarantor
Consent constitutes a legal, valid and binding obligation of each Guarantor, enforceable against the Borrower and each Guarantor,
as applicable, in accordance with its terms, subject to the Legal Reservations; and
(d)
Each of the Loan Parties and each of its Restricted Subsidiaries (i) is (A) duly organized and validly existing
and (B) in good standing (to the extent such concept exists in the relevant jurisdiction) under the laws of its jurisdiction of
organization, (ii) has all requisite organizational power and authority to own its property and assets and to carry on its
business as now conducted and (iii) is qualified to do business in, and is in good standing (to the extent such concept exists
in the relevant jurisdiction) in, every jurisdiction where its ownership, lease or operation of properties or conduct of its business
requires such qualification; except, in each case referred to in this clause (d) (other than clause (i)(A)
with respect to the Borrower and clause (ii) with respect to the Loan Parties) where the failure to do so, individually
or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect.
SECTION 6. Costs
and Expenses. The Borrower agrees to pay all reasonable and documented out-of-pocket expenses incurred by the
Administrative Agent (including, without limitation, actual reasonable and documented out-of-pocket fees, disbursements and
other charges of one firm of outside counsel to all such Persons taken as a whole and, if reasonably necessary, of one local
counsel in any relevant jurisdiction to all such Persons, taken as a whole, to the extent provided for in Section 9.03 of the
Credit Agreement) in connection with the preparation, execution and delivery of this Amendment and any other instruments and
documents to be delivered hereunder or in connection herewith.
SECTION 7.
Execution in Counterparts; Effectiveness. This Amendment may be executed in counterparts
(and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. Delivery of an executed counterpart of a signature page of this Amendment by
facsimile or other electronic imaging (including in .pdf format) means shall be effective as delivery of a manually executed counterpart
of this Amendment. Except as provided in Section 4, this Amendment shall become effective when it shall have been executed
by the Borrower, the Administrative Agent and the 2018 Incremental Term Lenders.
SECTION 8.
GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK. Clauses (b) and (c) of Section 9.10 of the Credit Agreement are incorporated herein by reference, mutatis mutandis.
SECTION 9.
WAIVER OF RIGHT OF TRIAL BY JURY. EACH PARTY TO THIS AMENDMENT HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY
OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AMENDMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT,
TORT OR ANY OTHER THEORY). eACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AMENDMENT BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF,
the parties have caused this Amendment to be executed by their respective authorized officers as of the date first above written.
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HAYWARD INDUSTRIES, INC.
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By:
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/s/ Clark Hale
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Name: Clark Hale
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Title: President, Chief Executive Officer and Secretary
|
[Signature Page to Amendment No. 1 to First Lien Credit Agreement]
|
|
BANK
OF AMERICA, N.A., as
|
|
|
Administrative
Agent
|
|
|
|
|
|
By:
|
/s/ Charlene Wright-Jones
|
|
|
|
Name: Charlene Wright-Jones
|
|
|
|
Title: Vice President
|
[Signature Page to Amendment No. 1 to First Lien Credit Agreement]
|
|
BANK OF AMERICA, N.A.,
|
|
|
as an Additional Lender and
|
|
|
2018 Incremental Term Lender
|
|
|
|
|
|
By:
|
/s/ David H. Strickert
|
|
|
|
Name: David H. Strickert
|
|
|
|
Title: Managing Director
|
[Signature Page to Amendment No. 1 to First Lien Credit Agreement]
Schedule 4(b)
Local Counsel
|
Firm
|
Jurisdiction
|
|
Lowenstein Sandler LLP
|
New Jersey
|
|
Ropes & Gray LLP
|
Delaware
|
|
Snell & Wilmer LLP
|
Arizona
|
EXHIBIT A
GUARANTOR CONSENT AND REAFFIRMATION
September 28, 2018
Reference is made to
Amendment No. 1 to First Lien Credit Agreement, dated as of September 28, 2018 (the “Amendment”), by and
among Hayward Industries, Inc., a New Jersey corporation (the “Borrower”), Bank of America, N.A., as administrative
agent and collateral agent (in such capacities, the “Administrative Agent”), and the lenders party thereto (the
“2018 Incremental Term Lenders”), amending that certain First Lien Credit Agreement, dated as of August 4, 2017
(as amended, supplemented or otherwise modified prior to the date hereof, the “Credit Agreement”; the Credit
Agreement as amended by the Amendment, the “Amended Credit Agreement”).
Each of the undersigned,
as a Guarantor under the First Lien Loan Guaranty, dated as of August 4, 2017 (the “Guaranty”), in favor of
the Administrative Agent and the Lenders parties to the Credit Agreement, hereby consents to such Amendment and the transactions
contemplated by such Amendment and, as of the First Amendment Effective Date, hereby, (a) ratifies, acknowledges and reaffirms
all of its payment and performance obligations, contingent or otherwise, under each of the Loan Documents to which it is a party,
in each case, as amended and in effect after giving effect to the Amendment and the making of the 2018 Incremental Term Loans and
agrees that its Guarantee remains in full force and effect to the extent set forth in such Guaranty and after giving effect to
this Amendment and the incurrence of the 2018 Incremental Term Loans, (b) ratifies, acknowledges and reaffirms each grant
of a lien on, or security interest or pledge in, its Collateral made pursuant to the Loan Documents, in each case, as amended by
the Amendment, and confirms that such liens and security interests continue to secure the Obligations in effect after giving effect
to the Amendment and the making of the 2018 Incremental Term Loans, in each case subject to the terms of the Amendment and the
Amended Credit Agreement, and (c) confirms that the obligations of the Loan Parties with respect to the 2018 Incremental Term
Loans shall constitute, from and after the making of the 2018 Incremental Term Loans, Obligations, Guaranteed Obligations (as defined
in the Guaranty), Secured Obligations and First Lien Term Credit Agreement Obligations and Other First Lien Term Obligations (each
as defined in the ABL Intercreditor Agreement) and agrees that the security interests in connection therewith remain in full force
and effect. Capitalized terms not otherwise defined in this Guarantor Consent have the same meanings as specified in the Amendment
or the Amended Credit Agreement, as applicable.
[The remainder of this page is intentionally
left blank]
|
|
Guarantors:
|
|
|
|
|
|
Hayward
Intermediate, Inc.
|
|
|
By:
|
/s/ Clark Hale
|
|
|
|
Name: Clark Hale
|
|
|
|
Title: President, Chief Executive Officer and Secretary
|
|
|
|
|
|
GOLDLINE
PROPERTIES LLC
|
|
|
|
|
|
By:
|
/s/ Clark Hale
|
|
|
|
Name: Clark Hale
|
|
|
|
Title: President, Chief Executive Officer and Secretary
|
|
|
HAYWARD
INDUSTRIAL PRODUCTS, INC.
|
|
|
|
|
|
By:
|
/s/ Clark Hale
|
|
|
|
Name: Clark Hale
|
|
|
|
Title: President, Chief Executive Officer and Secretary
|
|
|
|
|
|
HAYWARD
/ WRIGHT-AUSTIN INC.
|
|
|
|
|
|
By:
|
/s/ Clark Hale
|
|
|
|
Name: Clark Hale
|
|
|
|
Title: President, Chief Executive Officer and Secretary
|
|
|
|
|
|
WEBSTER
PUMPS, INC.
|
|
|
|
|
|
By:
|
/s/ Clark Hale
|
|
|
|
Name: Clark Hale
|
|
|
|
Title: President, Chief Executive Officer and Secretary
|
[Signature Page to Guarantor Consent and Reaffirmation]
|
|
LDAG HOLDINGS, INC.
|
|
|
|
|
|
By:
|
/s/ Clark Hale
|
|
|
|
Name: Clark Hale
|
|
|
|
Title: President, Chief Executive Officer and Secretary
|
|
|
|
|
|
LDAG ACQUISITION CORP.
|
|
|
|
|
|
By:
|
/s/ Clark Hale
|
|
|
|
Name: Clark Hale
|
|
|
|
Title: President, Chief Executive Officer and Secretary
|
|
|
|
|
|
PARAMOUNT LEISURE INDUSTRIES,
INC.
|
|
|
|
|
|
By:
|
/s/ Clark Hale
|
|
|
|
Name: Clark Hale
|
|
|
|
Title: President, Chief Executive Officer and Secretary
|
|
|
|
|
|
GSG HOLDINGS, INC.
|
|
|
|
|
|
By:
|
/s/ Clark Hale
|
|
|
|
Name: Clark Hale
|
|
|
|
Title: President, Chief Executive Officer and Secretary
|
|
|
|
|
|
PARAMOUNT CAPITAL FINANCE
CORP.
|
|
|
|
|
|
By:
|
/s/ Clark Hale
|
|
|
|
Name: Clark Hale
|
|
|
|
Title: President, Chief Executive Officer and Secretary
|
|
|
|
|
|
PARAMOUNT INTERNATIONAL,
INC.
|
|
|
|
|
|
By:
|
/s/ Clark Hale
|
|
|
|
Name: Clark Hale
|
|
|
|
Title: President, Chief Executive Officer and Secretary
|
[Signature Page to Guarantor Consent and Reaffirmation]
Exhibit 10.3
EXECUTION VERSION
AMENDMENT
NO. 2 TO FIRST LIEN CREDIT AGREEMENT
This AMENDMENT NO.
2 TO FIRST LIEN CREDIT AGREEMENT, dated as of October 28, 2020 (this “Amendment”), is entered into by and among
Hayward Industries, Inc., a New Jersey corporation (the “Borrower”), Bank of America, N.A., as administrative
agent and collateral agent (in such capacities, the “Administrative Agent”), and the undersigned 2020 Incremental
Term Lenders (as defined below).
PRELIMINARY STATEMENTS:
WHEREAS, the Borrower,
Hayward Intermediate, Inc., a Delaware corporation (“Holdings”), the Administrative Agent and the lenders from
time to time party thereto are party to that certain First Lien Credit Agreement, dated as of August 4, 2017 (as amended by that
certain Amendment No. 1 to First Lien Credit Agreement, dated as of September 28, 2018, and as further amended, supplemented or
otherwise modified prior to the date hereof, the “Credit Agreement”; capitalized terms not otherwise defined
in this Amendment have the same meanings as specified in the Credit Agreement);
WHEREAS, (i) pursuant
to Section 2.22(a) of the Credit Agreement, the Borrower has delivered a written request for a new Class of Term Loans to the Administrative
Agent in an aggregate principal amount of $150,000,000, (ii) the Borrower has requested that each financial institution signatory
hereto as an Additional Lender (in such capacity, each a “2020 Incremental Term Lender”) provide, pursuant to
Section 2.22(a) and clause (c) of the definition of “Incremental Cap”, an Additional Term Commitment (the “2020
Incremental Term Loan Commitment”) under the Amended Credit Agreement (as defined below), and make Incremental Term Loans
(with respect to each 2020 Incremental Term Lender, its “2020 Incremental Term Loans”) in an aggregate principal
amount equal to $150,000,000 on the Second Amendment Effective Date (as defined below), the proceeds of which will be used by the
Borrower, directly or indirectly, (a) together with Cash on the Borrower’s balance sheet, to fund a portion of a one-time
Cash dividend substantially concurrently with the Second Amendment Effective Date (as defined below) to the Parent Company of Holdings
in the aggregate amount of $275,000,000 (the “2020 Dividend”), (b) for working capital and general corporate
purposes and (c) without duplication, to pay fees, costs and expenses in connection with the 2020 Dividend, the 2020 Incremental
Term Loans, this Amendment, and the other transactions contemplated by this Amendment, and (iii) each 2020 Incremental Term
Lender is prepared to provide its 2020 Incremental Term Loan Commitment and to make its 2020 Incremental Term Loans pursuant to
the Amended Credit Agreement in the principal amount set forth opposite such 2020 Incremental Term Lender’s name under the
heading “2020 Incremental Term Loan Commitments” on Schedule 1.01(b) to the Credit Agreement (as amended by
this Amendment, the “Amended Credit Agreement”), in each case subject to the other terms and conditions set
forth herein;
WHEREAS, the Borrower,
the 2020 Incremental Term Lenders and the Administrative Agent are entering into this Amendment in order to evidence such 2020
Incremental Term Loan Commitments and such 2020 Incremental Term Loans in accordance with Section 2.22(e) of the Credit Agreement;
WHEREAS, in furtherance
of the foregoing, the Borrower, the undersigned 2020 Incremental Term Lenders and the Administrative Agent (pursuant to its authority
under Section 2.22(e) and 9.02(d)(ii) of the Credit Agreement) have agreed to amend the Credit Agreement pursuant to Section 2.22(e)
and 9.02(d)(ii) of the Credit Agreement as hereinafter set forth;
NOW, THEREFORE, in
consideration of the premises and for other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged),
the parties hereto hereby agree as follows:
Section
1. Amendments to Credit Agreement. The Credit Agreement is, effective as of the Second Amendment Effective Date and
subject to the satisfaction of the conditions precedent set forth in Section 4 hereof, hereby amended as follows:
(a)
The following shall be added to the Credit Agreement as Schedule 1.01(b) thereof:
2020 Incremental Term Loan Commitments:
|
Lender
|
|
Pro Rata Share
|
|
|
2020 Incremental
Term Loan
Commitment
|
|
|
Bank of America, N.A.
|
|
|
100.00
|
%
|
|
$
|
150,000,000
|
|
|
Total
|
|
|
100.00
|
%
|
|
$
|
150,000,000
|
|
(b)
Section 1.01 of the Credit Agreement is hereby amended by adding the following new definitions thereto in the proper alphabetical
order:
“2020
Incremental Term Lender” means, at any time, any Lender that has a 2020 Incremental Term Loan Commitment or a 2020 Incremental
Term Loan at such time.
“2020
Incremental Term Loan Commitment” means, as to each 2020 Incremental Term Lender, its obligation to make a 2020 Incremental
Term Loan to the Borrower on the Second Amendment Effective Date in an aggregate amount not to exceed the amount specified opposite
such 2020 Incremental Term Lender’s name on Schedule 1.01(b) under the caption “2020 Incremental Term Loan Commitment”.
“2020
Incremental Term Loan Maturity Date” means August 4, 2026. “2020 Incremental Term Loans” means the
Term Loans made by each 2020 Incremental Term Lender on the Second Amendment Effective Date to the Borrower pursuant to Section
2.01(b).
“Second
Amendment” means that certain Amendment No. 2 to First Lien Credit Agreement, dated as of October 28, 2020, among the
Borrower, the Administrative Agent and the 2020 Incremental Term Lenders party thereto.
“Second
Amendment Effective Date” means October 28, 2020.
(c)
The definition of the term “Applicable Rate” in Section 1.01 of the Credit Agreement is hereby amended and restated
in its entirety to read as follows:
“Applicable
Rate” means, for any day, with respect to (x) any Initial Term Loans (i) that are LIBO Rate Loans, 3.50% per annum and
(ii) that are ABR Loans, 2.50% per annum and (y) any 2020 Incremental Term Loans (i) that are LIBO Rate Loans, 3.75% per annum
and (ii) that are ABR Loans, 2.75% per annum.
(d)
The definition of the term “First Priority Secured Obligations” in Section 1.01 of the Credit Agreement is hereby
amended and restated in its entirety to read as follows:
“First
Priority Secured Obligations” means the Secured Obligations in respect of the Initial Term Loans, the 2020 Incremental
Term Loans and any other Credit Facilities secured by the Collateral on a pari passu basis with the Initial Term Loans (as
incurred and secured on the Closing Date) or the 2020 Incremental Term Loans (as incurred and secured on the Second Amendment Effective
Date), as applicable.
(e)
The definition of the term “LIBO Rate” in Section 1.01 of the Credit Agreement is hereby amended and restated
in its entirety to read as follows:
“LIBO
Rate” means, the Published LIBO Rate, as adjusted to reflect applicable reserves prescribed by governmental authorities;
provided that, in respect of the Initial Term Loans, in no event shall the LIBO Rate be less than 0.00% per annum; provided
further that, in respect of the 2020 Incremental Term Loans, in no event shall the LIBO Rate be less than 0.75% per annum.
(f)
The definition of the term “Maturity Date” in Section 1.01 of the Credit Agreement is hereby amended and restated
in its entirety to read as follows:
“Maturity
Date” means (a) with respect to the Initial Term Loans, the Initial Term Loan Maturity Date, (b) as to any
Replacement Term Loans incurred pursuant to Section 9.02(c), the final maturity date for such Replacement Term Loan as
set forth in the applicable Refinancing Amendment, (c) as to any Replacement Revolving Facility established pursuant to Section
9.02(c), the final maturity date for such Replacement Revolving Facility as set forth in the applicable Refinancing
Amendment, (d) with respect to any Incremental Term Loans, the final maturity date set forth in the applicable documentation
with respect thereto, (e) with respect to any Incremental Revolving Facility, the final maturity date set forth in the
applicable documentation with respect thereto, (f) with respect to the 2020 Incremental Term Loans, the 2020 Incremental Term
Loan Maturity Date and (g) with respect to any other Loans, the final maturity date for such Loans as set forth in the
applicable Credit Facility.
(g)
The definition of the term “Repricing Transaction” in Section 1.01 of the Credit Agreement is hereby amended
and restated in its entirety to read as follows:
“Repricing
Transaction” means any of the following, but solely to the extent effected and consummated for the primary purpose of
reducing the All-In Yield of the Initial Term Loans or the 2020 Incremental Term Loans, as applicable: (a) the prepayment, repayment,
refinancing, substitution or replacement of all or a portion of the Initial Term Loans or 2020 Incremental Term Loans substantially
concurrently with the incurrence by any Loan Party of any term loans (including any Replacement Term Loans) pari passu in
right of payment with the existing Initial Term Loans or 2020 Incremental Term Loans being so prepaid, repaid, refinanced, substituted
or replaced in right of payment and secured by a Lien on the Collateral on a pari passu basis with the Liens securing such
Initial Term Loans or such 2020 Incremental Term Loans, having an All-In Yield that is less than the effective All-In Yield applicable
to the Initial Term Loans or 2020 Incremental Term Loans so prepaid, repaid, refinanced, substituted or replaced, and (b) any amendment,
waiver or other modification to this Agreement that would have the effect of reducing the All-In Yield of the Initial Term Loans
or 2020 Incremental Term Loans in lieu of a transaction described in clause (a); provided, that the determinations
of All-In Yield for any Repricing Transaction shall be made in a manner consistent with generally accepted financial practices
and reasonably determined by the Administrative Agent, and in any event consistent with the second proviso to Section 2.22(a)(v))
and shall disregard any fluctuation in any “base” or reference rate; provided, further, that in none
of the events in the preceding clauses (a) and (b) shall constitute a Repricing Transaction if effected or consummated
in connection with a Change of Control, Qualifying IPO or Transformational Event. Any determination by the Administrative Agent
and the Borrower contemplated by preceding clauses (a) and (b) shall be conclusive and binding on all Lenders, and
the Administrative Agent shall have no liability to any Person with respect to such determination absent bad faith, gross negligence
or willful misconduct.
(h)
The definition of the term “Second Lien Facility” in Section 1.01 of the Credit Agreement is hereby amended
and restated in its entirety to read as follows:
“Second
Lien Facility” means the credit facility governed by the Second Lien Credit Agreement and one or more debt
facilities or other financing arrangements (including indentures) providing for loans, notes or other long-term indebtedness
that replace or refinance such credit facility, including any such replacement or refinancing facility or indenture that
increases or decreases the amount permitted to be borrowed thereunder or alters the maturity thereof and whether by the same
or any other agent, lender or group of lenders, and any amendments, supplements, modifications, extensions, renewals,
restatements, amendments and restatements or refundings thereof or any such indentures or credit facilities that replace or
refinance such credit facility (or any subsequent replacement thereof), in each case to the extent permitted pursuant to Section
6.01(p) (or any other provision in Section 6.01, so long as, if applicable, any corresponding Lien is (x) junior
to the Lien securing the Initial Term Loans and the 2020 Incremental Term Loans and (y) permitted by Section
6.02).
(i)
The definition of the term “Term Loan” in Section 1.01 of the Credit Agreement is hereby amended and restated
in its entirety to read as follows:
“Term
Loan” means the Initial Term Loans, any Additional Term Loans (including, for the avoidance of doubt, the 2020 Incremental
Term Loans) and any term loan under any other Credit Facility.
(j)
Section 2.01 of the Credit Agreement is hereby amended by adding the following sub-clause (c):
(c) Subject
to the terms and conditions set forth herein, each 2020 Incremental Term Lender severally, and not jointly, agrees to make 2020
Incremental Term Loans to the Borrower on the Second Amendment Effective Date in Dollars in a principal amount not to exceed its
2020 Incremental Term Loan Commitment.
(k)
Section 2.09 of the Credit Agreement is hereby amended by adding the following sentence immediately after the second sentence
thereof:
Unless previously terminated, the
2020 Incremental Term Loan Commitments shall automatically terminate upon the making of the 2020 Incremental Term Loans on the
Second Amendment Effective Date.
(l)
Section 2.10(a) of the Credit Agreement is hereby amended and restated in its entirety to read as follows:
(a) (X)
The Borrower hereby unconditionally promises to repay Initial Term Loans to the Administrative Agent for the account of each Term
Lender (i) commencing December 31, 2017, on the last Business Day of each March, June, September and December on or prior to the
First Amendment Effective Date (each such date being referred to as a “Pre-Amendment Loan Installment Date”),
in each case in an amount equal to 0.25% of the original principal amount of the Initial Term Loans made to the Borrower on the
Closing Date, (ii) commencing December 31, 2018, on the last Business Day of each March, June, September and December prior to
the Initial Term Loan Maturity Date (together with each Pre-Amendment Loan Installment Date, each a “Loan Installment
Date”), in each case in an amount equal to the First Amendment Amortization Percentage of the aggregate principal amount
of all Initial Term Loans outstanding on the First Amendment Effective Date (after giving effect to the 2018 Incremental Term
Loans made pursuant to the First Amendment) (as such payments, in the case of clause (i) and (ii), may be reduced from time to
time as a result of the application of prepayments in accordance with Section 2.11 and repurchases in accordance with Section
9.05(h) or increased as a result of any increase in the amount of such Initial Term Loans pursuant to Section 2.22(a)), and
(iii) on the Initial Term Loan Maturity Date, in an amount equal to the remainder of the principal amount of the Initial Term
Loans outstanding on such date, together in each case with accrued and unpaid interest on the principal amount to be paid to,
but excluding, the date of such payment.
(Y) The Borrower
hereby unconditionally promises to repay 2020 Incremental Term Loans to the Administrative Agent for the account of each 2020 Incremental
Term Lender (i) commencing March 31, 2021, on the last Business Day of each March, June, September and December prior to the 2020
Incremental Term Loan Maturity Date, in each case in an amount equal to the 0.25% of the aggregate principal amount of all 2020
Incremental Term Loans outstanding on the Second Amendment Effective Date (as such payments may be reduced from time to time as
a result of the application of prepayments in accordance with Section 2.11 and repurchases in accordance with Section
9.05(h) or increased as a result of any increase in the amount of such 2020 Incremental Term Loans pursuant to Section 2.22(a)),
and (ii) on the 2020 Incremental Term Loan Maturity Date, in an amount equal to the remainder of the principal amount of the 2020
Incremental Term Loans outstanding on such date, together in each case with accrued and unpaid interest on the principal amount
to be paid to, but excluding, the date of such payment.
(m)
Section 2.11(b)(ii) of the Credit Agreement is hereby amended by replacing the last sentence thereof in its entirety with
the following sentence:
Notwithstanding anything to the
contrary herein or in any other Loan Document, the Net Proceeds of any Disposition of any ABL US Priority Collateral shall not
be required to be applied to the prepayment of the Term Loans hereunder.
(n)
Section 2.11(b)(vi) of the Credit Agreement is hereby amended by adding the following sentence at the end thereof:
Any prepayment of 2020 Incremental
Term Loans made on or prior to the date that is six months after the Second Amendment Effective Date pursuant to Section 2.11(b)(iii)
as part of a Repricing Transaction shall be accompanied by the fee set forth in Section 2.12(e).
(o)
Section 2.12 of the Credit Agreement is hereby amended by inserting the following new subsection (e) at the end thereof:
(e) In
the event that, on or prior to the date that is six months after the Second Amendment Effective Date, the Borrower (x)
prepays, repays, refinances, substitutes or replaces any 2020 Incremental Term Loans in connection with a Repricing
Transaction (including, for the avoidance of doubt, any prepayment made pursuant to Section 2.11(b)(iii) that
constitutes a Repricing Transaction), or (y) effects any amendment, modification or waiver of, or consent under, this
Agreement resulting in a Repricing Transaction, the Borrower shall pay to the Administrative Agent, for the ratable account
of each of the applicable 2020 Incremental Term Lenders, (I) in the case of clause (x), a premium of 1.00% of the
aggregate principal amount of the 2020 Incremental Term Loans so prepaid, repaid, refinanced, substituted or replaced and
(II) in the case of clause (y), a fee equal to 1.00% of the aggregate principal amount of the 2020 Incremental Term
Loans that are the subject of such Repricing Transaction outstanding immediately prior to such amendment. All such amounts
shall be due and payable on the date of effectiveness of such Repricing Transaction.
(p)
Section 5.11 of the Credit Agreement is hereby amended by replacing the first sentence thereof in its entirety with the
following sentence:
The Borrower
shall (a) use the proceeds of the Initial Term Loans made to the Borrower on the Closing Date solely to finance a portion of the
Transactions (including working capital and/or purchase price adjustments and the payment of Transaction Costs), (b) notwithstanding
anything to the contrary in Section 2.22(a)(xii), use the proceeds of the 2018 Incremental Term Loans made to the Borrower on the
First Amendment Effective Date solely to (i) replenish cash on the Borrower’s balance sheet and/or prepay Revolving Loans
(as defined in the ABL Credit Agreement) in an aggregate amount no greater than the consideration paid under the Paramount Acquisition
Agreement to consummate the Paramount Acquisition and to pay fees, costs and expenses in connection therewith, (ii) prepay term
loans outstanding under the Second Lien Facility on the First Amendment Effective Date in an aggregate principal amount of approximately
$80,000,000 (the “2018 Second Lien Prepayment”) and (iii) without duplication, pay fees, costs and expenses
in connection with the 2018 Incremental Term Loans, the First Amendment, the 2018 Second Lien Prepayment and the other transactions
contemplated by the First Amendment and (c) use the proceeds of the 2020 Incremental Term Loans made to the Borrower on the Second
Amendment Effective Date solely to (i) together with Cash on the balance sheet, fund a portion of a one-time Cash dividend substantially
concurrently with the Second Amendment Effective Date to the Parent Company of Holdings in the aggregate amount of $275,000,000
(the “2020 Dividend”), (ii) for general corporate and working capital purposes and (iii) without duplication,
pay fees, costs and expenses in connection with the 2020 Dividend, the 2020 Incremental Term Loans, the Second Amendment, and the
other transactions contemplated by the Second Amendment.
(q)
Section 6.02(t) of the Credit Agreement is hereby amended and restated in its entirety to read as follows:
(t) Liens
securing (i) Indebtedness (and related obligations) incurred pursuant to Section 6.01(x); provided that such Liens
are junior to the Lien securing the Initial Term Loans and 2020 Incremental Term Loans pursuant to an Acceptable Intercreditor
Agreement and (ii) Indebtedness (and related obligations) incurred pursuant to Section 6.01(aa), subject, if applicable,
to an Acceptable Intercreditor Agreement;
Section
2. The 2020 Incremental Term Loan Commitment and the 2020 Incremental
Term Loans.
(a) In
accordance with Section 2.22 of the Credit Agreement, and subject to the satisfaction of the conditions set forth in Section
4 hereof, on and as of the Second Amendment Effective Date, each 2020 Incremental Term Lender hereby agrees that such 2020
Incremental Term Lender (i) shall have, as contemplated by this Amendment and the Amended Credit Agreement, a 2020 Incremental
Term Loan Commitment under the Amended Credit Agreement in an amount equal to the amount set forth opposite such 2020 Incremental
Term Lender’s name under the heading “2020 Incremental Term Loan Commitments” on Schedule 1.01(b) to
the Amended Credit Agreement, (ii) shall make 2020 Incremental Term Loans to the Borrower pursuant to Section 2.01(c) of the Amended
Credit Agreement on the Second Amendment Effective Date in a principal amount not to exceed its 2020 Incremental Term Loan Commitment
under the Amendment Credit Agreement, and (iii) shall be deemed to be, and shall become, a “2020 Incremental Term Lender”,
an “Additional Lender”, a “Term Lender”, a “Lender” and a “Secured Party” for
all purposes of, and subject to all the obligations of a “2020 Incremental Term Lender”, an “Additional Lender”,
a “Term Lender”, a “Lender” and a “Secured Party” under, the Amended Credit Agreement and
the other Loan Documents.
(b) The
Borrower and the Administrative Agent hereby agree that from and after the Second Amendment Effective Date, (i) each 2020 Incremental
Term Lender shall be deemed to be, and shall become, a “2020 Incremental Term Lender”, an “Additional Lender”,
a “Term Lender”, a “Lender” and a “Secured Party” for all purposes of, and with all the rights
and remedies of a “2020 Incremental Term Lender”, an “Additional Lender”, a “Term Lender”,
a “Lender” and a “Secured Party” under, the Amended Credit Agreement and the other Loan Documents and
(ii) the 2020 Incremental Term Loans shall constitute “Loans”, “Term Loans”, “Additional Term Loans”
and “Incremental Term Loans”, for all purposes of the Amended Credit Agreement and the other Loan Documents.
(c) The
Borrower hereby designates that the 2020 Incremental Term Loans are being incurred in reliance on clause (c) of the definition
of “Incremental Cap” in the Credit Agreement.
(d) The
2020 Incremental Term Loans shall (i) constitute an Incremental Term Facility and a new Class of Term Loans, (ii) be secured on
a pari passu basis by the Liens granted to the Administrative Agent for the benefit of the Secured Parties under the Collateral
Documents and (iii) be guaranteed in the same manner and to the same extent by the Loan Parties that guarantee the Obligations.
(e) The
2020 Incremental Term Loans shall not accrue interest for any period prior to the funding thereof on the Second Amendment Effective
Date, and the Borrower shall not be required to pay interest on the 2020 Incremental Term Loans pursuant to Section 2.13 of the
Credit Agreement for any period prior to the Second Amendment Effective Date.
Section
3. Reference to and Effect on the Loan
Documents. On and after the Second Amendment Effective Date, each reference in the Credit Agreement to “this
Agreement”, “hereunder”, “hereof” or words of like import referring to the Credit Agreement,
and each reference in the other Loan Documents to “the Credit Agreement”, “thereunder”,
“thereof” or words of like import referring to the “Credit Agreement”, shall mean and be a reference
to the Amended Credit Agreement, and any reference to “Obligations” shall mean and be a reference to the
“Obligations” under the Amended Credit Agreement.
(a) On
and after the Second Amendment Effective Date, the Credit Agreement, as specifically amended by this Amendment, and the other
Loan Documents are, and shall continue to be, in full force and effect, and are hereby in all respects ratified and confirmed.
(b) From
and after the Second Amendment Effective Date, this Amendment shall be deemed a Loan Document for all purposes under the Amended
Credit Agreement and the other Loan Documents.
(c) The
parties hereto acknowledge and agree that the amendment of the Credit Agreement pursuant to this Amendment and all other Loan
Documents amended and/or executed and delivered in connection herewith shall not constitute a novation of the Credit Agreement
and the other Loan Documents as in effect prior to the Second Amendment Effective Date.
Section
4. Conditions of Effectiveness. The obligations of
the 2020 Incremental Term Lenders to make 2020 Incremental Term Loans under the Amended Credit Agreement, and the amendments to
the Credit Agreement contained in Section 1 hereof, shall become effective as of the first date (the “Second Amendment
Effective Date”) on which the following conditions shall have been satisfied (or waived by the 2020 Incremental Term
Lenders):
(a) The
Administrative Agent and the 2020 Incremental Term Lenders shall have received counterparts of (i) this Amendment executed by
the Borrower, the Administrative Agent and the 2020 Incremental Term Lenders and (ii) the Guarantor Consent and Reaffirmation
attached hereto as Exhibit A (the “Guarantor Consent”) executed by Holdings and each Subsidiary Guarantor (collectively,
the “Guarantors” and each, a “Guarantor”);
(b) The
Administrative Agent on behalf of itself and the 2020 Incremental Term Lenders shall have received a customary legal opinion from
(i) Ropes & Gray LLP, counsel to the Loan Parties and (ii) each local counsel to the Loan Parties listed on Schedule 4(b)
to this Amendment;
(c) The
Administrative Agent on behalf of itself and the 2020 Incremental Term Lenders shall have received, with respect to each Loan
Party, certificates of good standing from the secretary of state of the state of organization of each Loan Party (to the extent
such concept exists in such jurisdiction), customary certificates of resolutions or other action, incumbency certificates or other
certificates of Responsible Officers of each Loan Party certifying true and complete copies of the Organizational Documents attached
thereto and evidencing the identity, authority and capacity of each Responsible Officer thereof authorized to act as a Responsible
Officer in connection with this Amendment and the Guarantor Consent;
(d) The
Administrative Agent and the 2020 Incremental Term Lenders shall have received a certificate of a Responsible Officer of the Borrower
certifying that the conditions in clauses (f) and (g) of this Section 4 have been satisfied;
(e) The Administrative Agent and the 2020 Incremental Term Lenders shall have received a solvency certificate from a Responsible
Officer of the Borrower (after giving effect to the transactions contemplated by this Amendment) based on and consistent with
the form attached to the Credit Agreement as Exhibit K;
(f) The
representations and warranties of the Borrower contained in Article III of the Credit Agreement and Section 5 of this Amendment
shall be true and correct in all material respects on and as of the Second Amendment Effective Date; provided that, in
the case of any representation and warranty which expressly relates to a specific date or period, such representation and warranty
shall be true and correct in all material respects as of the respective date or for the respective period, as the case may be;
provided, further, that, if any representation and warranty is qualified by or subject to a “material adverse
effect”, “material adverse change” or similar term or qualification, such representation and warranty shall
be true and correct (after giving effect to any qualification therein) in all respects on such respective dates;
(g) No
Event of Default shall exist immediately prior to or after giving effect to this Amendment and the making of the 2020 Incremental
Term Loans;
(h) The
Administrative Agent on behalf of itself and the 2020 Incremental Term Lenders shall have received a Borrowing Request no later
than 2:00 p.m. (New York time) at least three Business Days prior to the requested date of the Borrowing (or any such later date
the Administrative Agent may agree) in respect of the 2020 Incremental Term Loans;
(i) The
Borrower shall have paid all reasonable and documented out-of-pocket expenses of the Administrative Agent and the Arrangers (as
defined in the engagement letter, dated as October 26, 2020 (the “Engagement Letter”), by and among the Borrower,
BofA Securities, Inc. (“BofA Securities”), Nomura Securities International, Inc. (“Nomura”),
Jefferies Finance LLC and Morgan Stanley Senior Funding, Inc. (including, without limitation, the actual reasonable and documented
out-of-pocket fees, disbursements and other charges of one firm of outside counsel to all such Persons taken as a whole and, if
reasonably necessary, of one local counsel in any relevant jurisdiction to all such Persons, taken as a whole, to the extent provided
for in Section 9.03 of the Credit Agreement or Section 5 of the Engagement Letter) and the 2020 Incremental Term Lenders in connection
with this Amendment invoiced at least three (3) Business Days (unless otherwise agreed by the Borrower) prior to the Second Amendment
Effective Date;
(j) The
Borrower shall have paid all fees required to be paid pursuant to the fee letter, dated as of October 20, 2020, by and between
the Borrower, BofA Securities and Nomura (the “Fee Letter”); and
(k) The
Administrative Agent shall have received (i) at least two (2) Business Days prior to the Second Amendment Effective Date all documentation
and other information about the Borrower and the Guarantors required under applicable “know your customer” and anti-money
laundering rules and regulations (including the USA PATRIOT Act) that has been reasonably requested in writing at least ten (10)
Business Days prior to the Second Amendment Effective Date and (ii) one (1) Business Day prior to the Second Amendment Effective
Date all documentation and other information about the Borrower required by regulatory authorities under 31 C.F.R. § 1010.230
(the “Beneficial Ownership Regulation”) that has been reasonably requested in writing at least ten (10) Business
Days prior to the Second Amendment Effective Date.
For purposes of determining
compliance with the conditions specified in this Section 4, the 2020 Incremental Term Lenders shall be deemed to have consented
to, approved or accepted or to be satisfied with, each document or other matter required hereunder to be consented to or approved
by or acceptable or satisfactory to the 2020 Incremental Term Lenders from and after the making by the 2020 Incremental Term Lenders
of the 2020 Incremental Term Loans pursuant to Section 2.01(b) of the Amended Credit Agreement. The 2020 Incremental Term Lenders
and the Borrower shall promptly notify the Administrative Agent of the occurrence of the Second Amendment Effective Date.
Section
5. Representations and Warranties. The Borrower hereby
represents and warrants to the Administrative Agent and the 2020 Incremental Term Lenders as of the Second Amendment Effective
Date that:
(a)
The execution, delivery and performance by the Borrower of this Amendment and the execution, delivery and performance by
each Guarantor of the Guarantor Consent are within each applicable Loan Party’s corporate or other organizational power and
have been duly authorized by all necessary corporate or other organizational action of such Loan Party;
(b)
None of the execution, delivery or performance by the Borrower of this Amendment or the execution, delivery or performance
by any Guarantor of the Guarantor Consent (i) require any consent or approval of, registration or filing with, or any other action
by, any Governmental Authority, except (A) such as have been obtained or made and are in full force and effect, (B) in connection
with the Perfection Requirements and (C) such consents, approvals, registrations, filings, or other actions the failure to obtain
or make which would not be reasonably expected to have a Material Adverse Effect, (ii) will violate any (A) of such Loan Party’s
Organizational Documents or (B) Requirements of Law applicable to such Loan Party which violation, in the case of this clause
(ii)(B), would reasonably be expected to have a Material Adverse Effect or (iii) will violate or result in a Default (as defined
in the ABL Credit Agreement and the Second Lien Credit Agreement) under (A) the ABL Credit Agreement, (B) the Second Lien Credit
Agreement or (C) any other material Contractual Obligation to which such Loan Party is a party which violation, in the case of
this clause (iii), would reasonably be expected to result in a Material Adverse Effect;
(c)
This Amendment has been duly executed and delivered by the Borrower, and the Guarantor Consent has been duly executed and
delivered by each Guarantor. This Amendment constitutes a legal, valid and binding obligation of the Borrower, and the Guarantor
Consent constitutes a legal, valid and binding obligation of each Guarantor, enforceable against the Borrower and each Guarantor,
as applicable, in accordance with its terms, subject to the Legal Reservations; and
(d) Each
of the Loan Parties and each of its Restricted Subsidiaries (i) is (A) duly organized and validly existing and (B) in good
standing (to the extent such concept exists in the relevant jurisdiction) under the laws of its jurisdiction of organization,
(ii) has all requisite organizational power and authority to own its property and assets and to carry on its business as now
conducted and (iii) is qualified to do business in, and is in good standing (to the extent such concept exists in the
relevant jurisdiction) in, every jurisdiction where its ownership, lease or operation of properties or conduct of its
business requires such qualification; except, in each case referred to in this clause (d) (other than clause
(i)(A) with respect to the Borrower and clause (ii) with respect to the Loan Parties) where the failure to do so,
individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect.
Section
6. Costs and Expenses. The Borrower agrees to pay
all reasonable and documented out-of-pocket expenses incurred by the Administrative Agent (including, without limitation, actual
reasonable and documented out-of-pocket fees, disbursements and other charges of one firm of outside counsel to all such Persons
taken as a whole and, if reasonably necessary, of one local counsel in any relevant jurisdiction to all such Persons, taken as
a whole, to the extent provided for in Section 9.03 of the Credit Agreement) in connection with the preparation, execution and
delivery of this Amendment and any other instruments and documents to be delivered hereunder or in connection herewith.
Section
7. Execution in Counterparts; Effectiveness. This
Amendment may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute
an original, but all of which when taken together shall constitute a single contract. Delivery of an executed counterpart of a
signature page of this Amendment by facsimile or other electronic imaging (including in .pdf format) means shall be effective as
delivery of a manually executed counterpart of this Amendment. Except as provided in Section 4, this Amendment shall become effective
when it shall have been executed by the Borrower, the Administrative Agent and the 2020 Incremental Term Lenders. This Agreement
may be in the form of an Electronic Record and may be executed using Electronic Signatures (including, without limitation, facsimile
and .pdf) and shall be considered an original, and shall have the same legal effect, validity and enforceability as a paper record.
This Amendment may be executed in as many counterparts as necessary or convenient, including both paper and electronic counterparts,
but all such counterparts are one and the same Amendment. For the avoidance of doubt, the authorization under this paragraph
may include, without limitation, use or acceptance by the Administrative Agent of a manually signed paper communication which has
been converted into electronic form (such as scanned into PDF format), or an electronically signed communication converted into
another format, for transmission, delivery and/or retention. The Administrative Agent may, at its option, create one or more copies
of this Amendment in the form of an imaged Electronic Record (an “Electronic Copy”), which shall be deemed created
in the ordinary course of the Administrative Agent’s business, and destroy the original paper document. This Amendment in
the form of an Electronic Record, including an Electronic Copy, shall be considered an original for all purposes, and shall have
the same legal effect, validity and enforceability as a paper record. Notwithstanding anything contained herein to the contrary,
the Administrative Agent is under no obligation to accept an Electronic Signature in any form or in any format unless expressly
agreed to by the Administrative Agent pursuant to procedures approved by it; provided, further, without limiting
the foregoing, (a) to the extent the Administrative Agent has agreed to accept such Electronic Signature, the Administrative Agent
shall be entitled to rely on any such Electronic Signature purportedly given by or on behalf of any Loan Party without further
verification and (b) upon the request of the Administrative Agent any Electronic Signature shall be promptly followed by a manually
executed, original counterpart. For purposes hereof, “Electronic Record” and “Electronic Signature” shall
have the meanings assigned to them, respectively, by 15 USC §7006, as it may be amended from time to time.
Section
8. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. Clauses (b) and (c) of Section 9.10 of the Credit Agreement
are incorporated herein by reference, mutatis mutandis.
Section
9. WAIVER OF RIGHT OF TRIAL BY JURY. EACH PARTY TO
THIS AMENDMENT HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AMENDMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION,
SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO
THIS AMENDMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF,
the parties have caused this Amendment to be executed by their respective authorized officers as of the date first above written.
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HAYWARD INDUSTRIES, INC.
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By:
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/s/ Eifion Jones
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Name: Eifion Jones
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Title: Chief Financial Officer
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BANK OF AMERICA, N.A.,
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as Administrative Agent
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By:
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/s/ Denise Jones
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Name: Denise Jones
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Title: Vice President
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BANK OF AMERICA, N.A.,
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as an Additional lender and
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2020 Incremental Term Lender
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By:
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/s/ David Stricker
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Name: David Stricker
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Title: Managing Director
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[Signature Page to Amendment No. 2 to First Lien Credit Agreement]
Schedule 4(b)
Local Counsel
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Firm
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Jurisdiction
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Lowenstein Sandler LLP
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New Jersey
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Ropes & Gray LLP
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Delaware
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Gordon Rees Scully Mansukhani, LLP
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Arizona
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EXHIBIT A
GUARANTOR CONSENT AND REAFFIRMATION
October 28, 2020
Reference is made to
Amendment No. 2 to First Lien Credit Agreement, dated as of October 28, 2020 (the “Amendment”), by and among
Hayward Industries, Inc., a New Jersey corporation (the “Borrower”), Bank of America, N.A., as administrative
agent and collateral agent (in such capacities, the “Administrative Agent”), and the lenders party thereto (the
“2020 Incremental Term Lenders”), amending that certain First Lien Credit Agreement, dated as of August 4, 2017
(as amended by Amendment No. 1 to First Lien Credit Agreement, dated as of September 28, 2018, and as further amended, supplemented
or otherwise modified prior to the date hereof, the “Credit Agreement”; the Credit Agreement as amended by the
Amendment, the “Amended Credit Agreement”).
Each of the undersigned,
as a Guarantor under the First Lien Loan Guaranty, dated as of August 4, 2017 (the “Guaranty”), in favor of
the Administrative Agent and the Lenders parties to the Credit Agreement, hereby consents to such Amendment and the transactions
contemplated by such Amendment and, as of the Second Amendment Effective Date, hereby, (a) ratifies, acknowledges and reaffirms
all of its payment and performance obligations, contingent or otherwise, under each of the Loan Documents to which it is a party,
in each case, as amended and in effect after giving effect to the Amendment and the making of the 2020 Incremental Term Loans and
agrees that its Guarantee remains in full force and effect to the extent set forth in such Guaranty and after giving effect to
this Amendment and the incurrence of the 2020 Incremental Term Loans, (b) ratifies, acknowledges and reaffirms each grant of a
lien on, or security interest or pledge in, its Collateral made pursuant to the Loan Documents, in each case, as amended by the
Amendment, and confirms that such liens and security interests continue to secure the Obligations in effect after giving effect
to the Amendment and the making of the 2020 Incremental Term Loans, in each case subject to the terms of the Amendment and the
Amended Credit Agreement, and (c) confirms that the obligations of the Loan Parties with respect to the 2020 Incremental Term Loans
shall constitute, from and after the making of the 2020 Incremental Term Loans, Obligations, Guaranteed Obligations (as defined
in the Guaranty), Secured Obligations and First Lien Term Credit Agreement Obligations and Other First Lien Term Obligations (each
as defined in the ABL Intercreditor Agreement) and agrees that the security interests in connection therewith remain in full force
and effect. Capitalized terms not otherwise defined in this Guarantor Consent have the same meanings as specified in the Amendment
or the Amended Credit Agreement, as applicable.
[The remainder of this page is intentionally
left blank]
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GUARANTORS
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HAYWARD INTERMEDIATE, INC.
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By:
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/s/ Eifion Jones
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Name:
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Eifion Jones
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Title:
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Chief Financial Officer
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GOLDLINE PROPERTIES LLC
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By:
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/s/ Eifion Jones
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Name:
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Eifion Jones
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Title:
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Treasurer
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HAYWARD INUSTRIAL PRODUCTS, INC.
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By:
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/s/ Eifion Jones
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Name:
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Eifion Jones
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Title:
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Chief Financial Officer
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HAYWARD WRIGHT-AUSTIN INC.
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By:
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/s/ Eifion Jones
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Name:
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Eifion Jones
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Title:
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Chief Financial Officer
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WEBSTER PUMPS, INC.
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By:
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/s/ Eifion Jones
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Name:
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Eifion Jones
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Title:
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Chief Financial Officer
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LDAG HOLDINGS, INC.
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By:
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/s/ Eifion Jones
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Name:
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Eifion Jones
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Title:
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Treasurer
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LDAG ACQUISITION CORP.
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By:
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/s/ Eifion Jones
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Name:
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Eifion Jones
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Title:
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Treasurer
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[Signature Page to Guarantor Consent and Reaffirmation]
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PARAMOUNT LEISURE INDUSTRIES, INC.
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By:
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/s/ Eifion Jones
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Name:
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Eifion Jones
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Title:
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Treasurer
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GSG HOLDINGS, INC.
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By:
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/s/ Eifion Jones
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Name:
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Eifion Jones
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Title:
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Treasurer
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PARAMOUNT CAPITAL FINANCE CORP.
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By:
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/s/ Eifion Jones
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Name:
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Eifion Jones
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Title:
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Treasurer
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PARAMOUNT INTERNATIONAL, INC.
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By:
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/s/ Eifion Jones
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Name:
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Eifion Jones
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Title:
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Treasurer
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[Signature Page to Guarantor Consent and Reaffirmation]
Exhibit 10.4
EXECUTION VERSION
SECOND LIEN CREDIT AGREEMENT
Dated as of August 4, 2017
among
HAYWARD ACQUISITION CORP.,
as Initial Borrower,
to be merged with and into
HAYWARD INDUSTRIES, INC.,
as survivor of the Merger and Borrower
HAYWARD INTERMEDIATE, INC.,
as Holdings,
THE FINANCIAL INSTITUTIONS PARTY HERETO,
as Lenders,
and
BANK OF AMERICA, N.A.
as Administrative Agent
TABLE OF CONTENTS
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Page
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ARTICLE I DEFINITIONS
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2
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Section 1.01.
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Defined Terms
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2
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Section 1.02.
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Classification of Loans and Borrowings
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58
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Section 1.03.
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Terms Generally
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58
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Section 1.04.
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Accounting Terms; GAAP
|
59
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Section 1.05.
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Effectuation of Transactions
|
60
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Section 1.06.
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Timing of Payment of Performance
|
60
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Section 1.07.
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Times of Day
|
60
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Section 1.08.
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Currency Generally
|
60
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Section 1.09.
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Cashless Rollovers
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60
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Section 1.10.
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Certain Conditions, Calculations and Tests
|
61
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Section 1.11.
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Rounding
|
64
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ARTICLE II THE CREDITS
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64
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Section 2.01.
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Commitments
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64
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Section 2.02.
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Loans and Borrowings
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64
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Section 2.03.
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Requests for Borrowings
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65
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Section 2.04.
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[Reserved]
|
66
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Section 2.05.
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[Reserved]
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66
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Section 2.06.
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[Reserved]
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66
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Section 2.07.
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Funding of Borrowings
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66
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Section 2.08.
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Type; Interest Elections
|
67
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Section 2.09.
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Termination of Commitments
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68
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Section 2.10.
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Repayment of Loans; Evidence of Debt
|
68
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Section 2.11.
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Prepayment of Loans
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69
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Section 2.12.
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Fees
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73
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Section 2.13.
|
Interest
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74
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Section 2.14.
|
Alternate Rate of Interest
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75
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Section 2.15.
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Increased Costs
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75
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Section 2.16.
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Break Funding Payments
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76
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Section 2.17.
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Taxes
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77
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Section 2.18.
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Payments Generally; Allocation of Proceeds; Sharing of Payments
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80
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Section 2.19.
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Mitigation Obligations; Replacement of Lenders
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82
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Section 2.20.
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Illegality
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83
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Section 2.21.
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Defaulting Lenders
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84
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Section 2.22.
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Incremental Credit Extensions
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85
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Section 2.23.
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Extensions of Loans
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88
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ARTICLE III REPRESENTATIONS AND WARRANTIES
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90
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Section 3.01.
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Organization; Powers
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90
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Section 3.02.
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Authorization; Enforceability
|
90
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Section 3.03.
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Governmental Approvals; No Conflicts
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90
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Section 3.04.
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Financial Condition; No Material Adverse Effect
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91
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Section 3.05.
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Properties
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91
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Section 3.06.
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Litigation and Environmental Matters
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91
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Section 3.07.
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Compliance with Laws
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92
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Section 3.08.
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Investment Company Status
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92
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Section 3.09.
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Taxes
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92
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Section 3.10.
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ERISA
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92
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Section 3.11.
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Disclosure
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92
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Section 3.12.
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Solvency
|
93
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Section 3.13.
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Capitalization and Subsidiaries
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93
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Section 3.14.
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Security Interest in Collateral
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93
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Section 3.15.
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Labor Disputes
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93
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Section 3.16.
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Federal Reserve Regulations
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94
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Section 3.17.
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Economic and Trade Sanctions and Anti-Corruption Laws
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94
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ARTICLE IV CONDITIONS
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94
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Section 4.01.
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Closing Date
|
94
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ARTICLE V AFFIRMATIVE COVENANTS
|
97
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Section 5.01.
|
Financial Statements and Other Reports
|
97
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|
Section 5.02.
|
Existence
|
101
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Section 5.03.
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Payment of Taxes
|
101
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Section 5.04.
|
Maintenance of Properties
|
101
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Section 5.05.
|
Insurance
|
101
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Section 5.06.
|
Inspections
|
101
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Section 5.07.
|
Maintenance of Books and Records
|
102
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Section 5.08.
|
Compliance with Laws
|
102
|
|
Section 5.09.
|
Compliance with Environmental Laws
|
102
|
|
Section 5.10.
|
Designation of Subsidiaries
|
103
|
|
Section 5.11.
|
Use of Proceeds
|
103
|
|
Section 5.12.
|
Covenant to Guarantee Obligations and Give Security
|
103
|
|
Section 5.13.
|
[Reserved]
|
104
|
|
Section 5.14.
|
Further Assurances
|
104
|
|
|
|
|
|
ARTICLE VI NEGATIVE COVENANTS
|
105
|
|
|
|
|
|
Section 6.01.
|
Indebtedness
|
105
|
|
Section 6.02.
|
Liens
|
111
|
|
Section 6.03.
|
No Further Negative Pledges
|
115
|
|
Section 6.04.
|
Restricted Payments; Certain Payments of Indebtedness
|
116
|
|
Section 6.05.
|
Restrictions on Subsidiary Distributions
|
121
|
|
Section 6.06.
|
Investments
|
122
|
|
Section 6.07.
|
Fundamental Changes; Disposition of Assets
|
125
|
|
Section 6.08.
|
Sale and Lease-Back Transactions
|
129
|
|
Section 6.09.
|
Transactions with Affiliates
|
130
|
|
Section 6.10.
|
Conduct of Business
|
131
|
|
Section 6.11.
|
[Reserved]
|
131
|
|
Section 6.12.
|
Amendments of or Waivers with Respect to Restricted Debt
|
132
|
|
Section 6.13.
|
Fiscal Year
|
132
|
|
Section 6.14.
|
Permitted Activities of Holdings
|
132
|
|
Section 6.15.
|
Anti-Layering
|
133
|
|
ARTICLE VII EVENTS OF DEFAULT
|
134
|
|
|
|
|
|
Section 7.01.
|
Events of Default
|
134
|
|
|
|
|
|
ARTICLE VIII THE ADMINISTRATIVE AGENT
|
137
|
|
|
|
|
|
ARTICLE IX MISCELLANEOUS
|
144
|
|
|
|
|
|
Section 9.01.
|
Notices
|
144
|
|
Section 9.02.
|
Waivers; Amendments
|
148
|
|
Section 9.03.
|
Expenses; Indemnity
|
153
|
|
Section 9.04.
|
Waiver of Claim
|
154
|
|
Section 9.05.
|
Successors and Assigns
|
154
|
|
Section 9.06.
|
Survival
|
162
|
|
Section 9.07.
|
Counterparts; Integration; Effectiveness; Electronic Execution
|
162
|
|
Section 9.08.
|
Severability
|
163
|
|
Section 9.09.
|
Right of Setoff
|
163
|
|
Section 9.10.
|
Governing Law; Jurisdiction; Consent to Service of Process
|
163
|
|
Section 9.11.
|
Waiver of Jury Trial
|
165
|
|
Section 9.12.
|
Headings
|
165
|
|
Section 9.13.
|
Confidentiality
|
165
|
|
Section 9.14.
|
No Fiduciary Duty
|
166
|
|
Section 9.15.
|
Several Obligations
|
167
|
|
Section 9.16.
|
USA PATRIOT Act
|
167
|
|
Section 9.17.
|
Disclosure
|
167
|
|
Section 9.18.
|
Appointment for Perfection
|
167
|
|
Section 9.19.
|
Interest Rate Limitation
|
167
|
|
Section 9.20.
|
Intercreditor Agreement
|
167
|
|
Section 9.21.
|
Conflicts
|
168
|
|
Section 9.22.
|
Release of Guarantors
|
168
|
|
Section 9.23.
|
Acknowledgement and Consent to Bail-In of EEA Financial Institutions
|
168
|
|
Section 9.24.
|
Lender Representation
|
169
|
|
SCHEDULES:
|
|
|
|
|
|
|
|
Schedule 1.01(a)
|
–
|
Commitment Schedule
|
|
Schedule 3.05
|
–
|
Fee Owned Real Estate Assets
|
|
Schedule 3.13
|
–
|
Subsidiaries
|
|
Schedule 3.15
|
–
|
Labor Disputes
|
|
Schedule 5.10
|
–
|
Unrestricted Subsidiaries
|
|
Schedule 6.01
|
–
|
Existing Indebtedness
|
|
Schedule 6.02
|
–
|
Existing Liens
|
|
Schedule 6.06
|
–
|
Existing Investments
|
|
Schedule 6.07(s)
|
|
Dispositions
|
|
Schedule 9.01
|
–
|
Borrower’s Website Address for Electronic Delivery
|
|
|
|
|
|
EXHIBITS:
|
|
|
|
|
|
|
|
Exhibit A-1
|
–
|
Form of Assignment and Assumption
|
|
Exhibit A-2
|
–
|
Form of Affiliated Lender Assignment and Assumption
|
|
Exhibit B
|
–
|
Form of Borrowing Request
|
|
Exhibit C
|
–
|
Form of Compliance Certificate
|
|
Exhibit D
|
–
|
Form of Interest Election Request
|
|
Exhibit E
|
–
|
Form of Perfection Certificate
|
|
Exhibit F
|
–
|
Form of Perfection Certificate Supplement
|
|
Exhibit G
|
–
|
Form of Promissory Note
|
|
Exhibit H
|
–
|
Form of Guaranty Agreement
|
|
Exhibit I
|
–
|
Form of Security Agreement
|
|
Exhibit J-1
|
–
|
Form of U.S. Tax Compliance Certificate (For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax Purposes)
|
|
Exhibit J-2
|
–
|
Form of U.S. Tax Compliance Certificate (For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax Purposes)
|
|
Exhibit J-3
|
–
|
Form of U.S. Tax Compliance Certificate (For Foreign Participants That Are Partnerships For U.S. Federal Income Tax Purposes)
|
|
Exhibit J-4
|
–
|
Form of U.S. Tax Compliance Certificate (For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)
|
|
Exhibit K
|
–
|
Form of Solvency Certificate
|
|
Exhibit L
|
–
|
Form of ABL Intercreditor Agreement
|
|
Exhibit M
|
–
|
Form of Term Intercreditor Agreement
|
SECOND
LIEN CREDIT AGREEMENT
SECOND LIEN CREDIT AGREEMENT,
dated as of August 4, 2017 (this “Agreement”), by and among Hayward Acquisition Corp., a New Jersey corporation
(the “Initial Borrower”, to be merged with and into the Company (as defined below) pursuant to the Merger (as
defined below), with the Company as survivor of the Merger, the “Borrower”), Hayward Intermediate, Inc.,
a Delaware corporation (“Holdings”), the Lenders from time to time party hereto including Bank of America, N.A.
(“Bank of America”), in its capacities as administrative agent and collateral agent (the “Administrative
Agent”).
RECITALS
A. Pursuant
to the terms of the Merger Agreement, the Initial Borrower, a wholly-owned direct subsidiary of Holdings, will merge (the “Merger”)
with and into Hayward Industries, Inc., a New Jersey corporation (the “Company”), with the Company to be
the surviving corporation of the Merger and a wholly-owned direct subsidiary of Holdings.
B. To
fund a portion of the Acquisition, the Sponsors and certain other investors (including the Co-Investors and members of management,
affiliates and direct or indirect existing shareholders of the Company and its subsidiaries prior to the Merger) will, directly
or indirectly (including through a Parent Company), make Cash equity contributions to Holdings or purchase equity interests of
a Parent Company for Cash (or, in the case of the Co-Investors, Cash or non-cash equity contributions, including through contribution,
conversion or other “rollover” of existing direct or indirect Capital Stock with respect to the Company) in respect
of Qualified Capital Stock, which, in the case of Cash shall, directly or indirectly, be contributed to the Borrower (except to
the extent to be utilized by a direct or indirect parent of the Borrower to make any payments required to consummate the Transactions)
in the form of Qualified Capital Stock (such contribution, purchase, retention, rollover and/or conversion, collectively, the “Equity
Contribution”), and the aggregate Equity Contribution will constitute not less than 30% of the sum of (i) the aggregate
gross proceeds received from the Loans borrowed under the First Lien Credit Agreement on the Closing Date, but excluding any gross
proceeds received from any increase in the Initial Term Loans (as defined in the First Lien Credit Agreement as in effect on the
Closing Date, the “Initial First Lien Term Loans”) to fund original issue discount or upfront fees, (ii) the
aggregate gross proceeds received from the loans borrowed under this Agreement on the Closing Date, (iii) the aggregate gross
proceeds received from the loans borrowed under the ABL Facility on the Closing Date, but excluding (A) the aggregate gross
proceeds received from loans borrowed under the ABL Facility to fund original issue discount or upfront fees in respect of the
Initial Loans hereunder and to finance working capital adjustments, the working capital needs and other general corporate purposes
of the Borrower and its subsidiaries and (B) any letter of credit issued or deemed issued under the ABL Facility and (iv) the
Equity Contribution; provided that the Sponsors’ investment on the Closing Date will constitute not less than 50.1%
direct or indirect beneficial ownership in the Borrower immediately upon consummation of the Transactions.
C. The
Initial Borrower (i) has requested that the Lenders extend credit in the form of Initial Loans in an original aggregate principal
amount equal to $285,000,000, subject to increase as provided herein, (ii) intends to obtain term loans under the First Lien
Credit Agreement in an original aggregate principal amount equal to $850,000,000 and (iii) intends to obtain, together with
its wholly-owned Canadian Subsidiary, an asset-based revolving credit facility under the ABL Credit Agreement in an original aggregate
principal amount equal to $250,000,000.
D. The
Lenders are willing to extend such credit to the Borrower on the terms and subject to the conditions set forth herein. Accordingly,
the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Defined
Terms. As used in this Agreement, the following terms have the meanings specified below:
“ABL Agent”
means Bank of America, N.A. in its capacity as administrative agent and collateral agent with respect to the ABL Facility as of
the Closing Date, or any successor or other administrative agent and collateral agent with respect to any other ABL Facility.
“ABL Credit
Agreement” means that certain ABL Credit Agreement, dated as of the Closing Date, by and among Holdings, the Borrower,
the other borrowers and guarantors party thereto, the lenders party thereto in their capacities as lenders thereunder, the swingline
lenders and letter of credit issuers party thereto in their capacities as such and the ABL Agent and the other agents party thereto
and any other credit agreement, indenture or similar agreement governing any ABL Facility.
“ABL Facility”
means the credit facility governed by the ABL Credit Agreement and any Refinancing Indebtedness that refinances or replaces any
part of the loans, notes, guarantees, other credit facilities or commitments thereunder.
“ABL Canadian
Collateral” means “Canadian Collateral” as defined in the ABL Credit Agreement.
“ABL Intercreditor
Agreement” means (a) the ABL Intercreditor Agreement substantially in the form of Exhibit L hereto, dated as
of the Closing Date, by and among the Administrative Agent, the ABL Agent, the First Lien Agent and the other parties thereto from
time to time and acknowledged by the Loan Parties, as amended, restated, amended and restated, supplemented or otherwise modified
from time to time; (b) an intercreditor agreement substantially in the form of the ABL Intercreditor Agreement as in effect
on the Closing Date with any material modifications which are reasonably acceptable to the Borrower, the Administrative Agent and
the Required Lenders; and (c) if requested by the Borrower, an intercreditor agreement the terms of which are consistent with
market terms governing security arrangements for the sharing of Liens and Collateral proceeds on a Split Collateral Basis in the
case of an asset based ABL Facility at the time the intercreditor agreement is proposed to be established, so long as the terms
of such intercreditor agreement are reasonably satisfactory to the Administrative Agent, the Required Lenders and the Borrower;
provided, that (i) if required by the Administrative Agent and the Required Lenders prior to agreeing that any form
(or modification) is reasonably acceptable to them, the form of any other intercreditor agreement shall be deemed acceptable to
the Administrative Agent (and the Required Lenders) if posted to the Lenders and not objected to by the Required Lenders within
five (5) Business Days thereafter, and (ii) any ABL Intercreditor Agreement shall be limited to terms governing the sharing
of Liens and the relative rights and obligations of the secured parties regarding Collateral and the proceeds thereof and shall
not restrict or limit any Indebtedness or the terms and conditions thereof (including any amendments and refinancings) to the extent
such Indebtedness would otherwise be permitted by the Loan Documents.
“ABL Loans”
shall mean revolving loans under any ABL Facility.
“ABL US Priority
Collateral” means “ABL Priority Collateral” as defined in the ABL Intercreditor Agreement of the US Loan
Parties (as defined in the ABL Credit Agreement).
“ABR”,
when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, bears interest
at a rate determined by reference to the Alternate Base Rate.
“ABR Loan”
means a Loan bearing interest at a rate determined by reference to the Alternate Base Rate.
“Acceptable
Intercreditor Agreement” means:
(a) in
the case of Indebtedness that is secured by a Lien on the Collateral on a “senior secured priority” basis with respect
to the Initial Loans (and any other Class of Loans that are Second Priority Secured Obligations), including the First Lien
Obligations, (i) the Term Intercreditor Agreement, (ii) an intercreditor agreement substantially in the form of the Term
Intercreditor Agreement with any material modifications which are reasonably acceptable to the Borrower, the Administrative Agent
and the Required Lenders, or (iii) if requested by the Borrower, an intercreditor agreement the terms of which are consistent
with market terms governing security arrangements for the sharing of Liens and Collateral proceeds on a “senior secured priority”
basis at the time the intercreditor agreement is proposed to be established in light of the type of Indebtedness subject thereto,
so long as the terms of such intercreditor agreement are reasonably satisfactory to the Administrative Agent, the Required Lenders
and the Borrower;
(b) to
the extent the ABL Facility is outstanding, any ABL Intercreditor Agreement (or an Acceptable Intercreditor Agreement under clause
(a) above in the case of any ABL Facility secured by the Collateral on a senior pari passu basis with the First
Priority Secured Obligations (and not a Split Collateral Basis));
(c) in
the case of Indebtedness that is secured by a Lien on the Collateral on a “second lien” basis pari passu with
the Initial Loans (and any other Class of Loans that are Second Priority Secured Obligations), (i) a Second Lien Pari
Passu Intercreditor Agreement, (ii) an intercreditor agreement substantially in the form of the Second Lien Pari Passu Intercreditor
Agreement with any material modifications which are reasonably acceptable to the Borrower, the Administrative Agent and the Required
Lenders, or (iii) if requested by the Borrower, an intercreditor agreement the terms of which are consistent with market terms
governing security arrangements for the sharing of Liens and Collateral proceeds on a “second lien” basis pari passu
at the time the intercreditor agreement is proposed to be established in light of the type of Indebtedness subject thereto, so
long as the terms of such intercreditor agreement are reasonably satisfactory to the Administrative Agent, the Required Lenders
and the Borrower;
(d) in
the case of Indebtedness that is secured by a Lien on the Collateral on a “junior secured priority” basis with respect
to the Initial Loans (and any Class of Loans that are Second Priority Secured Obligations), (i) a Junior Lien Intercreditor
Agreement, (ii) an intercreditor agreement substantially in the form of the Junior Lien Intercreditor Agreement with any material
modifications which are reasonably acceptable to the Borrower, the Administrative Agent and the Required Lenders, or (iii) if
requested by the Borrower, an intercreditor agreement the terms of which are consistent with market terms governing security arrangements
for the sharing of Liens and Collateral proceeds on a “junior secured priority” basis at the time the intercreditor
agreement is proposed to be established in light of the type of Indebtedness subject thereto, so long as the terms of such intercreditor
agreement are reasonably satisfactory to the Administrative Agent, the Required Lenders and the Borrower; and
(e) any
Additional Agreement the terms of which are consistent with market terms governing, as applicable, security arrangements for the
sharing of Liens and Collateral proceeds and/or payment subordination provisions, in each case on a basis applicable to the specified
intercreditor arrangement at the time the intercreditor or subordination agreement, as applicable, is proposed to be established
in light of the type of Indebtedness subject thereto, so long as the terms of such intercreditor or subordination agreement, as
applicable, are reasonably satisfactory to the Administrative Agent, the Required Lenders and the Borrower;
provided, that (A) if required
by the Administrative Agent and the Required Lenders prior to agreeing that any form (or modification) is reasonably acceptable
to them, the form of any other intercreditor agreement shall be deemed acceptable to the Administrative Agent (and the Required
Lenders) if posted to the Lenders and not objected to by the Required Lenders within five (5) Business Days thereafter, and
(B) any Acceptable Intercreditor Agreement shall be limited to terms governing the sharing of Liens and the relative rights
and obligations of the secured parties regarding Collateral and the proceeds thereof and shall not restrict or limit any Indebtedness
or the terms and conditions thereof (including any amendments and refinancings) to the extent such Indebtedness would otherwise
be permitted by the Loan Documents.
“ACH”
means automated clearing house transfers.
“Acquisition”
means (a) the acquisition of, and business combination with, the Company through the Merger and (b) the other transactions
contemplated by the Merger Agreement.
“Additional
Agreement” has the meaning assigned to such term in Article 8.
“Additional
Commitments” means any term commitment added pursuant to Sections 2.22, 2.23 or 9.02(c).
“Additional
Facility” means any term loan facility added pursuant to Sections 2.22, 2.23 or 9.02(c).
“Additional
Lender” has the meaning assigned to such term in Section 2.22(b).
“Additional
Loans” means any term loan added pursuant to Sections 2.22, 2.23 or 9.02(c).
“Administrative
Agent” has the meaning assigned to such term in the preamble to this Agreement.
“Administrative
Questionnaire” has the meaning assigned to such term in Section 2.22(d).
“Adverse Proceeding”
means any action, suit, proceeding (whether administrative, judicial or otherwise), governmental investigation or arbitration (whether
or not purportedly on behalf of Holdings, the Borrower or any of their respective Restricted Subsidiaries) at law or in equity,
or before or by any Governmental Authority, domestic or foreign (including any Environmental Claim), whether pending or, to the
knowledge of Holdings, the Borrower or any of their respective Restricted Subsidiaries, threatened in writing, against or affecting
Holdings, the Borrower or any of their respective Restricted Subsidiaries or any property of Holdings, the Borrower or any of their
respective Restricted Subsidiaries.
“Affiliate”
means, as applied to any Person, any other Person directly or indirectly Controlling, Controlled by, or under common Control with,
that Person. No Person shall be an “Affiliate” of Holdings or any subsidiary thereof solely because it is an unrelated
portfolio company of the Sponsors and none of the Administrative Agent, any Lender (other than any Affiliated Lender or any Debt
Fund Affiliate) or any of their respective Affiliates shall be considered an Affiliate of Holdings or any subsidiary thereof.
“Affiliated
Lender” means any Non-Debt Fund Affiliate, Holdings, the Borrower and/or any subsidiary of Holdings.
“Affiliated
Lender Assignment and Assumption” means an assignment and assumption entered into by a Lender and an Affiliated Lender
(with the consent of any party whose consent is required by Section 9.05) and accepted by the Administrative Agent
in the form of Exhibit A-2 or any other form approved by the Administrative Agent and the Borrower.
“Affiliated
Lender Cap” has the meaning assigned to such term in Section 9.05(h)(iv).
“Agreement”
has the meaning assigned to such term in the preamble to this Second Lien Credit Agreement.
“AHYDO”
has the meaning assigned to such term in Section 2.11(b)(ix).
“AIMCo”
has the meaning assigned to such term in the definition of “Sponsor”.
“All-In Yield”
means, as to any Indebtedness, the yield thereof, whether in the form of interest rate, margin, original issue discount, upfront
fees, a LIBO Rate or Alternate Base Rate floor, or otherwise, in each case, incurred or payable directly by the Borrower ratably
to all lenders of such Indebtedness; provided that (a) original issue discount and upfront fees shall be equated to
interest rate assuming a 4-year life to maturity (or, if less, the stated life to maturity at the time of its incurrence of the
applicable indebtedness), (b) “All-In Yield” shall not include arrangement fees, structuring fees, commitment
fees, underwriting fees, placement fees, success fees, advisory fees, ticking and unused line fees, consent or amendment fees and
any similar fees (regardless of whether shared or paid, in whole or in part, with or to any or all lenders) and any other fees
not generally paid ratably to all lenders of such Indebtedness, and (c) if any Incremental Facility includes an Alternate
Base Rate or LIBO Rate floor that is greater than the Alternate Base Rate or LIBO Rate floor applicable to the Initial Loans, such
differential between interest rate floors shall be included in the calculation of All-In Yield, but only to the extent an increase
in the Alternate Base Rate or LIBO Rate floor applicable to the Initial Loans would cause an increase in the interest rate then
in effect thereunder, and in such case the Alternate Base Rate or LIBO Rate floors (but not the applicable rate, unless otherwise
elected by the Borrower) applicable to the Initial Loans shall be increased to the extent of such differential between interest
rate floors.
“Alternate Base
Rate” means, for any day, a fluctuating rate per annum equal to the highest of (a) the Federal Funds Effective Rate
in effect on such day plus 0.50%, (b) to the extent ascertainable, the Published LIBO Rate (which rate shall be calculated
based upon an Interest Period of one month and shall be determined on a daily basis) plus 1.00%, (c) the Prime Rate
and (d) 0.00% per annum. Any change in the Alternate Base Rate due to a change in the Federal Funds Effective Rate or the
Published LIBO Rate, as the case may be, shall be effective from and including the effective date of such change in the Federal
Funds Effective Rate or the Published LIBO Rate, as the case may be.Any change in the Prime Rate announced by Bank of America shall
be effective from and including the opening of business on the day specified in the public announcement of such change.
“Applicable
Percentage” means, with respect to any Lender for any Class, a percentage equal to a fraction the numerator of which
is the aggregate outstanding principal amount of the Loans and unused Additional Commitments of such Lender for such Class and
the denominator of which is the aggregate outstanding principal amount of the Loans and unused Additional Commitments of all Lenders
for such Class; provided that for purposes of Section 2.21 and otherwise herein, when there is a Defaulting Lender,
any such Defaulting Lender’s Commitment shall be disregarded in the relevant calculations.
“Applicable
Price” has the meaning assigned to such term in the definition of “Dutch Auction”.
“Applicable
Rate” means, for any day, with respect to any Initial Loans (a) that are LIBO Rate Loans, 8.25% per annum and (b) that
are ABR Loans, 7.25% per annum.
“Approved Fund”
means, with respect to any Lender, any Person (other than a natural person or a Disqualified Institution) that is engaged in making,
purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its activities
and is administered, advised or managed by (a) such Lender, (b) any Affiliate of such Lender or (c) any entity or
any Affiliate of any entity that administers, advises or manages such Lender.
“Assignment
and Assumption” means an assignment and assumption entered into by a Lender and an assignee (with the consent of any
party whose consent is required by Section 9.05), and accepted by the Administrative Agent in the form of Exhibit A-1
or any other form approved by the Administrative Agent and the Borrower.
“Auction”
has the meaning assigned to such term in the definition of “Dutch Auction”.
“Auction Agent”
means (a) the Administrative Agent or any of its Affiliates to the extent the Administrative Agent or such Affiliate has agreed
to act in such capacity or (b) any other financial institution or advisor engaged by the Borrower (whether or not an Affiliate
of the Administrative Agent) to act as an arranger in connection with any Auction pursuant to the definition of “Dutch Auction”.
“Auction Amount”
has the meaning assigned to such term in the definition of “Dutch Auction”.
“Auction Notice”
has the meaning assigned to such term in the definition of “Dutch Auction”.
“Auction Party”
has the meaning set forth in the definition of “Dutch Auction”.
“Auction Response
Date” has the meaning assigned to such term in the definition of “Dutch Auction”.
“Available Amount”
means, at any time, an amount equal to, without duplication:
(a) the
sum of:
(i) the
greater of $48,000,000 and 29% of Consolidated Adjusted EBITDA plus
(ii) the
CNI Growth Amount; plus
(iii) the
amount of any Cash and Cash Equivalents (including from the proceeds of any property or assets (including Capital Stock)) and the
Fair Market Value of property or assets contributed to the Borrower or any of its Restricted Subsidiaries by any Parent Company
or received by the Borrower or any of its Restricted Subsidiaries in return for any issuance of Qualified Capital Stock to any
Parent Company (but excluding any amounts (w) constituting a “Cure Amount” (as defined in the ABL Credit Agreement)
or similar term with respect to an equity cure of a financial covenant default, (x) received from the Borrower or any Restricted
Subsidiary, (y) for all purposes other than Investments in Restricted Subsidiaries, the proceeds of equity used to incur Contribution
Indebtedness, or (z) consisting of the proceeds of any loan or advance made pursuant to Section 6.06(h)(ii)),
in each case, during the period from and including the day immediately following the Closing Date through and including such time;
plus
(iv) the
aggregate principal amount of any Indebtedness or Disqualified Capital Stock, in each case, of the Borrower or any Restricted Subsidiary
(other than Indebtedness or such Disqualified Capital Stock issued to the Borrower or any Restricted Subsidiary), which has been
directly or indirectly converted into or exchanged for Qualified Capital Stock of the Borrower, any Restricted Subsidiary or any
Parent Company (or contributed to the Borrower, any Restricted Subsidiary or any Parent Company and cancelled), together with the
Fair Market Value of any Cash Equivalents and the Fair Market Value of any property or assets received by the Borrower or such
Restricted Subsidiary upon such exchange or conversion, in each case, during the period from and including the day immediately
following the Closing Date through and including such time; plus
(v) the
net proceeds received by the Borrower or any Restricted Subsidiary during the period from and including the day immediately following
the Closing Date through and including such time in connection with the Disposition to any Person (other than the Borrower or any
Restricted Subsidiary) of any acquisition or Investment made in reliance on amounts available under Section 6.06(r);
plus
(vi) to
the extent not already reflected as a return of capital with respect to any Investment made in reliance on any provision of Section 6.06
for purposes of determining the outstanding amount of such Investment, the aggregate proceeds received by the Borrower or any Restricted
Subsidiary during the period from and including the day immediately following the Closing Date through and including such time
in connection with returns, profits, distributions and similar amounts received in Cash, Cash Equivalents and/or the Fair Market
Value of any property or assets, including cash principal repayments and interest payments of loans, in each case, received in
respect of any Investment made after the Closing Date in reliance on amounts available under Section 6.06(r); plus
(vii) an
amount equal to the sum of (A) the amount of any Investments by the Borrower or any Restricted Subsidiary in reliance on amounts
available under Section 6.06(r) in any Unrestricted Subsidiary (in an amount not to exceed the aggregate amount
of Investments in such Unrestricted Subsidiary) that has been redesignated as a Restricted Subsidiary or has been merged, consolidated
or amalgamated with or into, or is liquidated, wound up or dissolved into, the Borrower or any Restricted Subsidiary and (B) the
amount of Cash, Cash Equivalents and the Fair Market Value of the property or assets of any Unrestricted Subsidiary that have been
transferred, conveyed or otherwise distributed (in an amount not to exceed the aggregate amount of Investments in such Unrestricted
Subsidiary) to the Borrower or any Restricted Subsidiary, in each case, during the period from and including the day immediately
following the Closing Date through and including such time; plus
(viii) the
amount of any First Lien Declined Proceeds to the extent not otherwise applied to prepay any Loans outstanding under this Agreement;
minus
(b) an
amount equal to the sum of (i) Restricted Payments made pursuant to Section 6.04(a)(iii), plus (ii) Restricted
Debt Payments made pursuant to Section 6.04(b)(vi), plus (iii) Investments made pursuant to Section 6.06(r),
in each case, after the Closing Date and prior to such time or contemporaneously therewith.
“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.
“Bankruptcy
Code” means Title 11 of the United States Code (11 U.S.C. § 101 et seq.).
“Board”
means the Board of Governors of the Federal Reserve System of the U.S.
“Borrower”
has the meaning assigned to such term in the preamble to this Agreement.
“Borrower Materials”
has the meaning assigned to such term in Section 9.01(d).
“Borrowing”
means any Loans of the same Type and Class made, converted or continued on the same date and, in the case of LIBO Rate Loans,
as to which a single Interest Period is in effect.
“Borrowing Request”
means a request by the Borrower for a Borrowing in accordance with Section 2.03 and substantially in the form attached
hereto as Exhibit B or such other form that is reasonably acceptable to the Administrative Agent and the Borrower (including
any form on an electronic platform or electronic transmission system as shall be approved by the Administrative Agent), appropriately
completed and signed by a Responsible Officer of the Borrower.
“Business Day”
means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required
by law to remain closed; provided that when used in connection with a LIBO Rate Loan, the term “Business Day”
shall also exclude any day on which banks are not open for dealings in Dollar deposits in the London interbank market.
“Calculation
Period” means, with respect to Excess Cash Flow, each annual period consisting of a Fiscal Year of the Borrower.
“Canadian Restricted
Subsidiary” means a Restricted Subsidiary that is incorporated or organized under the laws of Canada or any province
or territory thereof.
“Capital Lease”
means, as applied to any Person, any lease of any property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is or should be accounted for as a capital lease on the balance sheet of that Person.
“Capital Stock”
means any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation,
any and all equivalent ownership interests in a Person (other than a corporation), including partnership interests and membership
interests, and any and all warrants, rights or options to purchase or other arrangements or rights to acquire any of the foregoing,
but excluding for the avoidance of doubt any Indebtedness convertible into or exchangeable for any of the foregoing.
“Captive Insurance
Subsidiary” means any Restricted Subsidiary of the Borrower that is maintained as a self-insurance subsidiary and is
subject to regulation as an insurance company (and any Restricted Subsidiary thereof).
“Cash”
means money, currency or a credit balance in any Deposit Account.
“Cash Equivalents”
means, as at any date of determination, (a) readily marketable securities (i) issued or directly and unconditionally
guaranteed or insured as to interest and principal by the U.S. government or (ii) issued by any agency or instrumentality
of the U.S. the obligations of which are backed by the full faith and credit of the U.S., in each case maturing within one year
after such date and, in each case, repurchase agreements and reverse repurchase agreements relating thereto; (b) readily marketable
direct obligations issued by any state of the U.S. or any political subdivision of any such state or any public instrumentality
thereof or by any foreign government, in each case maturing within one year after such date and having, at the time of the acquisition
thereof, a rating of at least A-2 from S&P or at least P-2 from Moody’s (or, if at any time neither S&P nor Moody’s
shall be rating such obligations, an equivalent rating from another nationally recognized statistical rating agency) and, in each
case, repurchase agreements and reverse repurchase agreements relating thereto; (c) commercial paper maturing no more than
one year from the date of creation thereof and having, at the time of the acquisition thereof, a rating of at least A-2 from S&P
or at least P-2 from Moody’s (or, if at any time neither S&P nor Moody’s shall be rating such obligations, an equivalent
rating from another nationally recognized statistical rating agency); (d) deposits, money market deposits, time deposit accounts,
certificates of deposit or bankers’ acceptances (or similar instruments) maturing within one year after such date and issued
or accepted by any Lender or by any bank organized under, or authorized to operate as a bank under, the laws of the U.S., any state
thereof or the District of Columbia or any political subdivision thereof and that has capital and surplus of not less than $100,000,000
and, in each case, repurchase agreements and reverse repurchase agreements relating thereto; and (e) shares of any money market
mutual fund that has (i) substantially all of its assets invested in the types of investments referred to in clauses (a) through
(d) above, (ii) net assets of not less than $250,000,000 and (iii) a rating of at least A-2 from S&P
or at least P-2 from Moody’s. Cash Equivalents shall also include (x) Investments of the type and maturity described
in clauses (a) through (e) above of foreign obligors, which Investments or obligors (or the parent companies
thereof) have the ratings described in such clauses or equivalent ratings from comparable foreign rating agencies and (y) other
short-term Investments utilized by Foreign Subsidiaries in accordance with normal investment practices for cash management in Investments
analogous to the Investments described in clauses (a) through (e) and in this paragraph.
“Change in Law”
means (a) the adoption of any law, treaty, rule or regulation after the Closing Date, (b) any change in any law,
treaty, rule or regulation or in the interpretation or application thereof by any Governmental Authority after the Closing
Date or (c) compliance by any Lender (or, for purposes of Section 2.15(b), by any lending office of such Lender
or by such Lender’s holding company, if any) with any request, guideline or directive (whether or not having the force of
law) of any Governmental Authority made or issued after the Closing Date (other than any such request, guideline or directive to
comply with any law, rule or regulation that was in effect on the Closing Date). For purposes of this definition and Section 2.15,
(x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines, requirements and directives
thereunder or issued in connection therewith or in implementation thereof and (y) all requests, rules, guidelines, requirements
or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor
or similar authority) or U.S. or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case described
in clauses (a), (b) and (c) above, be deemed to be a Change in Law, regardless of the date enacted,
adopted, issued or implemented.
“Change of Control”
means the earliest to occur of:
(a) at
any time prior to a Qualifying IPO, the Permitted Holders ceasing to beneficially own, either directly or indirectly (within the
meaning of Rule 13d-3 and Rule 13d-5 under the Exchange Act), Capital Stock representing more than 50% of the total voting
power of all of the outstanding voting stock of Holdings;
(b) at
any time on or after a Qualifying IPO, the acquisition, directly or indirectly, by any Person or group (within the meaning of Section 13(d)(3) or
Section 14(d)(2) of the Exchange Act), including any group acting for the purpose of acquiring, holding or disposing
of Securities (within the meaning of Rule 13d-5(b)(1) under the Exchange Act, but excluding (i) any employee benefit
plan and/or Person acting as the trustee, agent or other fiduciary or administrator therefor, (ii) one or more Permitted Holders,
(iii) any group directly or indirectly controlled by one or more Permitted Holders, and (iv) any underwriter in connection
with any Qualifying IPO solely for the purposes of facilitating the distribution of such Capital Stock), of Capital Stock representing
more than the greater of (A) 40% of the total voting power of all of the outstanding voting stock of Holdings and (B) the
percentage of the total voting power of all of the outstanding voting stock of Holdings beneficially owned, directly or indirectly,
by the Permitted Holders; and
(c) the
Borrower ceasing to be a direct or indirect Wholly-Owned Subsidiary of Holdings (or any permitted successor hereunder);
provided that (x) a “Change
of Control” shall not be deemed to have occurred with respect to clauses (a) or (b) above if the Permitted Holders
have, at such time, the right or ability by voting power, contract or otherwise to elect or designate for election a majority of
the board of directors or similar governing body of Holdings, and (y) the creation of a Parent Company shall not in and of
itself cause a Change of Control so long as at the time such Person became a Parent Company, (1) there is no change in the
direct or indirect beneficial ownership of the total voting power of all of the outstanding voting stock of Holdings by the Permitted
Holders or (2) no Person and no group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the
Exchange Act), including any such group acting for the purpose of acquiring, holding or disposing of Securities (within the meaning
of Rule 13d-5(b)(1) under the Exchange Act) (other than one or more Permitted Holders or any group directly or indirectly
controlled by one or more Permitted Holders), shall have beneficial ownership (within the meaning of Rule 13d-3 under the
Exchange Act, or any successor provisions), directly or indirectly, of 50% or more, in the case of clause (a) above,
or 40% or more, in the case of clause (b) above, of the total voting power of all of the outstanding voting stock of
Holdings.
“Charge”
means any charge, fee, loss, expense, cost, accrual or reserve of any kind.
“Charged Amounts”
has the meaning assigned to such term in Section 9.19.
“Class”,
when used in reference to (a) any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing,
are Initial Loans, Additional Loans of any series established as a separate “Class” pursuant to Section 2.22,
2.23 or 9.02(c) or any other Loans under any other Credit Facilities established as a separate “Class”,
(b) any Commitment, refers to whether such Commitment is an Initial Loan Commitment, an Additional Commitment of any series
established as a separate “Class” pursuant to Section 2.22, 2.23 or 9.02(c) or any other
Commitment under any other Credit Facilities established as a separate “Class” and (c) any Lender, refers to whether
such Lender has a Loan or Commitment of a particular Class. For purposes of this definition, any separate series or tranche shall
be treated as a separate “Class” regardless of whether such series or tranche is specifically as a separate “Class”.
“Closing Date”
means the date on which the conditions specified in Section 4.01 are satisfied (or waived in accordance with Section 9.02).
“Closing Date
Material Adverse Effect” means a Material Adverse Effect (as defined in the Merger Agreement (as in effect on the Closing
Date)).
“CNI Growth
Amount” means, at any date of determination, an amount equal to 50% of the Consolidated Net Income of the Borrower and
the Restricted Subsidiaries for the period (taken as one accounting period) commencing on July 1, 2017, to the end of the
most recently ended fiscal quarter for which internal financial statements of the Borrower are available preceding such date; provided,
that such cumulative amount shall (a) be determined in good faith by the Borrower and (b) not be less than zero.
“Code”
means the Internal Revenue Code of 1986, as amended.
“Co-Investors”
means, individually and collectively, (a) any current and former officers, directors and members of the management of the
Borrower, any Parent Company and/or any Subsidiary of the Borrower, solely to the extent that such Persons own Capital Stock in
the Borrower or any direct or indirect parent thereof on the Closing Date, (b) any Person directly or indirectly owning Capital
Stock of the Company immediately prior to the Merger investing directly or indirectly in any Parent Company on the Closing Date
(including by contributing, converting, exchanging or otherwise “rolling over” such Capital Stock) or is subject to
a binding agreement on the Closing Date with respect thereto, and (c) any other Person (other than the Sponsors) making a
cash equity investment directly or indirectly in any Parent Company on the Closing Date, so long as, in each case, immediately
after giving effect thereto, the Sponsors’ investment will constitute not less than 50.1% direct or indirect beneficial ownership
of Holdings upon consummation of the Transactions.
“Collateral”
means any and all property of any Loan Party subject (or purported to be subject) to a Lien under any Collateral Document and any
and all other property of any Loan Party, now existing or hereafter acquired, that is or becomes subject (or purported to be subject)
to a Lien pursuant to any Collateral Document to secure the Secured Obligations.
“Collateral
and Guarantee Requirement” means, at any time, subject to (x) the applicable limitations set forth in this Agreement
and/or any other Loan Document and (y) the time periods (and extensions thereof) set forth in Section 5.12, the
requirement that the Administrative Agent shall have received in the case of any Restricted Subsidiary that is required to become
a Loan Party after the Closing Date pursuant to Section 5.12 (including by ceasing to be an Excluded Subsidiary):
(a) (i) a
joinder to the Loan Guaranty in substantially the form attached as an exhibit thereto, (ii) a supplement to the Security Agreement
in substantially the form attached as an exhibit thereto, (iii) if such Restricted Subsidiary owns registrations of or applications
for U.S. Patents, Trademarks and/or Copyrights that constitute Collateral, an Intellectual Property Security Agreement, (iv) a
completed Perfection Certificate, (v) Uniform Commercial Code financing statements in appropriate form for filing in such
jurisdictions as the Administrative Agent may reasonably request and (vi) an executed joinder to the Intercreditor Agreements
(and any other applicable Acceptable Intercreditor Agreement) in substantially the form attached as an exhibit thereto; and
(b) each
item of Collateral that such Restricted Subsidiary is required to deliver under Section 4.02 of the Security Agreement (which,
for the avoidance of doubt, shall be delivered within the time periods set forth in Section 5.12 and shall exclude
Excluded Assets);
Notwithstanding any provision
of this Agreement or any other Loan Document to the contrary,
(A) no
control agreements, other control arrangements or perfection by “control” shall be required (except as provided in
clauses (y) and (z) below) and no Loan Party shall be required to perfect a security interest in any Collateral,
in each case (to the extent applicable), other than perfection by (w) filing of a UCC-1 financing statement, (x) with
respect to IP Rights, filings with the United States Patent and Trademark Office or the United States Copyright Office, (y) delivery
of certificates evidencing Capital Stock and notes and other evidence of indebtedness, in each case, to the extent required to
be pledged as Collateral and required to be delivered pursuant to the Security Agreement, and (z) to the extent control agreements
have been delivered under the ABL Facility with respect to the ABL US Priority Collateral, third-priority control agreements with
respect to the ABL US Priority Collateral;
(B) (1) no
action (including any filings or registrations) outside of the United States in order to create or perfect any security interest
in any asset located outside of the United States (including with respect to intellectual property and equity interests) shall
be required and (2) no security or pledge agreements shall be governed by any other law other than the laws of New York (except
the laws of any other U.S. state may govern to the extent necessary to create or perfect a security interest in any portion of
the Collateral); and
(C) the
Loan Parties shall not be required to collaterally assign to the Administrative Agent their respective rights under (w) the
Merger Agreement, (x) any documentation governing permitted acquisition or investment not prohibited under the terms of this
Agreement, (y) any representation and warranty insurance policy or (z) any business interruption policy.
With respect to any Collateral
that is ABL US Priority Collateral, to the extent that the ABL Agent determines that any such property or assets shall not become
part of, or shall be excluded from, the collateral under the ABL Facility, or that any delivery or notice requirement in respect
of any such Collateral shall be extended or waived, the Administrative Agent shall automatically be deemed to accept such determination
and shall execute any documentation, if applicable, requested by the Borrower in connection therewith, including termination and
release documents.
Notwithstanding anything
to the contrary herein or in any other Loan Document, (1) the Loan Parties shall not create any Lien on any assets of any
Loan Party securing any First Priority Secured Obligations if such assets are not Collateral or do not become Collateral for the
Second Priority Secured Obligations, (2) to the extent that the First Lien Agent determines that any property or assets constituting
(or are intended or required to constitute) Collateral shall be excluded from, or shall not become part of, the collateral under
the First Lien Facilities, the Administrative Agent hereunder shall be deemed to accept such determination, such Collateral shall
automatically be released and/or such property or assets shall not be, or required to become, Collateral for the Second Priority
Secured Obligations and the Administrative Agent shall execute any documentation, if applicable, requested by the Borrower in connection
therewith, including termination and release documents, and (3) to the extent that the First Lien Agent determines that any
Lien, perfection, delivery or notice requirement in respect of any Collateral (or other property or assets) shall be extended or
waived under the First Lien Credit Agreement and other documents governing the First Lien Facilities as permitted thereunder, the
Administrative Agent shall automatically be deemed to accept such determination, such extension or waiver shall automatically be
effective hereunder and under the other Loan Documents and the Administrative Agent shall execute any documentation, if applicable,
requested by the Borrower in connection therewith, including extension and waiver documents.
“Collateral
Documents” means, collectively, (a) the Security Agreement, (b) each Intellectual Property Security Agreement,
(c) any supplement to any of the foregoing delivered to the Administrative Agent pursuant to the definition of “Collateral
and Guarantee Requirement” and (d) each of the other instruments and documents pursuant to which any Loan Party grants
a Lien on any Collateral as security for payment of the Secured Obligations.
“Commercial
Tort Claim” has the meaning set forth in Article 9 of the UCC.
“Commitment”
means, with respect to each Lender, such Lender’s Initial Loan Commitment, Additional Commitments and any other commitment
to provide Loans under a Credit Facility, as applicable, in effect as of such time.
“Commitment
Schedule” means the Schedule attached hereto as Schedule 1.01(a).
“Commodity Exchange
Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.).
“Company”
has the meaning assigned to such term in the Recitals to this Agreement.
“Company Competitor”
means (a) any Person that is or becomes (i) a competitor of the Borrower and/or any of its subsidiaries and/or the Company
and/or any of its subsidiaries, or (ii) an Affiliate of a Person described in clause (a)(i) and, in each case,
identified in writing to the Administrative Agent, (b) any reasonably identifiable Affiliate of any person described in clause
(a) above (on the basis of such Affiliate’s name) (other than any Debt Fund Affiliate), and/or (c) any other
Affiliate of any Person described in clause (a) or clause (b) above identified by name in a written notice
to the Administrative Agent.
“Compliance
Certificate” means a Compliance Certificate substantially in the form of Exhibit C.
“Confidential
Information” has the meaning assigned to such term in Section 9.13.
“Consolidated
Adjusted EBITDA” means, as to any Person for any period, an amount determined for such Person on a consolidated basis
equal to the total of (a) Consolidated Net Income for such period plus (b) the sum, without duplication, of (to
the extent deducted in calculating Consolidated Net Income, other than in respect of clauses (xi), (xiii), (xv),
(xvi) and (xviii) below) the amounts of:
(i) consolidated
total interest expense determined in accordance with GAAP and, to the extent not reflected in such consolidated total interest
expense, annual agency fees paid to the administrative agents and collateral agents under any credit facilities, costs associated
with obtaining hedging arrangements and breakage costs in respect of hedging arrangements related to interest rates), any expense
resulting from the discounting of any indebtedness in connection with the application of recapitalization accounting or, if applicable,
purchase accounting in connection with the Transactions or any acquisition, penalties and interest relating to taxes, any “additional
interest” or “liquidated damages” with respect to other securities for failure to timely comply with registration
rights obligations, amortization or expensing of deferred financing fees, amendment and consent fees, debt issuance costs, commissions,
fees, expenses and discounted liabilities and any other amounts of non-Cash interest, any expensing of bridge, commitment and other
financing fees and any other fees related to the Transactions or any acquisitions after the Closing Date, commissions, discounts,
yield and other fees and charges (including any interest expense) related to any qualified securitization facility, any accretion
of accrued interest on discounted liabilities and any prepayment premium or penalty, interest expense attributable to a parent
company resulting from push-down accounting and any lease, rental or other expense in connection with any lease that is not a capitalized
lease, any losses on hedging obligations or other derivative instruments entered into for the purpose of hedging interest rate
risk (net of interest income and gains on such hedging obligations), costs of surety bonds in connection with financing activities
(whether amortized or immediately expensed), fees and expenses paid to (or for the benefit of) any arranger, any administrative
or collateral agent, any lender or any other secured party under the Loan Documents, the First Lien Credit Agreement (and any related
loan documents) and the ABL Credit Agreement (and any related loan documents) or to (or for the benefit of) any other holder of
permitted Indebtedness in connection with its services hereunder (including fees and expenses in connection with any modifications
of the Loan Documents), other bank or any other Person in connection with its services as administrative agent or trustee, or similar
capacity under any other Indebtedness permitted hereunder and financing fees;
(ii) provision
for Taxes during such period (including pursuant to any Tax sharing arrangement or any distributions or other Restricted Payments
for the payment of any Tax), including, in each case, arising out of tax examinations, repatriation of amounts from a Foreign Subsidiary
and (without duplication) any payment to a Parent Company pursuant to Section 6.04(a)(i) and (iv) in respect
of Taxes;
(iii) depreciation
and amortization (including, without limitation, amortization of goodwill, software and other intangible assets);
(iv) any
non-Cash Charge (provided, that to the extent any such non-Cash Charge represents an accrual or reserve for any actual or
potential cash items in any future period (including of the type described in clause (vii) below), (A) such Person
may elect (in its sole discretion) not to add back such non-Cash Charge in the then-current period, in which case, any cash payment
in respect thereof in any future period shall be not subtracted from Consolidated Adjusted EBITDA, and (B) to the extent such
Person elects (in its sole discretion) to add back such non-Cash Charge in the then-current period, any cash payment in respect
thereof in any subsequent periods shall be subtracted from Consolidated Adjusted EBITDA pursuant to clause (c)(v) below);
(v) (A) Transaction
Costs, and (B) transaction fees and Charges (1) incurred or amortized for such period in connection with the consummation
of any transaction (or any transaction proposed and not consummated), (2) incurred in connection with any Qualifying IPO (or
any Qualifying IPO proposed and not consummated) and/or (3) that are actually reimbursed or reimbursable by third parties
pursuant to indemnification or reimbursement provisions or similar agreements or insurance; provided, that in respect of
any fee, cost, expense or reserve that is added back in reliance on clause (3) above, such Person in good faith expects
to receive reimbursement for such fee, cost, expense or reserve within the next four Fiscal Quarters (it being understood that
to the extent any reimbursement amount is not actually received within such Fiscal Quarters, such reimbursement amount shall be
deducted in calculating Consolidated Adjusted EBITDA for such Fiscal Quarters pursuant to clause (c)(iii) below);
(vi) Public
Company Costs;
(vii) (A) management,
monitoring, consulting, transaction and advisory fees (including termination fees) and indemnities and expenses actually paid or
accrued by, or on behalf of, such Person or any of its subsidiaries (1) to the Investors (or their Affiliates or management
companies) to the extent permitted under this Agreement or (2) as permitted by Section 6.09(f); (B) the amount
of payments made to option holders of any Parent Company in connection with, or as a result of, any distribution being made to
shareholders of such Person, which payments are being made to compensate such option holders as though they were shareholders at
the time of, and entitled to share in, such distribution, including any cash consideration for any repurchase of equity, in each
case to the extent permitted under the Loan Documents and (C) the amount of fees, expenses and indemnities paid to directors,
including of Holdings or any Parent Company;
(viii) losses
or discounts on sales of receivables and related assets in connection with any receivables financing permitted under this Agreement;
(ix) any
Charges (or net income) attributable to any interest, non-controlling interest and/or minority interest of any third party in any
Restricted Subsidiary;
(x) the
amount of earnout obligation expense incurred in connection with (including adjustments thereto) (A) the Acquisition, (B) acquisitions
and Investments consummated prior to the Closing Date and (C) any Permitted Acquisition or other Investment permitted by this
Agreement, in each case, which is paid or accrued during the applicable period;
(xi) pro
forma “run rate” cost savings (including sourcing and supply chain savings), operating expense reductions, operating
and productivity improvements and synergies (net of actual amounts realized) projected by the Borrower in good faith that are reasonably
identifiable and factually supportable (in the good faith determination of such Person) in connection with (A) the Transactions
related to actions that have been taken (including prior to the Closing Date) or with respect to which substantial steps have been
taken or are expected to be taken (in the good faith determination of the Borrower) within 24 months after the Closing Date (or,
in respect of any pricing increases only, within 12 months after the Closing Date) and (B) any permitted acquisitions, Investments,
Dispositions and other Specified Transactions, and any operating and productivity improvements, restructurings, cost savings initiatives
and other initiatives (including the modification and renegotiation of contracts and other arrangements, pricing adjustments, supply
chain optimization (including consolidating or changing suppliers, supply base reduction and reduction in materials costs), product
and warranty improvements (including lean manufacturing initiatives, design, engineering and automation optimization and discontinuing
or replacing products) and other items of the type described in clause (xii) below) projected by the Borrower in good
faith to result from actions that have been taken (including prior to completion of any such acquisitions, Investments, Dispositions
and other Specified Transactions) or with respect to which substantial steps have been taken or are expected to be taken (in the
good faith determination of the Borrower) within 24 months (or, in respect of any pricing increases only, within 12 months) after
any such acquisitions, Investments, Dispositions and other Specified Transactions or operating improvements, restructurings,
cost savings initiatives and other initiatives; pro forma “run rate” shall be the full benefit associated with
any action taken, committed to be taken or with respect to which substantial steps have been taken or are expected to be taken
calculated on a Pro Forma Basis as though such cost savings, operating expense reductions and synergies had been fully realized
on the first day of the applicable period for the entirety of such period;
(xii) (A) Charges
attributable to the undertaking and/or implementation of operating improvements, operating expense reductions, cost savings initiatives
and other initiatives, transitions, openings and pre-openings, business optimization, restructurings and integration (including
inventory optimization programs, software development, systems upgrade, closure or consolidation of facilities and plants, curtailments,
entry into new markets, strategic initiatives and contracts, consulting fees, signing or retention costs, retention or completion
bonuses, expansion and relocation expenses, severance payments, modifications to pension and post-retirement employee benefit plans
or other post-employment benefit costs representing amortization of unrecognized prior service costs, actuarial losses, including
amortization of such amounts arising in prior periods, amortization of the unrecognized net obligation (and loss or cost) existing
at the date of initial application of FASB Accounting Standards Codification 715, and any other items of a similar nature, new
systems design and implementation and startup costs), (B) reductions, improvements, enhancements, synergies and initiatives
as contemplated in clause (xi) above, and (C) Charges related to legal settlement, fines, judgments or orders,
including with respect to warranty claims;
(xiii) to
the extent not otherwise included in Consolidated Net Income, proceeds of business interruption insurance in an amount representing
the earnings for the applicable period that such proceeds are intended to replace (whether or not then received so long as such
Person in good faith expects to receive such proceeds within the next four Fiscal Quarters (it being understood that to the extent
not actually received within such Fiscal Quarters, such proceeds shall be deducted in calculating Consolidated Adjusted EBITDA
pursuant to clause (c)(iv) below)) and (B) the amount of any cash tax benefits related to the tax amortization
of intangible assets in such period;
(xiv) (A) unrealized
net losses in the Fair Market Value of any arrangements under Hedge Agreements and/or other derivative instrument pursuant to (in
the case of such other derivative instruments) FASB ASC No. 815 – Derivatives and Hedging and (B) any net loss
(less all fees and expenses or charges related thereto) attributable to the early extinguishment of indebtedness (and the termination
of any associated hedging arrangements);
(xv) the
amount of (A) any Charge to the extent that a corresponding amount is received in cash by such Person from a Person other
than such Person or any Restricted Subsidiary of such Person under any agreement providing for reimbursement of such Charge and
(B) any Charge with respect to any liability or casualty event, business interruption or any product recall, (1) so long
as such Person has submitted in good faith, and reasonably expects to receive payment in connection with, a claim for reimbursement
of such amounts under its relevant insurance policy (with a deduction in the applicable future period for any amount so added back
to the extent not so reimbursed within the next four Fiscal Quarters) or (2) without duplication of amounts included in a
prior period under clause (B)(1) above, to the extent such Charge is covered by insurance proceeds received in cash
during such period (it being understood that if the amount received in cash under any such agreement in any period exceeds the
amount of Charge paid during such period such excess amounts received may be carried forward and applied against any Charge in
any future period);
(xvi) the
amount of Cash actually received (or the amount of the benefit of any netting arrangement resulting in reduced Cash Charges) during
such period, to the extent not included in Consolidated Net Income in any period or related non-Cash gain deducted in the calculation
of Consolidated Adjusted EBITDA in any prior period;
(xvii) the
excess of rent expense during such period over actual Cash rent paid over due to the use of straight line rent for GAAP purposes;
and
(xviii) Other
Agreed Adjustments,
minus (c) to the extent such
amounts increase Consolidated Net Income, without duplication:
(i) non-Cash
gains or income; provided, that to the extent any non-Cash gain or income represents an accrual or deferred income in respect
of actual potential Cash items in any future period, such Person may elect (in its sole discretion) not to deduct such non-Cash
gain or income in the then-current period;
(ii) unrealized
net gains in the Fair Market Value of any arrangements under Hedge Agreements;
(iii) the
amount added back to Consolidated Adjusted EBITDA pursuant to clause (b)(v)(B)(3) above in a prior period to the extent
the relevant reimbursement amounts were not received within the time period required by such clause and are required to be deducted
from Consolidated Adjusted EBITDA for such required time periods pursuant to clause (b)(v)(B)(3) above;
(iv) the
amount added back to Consolidated Adjusted EBITDA pursuant to clause (b)(xiii) above in a prior period to the extent
the relevant business interruption insurance proceeds were not received within the time period required by such clause and are
required to be deducted from Consolidated Adjusted EBITDA pursuant to clause (b)(xiii) above;
(v) to
the extent that such Person added back the amount of any non-Cash charge to Consolidated Adjusted EBITDA pursuant to clause
(b)(iv) above in a prior period, the cash payment in respect thereof in the relevant future period (except as otherwise
provided in clause (b)(iv) above); and
(vi) the
excess of actual Cash rent paid over rent expense during such period due to the use of straight line rent for GAAP purposes.
Notwithstanding anything
to the contrary herein, to the extent applicable, (i) Consolidated Adjusted EBITDA for the Fiscal Quarter ended on or around
June 30, 2016 shall be deemed to be $51,453,000, (ii) Consolidated Adjusted EBITDA for the Fiscal Quarter ended on or
around September 30, 2016 shall be deemed to be $23,046,000, (iii) Consolidated Adjusted EBITDA for the Fiscal Quarter
ended on or around December 31, 2016 shall be deemed to be $55,795,000 and (iv) Consolidated Adjusted EBITDA for the
Fiscal Quarter ended on or around March 31, 2017 shall be deemed to be $39,888,000, in each case, as subject to adjustment
pursuant to clause (b) of this definition to the extent applicable to any such Fiscal Quarter (and not otherwise already
included in such amounts) and otherwise adjusted on a Pro Forma Basis.
“Consolidated
First Lien Debt” means, as to any Person determined on a consolidated basis, at any date of determination, the aggregate
principal amount of Consolidated Total Debt outstanding on such date that is secured by a Lien on the Collateral on a pari passu
or senior basis with the First Priority Secured Obligations (it being understood that Consolidated Total Debt outstanding on
any applicable date of determination (subject to Section 1.10) under any ABL Facility secured on a Split Collateral
Basis (including the ABL Facility as of the Closing Date) or a “cash flow” based ABL Facility secured by the Collateral
on a “senior secured priority” basis with respect to the Second Priority Secured Obligations subject to an Acceptable
Intercreditor Agreement under clause (a) of the definition thereof, in each case, shall constitute Consolidated First
Lien Debt).
“Consolidated
Interest Expense” means, as to any Person determined on a consolidated basis at any date of determination, the sum, without
duplication, of (a) consolidated Cash interest of the Borrower and its Restricted Subsidiaries determined in accordance with
GAAP, (i) including (A) the Cash interest component of Capital Lease obligations and (B) net Cash payments made
(less net Cash payments received) pursuant to obligations under permitted hedging arrangements related to interest rates; but (ii) excluding
(to the extent such expense was deducted in computing Consolidated Net Income and not added back in computing Consolidated Adjusted
EBITDA) (A) annual agency fees paid to the administrative agents and collateral agents under any credit facilities, (B) costs
associated with obtaining hedging arrangements and breakage costs in respect of hedging arrangements related to interest rates),
(C) any expense resulting from the discounting of any Indebtedness in connection with the application of recapitalization
accounting or, if applicable, purchase accounting in connection with the Transactions or any acquisition, (D) penalties and
interest relating to Taxes, (E) any “additional interest” or “liquidated damages” with respect to
other securities for failure to timely comply with registration rights obligations, (F) amortization or expensing of deferred
financing fees, amendment and consent fees, debt issuance costs, commissions, fees, expenses and discounted liabilities and any
other amounts of non-Cash interest, (G) any expensing of bridge, commitment and other financing fees and any other fees related
to the Transactions or any acquisitions after the Closing Date, (H) commissions, discounts, yield and other fees and charges
(including any interest expense) related to any qualified securitization facility, (I) any accretion of accrued interest on
discounted liabilities and any prepayment premium or penalty, (J) interest expense attributable to a parent company resulting
from push-down accounting and (K) any lease, rental or other expense in connection with any lease that is not a Capital Lease,
net of (b) Cash interest income of the Borrower and its Restricted Subsidiaries.
“Consolidated
Net Income” means, as to any Person determined on a consolidated basis (the “Subject Person”) for
any period, the net income (or loss) of the Subject Person for such period taken as a single accounting period determined in accordance
with GAAP; provided that there shall be excluded, without duplication:
(a) (i) the
income of any Person (other than a Restricted Subsidiary of the Subject Person) in which any other Person (other than the Subject
Person or any of its Restricted Subsidiaries) has a joint interest, except that the amount of dividends or distributions or other
payments (including any ordinary course dividend, distribution or other payment) paid in cash (or to the extent converted into
cash) to the Subject Person or any of its Restricted Subsidiaries by such Person during such period (regardless of whether such
payment is in respect of the income of such Person in the current period or any prior period) shall be included in Consolidated
Net Income or (ii) the loss of any Person (other than a Restricted Subsidiary of the Subject Person) in which any other Person
(other than the Subject Person or any of its Restricted Subsidiaries) has a joint interest, other than to the extent that the Subject
Person or any of its Restricted Subsidiaries has contributed cash or Cash Equivalents to such Person in respect of such loss during
such period for the express purpose of funding such losses (but shall exclude any other Investment in such Person);
(b) gains
or losses (less all fees and expenses chargeable thereto) attributable to any sales or dispositions of Capital Stock or assets
(including asset retirement costs) or of returned surplus assets, in each case, outside of the ordinary course of business;
(c) gains
or losses from extraordinary items, any one-time event or item, and nonrecurring or unusual items (including costs of and payments
of actual or prospective legal settlements, fines, judgments or orders), including in connection with any acquisition;
(d) any
unrealized or realized net foreign currency translation or transaction gains or losses impacting net income (including currency
re-measurements of Indebtedness); provided that notwithstanding anything to the contrary herein, realized gains and losses
in respect of any Designated Operational FX Hedge shall be included in the calculation of Consolidated Net Income;
(e) any
net gains, Charges or losses with respect to (i) any disposed (other than Dispositions of assets and inventory in the ordinary
course of business), abandoned, divested and/or discontinued asset, property or operation (other than, at the option of the Borrower,
any asset, property or operation pending the disposal, abandonment, divestiture and/or termination thereof), (ii) any disposal
(other than Dispositions of assets and inventory in the ordinary course of business), abandonment, divestiture and/or discontinuation
of any asset, property or operation (other than, at the option of such Person, relating to assets or property held for sale pending
the Disposition thereof) and/or (iii) facilities or plants that have been closed during such period or for which Charges and
losses were required to be recorded pursuant to GAAP;
(f) (i) any
net income or loss (less all fees and expenses or charges related thereto) attributable to the early extinguishment of Indebtedness
(and the termination of any associated Hedge Agreements) and (ii) any other losses and expenses incurred in connection with
the early termination, refinancing or prepayment of guarantee obligations, operating leases and other similar contractual obligations;
(g) (i) any
Charges incurred pursuant to any management equity plan, profits interest or stock option plan or any other management or employee
benefit plan or agreement, pension plan, any stock subscription or shareholder agreement or any distributor equity plan or agreement,
or any similar equity plan or agreement, including any fair value adjustments that may be required under liquidity puts for such
arrangements and (ii) any Charges in connection with the rollover, acceleration or payout of Capital Stock held by management
of any Parent Company, the Borrower and/or any Restricted Subsidiary, in each case, to the extent that any such Charge is funded
with net cash proceeds contributed to relevant Person as a capital contribution or as a result of the sale or issuance of Qualified
Capital Stock;
(h) accruals
and reserves that are established or adjusted within 12 months after the Closing Date (or after the closing of any consummated
acquisition or Investment) that are required to be established or adjusted as a result of the Transactions (or such acquisition
or Investment) in accordance with GAAP or as a result of the adoption or modification of accounting policies in accordance with
GAAP;
(i) any
(A) write-off or amortization made in such period of deferred financing costs and premiums paid or other expenses incurred
directly in connection with any early extinguishment of Indebtedness, (B) impairment Charges, write-offs or write-downs of
any assets and (C) amortization of intangible assets;
(j) (A) effects
of adjustments (including the effects of such adjustments pushed down to the Subject Person and its subsidiaries) in the Subject
Person’s consolidated financial statements pursuant to GAAP (including in the inventory, property and equipment, software,
goodwill, intangible assets, in-process research and development, deferred revenue, deferred rent, deferred trade incentives and
other lease-related items, advanced billings and debt line items thereof) resulting from the application of recapitalization accounting
or acquisition accounting, as the case may be, in relation to the Transactions or any consummated acquisition or Investment or
the amortization or write-off of any amounts thereof, net of Taxes and (B) the cumulative effect of changes in accounting
principles or policies made in such period in accordance with GAAP which affect Consolidated Net Income (except that, if the Borrower
determines in good faith that the cumulative effects thereof are not material to the interests of the Lenders, the effects of any
change, adoption or modification of any such principles or policies may be included);
(k) the
income or loss of any Person accrued prior to the date on which such Person becomes a Restricted Subsidiary of such Person or is
merged into or consolidated or amalgamated with such Person’s assets are acquired by such Person or any Restricted Subsidiary
of such Person.
(l) any
costs or expenses incurred during such period relating to environmental remediation, litigation, or other disputes in respect of
events and exposures that occurred prior to the Closing Date; and
(m) any
deferred tax expense associated with tax deductions or net operating losses arising as a result of the Transactions, or the release
of any valuation allowance related to such items.
“Consolidated
Secured Debt” means, as to any Person determined on a consolidated basis, at any date of determination, the aggregate
principal amount of Consolidated Total Debt outstanding on such date that is secured by a Lien on the Collateral.
“Consolidated
Total Assets” means, as to any Person determined on a consolidated basis, at any date of determination, all amounts that
would, in conformity with GAAP, be set forth opposite the caption “total assets” (or any like caption) on a consolidated
balance sheet of the applicable Person at such date.
“Consolidated
Total Debt” means, as to any Person determined on a consolidated basis, at any date of determination, an amount equal
to (a) the aggregate principal amount of all Indebtedness for borrowed money (which shall be deemed to include LC Disbursements
(as defined in the ABL Credit Agreement) that have not been reimbursed within the time periods required by the ABL Credit Agreement)
and the outstanding principal balance of all Indebtedness with respect to Capital Leases and purchase money Indebtedness, in each
case, in an amount that would be reflected on a balance sheet prepared as of such date on a consolidated basis in accordance with
GAAP (but excluding, for the avoidance of doubt, (i) any letter of credit, bank guarantees and performance or similar bonds,
(ii) any intercompany Indebtedness eliminated in accordance with GAAP during consolidation and (iii) any such Indebtedness
for which such Person has irrevocably deposited in trust or escrow the necessary funds (including Cash and Cash Equivalents) for
the payment, redemption or satisfaction of Indebtedness), minus, (b) the aggregate amount of (i) unrestricted
Cash and Cash Equivalents of such Person in an amount that would be reflected on a balance sheet prepared as of such date on a
consolidated basis in accordance with GAAP and (ii) Cash and Cash Equivalents restricted in favor of the Credit Facilities,
the ABL Facility and any First Lien Facility (which may also include Cash and Cash Equivalents securing other Indebtedness that
is secured by a Lien on the Collateral along with the Credit Facilities, the ABL Facility and any First Lien Facility).
“Consolidated
Working Capital” means, with respect to the Borrower, as at any date of determination, the excess of Current Assets over
Current Liabilities.
“Consolidated
Working Capital Adjustment” means, with respect to the Borrower, for any period on a consolidated basis, the amount (which
may be a negative number) by which Consolidated Working Capital as of the beginning of such period exceeds (or is less than) Consolidated
Working Capital as of the end of such period; provided that there shall be excluded (a) the effect of reclassification
during such period between current assets and long term assets and current liabilities and long term liabilities (with a corresponding
restatement of the prior period to give effect to such reclassification), (b) the effect of any Disposition of any Person,
facility or line of business or acquisition of any Person, facility or line of business during such period, (c) the effect
of any fluctuations in the amount of accrued and contingent obligations under any Hedge Agreement, and (d) the application
of purchase or recapitalization accounting.
“Contract Consideration”
has the meaning assigned to such term in the definition of “Excess Cash Flow”.
“Contractual
Obligation” means, as applied to any Person, any provision of any Security issued by that Person or of any indenture,
mortgage, deed of trust, contract, undertaking, agreement or other instrument to which that Person is a party or by which it or
any of its properties is bound or to which it or any of its properties is subject.
“Contribution
Indebtedness” has the meaning assigned to such term in Section 6.01(r).
“Control”
means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled”
have meanings correlative thereto.
“Copyright”
means the following: (a) all copyrights, rights and interests in copyrights, works protectable by copyright whether published
or unpublished, copyright registrations and copyright applications; (b) all renewals of any of the foregoing; (c) all
income, royalties, damages, and payments now or hereafter due and/or payable under any of the foregoing, including, without limitation,
damages or payments for past, present or future infringements for any of the foregoing; (d) the right to sue for past, present,
and future infringements of any of the foregoing; and (e) all rights corresponding to any of the foregoing.
“Credit Facilities”
means the facility of any Class of Loans provided to or for the benefit of the Borrower on the Closing Date pursuant to the
terms of this Agreement, together with any Additional Facility and any other facility created or established under this Agreement.
“Current Assets”
means, as to any Person determined on a consolidated basis, at any date of determination, consolidated current assets as would
be reflected on a balance sheet prepared as of such date on a consolidated basis in accordance with GAAP, but excluding, without
duplication, (a) Cash and Cash Equivalents, (b) the current portion of current and deferred Taxes, (c) permitted
loans made to third parties, (d) assets held for sale, (e) pension assets, (f) deferred bank fees and (g) derivative
financial instruments.
“Current Liabilities”
means, as to any Person determined on a consolidated basis, at any date of determination, the consolidated current liabilities
as would be reflected on a balance sheet prepared as of such date on a consolidated basis in accordance with GAAP, but excluding,
without duplication, (a) the current portion of any long-term Indebtedness, (b) outstanding revolving loans and letter
of credit exposure (whether under this Agreement or otherwise), (c) the Consolidated Interest Expense, (d) the current
portion of any Capital Lease, (e) the current portion of current and deferred Taxes, (f) liabilities in respect of unpaid
earn-outs, (g) the current portion of any other long-term liabilities, (h) accruals relating to restructuring reserves,
(i) liabilities in respect of funds of third parties on deposit with the Borrower or any of its Restricted Subsidiaries and
(j) any liabilities recorded in connection with stock-based awards, partnership interest-based awards, awards of profits interests,
deferred compensation awards and similar incentive based compensation awards or arrangements.
“Debt Fund Affiliate”
means (a) with respect to any Disqualified Institution, any debt fund, investment vehicle, regulated bank entity or unregulated
lending entity (in each case, other than any person that would otherwise be a Disqualified Institution pursuant to clause (a) or
(c) of the definition of “Disqualified Institution”) that is (i) primarily engaged in making, purchasing,
holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of business and (ii) managed,
sponsored or advised by any Person that is Controlling, Controlled by or under common Control with such Disqualified Institution
or Affiliate thereof, but only to the extent that no personnel associated or involved with the investment in such Disqualified
Institution or such Affiliate thereof (A) makes (or has the right to make or participate with others in making) investment
decisions on behalf of, or otherwise cause the direction of the investment policies of, such debt fund, investment vehicle, regulated
bank entity or unregulated entity or (B) has access, directly or indirectly (including through such Disqualified Institution
or any of its Affiliates), to any information (other than information that is publicly available) relating to Holdings, the Borrower,
the Company and/or any of their respective subsidiaries and/or of their respective businesses and (b) with respect to any
other entity (i) any Affiliate of the Sponsors (other than a natural person, Holdings, the Borrower or their respective subsidiaries)
that is primarily engaged in, or advises funds or other investment vehicles that are engaged in, making, purchasing, holding or
otherwise investing in commercial loans, bonds and similar extensions of credit in the ordinary course of business and whose managers
have fiduciary duties to the investors thereof that are independent of (or in addition to) their duties to Holdings, the Borrower,
any Restricted Subsidiary or any Sponsor (or any investor thereof) and (ii) for purposes of any investment in Loans (or participations
therein) made by or on behalf of AIMCo by persons at AIMCo that are not engaged in making, acquiring or holding equity investments
in Holdings, the Borrower or its Restricted Subsidiaries or similar private equity investments, AIMCo.
“Debtor Relief
Laws” means the Bankruptcy Code of the U.S., and all other liquidation, conservatorship, bankruptcy, general assignment
for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization or similar debtor relief laws
of the U.S. or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.
“Declined Proceeds”
has the meaning assigned to such term in Section 2.11(b)(v).
“Default”
means any event or condition which upon notice, lapse of time or both would become an Event of Default.
“Defaulting
Lender” means any Lender that has (a) defaulted in its obligations under this Agreement, including without limitation,
to make a Loan within two Business Days of the date required to be made by it hereunder, (b) notified the Administrative Agent
or any Loan Party in writing that it does not intend to satisfy any such obligation or has made a public statement to the effect
that it does not intend to comply with its funding obligations under this Agreement or under agreements in which it commits to
extend credit generally, (c) failed, within two Business Days after the request of Administrative Agent or the Borrower, to
confirm in writing that it will comply with the terms of this Agreement relating to its obligations to fund prospective Loans;
provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of
such written confirmation by the Administrative Agent if received prior to the applicable funding date, (d) become (or any
parent company thereof has become) (i) insolvent or been determined by any Governmental Authority having regulatory authority
over such Person or its assets, to be insolvent, or the assets or management of which has been taken over by any Governmental Authority
or (ii) the subject of a Bail-In Action or (e) become the subject of a bankruptcy or insolvency proceeding, or has had
a receiver, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization
or liquidation of its business or custodian, appointed for it, or has taken any action in furtherance of, or indicating its consent
to, approval of or acquiescence in, any such proceeding or appointment, unless in the case of any Lender subject to this clause
(e), the Borrower and the Administrative Agent shall each have determined that such Lender intends, and has all approvals required
to enable it (in form and substance satisfactory to each of the Borrower and the Administrative Agent), to continue to perform
its obligations as a Lender hereunder; provided that no Lender shall be deemed to be a Defaulting Lender solely by virtue
of the ownership or acquisition of any Capital Stock in such Lender or its parent by any Governmental Authority; provided
that, such action does not result in or provide such Lender with immunity from the jurisdiction of courts within the U.S. or from
the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject,
repudiate, disavow or disaffirm any contract or agreement to which such Lender is a party.
“Deposit Account”
means a demand, time, savings, passbook or like account with a bank, savings and loan association, credit union or like organization,
other than an account evidenced by a negotiable certificate of deposit.
“Derivative
Transaction” means (a) any interest-rate transaction, including any interest-rate swap, basis swap, forward rate
agreement, interest rate option (including a cap, collar or floor), and any other instrument linked to interest rates that gives
rise to similar credit risks (including when-issued securities and forward deposits accepted), (b) any exchange-rate transaction,
including any cross-currency interest-rate swap, any forward foreign-exchange contract, any currency option, and any other instrument
linked to exchange rates that gives rise to similar credit risks, (c) any equity derivative transaction, including any equity-linked
swap, any equity-linked option, any forward equity-linked contract, and any other instrument linked to equities that gives rise
to similar credit risk and (d) any commodity (including precious metal) derivative transaction, including any commodity-linked
swap, any commodity-linked option, any forward commodity-linked contract, and any other instrument linked to commodities that gives
rise to similar credit risks; provided that no phantom stock or similar plan providing for payments only on account of services
provided by current or former directors, officers, employees, members of management, managers or consultants of the Borrower or
its subsidiaries shall be a Derivative Transaction.
“Designated
Non-Cash Consideration” means the Fair Market Value of non-Cash consideration received by the Borrower or any Restricted
Subsidiary in connection with any Disposition pursuant to Section 6.07(h) and/or Section 6.08 that
is designated as Designated Non-Cash Consideration pursuant to a certificate of a Responsible Officer of the Borrower, setting
forth the basis of such valuation (which amount will be reduced by the amount of Cash or Cash Equivalents received in connection
with a subsequent sale or conversion of such Designated Non-Cash Consideration to Cash or Cash Equivalents).
“Designated
Operational FX Hedge” means any Hedge Agreement entered into for the purpose of hedging currency-related risks in respect
of the revenues, cash flows or other balance sheet items of Holdings, the Borrower and/or any Restricted Subsidiaries and designated
at the time entered into (or on or prior to the Closing Date, with respect to any Hedge Agreement entered into on or prior to the
Closing Date) as a Designated Operational FX Hedge by the Borrower in writing to the Administrative Agent.
“Discount Range”
has the meaning assigned to such term in the definition of “Dutch Auction”.
“Disposition”
or “Dispose” means the sale, lease, sublease, or other disposition of any property of any Person.
“Disqualified
Capital Stock” means any Capital Stock which, by its terms (or by the terms of any security into which it is convertible
or for which it is exchangeable), or upon the happening of any event, (a) matures (excluding any maturity as the result of
an optional redemption by the issuer thereof) or is mandatorily redeemable (other than for Qualified Capital Stock), pursuant to
a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof (other than for Qualified Capital
Stock), in whole or in part, on or prior to 91 days following the Latest Maturity Date at the time such Capital Stock is issued
(it being understood that if any such redemption is in part, only such part coming into effect prior to 91 days following the Latest
Maturity Date shall constitute Disqualified Capital Stock), (b) is or becomes convertible into or exchangeable (unless at
the sole option of the issuer thereof) for (i) debt securities or (ii) any Capital Stock that would constitute Disqualified
Capital Stock, in each case at any time on or prior to 91 days following the Latest Maturity Date at the time such Capital Stock
is issued, (c) contains any mandatory repurchase obligation or any other repurchase obligation at the option of the holder
thereof (other than for Qualified Capital Stock), in whole or in part, which may come into effect prior to 91 days following the
Latest Maturity Date at the time such Capital Stock is issued (it being understood that if any such repurchase obligation is in
part, only such part coming into effect prior to 91 days following the Latest Maturity Date shall constitute Disqualified Capital
Stock) or (d) requires scheduled payments of dividends in Cash on or prior to 91 days following the Latest Maturity Date at
the time such Capital Stock is issued; provided that any Capital Stock that would not constitute Disqualified Capital Stock
but for provisions thereof giving holders thereof (or the holders of any security into or for which such Capital Stock is convertible,
exchangeable or exercisable) the right to require the issuer thereof to redeem such Capital Stock upon the occurrence of any change
in control, Qualifying IPO or any Disposition occurring prior to 91 days following the Latest Maturity Date at the time such Capital
Stock is issued shall not constitute Disqualified Capital Stock if (x) such Capital Stock provides that the issuer thereof
will not redeem any such Capital Stock pursuant to such provisions prior to the Termination Date or (y) such redemption is
subject to events that would cause the Termination Date to occur.
Notwithstanding the preceding
sentence, (A) if such Capital Stock is issued pursuant to any plan for the benefit of directors, officers, employees, members
of management, managers or consultants or by any such plan to such directors, officers, employees, members of management, managers
or consultants, in each case in the ordinary course of business of Holdings, the Borrower or any Restricted Subsidiary, such Capital
Stock shall not constitute Disqualified Capital Stock solely because it may be required to be repurchased by the issuer thereof
in order to satisfy applicable statutory or regulatory obligations, and (B) no Capital Stock held by any future, present or
former employee, director, officer, manager, member of management or consultant (or their respective Affiliates or Immediate Family
Members) of the Borrower (or any Parent Company or any subsidiary) shall be considered Disqualified Capital Stock because such
stock is redeemable or subject to repurchase pursuant to any management equity subscription agreement, stock option, stock appreciation
right or other stock award agreement, stock ownership plan, put agreement, stockholder agreement or similar agreement that may
be in effect from time to time.
“Disqualified
Institution” means:
(a) (i) any
Person that is identified in writing to the Administrative Agent, (ii) any reasonably identifiable Affiliate of any Person
described in clause (i) above (on the basis of such Affiliate’s name) and (iii) any other Affiliate of any
Person described in clauses (i) and/or (ii) above that is identified by name in a written notice to the
Administrative Agent;
(b) any
Company Competitor (it being understood and agreed that no Debt Fund Affiliate of any Company Competitor may be designated as Disqualified
Institution pursuant to this clause (b)); and/or
(c) any
Affiliate of any Initial Committed Lender that is engaged as a principal primarily in private equity, venture capital, restructuring
or distressed debt; provided that the restriction in this clause (c) shall not apply during the continuation
of an Event of Default under Sections 7.01(a), (f) and (g) (solely with respect to the Borrower)
and shall not apply retroactively to disqualify any such Affiliate that validly acquired an assignment or participation in the
Loans during the continuation of any such Event of Default;
provided, that no written notice
delivered pursuant to clauses (a)(i), (a)(iii) above or clauses (a) and/or (c) of the
definition of “Company Competitor” shall apply retroactively to disqualify any person that has previously acquired
a valid assignment or participation interest in the Loans.
“Dollars”
or “$” refers to lawful money of the U.S.
“Domestic Subsidiary”
means any direct or indirect subsidiary of the Borrower organized under the laws of the United States, any state or the District
of Columbia.
“Dutch Auction”
means an auction (an “Auction”) conducted by Holdings, the Borrower, any subsidiary of the Borrower, any Affiliated
Lender or any Debt Fund Affiliate (any such Person, the “Auction Party”) in order to purchase Initial Loans
(or any other Loans), in accordance with the following procedures; provided that no Auction Party shall initiate an Auction
unless (I) at least five Business Days have passed since the consummation of the most recent purchase of Loans pursuant to
an Auction conducted hereunder; or (II) at least three Business Days have passed since the date of the last Failed Auction
which was withdrawn pursuant to clause (c)(i) below:
(a) Notice
Procedures. In connection with any Auction, the Auction Party will provide notification to the Auction Agent (for distribution
to the relevant Lenders) of the Loans that will be the subject of the Auction (an “Auction Notice”). Each Auction
Notice shall be in a form reasonably acceptable to the Auction Agent and shall (i) specify the maximum aggregate principal
amount of the Loans subject to the Auction, in a minimum amount of $10,000,000 and whole increments of $1,000,000 in excess thereof
(or, in any case, such lesser amount of such Loans then outstanding or which is otherwise reasonably acceptable to the Auction
Agent and the Administrative Agent (if different from the Auction Agent)) (the “Auction Amount”), (ii) specify
the discount to par (which may be a range (the “Discount Range”) of percentages of the par principal amount
of the Loans subject to such Auction), that represents the range of purchase prices that the Auction Party would be willing to
accept in the Auction, (iii) be extended, at the sole discretion of the Auction Party, to (x) each Lender and/or (y) each
Lender with respect to any Loan on an individual Class basis, (iv) remain outstanding through the Auction Response Date
and (v) at the option of the Auction Party, be subject to one of more conditions or contingencies. The Auction Agent will
promptly provide each appropriate Lender with a copy of the Auction Notice and a form of the Return Bid to be submitted by a responding
Lender to the Auction Agent (or its delegate) by no later than 5:00 p.m. on the date specified in the Auction Notice (or such
later date as the Auction Party may agree with the reasonable consent of the Auction Agent) (the “Auction Response Date”).
(b) Reply
Procedures. In connection with any Auction, each Lender holding the relevant Loans subject to such Auction may, in its sole
discretion, participate in such Auction and may provide the Auction Agent with a notice of participation (the “Return
Bid”) which shall be in a form reasonably acceptable to the Auction Agent, and shall specify (i) a discount to par
(that must be expressed as a price at which it is willing to sell all or any portion of such Loans) (the “Reply Price”),
which (when expressed as a percentage of the par principal amount of such Loans) must be within the Discount Range, and (ii) a
principal amount of such Loans, which must be in whole increments of $1,000,000 (or, in any case, such lesser amount of such Loans
of such Lender then outstanding or which is otherwise reasonably acceptable to the Auction Agent) (the “Reply Amount”).
Lenders may only submit one Return Bid per Auction, but each Return Bid may contain up to three bids only one of which may result
in a Qualifying Bid. In addition to the Return Bid, the participating Lender must execute and deliver, to be held in escrow by
the Auction Agent, an Assignment and Assumption with the dollar amount of the Loans to be assigned to be left in blank, which amount
shall be completed by the Auction Agent in accordance with the final determination of such Lender’s Qualifying Bid pursuant
to clause (c) below. Any Lender whose Return Bid is not received by the Auction Agent by the Auction Response Date
shall be deemed to have declined to participate in the relevant Auction with respect to all of its Loans.
(c) Acceptance
Procedures. Based on the Reply Prices and Reply Amounts received by the Auction Agent prior to the applicable Auction Response
Date, the Auction Agent, in consultation with the Auction Party, will determine the applicable price (the “Applicable
Price”) for the Auction, which will be the lowest Reply Price for which the Auction Party can complete the Auction at
the Auction Amount; provided that, in the event that the Reply Amounts are insufficient to allow the Auction Party to complete
a purchase of the entire Auction Amount (any such Auction, a “Failed Auction”), the Auction Party shall either,
at its election, (i) withdraw the Auction or (ii) complete the Auction at an Applicable Price equal to the highest Reply
Price. The Auction Party shall purchase the relevant Loans (or the respective portions thereof) from each Lender with a Reply Price
that is equal to or lower than the Applicable Price (“Qualifying Bids”) at the Applicable Price; provided
that if the aggregate proceeds required to purchase all Loans subject to Qualifying Bids would exceed the Auction Amount for such
Auction, the Auction Party shall purchase such Loans at the Applicable Price ratably based on the principal amounts of such Qualifying
Bids (subject to rounding requirements specified by the Auction Agent in its discretion). If a Lender has submitted a Return Bid
containing multiple bids at different Reply Prices, only the bid with the lowest Reply Price that is equal to or less than the
Applicable Price will be deemed to be the Qualifying Bid of such Lender (e.g., a Reply Price of $100 with a discount to
par of 1%, when compared to an Applicable Price of $100 with a 2% discount to par, will not be deemed to be a Qualifying Bid, while,
however, a Reply Price of $100 with a discount to par of 2.50% would be deemed to be a Qualifying Bid). The Auction Agent shall
promptly, and in any case within five Business Days following the Auction Response Date with respect to an Auction, notify (I) the
Borrower of the respective Lenders’ responses to such solicitation, the effective date of the purchase of Loans pursuant
to such Auction, the Applicable Price, and the aggregate principal amount of the Loans and the Classes thereof to be purchased
pursuant to such Auction, (II) each participating Lender of the effective date of the purchase of Loans pursuant to such Auction,
the Applicable Price, and the aggregate principal amount and the Classes of Loans to be purchased at the Applicable Price on such
date, (III) each participating Lender of the aggregate principal amount and the Classes of the Loans of such Lender to be
purchased at the Applicable Price on such date and (IV) if applicable, each participating Lender of any rounding and/or proration
pursuant to the second preceding sentence. Each determination by the Auction Agent of the amounts stated in the foregoing notices
to the Borrower and Lenders shall be conclusive and binding for all purposes absent manifest error.
(d) Additional
Procedures.
(i) Once
initiated by an Auction Notice, the Auction Party may not withdraw an Auction other than a Failed Auction or one or more conditions
or contingencies have not been satisfied (or waived by the Auction Party). Furthermore, in connection with any Auction, upon submission
by a Lender of a Qualifying Bid, such Lender (each, a “Qualifying Lender”) will be obligated to sell the entirety
or its allocable portion of the Reply Amount, as the case may be, at the Applicable Price.
(ii) To
the extent not expressly provided for herein, each purchase of Loans pursuant to an Auction shall be consummated pursuant to procedures
consistent with the provisions in this definition, established by the Auction Agent acting in its reasonable discretion and as
reasonably agreed by the Borrower.
(iii) In
connection with any Auction, the Borrower and the Lenders acknowledge and agree that the Auction Agent may require one or more
conditions or contingencies to any Auction, including the payment of customary fees and expenses by the Auction Party in connection
therewith as agreed between the Auction Party and the Auction Agent.
(iv) Notwithstanding
anything in any Loan Document to the contrary, for purposes of this definition, each notice or other communication required to
be delivered or otherwise provided to the Auction Agent (or its delegate) shall be deemed to have been given upon the Auction Agent’s
(or its delegate’s) actual receipt during normal business hours of such notice or communication; provided that any
notice or communication actually received outside of normal business hours shall be deemed to have been given as of the opening
of business on the next Business Day.
(v) The
Borrower and the Lenders acknowledge and agree that the Auction Agent may perform any and all of its duties under this definition
by itself or through any Affiliate of the Auction Agent and expressly consent to any such delegation of duties by the Auction Agent
to such Affiliate and the performance of such delegated duties by such Affiliate. The exculpatory provisions pursuant to this Agreement
shall apply to each Affiliate of the Auction Agent and its respective activities in connection with any purchase of Loans provided
for in this definition as well as activities of the Auction Agent.
“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 Assignee”
means (a) any Lender, (b) any commercial bank, insurance company, or finance company, financial institution, any fund
that invests in loans or any other “accredited investor” (as defined in Regulation D of the Securities Act), (c) any
Affiliate of any Lender, (d) any Approved Fund of any Lender or (e) to the extent permitted under Section 9.05(g) and/or
9.05(h), any Affiliated Lender or any Debt Fund Affiliate; provided that in any event, “Eligible Assignee”
shall not include (i) any natural person, (ii) any Disqualified Institution or (iii) except as permitted under Section 9.05(g) and/or
9.05(h), the Borrower or any of its Affiliates.
“Environment”
means ambient air, indoor air, surface water, groundwater, drinking water, land surface and subsurface strata and natural resources
such as wetlands, flora and fauna.
“Environmental
Claim” means any investigation, notice, notice of violation, claim, action, suit, proceeding, demand, abatement order
or other order or directive (conditional or otherwise), by any Governmental Authority or any other Person, arising (a) pursuant
to or in connection with any actual or alleged violation of any Environmental Law; (b) in connection with any Hazardous Material
or any actual or alleged Hazardous Materials Activity; or (c) in connection with any actual or alleged damage, injury, threat
or harm to the Environment.
“Environmental
Laws” means any and all current or future applicable foreign or domestic, federal or state (or any subdivision of either
of them), statutes, ordinances, orders, rules, regulations, judgments, Governmental Authorizations, or any other applicable requirements
of Governmental Authorities and the common law relating to (a) environmental matters, including those relating to any Hazardous
Materials Activity; or (b) the generation, use, storage, transportation or disposal of or exposure to Hazardous Materials,
in any manner applicable to the Borrower or any of its Restricted Subsidiaries or any Facility.
“Environmental
Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental
investigation or remediation, fines, penalties or indemnities), directly or indirectly resulting from or based upon (a) violation
of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous
Materials, (c) exposure to any Hazardous Materials, (d) the Release or threatened Release of any Hazardous Materials
into the Environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed
or imposed with respect to any of the foregoing.
“Equity Contribution”
has the meaning assigned to such term in the Recitals to this Agreement.
“ERISA”
means the Employee Retirement Income Security Act of 1974.
“ERISA Affiliate”
means, as applied to any Person, (a) any corporation which is a member of a controlled group of corporations within the meaning
of Section 414(b) of the Code of which that Person is a member; and (b) any trade or business (whether or not incorporated)
which is a member of a group of trades or businesses under common control within the meaning of Section 414(c) of the
Code of which that Person is a member.
“ERISA Event”
means (a) a “reportable event” within the meaning of Section 4043 of ERISA and the regulations issued thereunder
with respect to any Pension Plan (excluding those for which the 30-day notice period has been waived); (b) the failure to
meet the minimum funding standard of Section 412 of the Code with respect to any Pension Plan, or the filing of any request
for or receipt of a minimum funding waiver under Section 412 of the Code with respect to any Pension Plan or a failure to
make a required contribution to a Multiemployer Plan; (c) the provision by the administrator of any Pension Plan pursuant
to Section 4041(a)(2) of ERISA of a notice of intent to terminate such plan in a distress termination described in Section 4041(c) of
ERISA; (d) the withdrawal by the Borrower, any of its Restricted Subsidiaries or any of their respective ERISA Affiliates
from any Pension Plan with two or more contributing sponsors or the termination of any such Pension Plan resulting in liability
to the Borrower, any of its Restricted Subsidiaries or any of their respective ERISA Affiliates pursuant to Section 4063 or
4064 of ERISA; (e) the institution by the PBGC of proceedings to terminate any Pension Plan; (f) the imposition of liability
on the Borrower, any of its Restricted Subsidiaries or any of their respective ERISA Affiliates pursuant to Section 4062(e) or
4069 of ERISA or by reason of the application of Section 4212(c) of ERISA; (g) a complete or partial withdrawal
(within the meaning of Sections 4203 and 4205 of ERISA) of the Borrower, any of its Restricted Subsidiaries or any of their respective
ERISA Affiliates from any Multiemployer Plan, or the receipt by the Borrower, any of its Restricted Subsidiaries or any of their
respective ERISA Affiliates of notice from any Multiemployer Plan that it is in insolvency pursuant to Section 4245 of ERISA,
or that it intends to terminate or has terminated under Section 4041A or 4042 of ERISA or is in “endangered” or
“critical” status, within the meaning of Section 432 of the Code or Section 305 of ERISA; (h) a failure
by the Borrower, any of its Restricted Subsidiaries or any of their respective ERISA Affiliates to pay when due (after expiration
of any applicable grace period) any installment payment with respect to withdrawal liability under Section 4201 of ERISA;
(i) a determination that any Pension Plan is, or is reasonably expected to be, in “at-risk” status, within the
meaning of Section 430(i)(4) of the Code or Section 303(i)(4) of ERISA; or (j) the incurrence of liability
or the imposition of a Lien pursuant to Section 436 or 430(k) of the Code or pursuant to ERISA with respect to any Pension
Plan.
“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 assigned to such term in Article 7.
“Excess Cash
Flow” means, for any Calculation Period, an amount (if positive) equal to:
(a) the
sum, without duplication, of the amounts for such Calculation Period of the following:
(i) Consolidated
Adjusted EBITDA for such Calculation Period without giving effect to clauses (b)(xi) and (b)(xviii) of
the definition thereof, plus
the Consolidated Working Capital
Adjustment for such Calculation Period, plus
(ii) cash
gains of the type described in clauses (b), (c), (d), (e) and (f) of the definition
of “Consolidated Net Income” during such Calculation Period, to the extent not otherwise included in Consolidated Adjusted
EBITDA (except to the extent such gains consist of proceeds applied pursuant to the First Lien Credit Agreement, the documentation
governing any other First Lien Facilities and/or Section 2.11(b)(ii)), plus
(iii) to
the extent not otherwise included in the calculation of Consolidated Adjusted EBITDA for such Calculation Period, cash payments
received by the Borrower or any of its Restricted Subsidiaries with respect to amounts deducted from Excess Cash Flow in a prior
Calculation Period pursuant to clause (b)(vii) below, minus
(b) the
sum, without duplication, of the amounts for such Calculation Period of the following:
(i) permanent
repayments of long-term Indebtedness, including for purposes of clarity, the current portion of any such Indebtedness (including
(x) payments under Sections 2.10(a) and (y) prepayments of Initial Loans and Additional Loans to the extent
(and only to the extent) made with the Net Proceeds of a Prepayment Asset Sale or Net Insurance/Condemnation Proceeds resulted
in an increase to Consolidated Net Income and not in excess of the amount of such increase, but excluding (A) the amount of
all deductions and reductions to the amount of mandatory prepayments pursuant to clause (B) of Section 2.11(b)(i),
(B) all other repayments of the Initial Loans or Additional Loans and (C) repayments of any loans under the ABL Facility,
any Additional Revolving Loans (as defined in the First Lien Credit Agreement) or loans under any other revolving credit facility
or arrangement, except to the extent a corresponding amount of the commitments under the ABL Facility or such revolving credit
facility or arrangement are permanently reduced in connection with such repayments), in each case, to the extent not financed with
Long-Term Funded Indebtedness; plus
(ii) all
Cash payments in respect of capital expenditures as would be reported in the Borrower’s consolidated statement of cash flows
made during such Calculation Period and, at the option of the Borrower, in the case of any Calculation Period, any Cash payments
in respect of any such capital expenditures made prior to the date of the Excess Cash Flow payment in respect of such Calculation
Period (except, in each case, to the extent financed with Long-Term Funded Indebtedness); plus
(iii) (A) amounts
added back pursuant to clauses (b)(i), (b)(ii), (b)(v) (other than clause (b)(v)(B)(3)),
(b)(vi), (b)(vii), (b)(ix), (b)(x) (to the extent actually paid in such period), (b)(xii),
and (b)(xvii) of the definition of “Consolidated Adjusted EBITDA”, to the extent paid in Cash, and (B) amounts
added back in calculating Consolidated Adjusted EBITDA or included in Consolidated Net Income, to the extent consisting of non-Cash
or unrealized items; plus
(iv) any
Charges (or net income) attributable to any non-controlling interest and/or minority interest of any third party in any Restricted
Subsidiary; plus
(v) Cash
payments made during such Calculation Period (or, at the option of the Borrower (in its sole discretion), made after such Calculation
Period and prior to the date of the applicable Excess Cash Flow payment) in respect of Permitted Acquisitions and other Investments
permitted by Section 6.06 or otherwise consented to by the Required Lenders (other than Investments in (x) Cash
and Cash Equivalents and (y) the Borrower or any of its Restricted Subsidiaries), except, in each case, to the extent financed
with Long-Term Funded Indebtedness; plus
(vi) (A) the
aggregate amount of all Restricted Payments made under Sections 6.04(a)(i), (ii), (iv), (vi),
(xi) and (xiii) or otherwise consented to by the Required Lenders, in each case to the extent actually
paid in Cash during such Calculation Period, or, at the option of the Borrower, made after such Calculation Period and prior to
the date of the applicable Excess Cash Flow payment, except, in each case, to the extent financed with Long-Term Funded Indebtedness,
and (B) to the extent paid in Cash, amounts paid with respect to the Transactions (including under Section 6.04(a)(vii))
after the Closing Date, to satisfy any payment obligations owing under the Merger Agreement and amounts required to be paid in
connection with, or as a result, of any working capital and purchase price adjustments; plus
(vii) amounts
added back under clause (b)(v)(B)(3), (b)(xiii) or (b)(xv) of the definition of “Consolidated
Adjusted EBITDA” to the extent such amounts have not yet been received by the Borrower or its Restricted Subsidiaries, plus
(viii) an
amount equal to all expenses, charges and losses either (A) excluded in calculating Consolidated Net Income or (B) added
back in calculating Consolidated Adjusted EBITDA, in the case of clauses (A) and (B), to the extent paid in
Cash, plus
(ix) without
duplication of amounts deducted from Excess Cash Flow in respect of any prior Calculation Period, at the option of the Borrower,
the aggregate consideration required to be paid in Cash by the Borrower or its Restricted Subsidiaries pursuant to binding contracts
(the “Contract Consideration”) entered into prior to or during such Calculation Period relating to capital expenditures,
acquisitions or Investments permitted by Section 6.06 (other than Investments in (x) Cash and Cash Equivalents
and (y) the Borrower or any of its Restricted Subsidiaries) and Restricted Payments permitted by Section 6.04(a) (other
than pursuant to Section 6.04(a)(iii)) to be consummated or made during the period of four consecutive Fiscal Quarters of
the Borrower following the end of such Calculation Period (except, in each case, to the extent financed with Long-Term Funded Indebtedness);
provided that to the extent the aggregate amount actually utilized to finance such capital expenditures, acquisitions or
Investments during such subsequent period of four consecutive Fiscal Quarters is less than the Contract Consideration, the amount
of the resulting shortfall shall be added to the calculation of Excess Cash Flow at the end of such subsequent period of four consecutive
Fiscal Quarters, plus
(x) to
the extent not expensed (or exceeding the amount expensed) during such Calculation Period or not deducted (or exceeding the amount
deducted) in calculating Consolidated Net Income (or exceeding the amount added back in calculating Consolidated Adjusted EBITDA),
the aggregate amount of expenditures, fees, costs and expenses paid in Cash by the Borrower and its Restricted Subsidiaries during
such Calculation Period, other than to the extent financed with Long-Term Funded Indebtedness, plus
(xi) Cash
payments (without duplication Taxes subject to clauses (iii) and (vi) above) made during such Calculation
Period for any liability the accrual of which in a prior Calculation Period did not increase Excess Cash Flow in such prior Calculation
Period (provided there was no other deduction to Consolidated Adjusted EBITDA or Excess Cash Flow related to such payment),
except to the extent financed with Long-Term Funded Indebtedness, plus
(xii) Cash
expenditures made in respect of any Hedge Agreement during such Calculation Period to the extent (A) not otherwise deducted
in the calculation of Consolidated Net Income or Consolidated Adjusted EBITDA and (B) not financed with Long-Term Funded Indebtedness,
plus
(xiii) amounts
paid in Cash (except to the extent financed with Long-Term Funded Indebtedness) during such Calculation Period on account of (A) items
that were accounted for as non-Cash reductions of Consolidated Net Income or Consolidated Adjusted EBITDA in a prior Calculation
Period and (B) reserves or amounts established in purchase accounting to the extent such reserves or amounts are added back
to, or not deducted from, Consolidated Net Income, plus
(xiv) cash
payments made by the Borrower or its Restricted Subsidiaries during such Calculation Period in respect of long-term liabilities
(other than in respect of Long-Term Funded Indebtedness, which is governed by clause (b)(i) above), including for purposes
of clarity, the current portion of any such liabilities of the Borrower or its Restricted Subsidiaries, except to the extent such
cash payments were (A) deducted in the calculation of Consolidated Net Income or Consolidated Adjusted EBITDA for such Calculation
Period or (B) financed with Long-Term Funded Indebtedness, plus
(xv) an
amount equal to any non-Cash credit or income included in Consolidated Net Income and any non-Cash Charges added back to Consolidated
Net Income in calculating Consolidated Adjusted EBITDA.
“Exchange Act”
means the Securities Exchange Act of 1934 and the rules and regulations of the SEC promulgated thereunder.
“Excluded Assets”
means each of the following:
(a) any
assets (including any lease, licenses or agreement) subject to a purchase money security interest, capital lease or similar arrangement
permitted by this Agreement as to which the grant of a security interest therein would (i) constitute a violation of a restriction
in favor of a third party (other than Holdings, the Borrower or any of its subsidiaries) or result in the abandonment, invalidation
or unenforceability of any right of the relevant Loan Party, or (ii) result in a breach, termination (or a right of termination)
or default under such contract, instrument, lease, license, agreement or other document (including pursuant to any “change
of control” or similar provision); provided, however, that any such asset will only constitute an Excluded
Asset under clause (i) or clause (ii) above to the extent such violation or breach, termination (or
right of termination) or default would not be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the UCC
(or any successor provision or provisions) of any relevant jurisdiction or any other applicable law; provided further that
any such asset shall cease to constitute an Excluded Asset at such time as the condition causing such violation, breach, termination
(or right of termination) or default or right to amend or require other actions no longer exists and to the extent severable, the
security interest granted under the applicable Collateral Document shall attach immediately to any portion of such contract, instrument,
lease, license, agreement or document that does not result in any of the consequences specified in clauses (i) and
(ii) above;
(b) the
Capital Stock of any (i) Immaterial Subsidiary, (ii) Captive Insurance Subsidiary, (iii) Unrestricted Subsidiary
(except to the extent the security interest in such Capital Stock may be perfected by the filing of a Form UCC-1 (or similar)
financing statement), (iv) not-for-profit subsidiary, (v) special purpose entity used for any permitted securitization
facility (to the extent pledge thereof is not permitted under securitization agreements applicable to such entities), (vi) any
Restricted Subsidiary that is not a Wholly-Owned Subsidiary and is not permitted to be pledged pursuant to such entity’s
organizational documents without (A) the consent of one or more unaffiliated third parties other than Holdings, the Borrower
or any of its subsidiaries (after giving effect to Sections 9-406, 9-407, 9-408 or 9-409 of the UCC (or any successor provision
or provisions) of any relevant jurisdiction or any other applicable law) or (B) giving rise to a “right of first refusal”,
a “right of first offer” or a similar right that may be exercised by any third party other than Holdings, the Borrower
or any of its subsidiaries, (vii) any subsidiary that is prohibited from having its stock pledged by (A) any law or regulation
or would require governmental (including regulatory) consent, approval or authorization, or (B) any Contractual Obligation
that exists on the Closing Date or at the same time such subsidiary becomes a subsidiary of the Borrower and not entered into in
contemplation of such subsidiary becoming a subsidiary of the Borrower, (viii) any Restricted Subsidiary acquired by the Borrower
or any of its Restricted Subsidiaries after the Closing Date that, at the time of the relevant acquisition (and not entered into
in contemplation of such acquisition), is an obligor in respect of any Indebtedness permitted to be assumed by the Borrower or
such Restricted Subsidiary to the extent (and for so long as) the documentation governing the applicable assumed Indebtedness prohibits
the Capital Stock of such Restricted Subsidiary from being pledged, and (ix) any person that is not (A) the Borrower
or (B) a Restricted Subsidiary that is a direct, first tier subsidiary of the Borrower or a Subsidiary Guarantor;
(c) any
IP Rights in any non-U.S. jurisdictions and any intent-to-use Trademark application prior to the filing of a “Statement of
Use” or an “Amendment to Allege Use” with respect thereto, only to the extent, if any, that, and solely during
the period, if any, in which, the grant of a security interest therein would impair the validity or enforceability of such intent-to-use
Trademark application or any registration issuing therefrom under applicable law;
(d) any
asset (including governmental licenses or state or local franchises, charters, authorizations and agreements), the grant or perfection
of a security interest in which would (i) be prohibited or restricted by applicable law or (ii) require any governmental
consent, approval, license or authorization that has not been obtained (after giving effect to Sections 9-406, 9-407, 9-408 or
9-409 of the UCC and other applicable laws), (iii) be prohibited by enforceable anti-assignment provisions of applicable Requirements
of Law, except, in the case of this clause (iii), to the extent such prohibition would be rendered ineffective under the
UCC or other applicable law notwithstanding such prohibition, or (iv) be prohibited by enforceable anti-assignment provisions
of contracts governing such asset in existence on the Closing Date or on the date of acquisition of the relevant asset (and in
each case not entered into in anticipation of the Closing Date or such acquisition and except, in each case, to the extent that
term in such contract providing for such prohibition purports to prohibit the granting of a security interest over all assets of
such Loan Party or any other Loan Party) other than to the extent such prohibition would be rendered ineffective under the UCC
or other applicable law;
(e) (i) any
leasehold Real Estate Asset and (ii) any owned Real Estate Asset;
(f) any
leasehold interests in any other asset or property (except to the extent the security interest in such leasehold interest may be
perfected by the filing of a Form UCC-1 financing statement);
(g) any
motor vehicles and other assets subject to certificates of title;
(h) any
Margin Stock;
(i) the
Capital Stock of any Foreign Subsidiary or any Foreign Subsidiary Holdco, other than 65% of the issued and outstanding Capital
Stock of any Restricted Subsidiary that is a direct, first-tier Restricted Subsidiary of the Borrower or a Subsidiary Guarantor
and owned by the Borrower or such Subsidiary Guarantor;
(j) (i) Commercial
Tort Claims with a value (as reasonably estimated by the Borrower) of less than $10,000,000 (except as to which perfection of the
security interest in such commercial tort claims is accomplished by the filing of a Form UCC-1 financing statement) and (ii) Letter-of-Credit
Rights (except to the extent constituting a supporting obligation for other Collateral as to which perfection of the security interest
in such Letter-of-Credit Rights may be perfected by the filing of a Form UCC-1 financing statement);
(k) except
to the extent constituting ABL US Priority Collateral required to be subject to the “Collateral and Guarantee Requirement”
pursuant to clause (A)(z) of the definition thereof, any (i) Cash or Cash Equivalents (other than Cash and Cash Equivalents
to the extent constituting proceeds with respect to Collateral), and (ii) deposit, securities and similar accounts (including
securities entitlements), payroll and other employee wage and benefit accounts, tax accounts (including, without limitation, sales
tax accounts) and any tax benefits, escrow accounts, fiduciary or trust accounts for the benefit of third parties and any funds
and other property held in or maintained in any such accounts;
(l) any
accounts receivable and related assets that are sold or disposed of in connection with any factoring or similar arrangement permitted
by this Agreement;
(m) any
asset or property (including the Capital Stock of any Restricted Subsidiary), the grant or perfection of a security interest in
which would result in material and adverse tax liabilities or consequences to Holdings, the Borrower or any Restricted Subsidiary
(including with respect to any tax distribution paid or payable to any Parent Company), as reasonably determined by the Borrower
in consultation with the Administrative Agent;
(n) any
asset with respect to which the Administrative Agent and the Borrower have reasonably determined that the cost, burden, difficulty
or consequence (including any effect on the ability of the relevant Loan Party to conduct its operations and business in the ordinary
course of business) of obtaining or perfecting a security interest therein outweighs the benefit of a security interest to the
relevant Secured Parties afforded thereby; and
(o) the
ABL Canadian Collateral;
provided that, Excluded Assets shall
not include any proceeds, substitutions or replacements of any Excluded Assets referred to in clauses (a) through (o).
Notwithstanding any of
the foregoing, any determination or exercise of discretion by the First Lien Agent under the First Lien Credit Agreement with respect
to Excluded Assets (as defined in the First Lien Credit Agreement) or under the Security Agreement (as defined in the First Lien
Credit Agreement) with respect to Collateral shall automatically constitute the corresponding determination or exercise of discretion
by the Administrative Agent with respect to Excluded Assets and under the Security Agreement with respect to Collateral.
“Excluded Subsidiary”
means:
(a) any
Restricted Subsidiary that is not a Wholly-Owned Subsidiary;
(b) any
Immaterial Subsidiary;
(c) any
Restricted Subsidiary that is prohibited from providing a Guarantee by (i) law or regulation or whose provision of a Guarantee
would require a governmental (including regulatory) consent, approval, license or authorization in order to provide a Guarantee
or (ii) any contractual obligation existing on the Closing Date or at the time such Restricted Subsidiary becomes a subsidiary
(which Contractual Obligation was not entered into in contemplation of such Restricted Subsidiary becoming a subsidiary) from providing
a Loan Guaranty;
(d) any
direct or indirect subsidiary of the Borrower that is (i) a not-for-profit subsidiary, (ii) a Captive Insurance Subsidiary,
(iii) a special purpose entity used for any permitted securitization or receivables facility or financing, (iv) a Foreign
Subsidiary or subsidiary of a Foreign Subsidiary, (v) a Foreign Subsidiary Holdco or a direct or indirect subsidiary of a
Foreign Subsidiary Holdco, or (vi) an Unrestricted Subsidiary;
(e) any
Restricted Subsidiary with respect to which, in the reasonable judgment of the Borrower (in consultation with the Administrative
Agent), the burden or cost of providing a Loan Guaranty outweighs the benefits afforded thereby;
(f) [Reserved];
(g) any
Restricted Subsidiary acquired by the Borrower or any of its Restricted Subsidiaries after the Closing Date that, at the time of
the relevant acquisition (and not entered into in contemplation of such acquisition), is an obligor in respect of assumed Indebtedness
that is permitted hereunder to the extent (and for so long as) the documentation governing the applicable assumed Indebtedness
prohibits such Restricted Subsidiary from providing a Loan Guaranty;
(h) any
subsidiary of the Borrower where the provision of a Loan Guaranty would result in material adverse tax consequences to Holdings,
the Borrower or any Restricted Subsidiary, as reasonably determined by the Borrower in consultation with the Administrative Agent;
and
(i) any
subsidiary as reasonably agreed between the Borrower and the Administrative Agent.
“Excluded Taxes”
means, with respect to the Administrative Agent, any Lender or any other recipient of any payment to be made by or on account of
any obligation of any Loan Party hereunder or under any other Loan Document, (a) Taxes imposed on (or measured by) its net
income or franchise Taxes (i) by the jurisdiction under the laws of which such recipient is organized or in which its principal
office is located or, in the case of any Lender, in which its applicable lending office is located or (ii) that are Other
Connection Taxes, (b) any branch profits Taxes imposed under Section 884(a) of the Code or any similar Tax, imposed
by any jurisdiction described in clause (a), (c) in the case of any Lender, any U.S. federal withholding Tax that is
imposed on amounts that are (or would be) required to be withheld pursuant to a Requirement of Law in effect at the time such Lender
becomes a party to this Agreement (or designates a new lending office), except (i) pursuant to an assignment or designation
of a new lending office under Section 2.19 and (ii) to the extent that such Lender (or its assignor, if any) was
entitled, immediately prior to the designation of a new lending office (or assignment), to receive additional amounts from any
Loan Party with respect to such withholding Tax pursuant to Section 2.17, (d) any Tax imposed as a result of a
failure by the Administrative Agent or any Lender to comply with Section 2.17(f), and (e) any U.S. federal withholding
Tax under FATCA.
“Extended Loans”
has the meaning assigned to such term in Section 2.23(a).
“Extension”
has the meaning assigned to such term in Section 2.23(a).
“Extension Offer”
has the meaning assigned to such term in Section 2.23(a).
“Facility”
means any real property (including all buildings, fixtures or other improvements located thereon) now, hereafter or, except with
respect to Articles 5 and 6, hereof owned, leased, operated or used by the Borrower or any of its Restricted Subsidiaries.
“Failed Auction”
has the meaning assigned to such term in the definition of “Dutch Auction”.
“Fair Market
Value” means, with respect to any property, assets (including Capital Stock and Indebtedness) or obligations, the fair
market value thereof as reasonably determined by the Borrower (after taking into account, with respect to property and assets,
any liabilities with respect thereto that impact such fair market value).
“FATCA”
means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively
comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof,
any agreements entered into pursuant to current Section 1471(b)(1) of the Code (or any amended or successor version described
above), any intergovernmental agreement between the U.S. and any other jurisdiction that facilitates the implementation of such
Sections of the Code and any treaty, law, regulation or other official guidance enacted in any other jurisdiction relating to any
such intergovernmental agreement.
“FCPA”
has the meaning assigned to such term in Section 3.17(b).
“Federal Funds
Effective Rate” means, for any day, 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 that is a Business Day, the average of the quotations for such day for such transactions
received by Administrative Agent from three Federal funds brokers of recognized standing selected by it.
“Fee Letter”
means that certain Fee Letter, dated as of June 7, 2017, between Bank of America, Merrill Lynch, Pierce, Fenner &
Smith Incorporated, Jefferies Finance LLC, Morgan Stanley Senior Funding, Inc., Nomura Securities International, Inc.
and the Borrower and any other fee letter with respect to the Credit Facilities in effect on or after the Closing Date.
“First Lien
Agent” means the administrative agent, the trustee or other similar representative under the First Lien Credit Agreement.
“First Lien
Credit Agreement” means the First Lien Credit Agreement, dated as of the Closing Date, among, inter alios, Holdings,
the Borrower, the First Lien Agent and the lenders from time to time party thereto, and any other document governing any First
Lien Facilities.
“First Lien
Declined Proceeds” means Declined Proceeds (as defined in the First Lien Credit Agreement).
“First Lien
Facilities” means the credit facilities governed by the First Lien Credit Agreement and one or more debt facilities or
other financing arrangements (including indentures) providing for loans, notes or other long-term indebtedness that replace or
refinance such credit facilities, including any such replacement or refinancing facility or indenture that increases or decreases
the amount permitted to be borrowed thereunder or alters the maturity thereof and whether by the same or any other agent, lender
or group of lenders, and any amendments, supplements, modifications, extensions, renewals, restatements, amendments and restatements
or refundings thereof or any such indentures or credit facilities that replace or refinance such credit facility (or any subsequent
replacement thereof), in each case, to the extent permitted pursuant to Section 6.01(p) (or any other provision
in Section 6.01, so long as, if applicable, any corresponding Lien is (x) senior to the Liens securing the Initial
Loans and (y) permitted by Section 6.02).
“First Lien
Incremental Equivalent Debt” means any Incremental Equivalent Debt (as defined in the First Lien Credit Agreement as
in effect on the Closing Date or the equivalent term in the documentation governing any First Lien Facilities).
“First Lien
Leverage Ratio” means the ratio, as of any date of determination, of (a) Consolidated First Lien Debt to (b) Consolidated
Adjusted EBITDA, in each case for the Borrower and its Restricted Subsidiaries on a consolidated basis.
“First Lien
Obligations” means (a) the “Secured Obligations” as defined in the First Lien Credit Agreement and with
respect to any other First Lien Facilities, any equivalent term under such First Lien Facilities, (b) all unpaid principal
and accrued and unpaid interest and fees owing respect to any First Lien Incremental Equivalent Debt or any “Incremental
Loans” (as defined in the First Lien Credit Agreement or any equivalent term under any documentation governing any First
Lien Facilities) and (c) all unpaid principal and accrued and unpaid interest and fees owing with respect to any refinancing
Indebtedness in respect of any or all of the foregoing.
“First Lien
Obligations Payment Date” means the “Termination Date” as defined in the First Lien Credit Agreement (or
equivalent term under any document governing any other First Lien Facility).
“First Priority
Secured Obligations” means “Secured Obligations” (as defined in the First Lien Credit Agreement or the equivalent
term under the documents governing any other First Lien Facilities) and any other First Lien Facilities secured by the Collateral
on a pari passu basis with the Initial First Lien Term Loans (as incurred and secured on the Closing Date).
“Fiscal Quarter”
means a fiscal quarter of any Fiscal Year.
“Fiscal Year”
means the fiscal year of the Borrower ending on December, 31 of each calendar year.
“Fixed Basket”
means any category of exceptions, thresholds, baskets, or other provisions in this Agreement based on a fixed Dollar amount and/or
percentage of Consolidated Adjusted EBITDA or Consolidated Total Assets as of any date of determination (including in Article VI
and the Shared Fixed Incremental Amount and clause (b) of the definition of “Incremental Cap”).
“Foreign Lender”
means any Lender that is not a “United States person” within the meaning of Section 7701(a)(30) of the Code.
“Foreign Subsidiary”
means any Restricted Subsidiary that is not a Domestic Subsidiary.
“Foreign Subsidiary
Holdco” means a direct or indirect Restricted Subsidiary of the Borrower that (i) has no material assets other than
the capital stock and, if applicable, indebtedness of one or more subsidiaries that are Foreign Subsidiaries or other Foreign Subsidiary
Holdcos or (ii) is treated as a disregarded entity for U.S. federal income tax purposes and owns capital stock of one or more
Foreign Subsidiaries or other Foreign Subsidiary Holdcos.
“Funding Account”
has the meaning assigned to such term in Section 2.03(f).
“GAAP”
means generally accepted accounting principles in the U.S. in effect and applicable to the accounting period in respect of which
reference to GAAP is made, subject to Section 1.04(a); provided, that, unless the Borrower elects otherwise
or exercises its rights under Section 1.04(a), the accounting for operating leases and capital leases under GAAP as
in effect on the date hereof (including, without limitation, Accounting Standards Codification 840) shall apply for the purposes
of determining compliance with the provisions of this Agreement (including the definition of Capital Lease, Consolidated Total
Debt and Indebtedness), as applied by the Borrower in good faith.
“Governmental
Authority” means any federal, state, municipal, national or other government, governmental department, commission, board,
bureau, court, agency or instrumentality or political subdivision thereof or any entity or officer exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to any government or any court, in each case whether associated
with a state or locality of the U.S., the U.S., or a foreign government or any other political subdivision thereof, including central
banks and supra national bodies.
“Governmental
Authorization” means any permit, license, authorization, plan, directive, consent order or consent decree of or from
any Governmental Authority.
“Granting Lender”
has the meaning assigned to such term in Section 9.05(e).
“Guarantee”
of or by any Person (the “Guarantor”) means any obligation, contingent or otherwise, of the Guarantor guaranteeing
or having the economic effect of guaranteeing any Indebtedness or other monetary obligation of any other Person (the “Primary
Obligor”) in any manner and including any obligation of the Guarantor (a) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Indebtedness or other monetary obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the
purpose of assuring the owner of such Indebtedness or other monetary obligation of the payment thereof, (c) to maintain working
capital, equity capital or any other financial statement condition or liquidity of the Primary Obligor so as to enable the Primary
Obligor to pay such Indebtedness or other monetary obligation, (d) as an account party in respect of any letter of credit
or letter of guaranty issued to support such Indebtedness or monetary obligation, (e) entered into for the purpose of assuring
in any other manner the obligee in respect of such Indebtedness or other monetary obligation of the payment or performance thereof
or to protect such obligee against loss in respect thereof (in whole or in part) or (f) secured by any Lien on any assets
of such Guarantor securing any Indebtedness or other monetary obligation of any other Person, whether or not such Indebtedness
or monetary other obligation is assumed by such Guarantor (or any right, contingent or otherwise, of any holder of such Indebtedness
or other monetary obligation to obtain any such Lien); provided that the term “Guarantee” shall not include
endorsements for collection or deposit in the ordinary course of business, or customary and reasonable indemnity obligations in
effect on the Closing Date or entered into in connection with any acquisition, Disposition or other transaction permitted under
this Agreement (other than such obligations with respect to Indebtedness). The amount of any Guarantee shall be deemed to be an
amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such
Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined
by the guaranteeing Person in good faith.
“Hazardous Materials”
means any chemical, material, substance or waste, or any constituent thereof, which is prohibited, defined, listed or regulated
as “toxic”, “hazardous” or as a “pollutant” or “contaminant” or words of similar
meaning or effect by any Environmental Law, including asbestos and asbestos-related material.
“Hazardous Materials
Activity” means any past, current, proposed or threatened activity, event or occurrence involving any Hazardous Material,
including the use, manufacture, possession, storage, holding, presence, existence, location, Release, threatened Release, discharge,
placement, generation, transportation, processing, construction, treatment, abatement, removal, remediation, disposal, disposition
or handling of any Hazardous Material, and any corrective action or response action with respect to any of the foregoing.
“Hedge Agreement”
means any agreement with respect to any Derivative Transaction between any Loan Party or any Restricted Subsidiary and any other
Person.
“Hedging Obligations”
means, with respect to any Person, the obligations of such Person under any Hedge Agreement.
“Holdings”
has the meaning assigned to such term in the preamble to this Agreement.
“IFRS”
means international accounting standards within the meaning of the IAS Regulation 1606/2002, as in effect from time to time (subject
to the provisions of Section 1.04), to the extent applicable to the relevant financial statements.
“Immaterial
Subsidiary” means, as of any date of determination, any Restricted Subsidiary of the Borrower that has been designated
by the Borrower as an “Immaterial Subsidiary” for purposes of this Agreement, provided that the Consolidated
Total Assets and Consolidated Adjusted EBITDA (as so determined) of all Immaterial Subsidiaries shall not exceed 5.0% of Consolidated
Total Assets and 5.0% of Consolidated Adjusted EBITDA, in each case, of the Borrower and its Restricted Subsidiaries for the relevant
Test Period; provided further that, at all times prior to the first delivery of financial statements pursuant to Section 5.01(a) or
(b), this definition shall be applied based on the pro forma consolidated financial statements delivered pursuant
to Section 4.01.
“Immediate Family
Member” means, with respect to any individual, such individual’s child, stepchild, grandchild or more remote descendant,
parent, stepparent, grandparent, spouse, former spouse, domestic partner, former domestic partner, sibling, mother-in-law, father-in-law,
son-in-law and daughter-in-law (including adoptive relationships), any trust, partnership or other bona fide estate-planning vehicle
the only beneficiaries of which are any of the foregoing individuals, such individual’s estate (or an executor or administrator
acting on its behalf), heirs or legatees or any private foundation or fund that is controlled by any of the foregoing individuals
or any donor-advised fund of which any such individual is the donor.
“Incremental
Cap” means:
(a) the Shared Fixed Incremental Amount; plus
(b) the
aggregate amount of voluntary prepayments, redemptions, repurchases or other retirements of (i) the Loans, (ii) any Incremental
Facilities and Incremental Equivalent Debt, in each case, to the extent not increasing the Shared Fixed Incremental Amount pursuant
to clause (c) of the definition thereof, and (iii) any Replacement Loans and Replacement Notes in respect
of the preceding subclauses (i) and (ii) of this clause (b); provided, that, in each case,
(A) the relevant prepayment is not funded with Long-Term Funded Indebtedness, and (B) any such increase in the Incremental
Cap resulting from such prepayments, redemptions, repurchases or other retirements of (x) Indebtedness secured on a junior
priority basis with the respect to the Collateral initially incurred under this clause (b) or clause (c) below
may only be used to incur Incremental Facilities or Incremental Equivalent Debt that is secured on a junior priority basis with
respect to the Collateral or is unsecured and (y) unsecured Indebtedness may only be used to incur Incremental Facilities
or Incremental Equivalent Debt that is unsecured; plus
(c) an
unlimited amount so long as, in the case of this clause (c), after giving effect to the relevant Incremental Facility,
(i) if such Incremental Facility is secured by a Lien on the Collateral that is pari passu with the Lien securing the
Second Priority Secured Obligations, the Secured Leverage Ratio would not exceed 6.75:1.00 or (ii) if such Incremental Facility
is secured by a Lien on the Collateral that is junior to the Lien securing the Second Priority Secured Obligations or unsecured,
either (A) the Total Leverage Ratio would not exceed 6.75:1.00 or (B) in the case of unsecured Indebtedness only, the
Net Interest Coverage Ratio is not less than 2.00:1.00, in each case of this clause (c), calculated on a Pro Forma Basis,
including the application of the proceeds thereof (without “netting” the Cash proceeds of the applicable Incremental
Facility) and related transactions (and giving effect to other permitted pro forma adjustments).
“Incremental
Commitment” means any commitment made by a lender to provide all or any portion of any Incremental Facility or Incremental
Loans.
“Incremental
Equivalent Debt” has the meaning assigned to such term in Section 6.01(aa).
“Incremental
Facility” has the meaning assigned to such term in Section 2.22(a).
“Incremental
Loans” has the meaning assigned to such term in Section 2.22(a).
“Incurrence-Based
Basket” means any category of exceptions, thresholds, baskets, or other provisions in this Agreement based on complying
(including on a Pro Forma Basis) with any financial ratio (including, without limitation any First Lien Leverage Ratio, any Secured
Leverage Ratio, any Total Leverage Ratio, any Net Interest Coverage Ratio and/or clause (c) of the definition of Incremental
Cap).
“Indebtedness”
as applied to any Person means, without duplication, (a) all indebtedness for borrowed money; (b) that portion of obligations
with respect to Capital Leases to the extent recorded as a liability on a balance sheet (excluding the footnotes thereto) of such
Person prepared in accordance with GAAP; (c) all obligations of such Person evidenced by bonds, debentures, notes or similar
instruments to the extent the same would appear as a liability on a balance sheet (excluding the footnotes thereto) of such Person
prepared in accordance with GAAP; (d) any obligation owed for all or any part of the deferred purchase price of property or
services (other than any earn out obligation, purchase price and working capital adjustment obligations and any similar obligation
except to the extent reflected as a liability on the balance sheet (excluding the footnotes thereto) in accordance with GAAP and
not paid within thirty (30) days after becoming due and payable), which purchase price is due more than three hundred sixty four
(364) days from the date of incurrence of the obligation in respect thereof; (e) all Indebtedness of other Persons secured
by any Lien on any property or asset owned or held by such Person regardless of whether the Indebtedness secured thereby shall
have been assumed by such Person in an amount equal to the lesser of (i) the aggregate unpaid amount of such Indebtedness
and (ii) the Fair Market Value of the property or asset subject to such Lien; (f) the face amount of any letter of credit
issued for the account of such Person or as to which such Person is otherwise liable for reimbursement of drawings; (g) the
Guarantee by such Person of the Indebtedness of another; (h) all obligations of such Person in respect of any Disqualified
Capital Stock and (i) all net obligations of such Person in respect of any Derivative Transaction, including any Hedge Agreement,
whether or not entered into for hedging or speculative purposes. For all purposes hereof, the Indebtedness of any Person shall
include the Indebtedness of any partnership or any joint venture (other than any joint venture that is itself a corporation or
limited liability company) in which such Person is a general partner or a joint venturer, except to the extent such Person’s
liability for such Indebtedness is otherwise limited and only to the extent such Indebtedness would otherwise be included in the
calculation of Consolidated Total Debt; provided that, notwithstanding anything herein to the contrary, the term “Indebtedness”
shall exclude, and shall be calculated without giving effect to, (A) the effects of Accounting Standards Codification Topic
815 and related interpretations to the extent such effects would otherwise increase or decrease an amount of Indebtedness for any
purpose hereunder as a result of accounting for any embedded derivatives created by the terms of such Indebtedness and any such
amounts that would have constituted Indebtedness hereunder but for the application of this proviso shall not be deemed an incurrence
of Indebtedness hereunder, (B) the effects of Statement of Financial Accounting Standards No. 133 and related interpretations
to the extent such effects would otherwise increase or decrease an amount of Indebtedness for any purpose under this Agreement
as a result of accounting for any embedded derivative created by the terms of such Indebtedness (it being understood that any such
amounts that would have constituted Indebtedness under this Agreement but for the application of this sentence shall not be deemed
to be an incurrence of Indebtedness under this Agreement), (C) liabilities under vendor agreements to the extent such liabilities
may be satisfied exclusively through non-cash means such as purchase volume earning credits, (D) reserves for deferred taxes,
(E) any obligations incurred under ERISA, (F) accrued expenses and trade accounts payable in the ordinary course of business
(including on an inter-company basis), (G) liabilities associated with customer prepayments and deposits, (H) Indebtedness
that is non-recourse to the credit of such Person and (I) for all purposes under this Agreement other than for purposes of
Section 6.01, intercompany Indebtedness among Holdings and its Restricted Subsidiaries.
“Indemnified
Taxes” means Taxes, other than Excluded Taxes or Other 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.
“Indemnitee”
has the meaning assigned to such term in Section 9.03(b).
“Information”
has the meaning set forth in Section 3.11(a).
“Initial Borrower”
has the meaning assigned to such term in the preamble to this Agreement.
“Initial Committed
Lenders” means Bank of America, Owl Rock Capital Corporation and Apollo Capital Management, L.P. on behalf of certain
of its funds and managed accounts, in their capacities as Lenders on the Closing Date.
“Initial First
Lien Term Loan” has the meaning assigned to such term in the Recitals to this Agreement.
“Initial Lender”
means any Lender with an Initial Loan Commitment or holding Initial Loans.
“Initial Loan
Commitment” means, with respect to each Initial Lender, the commitment of such Initial Lender to make Initial Loans hereunder
in an aggregate amount not to exceed the amount set forth opposite such Initial Lender’s name on the Commitment Schedule,
as the same may be reduced or increased from time to time pursuant to (i) assignments by or to such Initial Lender pursuant
to Section 9.05 or (ii) an Additional Commitment of the same Class. The aggregate amount of the Initial Loan Commitments
on the Closing Date is $285,000,000.
“Initial Loan
Maturity Date” means the date that is eight years after the Closing Date.
“Initial Loans”
means the term loans made by the Lenders to the Borrower pursuant to Section 2.01(a).
“Intellectual
Property Security Agreement” means any agreement executed on or after the Closing Date confirming or effecting the grant
of any Lien on IP Rights owned by any Loan Party to the Administrative Agent, for the benefit of the Secured Parties, in accordance
with this Agreement and the Security Agreement, including any of the following: (a) a Trademark Security Agreement substantially
in the form attached as an exhibit to the Security Agreement, (b) a Patent Security Agreement substantially in the form attached
as an exhibit to the Security Agreement or (c) a Copyright Security Agreement attached as an exhibit to the Security Agreement,
together with any and all supplements or amendments thereto.
“Intercreditor
Agreements” means the ABL Intercreditor Agreement, the Pari Passu Intercreditor Agreement (as defined in the First Lien
Credit Agreement) (if any) and/or the Term Intercreditor Agreement, as the context may require.
“Interest Election
Request” means a request by the Borrower in the form of Exhibit D or another form reasonably acceptable to
the Administrative Agent to convert or continue a Borrowing in accordance with Section 2.08.
“Interest Payment
Date” means (a) with respect to any ABR Loan, the last Business Day of each March, June, September and December (commencing
on September 30, 2017) or the maturity date applicable to such Loan, (b) with respect to any LIBO Rate Loan, the last
day of the Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a LIBO Rate Borrowing with
an Interest Period of more than three months’ duration, each day that would have been an Interest Payment Date had successive
Interest Periods of three months’ duration been applicable to such Borrowing and (c) to the extent necessary to create
a fungible Class of Loans in connection with the incurrence of any Additional Loans, as reasonably determined by the Administrative
Agent and the Borrower, the date of the incurrence of such Additional Loans.
“Interest Period”
means with respect to any LIBO Rate Borrowing, the period commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months (or, to the extent available to all relevant affected
Lenders, twelve months) thereafter, as the Borrower may elect; provided that (i) if any Interest Period would end on
a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding
Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business
Day, (ii) any Interest Period that commences on the last Business Day of a calendar month (or on a day for which there is
no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the
last calendar month of such Interest Period, (iii) the Borrower may not elect any interest period that would result in such
Interest Period extending beyond the Maturity Date and (iv) the initial Interest Period after the Closing Date shall be deemed
to end on August 31, 2017. For purposes hereof, the date of a Borrowing initially shall be the date on which such Borrowing
is made and thereafter shall be the effective date of the most recent conversion or continuation of such Borrowing.
“Investment”
means (a) any purchase or other acquisition by the Borrower or any of its Restricted Subsidiaries of any of the Securities
of any other Person (other than any Loan Party), (b) the acquisition by purchase or otherwise (other than any purchase or
other acquisition of inventory, materials, supplies and/or equipment in the ordinary course of business) of all or substantially
all of the business, property or fixed assets of any other Person or any division or line of business or other business unit of
any other Person and (c) any loan, advance (other than any advance to any current or former employee, officer, director, member
of management, manager, consultant or independent contractor of the Borrower, any Restricted Subsidiary or any Parent Company for
moving, entertainment and travel expenses, drawing accounts and similar expenditures in the ordinary course of business) or capital
contribution by the Borrower or any of its Restricted Subsidiaries to any other Person. Subject to Section 5.10, the
amount of any Investment shall be the original cost of such Investment, plus the cost of all additions thereto, without
any adjustments for increases or decreases in value, or write-ups, write-downs or write-offs with respect thereto, but giving effect
to any repayments of principal in the case of any Investment in the form of a loan and any return of capital or return on Investment
in the case of any equity Investment (whether as a distribution, dividend, redemption or sale but not in excess of the amount of
the relevant initial Investment).
“Investors”
means (a) the Sponsors, (b) the Co-Investors and (c) any other Person making a cash equity investment directly or
indirectly in any Parent Company after the Closing Date, so long as in the case of this clause (c), (i) no such Person’s
direct or indirect beneficial ownership of Holdings is greater than the Sponsors’ direct or indirect beneficial ownership
of Holdings, and (ii) the aggregate direct or indirect beneficial ownership of Holdings by such Persons does not exceed 40%
of the aggregate direct or indirect beneficial ownership of Holdings of all Investors collectively, in each case, other than any
Person who is a Lender on the Closing Date (and such Person shall not be deemed to be an Affiliate of an Investor under this Agreement).
“IP Rights”
has the meaning assigned to such term in Section 3.05(c).
“IRS”
means the U.S. Internal Revenue Service.
“Junior Lien
Indebtedness” means any Indebtedness that is secured by a security interest on the Collateral (other than Indebtedness
among Holdings and/or its subsidiaries) that is expressly junior or subordinated to the Lien on the Collateral securing the Initial
Loans (and any other Class of Loans that are Second Priority Secured Obligations).
“Junior Lien
Intercreditor Agreement” means an intercreditor agreement substantially in the form of the Term Intercreditor Agreement
with such conforming changes and modifications as are necessary or appropriate to the reflect the Second Priority Secured Obligations
as the “senior priority” obligations (i.e., as if the Second Priority Secured Obligations were “First Priority
Obligations” (as defined in the Term Intercreditor Agreement)) and the applicable Junior Lien Indebtedness were “Second
Priority Obligations” (as defined in the Term Intercreditor Agreement), including with respect to any other related definitions
and provisions, and any other material modifications which are reasonably acceptable to the Borrower, the Administrative Agent
and the Required Lenders.
“Latest Maturity
Date” means, as of any date of determination, the latest maturity or expiration date applicable to any Loan or commitment
hereunder at such time, including the latest maturity or expiration date of any Initial Loan, Additional Loan or Additional Commitment.
“LCT Election”
has the meaning assigned to such term in Section 1.10(a).
“LCT Test Date”
has the meaning assigned to such term in Section 1.10(a).
“Legal Reservations”
means the application of relevant Debtor Relief Laws, general principles of equity and/or principles of good faith and fair dealing.
“Lenders”
means the Initial Lenders, any Additional Lender, any lender with a Commitment or an outstanding Loan and any other Person that
becomes a party hereto pursuant to an Assignment and Assumption, other than any such Person that ceases to be a party hereto pursuant
to an Assignment and Assumption.
“Letter-of-Credit
Right” has the meaning set forth in Article 9 of the UCC.
“LIBO Rate”
means, the Published LIBO Rate, as adjusted to reflect applicable reserves prescribed by governmental authorities; provided
that, in no event shall the LIBO Rate be less than 0.00% per annum.
“LIBO Rate Loan”
means a Loan bearing interest at a rate determined by reference to the LIBO Rate.
“Lien”
means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, or
preference, priority or other security interest or preferential arrangement of any kind or nature whatsoever (including any conditional
sale or other title retention agreement, any easement, right of way or other encumbrance on title to real property, and any Capital
Lease having substantially the same economic effect as any of the foregoing), in each case, in the nature of security; provided
that in no event shall an operating lease in and of itself be deemed to constitute a Lien on any asset.
“Limited Condition
Transaction” has the meaning assigned to such term in Section 1.10(a).
“Loan Documents”
means this Agreement, any Promissory Note, each Loan Guaranty, the Collateral Documents, the Intercreditor Agreements, any other
applicable Acceptable Intercreditor Agreement, the Fee Letter and any other document or instrument designated by the Borrower and
the Administrative Agent as a “Loan Document.” Any reference in this Agreement or any other Loan Document to a Loan
Document shall include all appendices, exhibits or schedules thereto.
“Loan Guaranty”
means (a) the Second Lien Loan Guaranty, dated as of the date hereof, executed by each Loan Party party thereto and by the
Administrative Agent for the benefit of the Secured Parties and (b)(i) each other guaranty agreement in substantially the
form attached as Exhibit H, (ii) another form of guaranty that is otherwise reasonably satisfactory to the Administrative
Agent and the Borrower or (iii) any supplement or joinder to any of the foregoing, in each case, executed by any Person pursuant
to Section 5.12 or as provided in the definition of “Subsidiary Guarantor”.
“Loan Parties”
means Holdings, the Borrower, each Subsidiary Guarantor, and in each case their respective successors and permitted assigns.
“Loans”
means any Initial Loan, any Additional Loan and any loan under any other Credit Facility.
“Long-Term Funded
Indebtedness” means any funded Indebtedness of the Borrower or its Restricted Subsidiaries) having a maturity of greater
than one (1) year; provided, that Long-Term Funded Indebtedness shall exclude all Indebtedness under any revolving
credit facility or line of credit.
“Margin Stock”
has the meaning assigned to such term in Regulation U.
“Material Adverse
Effect” means (a) for any purpose on or prior to the Closing Date, a Closing Date Material Adverse Effect and (b) for
any purpose after the Closing Date, a material adverse effect on (i) the business, assets, financial condition or results
of operations, in each case, of Holdings, the Borrower and its Restricted Subsidiaries, taken as a whole, (ii) the rights
and remedies (taken as a whole) of the Administrative Agent (on behalf of the Lenders) under the applicable Loan Documents or (iii) the
ability of the Loan Parties (taken as a whole) to perform their payment obligations under the applicable Loan Documents.
“Material Debt
Instrument” means any promissory note payable to, or in favor, of a Loan Party with an aggregate principal amount outstanding,
in each case, of not less than $15,000,000.
“Maturity Date”
means (a) with respect to the Initial Loans, the Initial Loan Maturity Date, (b) as to any Replacement Loans incurred
pursuant to Section 9.02(c), the final maturity date for such Replacement Loan as set forth in the applicable Refinancing
Amendment, (c) with respect to any Incremental Loans, the final maturity date set forth in the applicable documentation with
respect thereto and (e) with respect to any other Loans, the final maturity date for such Loans as set forth in the applicable
Credit Facility.
“Maximum Rate”
has the meaning assigned to such term in Section 9.19.
“Merger”
has the meaning assigned to such term in the Recitals to this Agreement.
“Merger Agreement”
means that certain Agreement and Plan of Merger, dated as of June 7, 2017, by and among, inter alios, Holdings, the
Initial Borrower, the Company and the other parties thereto, together with the exhibits and disclosure schedules thereto.
“Minimum Extension
Condition” has the meaning assigned to such term in Section 2.23(b).
“Moody’s”
means Moody’s Investors Service, Inc.
“Multiemployer
Plan” means any employee benefit plan which is a “multiemployer plan” as defined in Section 3(37) of
ERISA, that is subject to the provisions of Title IV of ERISA, and in respect of which the Borrower or any of its Restricted Subsidiaries,
or any of their respective ERISA Affiliates, makes or is obligated to make contributions or with respect to which any of them has
any ongoing obligation or liability, contingent or otherwise.
“Narrative Report”
means, with respect to the financial statements with respect to which it is delivered, a management discussion and narrative report
describing the operations of Holdings, the Borrower and its Restricted Subsidiaries for the applicable Fiscal Quarter or Fiscal
Year and for the period from the beginning of the then-current Fiscal Year to the end of the period to which the relevant financial
statements relate.
“Net Insurance/Condemnation
Proceeds” means an amount equal to: (a) any Cash payments or proceeds (including Cash Equivalents) received by the
Borrower or any of its Restricted Subsidiaries (i) under any casualty insurance policy in respect of a covered loss thereunder
of any assets of the Borrower or any of its Restricted Subsidiaries or (ii) as a result of the taking of any assets of the
Borrower or any of its Restricted Subsidiaries by any Person pursuant to the power of eminent domain, condemnation or otherwise,
or pursuant to a sale of any such assets to a purchaser with such power under threat of such a taking, minus (b) (i) any
actual out-of-pocket costs and expenses incurred by the Borrower or any of its Restricted Subsidiaries in connection with the adjustment,
settlement or collection of any claims of the Borrower or the relevant Restricted Subsidiary in respect thereof, (ii) payment
of the outstanding principal amount of, premium or penalty, if any, and interest and other amounts on any Indebtedness (including
any First Lien Obligations, but excluding the Loans and any Indebtedness secured by a Lien that is pari passu with or expressly
subordinated to the Lien on the Collateral securing the Secured Obligations) that is secured by a Lien on the assets in question
and that is required to be repaid or otherwise comes due or would be in default under the terms thereof as a result of such loss,
taking or sale, (iii) in the case of a taking, the reasonable out-of-pocket costs of putting any affected property in a safe
and secure position, (iv) any selling costs and out-of-pocket expenses (including reasonable broker’s fees or commissions,
legal fees, accountants’ fees, investment banking fees, survey costs, title insurance premiums, and related search and recording
charges, transfer taxes, deed or mortgage recording taxes, other customary expenses and brokerage, consultant and other customary
fees actually incurred and paid to unaffiliated third parties in connection therewith, transfer and similar Taxes and the Borrower’s
good faith estimate of income Taxes paid or payable) in connection with any sale or taking of such assets as described in clause
(a) of this definition, (v) any amounts provided as a reserve in accordance with GAAP against any liabilities under
any indemnification obligation or purchase price adjustments associated with any sale or taking of such assets as referred to in
clause (a) of this definition (provided that to the extent and at the time any such amounts are released from
such reserve, such amounts shall constitute Net Insurance/Condemnation Proceeds) and (vi) in the case of any covered loss
or taking from a non-Wholly-Owned Subsidiary, the pro rata portion thereof (calculated without regard to this clause
(vi)) attributable to minority interests and not available for distribution to or for the account of the Borrower or a Wholly-Owned
Subsidiary as a result thereof.
“Net Interest
Coverage Ratio” means, as of any date of determination, the ratio of (a) Consolidated Adjusted EBITDA to (b) Consolidated
Interest Expense, in each case for the Borrower and its Restricted Subsidiaries on a consolidated basis.
“Net Proceeds”
means (a) with respect to any Disposition (including any Prepayment Asset Sale), the Cash proceeds (including Cash Equivalents
and Cash proceeds subsequently received (as and when received) in respect of non-Cash consideration initially received), net of
(i) selling costs and out-of-pocket expenses (including reasonable broker’s fees or commissions, legal fees, accountants’
fees, investment banking fees, survey costs, title insurance premiums, and related search and recording charges, transfer taxes,
deed or mortgage recording taxes, other customary expenses and brokerage, consultant and other customary fees actually incurred
and paid to unaffiliated third parties in connection therewith and transfer and similar Taxes and the Borrower’s good faith
estimate of income Taxes paid or payable (including pursuant to Tax sharing arrangements or any Tax distributions) in connection
with such Disposition including, in the case of a Disposition by a Foreign Subsidiary, any additional Taxes that are or would be
payable or reserved against as a result of repatriation), (ii) amounts provided as a reserve in accordance with GAAP against
any liabilities under any indemnification obligation or purchase price adjustment associated with such Disposition (provided
that to the extent and at the time any such amounts are released from such reserve, such amounts shall constitute Net Proceeds),
(iii) the principal amount, premium or penalty, if any, interest and other amounts on any Indebtedness (including any First
Lien Obligations, but excluding the Loans and any Indebtedness secured by a Lien that is pari passu with or expressly subordinated
to the Lien on the Collateral securing the Secured Obligations) which is secured by the asset sold in such Disposition and which
is required to be repaid or otherwise comes due or would be in default and is repaid (other than any such Indebtedness that is
assumed by the purchaser of such asset) (iv) Cash escrows (until released from escrow to the Borrower or any of its Restricted
Subsidiaries) from the sale price for such Disposition and (v) in the case of any Disposition by a non-Wholly-Owned Subsidiary,
the pro rata portion of the Net Proceeds thereof (calculated without regard to this clause (v)) attributable to minority
interests and not available for distribution to or for the account of the Borrower or a Wholly-Owned Subsidiary as a result thereof;
and (b) with respect to any issuance or incurrence of Indebtedness or Capital Stock, the Cash proceeds thereof, net of all
Taxes and customary fees, commissions, costs, underwriting discounts and other fees and expenses incurred in connection therewith.
“Non-Consenting
Lender” has the meaning assigned to such term in Section 2.19(b).
“Non-Debt Fund
Affiliate” means the Investors and their Affiliates (other than Holdings, the Borrower or their respective subsidiaries,
a natural person or any Affiliate thereof that is a Debt Fund Affiliate), and any direct or indirect parent of Holdings.
“Non-Guarantor
Subsidiary” means any subsidiary of the Borrower that is not a Subsidiary Guarantor.
“Obligations”
means all unpaid principal of and accrued and unpaid interest (including interest, fees and expenses accruing during the pendency
of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding)
on the Loans, Commitments, all accrued and unpaid fees and all expenses, reimbursements, indemnities and all other liabilities
and obligations of the Loan Parties to the Lenders or to any Lender, the Administrative Agent or any indemnified party arising
under the Loan Documents in respect of any Loan, whether direct or indirect (including those acquired by assumption), absolute,
contingent, due or to become due, now existing or hereafter arising.
“OFAC”
has the meaning assigned to such term in Section 3.17.
“Organizational
Documents” means (a) with respect to any corporation, its certificate or articles of incorporation or organization
and its by-laws, (b) with respect to any limited partnership, its certificate of limited partnership and its partnership agreement,
(c) with respect to any general partnership, its partnership agreement, (d) with respect to any limited liability company,
its articles of organization or certificate of formation, and its operating agreement, and (e) with respect to any other form
of entity, such other organizational documents required by local law or customary under such jurisdiction to document the formation
and governance principles of such type of entity. In the event that any term or condition of this Agreement or any other Loan Document
requires any Organizational Document to be certified by a secretary of state or similar governmental official, the reference to
any such “Organizational Document” shall only be to a document of a type customarily certified by such governmental
official.
“Other Agreed
Adjustments” means any add-backs and adjustments (including pro forma adjustments pursuant to clause (b)(xi) of
the definition of “Consolidated Adjusted EBITDA”), to the extent not otherwise included in Consolidated Net Income,
of the type reflected in (a) the Sponsor Model (b) the quality of earnings report delivered to the Initial Committed
Lenders on or prior to June 7, 2017, and (c) the confidential information memorandum in respect of the Initial Loans,
in each case, which add-backs and adjustments shall not, for the avoidance of doubt, be limited to the time periods or amounts
in respect of which such add backs and adjustments were identified therein.
“Other Applicable
Indebtedness” has the meaning assigned to such term in Section 2.11(b)(ii).
“Other Connection
Taxes” means, with respect to any Lender or the Administrative Agent, Taxes imposed as a result of a present or former
connection between such recipient and the jurisdiction imposing such Tax (other than connections arising solely from such recipient
having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected
a security interest under, or engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an
interest in any Loan or Loan Document).
“Other Taxes”
means any and all present or future stamp, court or documentary taxes or any intangible, recording, filing or other similar Taxes,
charges or similar levies arising from any payment made hereunder or from the execution, delivery or enforcement of, or otherwise
with respect to, this Agreement or any other Loan Document, but not including, for the avoidance of doubt, any such Taxes that
are Other Connection Taxes imposed with respect to an assignment, grant of a participation, designation of a different lending
office or other transfer (other than an assignment or designation of a different lending office made pursuant to Section 2.19)
or Excluded Taxes.
“Parent Company”
means Holdings and any other Person of which the Borrower is an indirect Wholly-Owned Subsidiary.
“Participant”
has the meaning assigned to such term in Section 9.05(c).
“Participant
Register” has the meaning assigned to such term in Section 9.05(c).
“Patent”
means the following: (a) any and all patents and patent applications; (b) all inventions described and claimed therein;
(c) all reissues, divisions, continuations, renewals, extensions and continuations in part thereof; (d) all income, royalties,
damages, claims, and payments now or hereafter due or payable under and with respect thereto, including, without limitation, damages
and payments for past, present and future infringements thereof; (e) all rights to sue for past, present, and future infringements
thereof; and (f) all rights corresponding to any of the foregoing.
“PBGC”
means the Pension Benefit Guaranty Corporation.
“Pension Plan”
means any “employee pension benefit plan”, as defined in Section 3(2) of ERISA (other than a Multiemployer
Plan), that is subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, which
the Borrower or any of its Restricted Subsidiaries, or any of their respective ERISA Affiliates, maintains or contributes to or
has an obligation to contribute to, or otherwise has any liability, contingent or otherwise.
“Perfection
Certificate” means a certificate substantially in the form of Exhibit E.
“Perfection
Certificate Supplement” means a supplement to the Perfection Certificate substantially in the form of Exhibit F.
“Perfection
Requirements” means the filing of appropriate financing statements with the office of the Secretary of State or other
appropriate office of the state of organization of each Loan Party, the filing of appropriate assignments or notices with the U.S.
Patent and Trademark Office and the U.S. Copyright Office, in each case in favor of the Administrative Agent for the benefit of
the Secured Parties and the delivery to the Administrative Agent (or the First Lien Agent as bailee and agent for the Administrative
Agent) of any stock certificate or Material Debt Instrument required to be delivered pursuant to the applicable Loan Documents,
together with instruments of transfer executed in blank, in each case, subject in all respects to the definitions of “Collateral
and Guarantee Requirement” and “Excluded Assets” and the last paragraph of Section 4.01.
“Permitted Acquisition”
means any acquisition by the Borrower or any of its Restricted Subsidiaries, whether by purchase, merger, amalgamation or otherwise,
of all or substantially all of the assets of, or any business line, unit or division or product line of, any Person or of a majority
of the outstanding Capital Stock of any Person (but in any event including any Investment in (x) any Person that results in
such Person becoming a Restricted Subsidiary of the Borrower, (y) any Restricted Subsidiary which serves to increase the Borrower’s
or any Restricted Subsidiary’s respective equity ownership in such Restricted Subsidiary or (z) any joint venture for
the purpose of increasing the Borrower’s or its relevant Restricted Subsidiary’s ownership interest in such joint venture);
provided, that the total consideration paid by Loan Parties (including pursuant to an Investment in any Restricted Subsidiary)
for (a) the Capital Stock of any Person that does not become a Guarantor and (b) in the case of an asset acquisition,
assets that are not acquired by the Borrower or any Guarantor, when taken together with the total consideration for all such Persons
and assets so acquired after the Closing Date, shall not exceed an amount outstanding equal to the sum of (i) the greater
of $72,000,000 and 42.0% of Consolidated Adjusted EBITDA and (ii) amounts otherwise available under clauses (b)(iii),
(d) (solely with respect to Investments in joint ventures) (q), (r), (bb) and (dd) of Section 6.06;
provided, further, that the limitation described in the foregoing proviso shall not apply (A) to any acquisition
to the extent such acquisition is made with the proceeds of sales of the Qualified Capital Stock of, or common equity capital contributions
to, the Borrower or any Restricted Subsidiary, (B) to any acquisition to the extent at least 75.0% of the Consolidated Adjusted
EBITDA (as determined by the Borrower in good faith) of the Person(s) (or assets) acquired in such acquisition (for this purpose
and for the component definitions used therein, determined on a consolidated basis for such Persons and their respective Restricted
Subsidiaries) is generated by Person(s) that will become (or, in the case of asset acquisitions, are acquired by) Subsidiary
Guarantors (or, if less than 75.0%, after giving pro forma effect thereto, the percentage of Consolidated Adjusted EBITDA
attributable to Loan Parties would be greater than the percentage immediately prior thereto), (C) to the portion of such consideration
provided by Restricted Subsidiaries that are not Loan Parties, including through cash flow, asset sale proceeds and Indebtedness
proceeds of such Restricted Subsidiaries and/or (D) if the Total Leverage Ratio would not exceed 6.25:1.00 calculated on a
Pro Forma Basis. In the event the amount available under the first proviso above is reduced as a result of any acquisition of any
Restricted Subsidiary that does not become a Loan Party (or any assets that are not transferred to a Loan Party) and such Restricted
Subsidiary subsequently becomes a Loan Party (or such assets are subsequently transferred to a Loan Party), the amount available
under such limit shall be proportionately increased as a result thereof.
“Permitted Holders”
means (a) the Investors and (b) any Person with which one or more Investors form a “group” (within the meaning
of Section 14(d) of the Exchange Act) so long as, in the case of this clause (b), the relevant Investors beneficially
own more than 50% of the relevant voting stock beneficially owned by the group.
“Permitted Liens”
means Liens permitted pursuant to Section 6.02.
“Permitted Senior
Secured Debt” means any Indebtedness permitted under Section 6.01 that is secured by the Collateral on a
“senior priority basis” or a pari passu basis with the Second Priority Secured Obligations (which shall be deemed
to include any ABL Facility secured on a Split Collateral Basis (including the ABL Facility as of the Closing Date) subject to
an ABL Intercreditor Agreement), including, in each case, any refinancing of such Indebtedness permitted under Section 6.01.
“Person”
means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental
Authority or any other entity.
“Plan”
means any “employee pension benefit plan” within the meaning of Section 3(2) of ERISA (other than a Multiemployer
Plan) maintained by the Borrower or any of its Restricted Subsidiaries for employees of the Borrower or any of its Restricted Subsidiaries
or any such Pension Plan to which the Borrower or any of its Restricted Subsidiaries is required to contribute on behalf of any
of its employees.
“Platform”
has the meaning assigned to such term in Section 9.01(d).
“Prepayment
Asset Sale” means any Disposition by the Borrower or its Restricted Subsidiaries made pursuant to, Section 6.07(h),
Section 6.07(n), Section 6.07(q), clause (ii) to the proviso to Section 6.07(r) (to
the extent provided therein) and Section 6.08.
“Primary Obligor”
has the meaning assigned to such term in the definition of “Guarantee”.
“Prime Rate”
means the rate set by Bank of America based upon various factors including Bank of America’s costs and desired return, general
economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above,
or below such announced rate.
“Pro Forma Basis”
or “pro forma effect” means, as to any calculation of any financial ratio or test (including the Total
Leverage Ratio, the First Lien Leverage Ratio, the Secured Leverage Ratio, the Net Interest Coverage Ratio, Consolidated Adjusted
EBITDA, Consolidated Total Assets or any component definitions of any of the foregoing), such financial ratio or test shall be
calculated on a pro forma basis in accordance with Section 1.10 and shall give pro forma effect to any
Specified Transactions (and if applicable, any Limited Condition Transaction) and other pro forma adjustments pursuant to
Section 1.10.
“Projections”
means the projections of the Borrower and its subsidiaries included in the Sponsor Model, including any financial estimates, forecasts
and other forward looking financial information set forth therein.
“Promissory
Note” means a promissory note of the Borrower payable to any Lender or its registered assigns, in substantially the form
of Exhibit G, evidencing the aggregate outstanding principal amount of Loans of the Borrower to such Lender resulting
from the Loans made by such Lender.
“Public Company
Costs” means any Charge associated with, or in anticipation of, or preparation for, compliance with the requirements
of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in connection therewith and Charges relating to
compliance with the provisions of the Securities Act and the Exchange Act (and, in each case, similar Requirements of Law under
other jurisdictions), as applicable to companies with equity or debt securities held by the public, the rules of national
securities exchange companies with listed equity or debt securities, directors’ or managers’ compensation, fees and
expense reimbursement, any Charge relating to investor relations, shareholder meetings and reports to shareholders or debtholders,
directors’ and officers’ insurance and other executive costs, legal and other professional fees and listing fees.
“Public Lender”
has the meaning assigned to such term in Section 9.01(d).
“Published LIBO
Rate” means, with respect to any Interest Period when used in reference to any Loan or Borrowing, (a) the rate of
interest as published on the applicable Bloomberg screen page (or on any successor or substitute page of such service,
or any successor to such service as determined by Administrative Agent) as the London interbank offered rate for deposits in Dollars
for a term comparable to such Interest Period, at approximately 11:00 a.m. (London time) on the date which is two Business
Days prior to the commencement of such Interest Period (but if more than one rate is specified on such page, the rate will be an
arithmetic average of all such rates) and (b) if such rate is not available at such time for any reason, then the “Published
LIBO Rate” for such Interest Period shall be the interest rate per annum reasonably determined by the Administrative Agent
in good faith to be the rate per annum at which deposits in Dollars for delivery on the first day of such Interest Period in immediately
available funds in the approximate amount of the LIBO Rate Loan being made, continued or converted by the Administrative Agent
and with a term equivalent to such Interest Period would be offered to the Administrative Agent by major banks in the London or
other offshore interbank market for Dollars at their request at approximately 11:00 a.m. (London time) two Business Days prior
to the commencement of such Interest Period.
“Qualified Capital
Stock” of any Person means any Capital Stock of such Person that is not Disqualified Capital Stock.
“Qualifying
Bid” has the meaning assigned to such term in the definition of “Dutch Auction”.
“Qualifying
IPO” means the issuance and sale by the Borrower or any Parent Company of its common Capital Stock in an underwritten
primary public offering (other than a public offering pursuant to a registration statement on Form S-8) pursuant to an effective
registration statement filed with the SEC in accordance with the Securities Act (whether alone or in connection with a secondary
public offering) pursuant to which Net Proceeds of at least $35,000,000 are received by, or contributed to, the Borrower.
“Qualifying
Lender” has the meaning assigned to such term in the definition of “Dutch Auction”.
“Real Estate
Asset” means, at any time of determination, all right, title and interest (fee, leasehold or otherwise) of any Loan Party
in and to real property (including, but not limited to, land, improvements and fixtures thereon).
“Refinancing”
has the meaning assigned to such term in Section 4.01(p).
“Refinancing
Amendment” means an amendment to this Agreement in form and substance reasonably satisfactory to the Administrative Agent
and the Borrower executed by (a) Holdings and the Borrower, (b) the Administrative Agent and (c) each Lender that
agrees to provide all or any portion of the Replacement Loans being incurred pursuant thereto and in accordance with Section 9.02(c).
“Refinancing
Indebtedness” has the meaning assigned to such term in Section 6.01(p).
“Refunding Capital
Stock” has the meaning assigned to such term in Section 6.04(a)(ix).
“Register”
has the meaning assigned to such term in Section 9.05(b)(iv).
“Regulation
D” means Regulation D of the Board as from time to time in effect and all official rulings and interpretations thereunder
or thereof.
“Regulation
T” means Regulation T of the Board as from time to time in effect and all official rulings and interpretations thereunder
or thereof.
“Regulation
U” means Regulation U of the Board as from time to time in effect and all official rulings and interpretations thereunder
or thereof.
“Regulation
X” means Regulation X of the Board as from time to time in effect and all official rulings and interpretations thereunder
or thereof.
“Related Funds”
means, with respect to any Lender that is an Approved Fund, any other Approved Fund that is managed by the same investment advisor
as such Lender or by an Affiliate of such investment advisor.
“Related Parties”
means, with respect to any specified Person, such Person’s Affiliates and the respective directors, managers, officers, trustees,
employees, partners, agents, advisors and other representatives of such Person and such Person’s Affiliates.
“Release”
means any release, spill, emission, leaking, pumping, pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping,
leaching or migration of any Hazardous Material into the Environment, including the movement of any Hazardous Material through
the air, soil, surface water or groundwater.
“Replaced Loans”
has the meaning assigned to such term in Section 9.02(c).
“Replacement
Loans” has the meaning assigned to such term in Section 9.02(c).
“Replacement
Notes” means any Refinancing Indebtedness (whether issued in a public offering, Rule 144A under the Securities Act
or other private placement or bridge financing in lieu of the foregoing or otherwise) incurred in respect of Indebtedness permitted
under Section 6.01(a).
“Reply Amount”
has the meaning assigned to such term in the definition of “Dutch Auction”.
“Reply Price”
has the meaning assigned to such term in the definition of “Dutch Auction”.
“Representative”
has the meaning assigned to such term in Section 9.13.
“Required Excess
Cash Flow Percentage” means, as of any date of determination, (a) if the Secured Leverage Ratio is greater than
4.75:1.00, 50%, (b) if the Secured Leverage Ratio is less than or equal to 4.75:1.00 and greater than 4.00:1.00, 25% and (c) if
the Secured Leverage Ratio is less than or equal to 4.00:1.00, 0%; it being understood and agreed that, for purposes of this definition
as it applies to the determination of the amount of Excess Cash Flow that is required to be applied to prepay the Loans under Section 2.11(b)(i) for
any Calculation Period, the Secured Leverage Ratio shall be determined on a Pro Forma Basis as of the last day of the relevant
Calculation Period (but without giving effect to the mandatory payment itself from Excess Cash Flow required by Section 2.11(b)(i)).
“Required Facility
Lenders” means, with respect to any Credit Facility of any Class, at any time, Lenders having Loans or unused Commitments
representing more than 50% of the sum of the total Loans and such unused commitments under such Credit Facility at such time.
“Required Lenders”
means, at any time, Lenders having Loans or unused Commitments representing more than 50% of the sum of the total Loans and such
unused Commitments at such time.
“Requirements
of Law” means, with respect to any Person, collectively, the common law and all federal, state, local, foreign, multinational
or international laws, statutes, codes, treaties, standards, rules and regulations, guidelines, ordinances, orders, judgments,
writs, injunctions, decrees (including administrative or judicial precedents or authorities) and the interpretation or administration
thereof by, and other determinations, directives, requirements or requests of any Governmental Authority, in each case whether
or not having the force of law and that are applicable to or binding upon such Person or any of its property or to which such Person
or any of its property is subject.
“Responsible
Officer” of any Person means the chief executive officer, the president, the chief financial officer, the treasurer,
any assistant treasurer, any executive vice president, any senior vice president, any vice president or the chief operating officer
of such Person and any other individual or similar official thereof responsible for the administration of the obligations of such
Person in respect of this Agreement, and, as to any document delivered on the Closing Date, shall include any secretary or assistant
secretary or any other individual or similar official thereof with substantially equivalent responsibilities of a Loan Party and,
solely for purposes of notices given pursuant to Article II, any other officer of the applicable Loan Party so designated
by any of the foregoing officers in a notice to the Administrative Agent or any other officer or employee of the applicable Loan
Party designated in or pursuant to an agreement between the applicable Loan Party and the Administrative Agent. Any document delivered
hereunder that is signed by a Responsible Officer of any Loan Party shall be conclusively presumed to have been authorized by all
necessary corporate, partnership and/or other action on the part of such Loan Party, and such Responsible Officer shall be conclusively
presumed to have acted on behalf of such Loan Party.
“Responsible
Officer Certification” means, with respect to the financial statements for which such certification is required, the
certification of a Responsible Officer of the Borrower that such financial statements fairly present, in all material respects,
in accordance with GAAP, the consolidated financial condition of the Borrower as at the dates indicated and its consolidated income
and cash flows for the periods indicated, subject to changes resulting from audit and normal year-end adjustments.
“Restricted
Amount” has the meaning set forth in Section 2.11(b)(iv)(B).
“Restricted
Debt” has the meaning set forth in Section 6.04(b).
“Restricted
Debt Payment” has the meaning set forth in Section 6.04(b).
“Restricted
Payment” means (a) any dividend or other distribution on account of any shares of any class of the Capital Stock
of the Borrower, except a dividend payable solely in shares of Qualified Capital Stock to the holders of such class; (b) any
redemption, retirement, sinking fund or similar payment, purchase or other acquisition for value of any shares of any class of
the Capital Stock of the Borrower and (c) any payment made to retire, or to obtain the surrender of, any outstanding warrants,
options or other rights to acquire shares of any class of the Capital Stock of the Borrower now or hereafter outstanding.
“Restricted
Subsidiary” means, as to any Person, any subsidiary of such Person that is not an Unrestricted Subsidiary. Unless otherwise
specified, “Restricted Subsidiary” shall mean any Restricted Subsidiary of the Borrower.
“Return Bid”
has the meaning assigned to such term in the definition of “Dutch Auction”.
“S&P”
means Standard & Poor’s Financial Services LLC, a subsidiary of the McGraw-Hill Companies, Inc.
“Sale and Lease-Back
Transaction” has the meaning assigned to such term in Section 6.08.
“Sanctions”
has the meaning assigned to such term in Section 3.17.
“SEC”
means the Securities and Exchange Commission, or any Governmental Authority succeeding to any or all of its functions.
“Second Lien
Pari Passu Intercreditor Agreement” means an intercreditor creditor agreement substantially in the form of the Pari Passu
Intercreditor Agreement attached as Exhibit N to the First Lien Credit Agreement as of the Closing Date with such conforming
changes and modifications as are necessary or appropriate to the reflect the Second Priority Secured Obligations as “Credit
Agreement Obligations” (as defined in such Pari Passu Intercreditor Agreement), including with respect to any other related
definitions and provisions, and any other material modifications which are reasonably acceptable to the Borrower, the Administrative
Agent and the Required Lenders.
“Second Priority”
means, with respect to any Lien purported to be created in any Collateral pursuant to any Collateral Document, that, subject to
the Intercreditor Agreements (and any other applicable Acceptable Intercreditor Agreement), such Lien is (a) secured by a
Lien on the Collateral “second lien” basis pari passu with the Initial Loans (and any other Class of Loans
that are Second Priority Secured Obligations), (b) junior in priority to any other Lien to which such Collateral is subject
on a “senior secured priority” basis, including any First Lien Obligations, and (c) senior in priority to any
other Lien on the Collateral securing Junior Lien Indebtedness, in each case, other than any Permitted Liens.
“Second Priority
Secured Obligations” means the Secured Obligations in respect of the Initial Loans and any other Credit Facilities secured
by the Collateral on a pari passu basis with the Initial Loans (as incurred and secured on the Closing Date).
“Secured Leverage
Ratio” means the ratio, as of any date of determination, of (a) Consolidated Secured Debt to (b) Consolidated
Adjusted EBITDA, in each case for the Borrower and its Restricted Subsidiaries on a consolidated basis.
“Secured Obligations”
means all Obligations.
“Secured Parties”
means (a) the Lenders, (b) the Administrative Agent and (c) the beneficiaries of each indemnification obligation
undertaken by any Loan Party under any Loan Document.
“Securities”
means any stock, shares, units, partnership interests, voting trust certificates, certificates of interest or participation in
any profit-sharing agreement or arrangement, options, warrants, bonds, debentures, notes, or other evidences of indebtedness, secured
or unsecured, convertible, subordinated or otherwise, or in general any instruments commonly known as “securities”
or any certificates of interest, shares or participations in temporary or interim certificates for the purchase or acquisition
of, or any right to subscribe to, purchase or acquire, any of the foregoing; provided that “Securities” shall
not include any earn-out agreement or obligation or any employee bonus or other incentive compensation plan or agreement.
“Securities
Act” means the Securities Act of 1933 and the rules and regulations of the SEC promulgated thereunder.
“Security Agreement”
means the Second Lien Pledge and Security Agreement, substantially in the form of Exhibit I, among the Loan Parties
and the Administrative Agent for the benefit of the Secured Parties.
“Shared Fixed
Incremental Amount” means an amount equal to (a) the greater of $125,000,000 and an amount equal to 75.0% of Consolidated
Adjusted EBITDA for the most recently ended four consecutive Fiscal Quarters for which financial statements are internally available,
minus (b) to the extent issued and/or incurred under this Shared Fixed Incremental Amount, the aggregate principal
amount of all Incremental Facilities, Incremental Equivalent Debt, and all First Lien Incremental Equivalent Debt and all
“Incremental Facilities” (as defined under the First Lien Credit Agreement or any equivalent term under any documentation
governing any First Lien Facilities having a “fixed” incremental basket or cap shared with the Incremental Facilities
and Incremental Equivalent Debt), plus (c) the aggregate amount of voluntary prepayments, redemptions, repurchases
and other retirements of indebtedness referred to in clause (b) above and any Replacement Loans, Replacement Notes
and any equivalent term under the documentation governing any First Lien Facilities, in respect of such Indebtedness referred to
in clause (b) above (with, in the case of any revolving facility, a corresponding reduction in commitments) to the
extent such prepayments, redemptions, repurchases and other retirements were not funded with Long-Term Funded Indebtedness.
“SPC”
has the meaning assigned to such term in Section 9.05(e).
“Specified Merger
Agreement Representations” means the representations and warranties made by or on behalf of (or related to) the Company,
its subsidiaries or their respective businesses in the Merger Agreement which are material to the interests of the Lenders, but
which are required to be true and correct only to the extent that the Borrower (or its applicable Affiliate) has the right to terminate,
taking into account any cure provisions, its obligations under the Merger Agreement or to decline to consummate the Acquisition
as a result of a breach of such representations and warranties.
“Specified Representations”
means the representations and warranties set forth in Section 3.01(a)(i), Section 3.01(b) (as it relates
to the due authorization, execution, delivery and performance of the Loan Documents and the enforceability thereof), Section 3.02
(as it relates to the due authorization, execution, delivery and performance of the Loan Documents and the enforceability thereof),
Section 3.03(b)(i), Section 3.08, Section 3.12, Section 3.14 (as it relates to
the creation, validity and perfection of the security interests in the Collateral, subject to the last paragraph of Section 4.01),
Section 3.16 and Sections 3.17(a)(ii), (b)(ii) and (c).
“Specified Transaction”
means (a) (i) any incurrence or issuance of any Indebtedness (excluding any borrowings under any ABL Facility or any
Additional Revolving Facility (as defined in the First Lien Credit Agreement) incurred substantially concurrently with such Specified
Transaction), and (ii) any prepayment, redemptions, repurchases and other retirements of any Indebtedness (in the case of
any ABL Facility or any Additional Revolving Facility (as defined in the First Lien Credit Agreement), to the extent accompanied
by a permanent reduction in the commitments thereunder), (b) to the extent applicable in determining the First Lien Leverage
Ratio or the Secured Leverage Ratio, the incurrence of any Lien on Collateral, (c) any Permitted Acquisition and any Investment
that results in a Person becoming a Restricted Subsidiary, (d) any Restricted Payment, (e) any Restricted Debt Payment,
(f) any Disposition, whether by purchase, merger or otherwise, of (i) all or substantially all of the assets of, or any
business line, unit or division or product line of, the Borrower or any Restricted Subsidiary, (ii) the Capital Stock of any
Restricted Subsidiary that results in such Restricted Subsidiary no longer being a Restricted Subsidiary of the Borrower, or (iii) any
asset pursuant to Section 6.07(h) having a Fair Market Value greater than $50,000,000, (h) to the extent
elected by the Borrower to be excluded in calculating Consolidated Adjusted EBITDA, any designation of operations or assets of
the Borrower or a Restricted Subsidiary as discontinued operations in accordance with GAAP, (i) solely for the purposes of
determining the applicable amount of Cash and Cash Equivalents, any contribution of capital to (and the Net Proceeds from the issuance
of any Qualified Capital Stock by) the Borrower or a Restricted Subsidiary, (j) any designation of a Restricted Subsidiary
as an Unrestricted Subsidiary or an Unrestricted Subsidiary as a Restricted Subsidiary in compliance with this Agreement, and (i) any
other transaction that by the terms of this Agreement requires a financial ratio to be calculated on Pro Forma Basis or after giving
pro forma effect thereto.
“Split Collateral
Basis” means, with respect to any ABL Facility, the obligations thereunder are secured by ABL US Priority Collateral
(or similar current assets) on a senior priority basis relative to the First Priority Secured Obligations and the Second Priority
Secured Obligations and secured by all other Collateral on a junior priority basis relative to the First Priority Secured Obligations
and the Second Priority Secured Obligations, in each case, as provided in an ABL Intercreditor Agreement.
“Sponsors”
means (a) CCMP Capital Advisors, LLC and any of its controlled Affiliates and funds managed or advised by any of them or any
of their respective controlled Affiliates, (b) MSD Partners, L.P. and any of its controlled Affiliates and funds managed or
advised by any of them or any of their respective controlled Affiliates and (c) The Alberta Investment Management Corporation
(together with (i) any entity to which it directly or indirectly provides or will provide investment management services pursuant
to the Alberta Investment Management Corporation Act and (ii) any entity that directly or indirectly controls, is controlled
by or is under common control with one or more of the entities described in the foregoing clause (i), “AIMCo”).
“Sponsor Model”
means the financial model delivered by the Sponsors to the Initial Committed Lenders on June 10, 2017.
“Subject Loans”
means, as of any date of determination, any outstanding Loans subject to ratable prepayment requirements in accordance with Section 2.11(b)(vi) on
such date of determination.
“Subject Person”
has the meaning assigned to such term in the definition of “Consolidated Net Income”.
“Subject Proceeds”
has the meaning assigned to such term in Section 2.11(b)(ii).
“Subordinated
Indebtedness” means any Indebtedness (other than Indebtedness among Holdings and/or its subsidiaries) of the Borrower
or any of its Restricted Subsidiaries that is expressly subordinated in right of payment to the Obligations.
“subsidiary”
means, with respect to any Person, any corporation, partnership, limited liability company, association, joint venture or other
business entity of which more than 50% of the total voting power of stock or other ownership interests entitled (without regard
to the occurrence of any contingency) to vote in the election of the Person or Persons (whether directors, trustees or other Persons
performing similar functions) having the power to direct or cause the direction of the management and policies thereof is at the
time owned or controlled, directly or indirectly, by such Person or one or more of the other subsidiaries of such Person or a combination
thereof, in each case to the extent such entity’s financial results are required to be included in such Person’s consolidated
financial statements under GAAP; provided that in determining the percentage of ownership interests of any Person controlled
by another Person, no ownership interests in the nature of a “qualifying share” of the former Person shall be deemed
to be outstanding. Unless otherwise specified, “subsidiary” shall mean any subsidiary of the Borrower.
“Subsidiary
Guarantor” means (x) on the Closing Date, each Restricted Subsidiary of the Borrower (other than any subsidiary
that is an Excluded Subsidiary) and (y) thereafter, each subsidiary of the Borrower that guarantees the Secured Obligations
pursuant to the terms of this Agreement, in each case, until such time as the relevant subsidiary is released from its obligations
under the Loan Guaranty in accordance with the terms and provisions hereof. Notwithstanding the foregoing, the Borrower may elect,
in its sole discretion, to cause any Restricted Subsidiary that is not otherwise required to be a Subsidiary Guarantor to provide
a Loan Guaranty by causing such Restricted Subsidiary to execute a joinder to the Loan Guaranty in substantially the form attached
as an exhibit thereto, and any such Restricted Subsidiary shall be a Loan Party and Subsidiary Guarantor hereunder for all purposes;
provided that upon such election such Restricted Subsidiary shall no longer be deemed to be an Excluded Subsidiary; provided,
further, that the Borrower may elect to redesignate such Restricted Subsidiary as an Excluded Subsidiary (and such Restricted
Subsidiary shall be released from its Loan Guaranty pursuant to Section 9.22), provided that, at the time of
such designation, the Investments in such Restricted Subsidiary made while such Restricted Subsidiary was a Loan Party and the
Indebtedness and Liens of such Restricted Subsidiary incurred while such Restricted Subsidiary was a Loan Party will be deemed
to constitute Investments, Indebtedness and Liens of a Restricted Subsidiary that is not a Loan Party for purposes of this
Agreement.
“Successor Borrower”
has the meaning assigned to such term in Section 6.07(a).
“Taxes”
means any and all present and future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments,
fees or other charges in the nature of a tax imposed by any Governmental Authority, including any interest, additions to tax or
penalties applicable thereto.
“Term Intercreditor
Agreement” means the Term Intercreditor Agreement substantially in the form of Exhibit M hereto, dated as of the
Closing Date, among, inter alios, the Administrative Agent, as agent for the Existing Second Priority Secured Creditors (as defined
therein), the First Lien Agent, as agent for the Existing First Priority Secured Creditors (as defined therein), and the Loan Parties
from time to time party thereto.
“Termination
Date” means the date that all (if any) Additional Commitments have expired or terminated and the principal of and interest
on each Loan and all fees, expenses and other amounts payable under any Loan Document (other than contingent indemnification obligations)
have been paid in full.
“Test Period”
means, as of any date, the period of four consecutive Fiscal Quarters determined in accordance with, and subject to, Section 1.10(c).
“Threshold Amount”
means $48,000,000.
“Total Leverage
Ratio” means the ratio, as of any date of determination, of (a) Consolidated Total Debt to (b) Consolidated
Adjusted EBITDA, in each case for the Borrower and its Restricted Subsidiaries on a consolidated basis.
“Trademark”
means the following: (a) all trademarks (including service marks), common law marks, trade names, trade dress, domain names
and logos, slogans and other indicia of origin under the laws of any jurisdiction in the world, and the registrations and applications
for registration thereof and the goodwill of the business connected to the use of and symbolized by the foregoing; (b) all
renewals of the foregoing; (c) all income, royalties, damages, and payments now or hereafter due or payable with respect thereto,
including, without limitation, damages, claims and payments for past, present and future infringements or dilutions thereof; (d) all
rights to sue for past, present, and future infringements or dilutions of any of the foregoing, including the right to settle suits
involving claims and demands for royalties owing; and (e) all rights corresponding to any of the foregoing.
“Transaction
Costs” means fees, premiums, expenses and other transaction costs (including original issue discount or upfront fees)
payable or otherwise borne by Holdings and its subsidiaries in connection with the Transactions and the transactions contemplated
thereby.
“Transactions”
means, collectively, (a) the execution, delivery and performance by the Loan Parties of the Loan Documents to which they are
a party and the Borrowing of Loans hereunder, (b) the transactions contemplated by the Merger Agreement on the Closing Date,
(c) the Equity Contribution, (d) the Refinancing, (e) the execution, delivery and performance by the Loan Parties
of the Loan Documents (as defined in the First Lien Credit Agreement) to which they are a party and the incurrence of Indebtedness
under the First Lien Credit Agreement on the Closing Date (f) the execution, delivery and performance by the Loan Parties
of the Loan Documents (as defined in the ABL Credit Agreement) to which they are a party and the incurrence of Indebtedness under
the ABL Credit Agreement on the Closing Date and (g) the payment of the Transaction Costs.
“Treasury Capital
Stock” has the meaning assigned to such term in Section 6.04(a)(ix).
“Treasury Regulations”
means the U.S. federal income tax regulations promulgated under the Code.
“Type”,
when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans comprising
such Borrowing, is determined by reference to the LIBO Rate or the Alternate Base Rate.
“UCC”
means the Uniform Commercial Code as in effect from time to time in the State of New York or any other state the laws of which
are required to be applied in connection with the creation or perfection of security interests.
“Unrestricted
Subsidiary” means any subsidiary of the Borrower designated by the Borrower as an Unrestricted Subsidiary on the Closing
Date and listed on Schedule 5.10 or after the Closing Date pursuant to Section 5.10.
“U.S.”
means the United States of America.
“U.S. Tax Compliance
Certificate” has the meaning assigned to such term in Section 2.17(f).
“USA PATRIOT
Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism
Act of 2001 (Title III of Pub. L. No. 107-56 (signed into law October 26, 2001)).
“Weighted Average
Life to Maturity” means, when applied to any Indebtedness at any date, the number of years obtained by dividing: (a) the
sum of the products obtained by multiplying (i) the amount of each then remaining installment, sinking fund, serial maturity
or other required scheduled payments of principal, including payment at final maturity, in respect thereof, by (ii) the number
of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment; by (b) the
then outstanding principal amount of such Indebtedness; provided that the effects of any prepayments made on such Indebtedness
shall be disregarded in making such calculation.
“Wholly-Owned
Subsidiary” of any Person means a subsidiary of such Person, 100% of the Capital Stock of which (other than directors’
qualifying shares or shares required by law to be owned by a resident of the relevant jurisdiction) shall be owned by such Person
or by one or more Wholly-Owned Subsidiaries of such Person.
“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.
Section 1.02. Classification
of Loans and Borrowings. For purposes of this Agreement, Loans may be classified and referred to by Class (e.g.,
a “Loan”) or by Type (e.g., a “LIBO Rate Loan”) or by Class and Type (e.g., a “LIBO
Rate Loan”). Borrowings also may be classified and referred to by Class (e.g., a “Borrowing”) or
by Type (e.g., a “LIBO Rate Borrowing”) or by Class and Type (e.g., a “LIBO Rate Borrowing”).
Section 1.03. Terms
Generally.
(a) The
definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and neuter forms.
(b) The
words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without
limitation”. The word “will” shall be construed to have the same meaning and effect as the word “shall”.
(c) Unless
the context requires otherwise (i) any definition of or reference to any agreement, instrument or other document herein or
in any Loan Document (or any Loan Document (as defined in the ABL Credit Agreement or the First Lien Credit Agreement)) shall be
construed as referring to such agreement, instrument or other document as from time to time amended, restated, amended and restated,
supplemented or otherwise modified or extended, replaced or refinanced (subject to any restrictions or qualifications on such amendments,
restatements, amendment and restatements, supplements or modifications or extensions, replacements or refinancings set forth herein),
(ii) any reference to any law in any Loan Document shall include all statutory and regulatory provisions consolidating, amending,
replacing, supplementing or interpreting such law, (iii) any reference herein or in any Loan Document to any Person shall
be construed to include such Person’s successors and permitted assigns, (iv) the words “herein”, “hereof”
and “hereunder”, and words of similar import, when used in any Loan Document, shall be construed to refer to such Loan
Document in its entirety and not to any particular provision hereof, (v) all references herein or in any Loan Document to
Articles, Sections, clauses, paragraphs, Exhibits and Schedules shall be construed to refer to Articles, Sections, clauses and
paragraphs of, and Exhibits and Schedules to, such Loan Document, (vi) in the computation of periods of time in any Loan Document
from a specified date to a later specified date, the word “from” means “from and including”, the words
“to” and “until” mean “to but excluding” and the word “through” means “to
and including” and (vii) the words “asset” and “property”, when used in any Loan Document, shall
be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including
Cash, securities, accounts and contract rights.
(d) Notwithstanding
anything else provided herein or in any other Loan Document, any interest, fee or principal payments on any Indebtedness due and
payable (or paid) as of the last Business Day of a calendar month, calendar quarter or calendar year, as applicable, shall be deemed
to have been due and payable (or paid) as of the end of the respective fiscal month, Fiscal Quarter or Fiscal Year, as applicable,
ended closest to such calendar period for purposes of all calculations of Consolidated Secured Debt, Consolidated First Lien Debt,
Consolidated Total Debt, Consolidated Adjusted EBITDA and Excess Cash Flow hereunder.
Section 1.04. Accounting
Terms; GAAP.
(a) All
financial statements to be delivered pursuant to this Agreement shall be prepared in accordance with GAAP as in effect from time
to time and, except as otherwise expressly provided herein, all terms of an accounting or financial nature that are used in calculating
the Total Leverage Ratio, the First Lien Leverage Ratio, the Secured Leverage Ratio, Consolidated Adjusted EBITDA or Consolidated
Total Assets shall be construed and interpreted in accordance with GAAP, as in effect from time to time; provided, that
(i) if the Borrower notifies the Administrative Agent that the Borrower requests an amendment to any provision hereof to eliminate
the effect of any change occurring after the date of delivery of the financial statements described in Section 3.04(a) in
GAAP or in the application thereof (including the conversion to IFRS as described below) on the operation of such provision (or
if the Administrative Agent notifies the Borrower that the Required Lenders request an amendment to any provision hereof for such
purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then
such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change becomes or became
effective until such notice shall have been withdrawn or such provision amended in accordance herewith, and (ii) if such an
amendment is requested by the Borrower or the Required Lenders, then the Borrower and the Administrative Agent shall negotiate
in good faith to enter into an amendment of the relevant affected provisions (without the payment of any amendment or similar fee
to the Lenders) to preserve the original intent thereof in light of such change in GAAP or the application thereof. All terms of
an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein
shall be made without giving effect to (i) any election under Accounting Standards Codification 825-10-25 (previously referred
to as Statement of Financial Accounting Standards 159) (or any other Accounting Standards Codification or Financial Accounting
Standard having a similar result or effect) to value any Indebtedness or other liabilities of the Borrower or any subsidiary at
“fair value”, as defined therein and (ii) any treatment of Indebtedness in respect of convertible debt instruments
under Accounting Standards Codification 470-20 (or any other Accounting Standards Codification or Financial Accounting Standard
having a similar result or effect) to value any such Indebtedness in a reduced or bifurcated manner as described therein, and such
Indebtedness shall at all times be valued at the full stated principal amount thereof. If the Borrower notifies the Administrative
Agent that the Borrower (or its applicable Parent Company) is required to report under IFRS or has elected to do so through an
early adoption policy, “GAAP” shall mean international financial reporting standards pursuant to IFRS (provided
that after such conversion, the Borrower cannot elect to report under GAAP).
(b) Notwithstanding
anything to the contrary contained in paragraph (a) above or in the definition of “Capital Lease”, in the
event of an accounting change requiring all leases to be capitalized, except as expressly provided in the definition of GAAP with
respect thereto, only those leases (assuming for purposes hereof that such leases were in existence on the date hereof) that would
constitute Capital Leases in conformity with GAAP on the date hereof shall be considered Capital Leases, and all calculations and
deliverables under this Agreement or any other Loan Document shall be made or delivered, as applicable, in accordance therewith.
Section 1.05. Effectuation
of Transactions. Each of the representations and warranties contained in this Agreement (and all corresponding definitions)
is made after giving effect to the Transactions, unless the context otherwise requires.
Section 1.06. Timing
of Payment of Performance. Subject to the definitions of Interest Payment Date and Interest Period, when payment of any obligation
or the performance of any covenant, duty or obligation is stated to be due or required on a day which is not a Business Day, the
date of such payment (other than as described in the definition of “Interest Period”) or performance shall extend to
the immediately succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall be payable for
the period of such extension.
Section 1.07. Times
of Day. Unless otherwise specified, all references herein to times of day shall be references to New York City time (daylight
or standard, as applicable).
Section 1.08. Currency
Generally.
(a) For
purposes of any determination under Article 5, Article 6 (other than the calculation of compliance with
any financial ratio for purposes of taking any action hereunder) or Article 7 with respect to the amount of Specified
Transaction, in a currency other than Dollars, (i) the Dollar equivalent amount of a Specified Transaction in a currency other
than Dollars shall be calculated based on the rate of exchange quoted by the Bloomberg Foreign Exchange Rates & World
Currencies Page (or any successor page thereto, or in the event such rate does not appear on any Bloomberg Page, by reference
to such other publicly available service for displaying exchange rates as may be agreed upon by the Administrative Agent and the
Borrower) for such foreign currency, as in effect at 11:00 a.m. (London time) on the date of such Specified Transaction (which,
in the case of any Restricted Payment, shall be deemed to be the date of the declaration thereof and, in the case of the incurrence
of Indebtedness, shall be deemed to be on the date first committed); provided that if any Indebtedness is incurred (and,
if applicable, associated Lien granted) to refinance or replace other Indebtedness denominated in a currency other than Dollars,
and the relevant refinancing or replacement would cause the applicable Dollar-denominated restriction to be exceeded if calculated
at the relevant currency exchange rate in effect on the date of such refinancing or replacement, such Dollar-denominated restriction
shall be deemed not to have been exceeded so long as the principal amount of such refinancing or replacement Indebtedness (and,
if applicable, associated Lien granted) does not exceed an amount sufficient to repay the principal amount of such Indebtedness
being refinanced or replaced, except by an amount equal to (x) unpaid accrued interest and premiums (including tender premiums)
thereon plus other reasonable and customary fees and expenses (including upfront fees and original issue discount) incurred
in connection with such refinancing or replacement, (y) any existing commitments unutilized thereunder and (z) additional
amounts permitted to be incurred under Section 6.01 and (ii) for the avoidance of doubt, no Default or Event of
Default shall be deemed to have occurred solely as a result of a change in the rate of currency exchange occurring after the time
of any Specified Transaction so long as such Specified Transaction was permitted at the time incurred, made, acquired, committed,
entered or declared as set forth in clause (i).
(b) Each
provision of this Agreement shall be subject to such reasonable changes of construction as the Administrative Agent may from time
to time specify with the Borrower’s consent to appropriately reflect a change in currency of any country and any relevant
market convention or practice relating to such change in currency.
Section 1.09. Cashless
Rollovers. Notwithstanding anything to the contrary contained in this Agreement or in any other Loan Document, to the extent
that any Lender extends the maturity date of, or replaces, renews or refinances, any of its then-existing Loans with Incremental
Loans, Replacement Loans, Extended Loans or loans incurred under a new credit facility, in each case, to the extent such extension,
replacement, renewal or refinancing is effected by means of a “cashless roll” by such Lender, such extension, replacement,
renewal or refinancing shall be deemed to comply with any requirement hereunder or any other Loan Document that such payment be
made “in Dollars”, “in immediately available funds”, “in Cash” or any other similar requirement.
Section 1.10. Certain
Conditions, Calculations and Tests.
(a) Notwithstanding
anything to the contrary herein, with respect to any intended acquisition, Investment (other than Investments in the Borrower
or any Restricted Subsidiary), Restricted Payment and/or Restricted Debt Payment (each, taken together with any related actions
and transactions (including, in the case of any Indebtedness (including any Incremental Facilities), the incurrence, repayment
and other intended uses of proceeds), a “Limited Condition Transaction”), to the extent that the terms of this
Agreement require satisfaction of, or compliance with, any condition, test or requirement, in order to effect, incur or consummate
such Limited Condition Transaction (including (w) compliance with any financial ratio or test (including, without limitation,
Section 2.22, any First Lien Leverage Ratio, any Secured Leverage Ratio, any Total Leverage Ratio, any Net Interest
Coverage Ratio and/or the amount of Consolidated Adjusted EBITDA or Consolidated Total Assets (including any component definitions
of the foregoing)), (x) the making or accuracy of any representations and warranties, (y) the absence of a Default or
Event of Default (or any type of Default or Event of Default) and/or (z) any other condition, test or requirement), at the
election of the Borrower (a “LCT Election”), the date of determination of whether any relevant conditions, tests
and requirements are satisfied or complied with shall be made on, and shall be deemed to be, the date (the “LCT Test Date”)
that the definitive agreements for such Limited Condition Transaction are entered into (or, if applicable, delivery of notice of
redemption, prepayment, declaration of dividend or similar event), giving pro forma effect to such Limited Condition Transaction
(including any related actions and transactions) pursuant to this Section 1.10.If the Borrower has made an LCT Election
for any Limited Condition Transaction and such Limited Condition Transaction (including any related actions and transactions) would
be permitted on the LCT Test Date, (i) each such condition, test and requirement shall be deemed satisfied and complied with
for all purposes of such Limited Condition Transaction and (ii) any change in status of any such condition, test and requirement
between the LCT Test Date and the taking of the relevant actions or consummation of the relevant transactions such that any applicable
financial ratios or tests, baskets, conditions, requirements or provisions would be exceeded, breached or otherwise no longer complied
with or satisfied for any reason (including due to fluctuations in Consolidated Adjusted EBITDA or Consolidated Total Assets or
the Person subject to such Limited Condition Transaction) shall be disregarded such that all financial ratios or tests, baskets,
conditions, requirements or provisions shall continue to be deemed complied with and satisfied for all purposes of such Limited
Condition Transaction, all applicable transactions and actions will permitted and no Default or Event of Default shall be deemed
to exist or to have occurred or resulted from such change in status or Limited Condition Transaction; provided, that (A) if
financial statements for one or more subsequent fiscal quarters shall have become available subsequent to the LCT Test Date, the
Borrower may elect, in its sole discretion, to re-determine all financial ratios or tests, baskets, conditions, requirements or
provisions on the basis of such financial statements, in which case, such date of redetermination shall thereafter be deemed to
be the applicable LCT Test Date for purposes of such ratios, tests or baskets, and (B) except as contemplated in the foregoing
clause (A), compliance with such financial ratios or tests, baskets, conditions, requirements or provisions shall not be
determined or tested at any time for purposes of such Limited Condition Transaction after the applicable LCT Test Date. If the
Borrower has made an LCT Election, then in connection with any subsequent calculation of any financial ratios or tests (including
any Incurrence-Based Baskets), thresholds and availability (including under any Fixed Basket) under this Agreement with respect
to any unrelated transactions or actions on or following the applicable LCT Test Date and prior to the earlier of the date on which
such Limited Condition Transaction is consummated or the definitive agreement (or, if applicable, notice, declaration or similar
event) for such Limited Condition Transaction is terminated or expires without consummation of such Limited Condition Transaction,
any financial ratios or tests, thresholds and availability shall be determined assuming such Limited Condition Transaction (including
any related actions and transactions) had been consummated.
(b) For
purposes of determining the permissibility of any action, change, transaction or event or compliance with any term that requires
a calculation of any financial ratio or test (including, without limitation, Sections 2.22 and 2.23, any First Lien
Leverage Ratio, any Secured Leverage Ratio, any Total Leverage Ratio, any Net Interest Coverage Ratio and/or the amount or percentage
of Consolidated Adjusted EBITDA or Consolidated Total Assets (including any component definitions of the foregoing and for the
avoidance of doubt, notwithstanding clause (k) of the definition of “Consolidated Net Income”, which shall
be disregarded)), (i) Specified Transactions that have been made during the applicable Test Period (or, except as provided
in Section 1.10(c), subsequent to such Test Period and prior to or simultaneously with the event for which the calculation
of any such ratio is made) and any Limited Condition Transaction (including any related actions and transactions) shall be calculated
on a Pro Forma Basis and be given pro forma effect assuming that all such Specified Transactions and Limited Condition Transactions
had occurred on the first day of the applicable Test Period (or, in the case of Consolidated Total Assets and Consolidated Total
Debt, on the last date of the applicable Test Period) in good faith by a Responsible Officer of the Borrower and include, for the
avoidance of doubt, the amount of “run-rate” cost savings (including sourcing), operating expense reductions, operating
improvements and synergies projected by the Borrower in good faith in a manner consistent with, and without duplication of, clause
(b)(xi) of the definition of “Consolidated Adjusted EBITDA” (calculated on a Pro Forma Basis and given pro
forma effect as though such cost savings (including sourcing), operating expense reductions, operating improvements and synergies
had been realized on the first day of such period for the entirety of such period), and any such adjustments shall be included
in the initial pro forma calculations of such financial ratios or tests and during any subsequent Test Period in a manner
consistent with, and without duplication of, clause (b)(xi) of the definition of “Consolidated Adjusted EBITDA”,
whether through a pro forma adjustment or otherwise, and (ii) any borrowings under any revolving credit facilities
incurred substantially concurrently with the applicable Specified Transaction shall be disregarded and excluded from such pro
forma calculation.
(c) The
calculation of any financial ratio or test (including, without limitation, Sections 2.22 and 2.23, any First Lien
Leverage Ratio, any Secured Leverage Ratio, any Total Leverage Ratio, any Net Interest Coverage Ratio and/or the amount or percentage
of Consolidated Adjusted EBITDA or Consolidated Total Assets (including any component definitions of the foregoing and for the
avoidance of doubt, notwithstanding clause (k) of the definition of “Consolidated Net Income”, which shall
be disregarded)) shall be based on the most recently ended Test Period for which internal financial statements are available (as
determined in good faith by the Borrower).
(d) The
principal amount of any non-interest bearing Indebtedness or other discount security constituting Indebtedness at any date shall
be the principal amount thereof that would be shown on a balance sheet of the Borrower dated such date prepared in accordance with
GAAP. If any Indebtedness bears a floating rate of interest and is being calculated on a Pro Forma Basis or being given pro
forma effect, the interest on such Indebtedness attributable to any period subsequent to such Test Period and prior to or simultaneously
with the event for which the calculation of any such ratio is made shall be calculated for as if the rate in effect on the date
of the event for which the calculation is made had been the applicable rate for the entire period (taking into account any hedging
obligations applicable to such Indebtedness). Interest on a Capital Lease obligation shall be deemed to accrue at an interest rate
reasonably determined by a Responsible Officer of the Borrower to be the rate of interest implicit in such Capital Lease obligation
in accordance with GAAP. Any calculation of the Net Interest Coverage Ratio on a Pro Forma Basis will be calculated using an assumed
interest rate in determining Consolidated Interest Expense based on the indicative interest margin contained in any financing commitment
documentation with respect to such Indebtedness or, if no such indicative interest margin exists, as reasonably determined by the
Borrower in good faith.
(e) The
increase in amounts secured by Liens by virtue of accrual of interest, the accretion of accreted value, the payment of interest
or dividends in the form of additional Indebtedness, amortization of original issue discount and increases in the amount of Indebtedness
outstanding solely as a result of fluctuations in the exchange rate of currencies will not be deemed to be an incurrence of Liens
for purposes of Section 6.02.
(f) For
purposes of determining compliance at any time with the provisions of this Agreement, in the event that any Indebtedness (including
any Incremental Facility and Incremental Equivalent Debt), Lien, Restricted Payment, Restricted Debt Payment, Investment,
Disposition or Affiliate transaction or other transaction, as applicable, meets the criteria of more than one category of exceptions,
thresholds, baskets, or other provisions of transactions or items permitted pursuant to any clause of Article VI, any
component in the definition of “Incremental Cap” or any other provision of this Agreement, the Borrower, in its sole
discretion, may, at any time, classify or reclassify (on one or more occasions) and/or divide or re-divide (on one or more occasions)
such transaction or item (or portion thereof) among one or more such categories of exceptions, thresholds, baskets or provisions,
as elected by the Borrower in its sole discretion (other than the Initial Loans, the “Revolving Loans” (as defined
in the ABL Credit Agreement) and the “Loans” (as defined in the First Lien Credit Agreement) outstanding on the Closing
Date and any refinancing indebtedness in respect thereof which may not be reclassified). It is understood and agreed that any Indebtedness
(including any Incremental Facility and Incremental Equivalent Debt), Lien, Restricted Payment, Restricted Debt Payment, Investment,
Disposition or Affiliate transaction or other transaction need not be permitted solely by reference to one category of exceptions,
thresholds, baskets or provisions permitting such Indebtedness, Lien, Restricted Payment, Restricted Debt Payment, Investment,
Disposition and/or Affiliate transaction under Article VI (other than Sections 6.01(a), (x) and (y)), any component
in the definition of “Incremental Cap” or any other provision of this Agreement, but may instead be permitted in part
under any combination thereof. Upon delivery of financial statements following any initial classification and division (or any
subsequent reclassification and re-division), if any applicable financial ratios for any Incurrence-Based Baskets would then be
satisfied for the incurrence of such Indebtedness (including any Incremental Facility and Incremental Equivalent Debt), Lien, Restricted
Debt Payment, Investment, Disposition or Affiliate transaction, any amount thereof under any Fixed Basket shall automatically
be deemed reclassified and re-divided as incurred under any available Incurrence-Based Baskets to the extent not previously elected
by the Borrower and will be deemed to have been incurred, issued, made or taken first, to the extent available, pursuant to any
available Incurrence-Based Baskets as set forth above without utilization of any Fixed Basket.
(g) With
respect to any amounts incurred or transactions entered into or consummated (including any Indebtedness (including any Incremental
Facility and Incremental Equivalent Debt), Lien, Restricted Payment, Restricted Debt Payment, Investment, Disposition or Affiliate
transaction or other transaction), in reliance on a combination of Fixed Baskets and Incurrence-Based Baskets, it is understood
and agreed that (i) the Incurrence-Based Baskets shall first be calculated without giving effect to any Fixed Baskets being
relied upon for any portion of such incurrence or transactions (i.e., Fixed Baskets shall be disregarded in the calculation of
the financial ratio applicable to the Incurrence-Based Baskets, but full pro forma effect shall be given thereto and to
all other applicable and related transactions (including, in the case of Indebtedness, the intended use of the aggregate proceeds
of Indebtedness being incurred in reliance on a combination of Fixed Baskets and Incurrence-Based Baskets, but without “netting”
the Cash proceeds of such Indebtedness) and all other permitted pro forma adjustments (except that the incurrence of any
borrowings under any any Additional Revolving Facility (as defined in the First Lien Credit Agreement) incurred substantially concurrently
with the applicable transaction shall be disregarded) and (ii) thereafter, the incurrence of the portion of such amounts or
other applicable transaction to be entered into in reliance on any Fixed Baskets shall be calculated (and may subsequently be reclassified
into Incurrence-Based Baskets in accordance with Section 1.10(f)). For example, in calculating the maximum amount of
Indebtedness permitted to be incurred under Fixed Baskets and Incurrence-Based Baskets in Section 6.01 in connection
with an acquisition, only the portion of such Indebtedness intended to be incurred under Incurrence-Based Baskets shall be included
in the calculation of financial ratios (and the portion of such Indebtedness intended to be incurred under Fixed Baskets shall
be deemed to not have been incurred in calculating such financial ratios), but pro forma effect shall be given to the use
of proceeds from the entire amount of Indebtedness intended to be incurred under both the Fixed Baskets and Incurrence-Based Baskets,
the consummation of the acquisitions and any related repayments of Indebtedness.
Section 1.11. Rounding.
Any financial ratios required to be maintained by the Borrower pursuant to this Agreement (or required to be satisfied in order
for a specific action to be permitted under this Agreement) shall be calculated by dividing the appropriate component by the other
component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding
the result up or down to the nearest number (with a rounding-up for five).
ARTICLE II
THE
CREDITS
Section 2.01. Commitments.
(a) Subject
to the terms and conditions set forth herein, each Initial Lender severally, and not jointly, agrees to make Initial Loans to the
Borrower on the Closing Date in Dollars in a principal amount not to exceed its Initial Loan Commitment.
(b) Subject
to the terms and conditions of this Agreement, each Lender and each Additional Lender with an Additional Commitment for a given
Class of Incremental Loans severally, and not jointly, agrees to make Additional Loans of such Class to the Borrower,
which Additional Loans shall not exceed for any such Lender or Additional Lender at the time of any incurrence thereof, the Additional
Commitment of such Lender or Additional Lender for such Class on the respective date of borrowing of such Additional Loans.
Amounts repaid or prepaid in respect of such Additional Loans may not be reborrowed.
Section 2.02. Loans
and Borrowings.
(a) Each
Loan shall be made as part of a Borrowing consisting of Loans of the same Class and Type made by the Lenders ratably in accordance
with their respective Commitments of the applicable Class.
(b) Subject
to Section 2.01 and Section 2.14, each Borrowing shall be comprised entirely of ABR Loans or LIBO Rate
Loans as the Borrower may request in accordance herewith. Each Lender at its option may make any LIBO Rate Loan by causing any
domestic or foreign branch or Affiliate of such Lender to make such Loan; provided that (i) any exercise of such option
shall not affect the obligation of the Borrower to repay such Loan in accordance with the terms of this Agreement, (ii) such
LIBO Rate Loan shall be deemed to have been made and held by such Lender, and the obligation of the Borrower to repay such LIBO
Rate Loan shall nevertheless be to such Lender for the account of such domestic or foreign branch or Affiliate of such Lender and
(iii) in exercising such option, such Lender shall use reasonable efforts to minimize increased costs to the Borrower resulting
therefrom (which obligation of such Lender shall not require it to take, or refrain from taking, actions that it determines would
result in increased costs for which it will not be compensated hereunder or that it otherwise determines would be disadvantageous
to it and in the event of such request for costs for which compensation is provided under this Agreement, the provisions of Section 2.15
shall apply); provided further that any such domestic or foreign branch or Affiliate of such Lender shall not be entitled
to any greater indemnification under Section 2.17 with respect to such LIBO Rate Loan than that to which the applicable
Lender was entitled on the date on which such Loan was made (except in connection with any indemnification entitlement arising
as a result of a Change in Law after the date on which such Loan was made).
(c) Borrowings
of more than one Type and Class may be outstanding at the same time; provided that there shall not at any time be more
than a total of fifteen (15) different Interest Periods in effect for LIBO Rate Borrowings at any time outstanding (or such greater
number of different Interest Periods as the Administrative Agent may agree from time to time).
(d) Notwithstanding
any other provision of this Agreement, the Borrower shall not, nor shall it be entitled to, request, or to elect to convert or
continue, any Borrowing if the Interest Period requested with respect thereto would end after the Maturity Date applicable to such
Loans.
Section 2.03. Requests
for Borrowings. Each Borrowing, each conversion of Loans from one Type to the other, and each continuation of LIBO Rate Loans
shall be made upon irrevocable notice by the Borrower to the Administrative Agent (provided that notices in respect of Borrowings
(x) to be made on the Closing Date may be conditioned on the closing of the Acquisition and (y) to be made in connection
with any permitted acquisition, investment or irrevocable repayment or redemption of Indebtedness may be conditioned on the closing
of such acquisition, investment or repayment or redemption of Indebtedness). Each such notice must be in writing or by telephone
(and promptly confirmed in writing) and must be received by the Administrative Agent (by hand delivery, fax or other electronic
transmission (including “.pdf” or “.tiff”)) not later than (i) 2:00 p.m. three (3) Business
Days prior to the requested day of any Borrowing, conversion or continuation of LIBO Rate Loans (or two Business Days in the case
of any Borrowing of LIBO Rate Loans to be made on the Closing Date) or (ii) by 12:00 p.m. (Noon) on the requested date
of any Borrowing of ABR Loans (or, in each case, such later time as shall be acceptable to the Administrative Agent); provided,
however, that if the Borrower wishes to request LIBO Rate Loans having an Interest Period of other than one, two, three
or six months in duration as provided in the definition of “Interest Period,” (A) the applicable notice from the
Borrower must be received by the Administrative Agent not later than 2:00 p.m. four (4) Business Days prior to the requested
date of such Borrowing (or such later time as shall be reasonably acceptable to the Administrative Agent), conversion or continuation,
whereupon the Administrative Agent shall give prompt notice to the appropriate Lenders of such request and determine whether the
requested Interest Period is acceptable to them and (B) not later than 12:00 p.m. (Noon) three (3) Business Days
before the requested date of such Borrowing, conversion or continuation, the Administrative Agent shall notify the Borrower whether
or not the requested Interest Period is available to the appropriate Lenders. Each written notice (or confirmation of telephonic
notice) with respect to a Borrowing by the Borrower pursuant to this Section 2.03 shall be delivered to the Administrative
Agent in the form of a written Borrowing Request or such other form as may be approved by the Administrative Agent (including any
form on an electronic platform or electronic transmission system as shall be approved by the Administrative Agent), appropriately
completed and signed by a Responsible Officer of the Borrower. Each such telephonic and written Borrowing Request shall specify
the following information in compliance with Section 2.02:
(a) the
Class of such Borrowing;
(b) the
aggregate amount of the requested Borrowing;
(c) the
date of such Borrowing, which shall be a Business Day;
(d) whether
such Borrowing is to be an ABR Borrowing or a LIBO Rate Borrowing;
(e) in
the case of a LIBO Rate Borrowing, the initial Interest Period to be applicable thereto, which shall be a period contemplated by
the definition of the term “Interest Period”; and
(f) the
location and number of the Borrower’s account or any other designated account(s) to which funds are to be disbursed
(the “Funding Account”).
If no election as to
the Type of Borrowing is specified, then the requested Borrowing shall be an ABR Borrowing. If no Interest Period is specified
with respect to any requested LIBO Rate Borrowing, then the Borrower shall be deemed to have selected an Interest Period of one
month’s duration. The Administrative Agent shall advise each Lender of the details thereof and of the amount of the Loan
to be made as part of the requested Borrowing (x) in the case of any ABR Borrowing, on the same Business Day of receipt of
a Borrowing Request in accordance with this Section 2.03 or (y) in the case of any LIBO Rate Borrowing, no later
than one Business Day following receipt of a Borrowing Request in accordance with this Section 2.03.
Section 2.04. [Reserved].
Section 2.05. [Reserved].
Section 2.06. [Reserved].
Section 2.07. Funding
of Borrowings.
(a) Each
Lender shall make each Loan of any Class to be made by it hereunder on the proposed date thereof by wire transfer of immediately
available funds by 2:00 p.m. to the account of the Administrative Agent most recently designated by it for such purpose by
notice to the Lenders of such Class in an amount equal to such Lender’s respective Applicable Percentage for such Class.
The Administrative Agent will make such Loans available to the Borrower by promptly crediting the amounts so received, in like
funds, to the Funding Account or as otherwise directed by the Borrower.
(b) Unless
the Administrative Agent has received notice from any Lender prior to the proposed date of any Borrowing that such Lender will
not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume
that such Lender has made such share available on such date in accordance with paragraph (a) of this Section 2.07
and may, in reliance upon such assumption, make available to the Borrower a corresponding amount. In such event, if any Lender
has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and
the Borrower severally agree to pay to the Administrative Agent forthwith on demand (without duplication) such corresponding amount
with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding
the date of payment to the Administrative Agent, at (i) in the case of such Lender, the greater of the Federal Funds Effective
Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation
or (ii) in the case of the Borrower, the interest rate applicable to Loans comprising such Borrowing at such time. If such
Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender’s Loan included in such
Borrowing and the Borrower’s obligation to repay the Administrative Agent such corresponding amount pursuant to this Section 2.07(b) shall
cease. If the Borrower pays such amount to the Administrative Agent, the amount so paid shall constitute a repayment of such Borrowing
by such amount. Nothing herein shall be deemed to relieve any Lender from its obligation to fulfill its Commitment or to prejudice
any rights which the Administrative Agent or the Borrower or any other Loan Party may have against any Lender as a result of any
default by such Lender hereunder.
Section 2.08. Type;
Interest Elections.
(a) Each
Borrowing initially shall be of the Type specified in the applicable Borrowing Request and, in the case of a LIBO Rate Borrowing,
shall have an initial Interest Period as specified in such Borrowing Request. Thereafter, the Borrower may elect to convert any
Borrowing to a Borrowing of a different Type or to continue such Borrowing and, in the case of a LIBO Rate Borrowing, may elect
Interest Periods therefor, all as provided in this Section 2.08. The Borrower may elect different options with respect
to different portions of the affected Borrowing, in which case each such portion shall be allocated ratably among the Lenders for
the relevant Class based upon their Applicable Percentages for such Class and the Loans of such Class comprising
each such portion shall be considered a separate Borrowing.
(b) To
make an election pursuant to this Section 2.08, the Borrower shall notify the Administrative Agent of such election
either in writing (by hand delivery, fax or other electronic transmission (including “.pdf” or “.tiff”))
or by telephone by the time that a Borrowing Request would be required under Section 2.03 if the Borrower were requesting
a Borrowing of the Type resulting from such election to be made on the effective date of such election. Each such telephonic Interest
Election Request shall be irrevocable and shall be confirmed promptly by hand delivery, fax or other electronic transmission (including
“.pdf” or “.tiff”) to the Administrative Agent of a written Interest Election Request signed by a Responsible
Officer of the Borrower.
(c) Each
telephonic and written Interest Election Request shall specify the following information in compliance with Section 2.02:
(i) the
Borrowing to which such Interest Election Request applies and, if different options are being elected with respect to different
portions thereof, the portions thereof to be allocated to each resulting Borrowing (in which case the information to be specified
pursuant to clauses (iii) and (iv) below shall be specified for each resulting Borrowing);
(ii) the
effective date of the election made pursuant to such Interest Election Request, which shall be a Business Day;
(iii) whether
the resulting Borrowing is to be an ABR Borrowing or a LIBO Rate Borrowing; and
(iv) if
the resulting Borrowing is a LIBO Rate Borrowing, the Interest Period to be applicable thereto after giving effect to such election,
which shall be a period contemplated by the definition of the term “Interest Period”.
If any such Interest
Election Request requests a LIBO Rate Borrowing but does not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month’s duration.
(d) Promptly
following receipt of an Interest Election Request, the Administrative Agent shall advise each applicable Lender of the details
thereof and of such Lender’s portion of each resulting Borrowing.
(e) If
the Borrower fails to deliver a timely Interest Election Request with respect to a LIBO Rate Borrowing prior to the end of the
Interest Period applicable thereto, then, unless such Borrowing is repaid as provided herein, such Borrowing shall be converted
at the end of such Interest Period to a LIBO Rate Borrowing with an Interest Period of one month. Notwithstanding any contrary
provision hereof, if an Event of Default exists and the Administrative Agent, at the request of the Required Lenders, so notifies
the Borrower, then, so long as such Event of Default exists (i) no outstanding Borrowing may be converted to or continued
as a LIBO Rate Borrowing and (ii) unless repaid, each LIBO Rate Borrowing shall be converted to an ABR Borrowing at the end
of the then-current Interest Period applicable thereto.
Section 2.09. Termination
of Commitments. Unless previously terminated, the Initial Loan Commitments shall automatically terminate upon the making of
the Initial Loans on the Closing Date.
Section 2.10. Repayment
of Loans; Evidence of Debt.
(a) The
Borrower hereby unconditionally promises to repay Initial Loans to the Administrative Agent for the account of each Lender on the
Initial Loan Maturity Date, in an amount equal to the remainder of the principal amount of the Initial Loans, outstanding on such
date, together in each case with accrued and unpaid interest on the principal amount to be paid to but excluding the date of such
payment.There shall be no required scheduled amortization of the Initial Loans.
(b) [Reserved]
(c) Each
Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Borrower
to such Lender resulting from each Loan made by such Lender, including the amounts of principal and interest payable and paid to
such Lender from time to time hereunder.
(d) The
Administrative Agent shall maintain accounts (which shall be part of the Register) in which it shall record (i) the amount
of each Loan made hereunder, the Class and Type thereof and the Interest Period (if any) applicable thereto, (ii) the
amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder and
(iii) the amount of any sum received by the Administrative Agent hereunder for the account of the Lenders and each Lender’s
share thereof.
(e) The
entries made in the accounts maintained in the Register shall be prima facie evidence of the existence and amounts of the obligations
recorded therein (absent manifest error); provided that the failure of any Lender or the Administrative Agent to maintain
accounts pursuant to Sections 2.10(c) and 2.10(d) or any manifest error therein shall not in any manner affect the obligation
of the Borrower to repay the Loans in accordance with the terms of this Agreement; provided, further, that in the
event of any inconsistency between the Register and any Lender’s records, the Register shall govern.
(f) Any
Lender may request that Loans made by it be evidenced by a Promissory Note. In such event, the Borrower shall prepare, execute
and deliver to such Lender a Promissory Note payable to such Lender and its registered assigns; it being understood and agreed
that such Lender (and/or its applicable assign) shall be required to return such Promissory Note to the Borrower in accordance
with Section 9.05(b)(iii) and upon the occurrence of the Termination Date (or as promptly thereafter as practicable).
Section 2.11. Prepayment
of Loans.
(a) Optional
Prepayments.
(i) Upon
prior notice in accordance with paragraph (a)(iii) of this Section 2.11, the Borrower shall have the right
at any time and from time to time to prepay any Borrowing of Loans of one or more Classes (such Class or Classes to be selected
by the Borrower in its sole discretion) in whole or in part without premium or penalty except as provided in Sections 2.12(c) and
2.16. Each such prepayment shall be paid to the Lenders in accordance with their respective Applicable Percentages of the
relevant Class.
(ii) [Reserved].
(iii) The
Borrower shall notify the Administrative Agent by telephone (promptly confirmed in writing) of any prepayment under this Section 2.11(a) (A) in
the case of a prepayment of a LIBO Rate Borrowing, not later than 1:00 p.m. three Business Days before the date of prepayment
or (B) in the case of a prepayment of an ABR Borrowing, not later than 12:00 p.m. (Noon) one Business Day before the
day of prepayment. Each such notice shall be irrevocable (except as set forth in the proviso to this sentence) and shall specify
the prepayment date and the principal amount of each Borrowing or portion or each relevant Class to be prepaid; provided
that a notice of prepayment delivered by the Borrower may state that such notice is conditioned upon the effectiveness of other
transactions, in which case such notice may be revoked by the Borrower (by notice to the Administrative Agent on or prior to the
specified effective date) if such condition is not satisfied. Promptly following receipt of any such notice relating to any Borrowing,
the Administrative Agent shall advise the relevant Lenders of the contents thereof. Each prepayment of Loans made pursuant to this
Section 2.11(a) shall be applied to the Class or Classes of Loans specified in the applicable prepayment
notice.
(b) Mandatory
Prepayments.
(i) Subject
to Section 2.11(b)(vii), no later than the fifth Business Day after the date on which the financial statements with
respect to each Fiscal Year of the Borrower are required to be delivered pursuant to Section 5.01(b), commencing with
the Fiscal Year ending December 31, 2018, the Borrower shall prepay the outstanding principal amount of Subject Loans in accordance
with clause (vi) of this Section 2.11(b) below in an aggregate principal amount (the “ECF
Prepayment Amount”) equal to (A) the Required Excess Cash Flow Percentage of Excess Cash Flow of the Borrower and
its Restricted Subsidiaries for the Calculation Period then ended, minus (B) unless otherwise elected by the Borrower,
the aggregate principal amount optionally or voluntarily prepaid, repurchased, redeemed or otherwise retired (to the extent permitted
under this Agreement and without duplication of the amount thereof applied to reduce the ECF Prepayment Amount in the prior Fiscal
Year) prior to such date of (w) any Initial Loans, any other Loans or Incremental Equivalent Debt prepaid pursuant to Section 2.11(a),
any ABL Loans to the extent secured on a Split Collateral Basis with the First Lien Facilities and any other Permitted Senior Secured
Debt, (x) any Indebtedness under any First Lien Facilities (and any Incremental Equivalent Debt (as defined in the equivalent
term in any document governing any First Lien Facilities)), (y) any Replacement Notes and Replacement Notes (as defined in
the First Lien Credit Agreement or the equivalent term in any other document governing any First Lien Facilities), and (z)(1) any
reduction in the outstanding amount of any Initial Loans or any other Loans resulting from any assignment (or purchases) made in
accordance with Section 9.05(h) of this Agreement (including in connection with any Dutch Auction, and in the
case of Affiliates that are not Restricted Subsidiaries of the Borrower, to the extent contributed or transferred to the Borrower)
and/or (2) to the extent permitted by the terms of this Agreement, the amount of any reduction in the outstanding amount of
any Indebtedness under the First Lien Facilities (including any Incremental Loans or Incremental Equivalent Debt (as each is defined
in the First Lien Credit Agreement or the equivalent term in any other document governing any First Lien Facilities)) resulting
from any assignment (or purchases, including in connection with any Dutch Auction (as defined in the First Lien Credit Agreement
or the equivalent term in any other document governing any First Lien Facilities), and in the case of Affiliates that are not Restricted
Subsidiaries of the Borrower, to the extent contributed or transferred to the Borrower), in each case under this clause (z),
based upon the actual amount of cash paid in connection with the relevant assignment or purchase; provided, that, in each
case, with respect to the ABL Facility, any Incremental Revolving Facility and any Replacement Revolving Facilities (each as defined
in the First Lien Credit Agreement or the equivalent term in any other document governing any First Lien Facilities), to the extent
accompanied by a permanent reduction in the relevant commitment, and in the case of all such prepayments, repurchases, redemptions
or other retirements, to the extent were not financed with the proceeds of Long-Term Funded Indebtedness; provided, further,
that that (I) if at the time that any such prepayment would be required, the Borrower (or any Restricted Subsidiary of the
Borrower) is also required to prepay any Indebtedness that is secured by the Collateral on a senior or pari passu basis
with the Second Priority Secured Obligations pursuant to the terms of the documentation governing such Indebtedness (such Indebtedness
required to be so prepaid or offered to be so repurchased, “Other Applicable Indebtedness”) with any portion
of the ECF Prepayment Amount, then the Borrower may apply such portion of the ECF Prepayment Amount on a pro rata basis
(determined on the basis of the aggregate outstanding principal amount of the Loans and Other Applicable Indebtedness at such time),
and the amount of prepayment of the Loans that would have otherwise been required pursuant to this Section 2.11(b)(i) shall
be reduced accordingly; provided, further, that the portion of such ECF Prepayment Amount allocated to the Other
Applicable Indebtedness shall not exceed the amount of such ECF Prepayment Amount required to be allocated to the Other Applicable
Indebtedness pursuant to the terms thereof, and the remaining amount, if any, of such ECF Prepayment Amount shall be allocated
to the Loans in accordance with the terms hereof, (II) to the extent the holders of Other Applicable Indebtedness decline
to have such Other Applicable Indebtedness prepaid, the declined amount shall promptly (and in any event within ten (10) Business
Days after the date of such rejection) be applied to prepay the Loans in accordance with the terms hereof (unless such other application
is otherwise permitted hereunder) and (III) no prepayment under this Section 2.11(b)(i) shall be required
if the amount thereof would not exceed $9,000,000.
(ii) Subject
to Section 2.11(b)(vii), no later than the fifth Business Day following the receipt of Net Proceeds in respect of any
Prepayment Asset Sale or Net Insurance/Condemnation Proceeds, in each case, in excess of $9.000,000 with respect to any single
event or transaction (or series of related events or transactions) and $21,000,000 in the aggregate in any Fiscal Year, the Borrower
shall apply an amount equal to 100% of the Net Proceeds or Net Insurance/Condemnation Proceeds received with respect thereto in
excess of such thresholds (the “Subject Proceeds”) to prepay the outstanding principal amount of Subject Loans
in accordance with clause (vi) below; provided, that if, prior to the date any such prepayment is required to
be made, the Borrower notifies the Administrative Agent of its intention to reinvest the Subject Proceeds in assets used or useful
in the business (other than Cash or Cash Equivalents) of the Borrower or any of its subsidiaries, then so long as no Event of Default
then exists, the Borrower shall not be required to make a mandatory prepayment under this clause (ii) in respect of
the Subject Proceeds to the extent (A) the Subject Proceeds are so reinvested within fifteen (15) months following receipt
thereof or (B) the Borrower or any of its subsidiaries has committed to so reinvest the Subject Proceeds during such 15-month
period and the Subject Proceeds are so reinvested within six (6) months after the expiration of such 15-month period; provided,
however, that if the Subject Proceeds have not been so reinvested prior to the expiration of the applicable period, the
Borrower shall promptly prepay the outstanding principal amount of Subject Loans with the Subject Proceeds not so reinvested as
set forth above (without regard to the immediately preceding proviso); provided, further, that (x) if, at the
time that any such prepayment would be required hereunder, the Borrower or any of its Restricted Subsidiaries is required to repay
or repurchase (or offer to repay or repurchase) any Other Applicable Indebtedness, then the relevant Person may apply the Subject
Proceeds on a pro rata basis to the prepayment of the Subject Loans and to the repurchase or repayment of the Other Applicable
Indebtedness (determined on the basis of the aggregate outstanding principal amount of the Subject Loans and Other Applicable Indebtedness
(or accreted amount if such Other Applicable Indebtedness is issued with original issue discount); provided, further,
that the portion of the Subject Proceeds allocated to the Other Applicable Indebtedness shall not exceed the amount of the Subject
Proceeds required to be allocated to the Other Applicable Indebtedness pursuant to the terms thereof, and the remaining amount,
if any, of the Subject Proceeds shall be allocated to the Loans in accordance with the terms hereof, and (y) to the extent
the holders of the Other Applicable Indebtedness decline to have such Other Applicable Indebtedness prepaid or repurchased, the
declined amount shall promptly (and in any event within ten Business Days after the date of such rejection) be applied to prepay
the Subject Loans in accordance with the terms hereof. Notwithstanding anything to the contrary herein or in any other Loan Document,
the Net Proceeds of any Disposition of any ABL US Priority Collateral shall not be required to be applied to the prepayment of
the Initial Loans hereunder.
(iii) Subject
to Sections 2.11(b)(vii) and 2.12(c), in the event that the Borrower or any of its Restricted Subsidiaries receives
Net Proceeds from the issuance or incurrence of Indebtedness by the Borrower or any of its Restricted Subsidiaries (other than
with respect to Indebtedness permitted under Section 6.01, except to the extent the relevant Indebtedness constitutes
(A) Replacement Loans or Replacement Notes incurred to refinance all or a portion of any Class or Classes of Loans (as
determined by the Borrower) in accordance with the requirements of Section 9.02(c), or (B) Incremental Loans or
Incremental Equivalent Debt incurred to refinance all or a portion of any Class or Classes of Loans to the extent required
by the terms thereof to prepay or offer to prepay such Loans and such Incremental Loans or Incremental Equivalent Debt do not constitute
utilization of the Incremental Cap pursuant to Section 2.22), the Borrower shall, promptly upon (and in any event not
later than the next succeeding Business Day) the receipt of such Net Proceeds by the Borrower or its applicable Restricted Subsidiary,
apply an amount equal to 100% of such Net Proceeds to prepay the outstanding principal amount of the relevant Class or Classes
of Loans in accordance with clause (vi) below.
(iv) Notwithstanding
anything in this Section 2.11(b) to the contrary,
(A) the
Borrower shall not be required to prepay any amount that would otherwise be required to be paid pursuant to Section 2.11(b)(i) or
(ii) above to the extent that the relevant Excess Cash Flow is generated by any Foreign Subsidiary, the relevant Prepayment
Asset Sale is consummated by any Foreign Subsidiary, the relevant Net Insurance/Condemnation Proceeds are received by any Foreign
Subsidiary, as the case may be, for so long as the repatriation to the Borrower of any such amount would be prohibited under any
Requirement of Law or conflict with the fiduciary duties of such Foreign Subsidiary’s directors, or result in, or could reasonably
be expected to result in, a material risk of personal or criminal liability for any officer, director, employee, manager, member
of management or consultant of such Foreign Subsidiary (it being agreed that, solely during the period within one (1) year
following the date such prepayments are required to be made, the Borrower shall, and shall cause the applicable Foreign Subsidiary
to, promptly use commercially reasonable efforts to take all actions required by applicable Requirements of Law to permit such
repatriation) and if after taking such actions, the affected Subject Proceeds or Excess Cash Flow, as the case may be, is permitted
under the applicable Requirement of Law and, to the extent applicable, would no longer conflict with the fiduciary duties of such
director, or result in, or could reasonably be expected to result in, a material risk of personal or criminal liability for the
Persons described above within one (1) year following the date such prepayments are required to be made, the relevant Foreign
Subsidiary will promptly repatriate the relevant Subject Proceeds or Excess Cash Flow, as the case may be, and the repatriated
Subject Proceeds or Excess Cash Flow, as the case may be, will be promptly (and in any event not later than two Business Days after
such repatriation) applied (net of additional Taxes payable or reserved against as a result thereof) to the repayment of the Initial
Loans and any other Loans required pursuant to this Section 2.11(b) to the extent required herein (without regard
to this clause (iv)(A)); and
(B) if
the Borrower determines in good faith that the repatriation (or other intercompany distribution) to the Borrower of any amounts
required to mandatorily prepay the Initial Loans and any other Loans pursuant to Section 2.11(b)(i) or (ii) above
would result in material tax liabilities (including any material withholding tax) or material adverse tax consequences (such amount,
a “Restricted Amount”), as reasonably determined by the Borrower, the amount the Borrower shall be required
to mandatorily prepay pursuant to Section 2.11(b)(i) or (ii) above, as applicable, shall be reduced
by the Restricted Amount until such time as the Restricted Amount may be repatriated (or otherwise distributed) to the Borrower
without the incurrence of such material tax liability (as determined in good faith by the Borrower); provided, that to the
extent that the repatriation (or other intercompany distribution) of any Subject Proceeds or Excess Cash Flow from the relevant
Foreign Subsidiary would no longer have a material tax liability within one (1) year following the date such prepayments are
required to be made, an amount equal to the Subject Proceeds or Excess Cash Flow, as applicable, not previously applied pursuant
to preceding clause (B), shall be promptly applied to the repayment of the Initial Loans and other Loans pursuant to Section 2.11(b) as
otherwise required above (without regard to this clause (iv)(B));
(v) Each
Lender may elect, by notice to the Administrative Agent at or prior to the time and in the manner specified by the Administrative
Agent, prior to any prepayment of Initial Loans and Additional Loans required to be made by the Borrower pursuant to this Section 2.11(b),
to decline all (but not a portion) of its Applicable Percentage of such prepayment (such declined amounts, the “Declined
Proceeds”), in which case such Declined Proceeds may be retained by the Borrower and for the avoidance of doubt, no Lender
may reject any prepayment made under Section 2.11(b)(iii) above to the extent that such prepayment is made with
Indebtedness described in clauses (A) or (B) of Section 2.11(b)(iii) above. If any Lender
fails to deliver a notice to the Administrative Agent of its election to decline receipt of its Applicable Percentage of any mandatory
prepayment within the time frame specified by the Administrative Agent, such failure will be deemed to constitute an acceptance
of such Lender’s Applicable Percentage of the total amount of such mandatory prepayment of Initial Loans and Additional Loans.
(vi) Except
as may otherwise be set forth in any amendment to this Agreement in connection with any Additional Loan, (A) each prepayment
of Initial Loans and other Loans required pursuant to this Section 2.11(b) shall be applied ratably to each Class of
Loans (based upon the then outstanding principal amounts of the respective Classes of Loans) (provided that any prepayment
of Initial Loans or Additional Loans constituting Refinancing Indebtedness incurred to refinance all or a portion of the Initial
Loans or Additional Loans pursuant to Section 6.01(p) or Replacement Loans incurred to refinance Initial Loans
or Additional Loans in accordance with the requirements of Section 9.02(c) shall be applied solely to each applicable
Class of refinanced or Replaced Loans) and (B) each such prepayment shall be paid to the Lenders in accordance with their
respective Applicable Percentages of the applicable Class. The amount of such mandatory prepayments shall be applied on a pro
rata basis to the then outstanding Initial Loans and other Loans being prepaid irrespective of whether such outstanding Loans
are ABR Loans or LIBO Rate Loans; provided that the amount thereof shall be applied first to ABR Loans to the full extent
thereof before application to the LIBO Rate Loans in a manner that minimizes the amount of any payments required to be made by
the Borrower pursuant to Section 2.16.
(vii) Notwithstanding
anything in this Section 2.11(b) to the contrary, until the First Lien Obligations Payment Date, no mandatory
prepayment of outstanding Loans that would otherwise be required to be made under this Section 2.11(b) shall be
required to be made, except that the Borrower shall make a mandatory prepayment in an amount equal to First Lien Declined Proceeds
in accordance with Section 2.11(b)(v) of the First Lien Credit Agreement (or equivalent provision under any document
governing any First Lien Facilities) of the outstanding principal amount of the relevant Class or Classes of Loans in accordance
with clause (vi) above, but subject to clause (v) above.
(viii) At
the time of each prepayment required under Section 2.11(b)(i), (ii) or (iii), the Borrower shall
deliver to the Administrative Agent a certificate signed by a Responsible Officer of the Borrower setting forth in reasonable detail
the calculation of the amount of such prepayment. Each such certificate shall specify the Borrowings being prepaid and the principal
amount of each Borrowing (or portion thereof) to be prepaid. Prepayments shall be accompanied by accrued interest as required by
Section 2.13. All prepayments of Borrowings under this Section 2.11(b) shall be subject to Section 2.16
and, other than with respect to prepayments under clause (iii) above, which are subject to Section 2.12(c),
shall be without premium or penalty.
(ix) Notwithstanding
anything to the contrary herein, it is intended that the Loans will not be treated as “applicable high yield discount obligations”
(“AHYDO”) within the meaning of Section 163(i)(1) of the Code and the provisions contained herein
shall be construed so that the Loans are not treated as AHYDO. Accordingly, starting on the fifth anniversary of the Closing Date
and prior to the end of each accrual period (as defined in Section 1272(a)(5)) thereafter, the Borrower shall pay such amounts
of accrued and unpaid interest or original issue discount (as determined for U.S. federal income tax purposes) on the Loans as
necessary to ensure that the Loans are not treated as having “significant original issue discount” within the meaning
of Section 163(i)(1) of the Code. The computations and determinations made by the Borrower under this provision shall
be binding upon each Lender.
Section 2.12. Fees.
(a) The
Borrower agrees to pay to the Administrative Agent, for its own account, the fees in the amounts and at the times separately agreed
upon by the Borrower and the Administrative Agent in writing.
(b) All
fees payable hereunder shall be paid on the dates due, in Dollars and in immediately available funds, to the Administrative Agent.
Fees paid shall not be refundable under any circumstances except as otherwise provided in the Fee Letter.
(c) In
the event that, on or prior to the second anniversary of the Closing Date, the Borrower prepays, repays, refinances, substitutes
or replaces any Initial Loans pursuant to Section 2.11(a)(i) or pursuant to Section 2.11(b)(iii) or
in connection with any Event of Default (it being understood and agreed, for the avoidance of doubt, that prepayments as a result
of assignments made pursuant to Section 9.05(h) hereof shall not be subject to this Section 2.12(c),
the Borrower shall pay to the Administrative Agent, for the ratable account of each applicable Initial Lender, a fee equal to (i) 2.00%
of the aggregate principal amount of the Initial Loans so prepaid, repaid, refinanced, substituted or replaced prior to the first
anniversary of the Closing Date and (ii) 1.00% of the aggregate principal amount of the Initial Loans so prepaid, repaid,
refinanced, substituted or replaced on or after the first anniversary of the Closing Date, but prior to the second anniversary
of the Closing Date. All such amounts shall be due and payable on the date of the relevant prepayment pursuant to Section 2.11(a)(i) or
2.11(b)(iii). For the avoidance of doubt, no prepayment premium shall be payable hereunder in connection with any prepayment
or refinancing of Initial Loans on or after the second anniversary of the Closing Date.
(d) Unless
otherwise indicated herein, all computations of fees shall be made on the basis of a 360-day year and shall be payable for the
actual days elapsed (including the first day but excluding the last day). Each determination by the Administrative Agent of a fee
hereunder shall be conclusive and binding for all purposes, absent manifest error.
Section 2.13. Interest.
(a) The
Loans comprising each ABR Borrowing shall bear interest at the Alternate Base Rate plus the Applicable Rate.
(b) The
Loans comprising each LIBO Rate Borrowing shall bear interest at the LIBO Rate for the Interest Period in effect for such Borrowing
plus the Applicable Rate.
(c) [Reserved].
(d) Notwithstanding
the foregoing and subject to Section 2.21, if any principal of or interest on any Initial Loan or Additional Loan or
any fee payable by Borrower hereunder is not, in each case, paid or reimbursed when due, whether at stated maturity, upon acceleration
or otherwise, the relevant overdue amount shall bear interest, to the fullest extent permitted by law, after as well as before
judgment, at a rate per annum equal to (i) in the case of overdue principal or interest of any Initial Loan or Additional
Loan, 2.00% plus the rate otherwise applicable to such Initial Loan or Additional Loan as provided in the preceding paragraphs
of this Section 2.13 or in the amendment to this Agreement relating thereto or (ii) in the case of any other amount,
2.00% plus the rate applicable to Initial Loans that are ABR Loans as provided in paragraph (a) of this Section 2.13;
provided that no amount shall accrue pursuant to this Section 2.13(d) on any overdue amount or other amount
payable to a Defaulting Lender so long as such Lender is a Defaulting Lender.
(e) Accrued
interest on each Initial Loan or Additional Loan shall be payable in arrears on each Interest Payment Date for such Initial Loan,
Additional Loan or any other Loan and on the Maturity Date applicable to such Loan; provided that (i) interest accrued
pursuant to paragraph (d) of this Section 2.13 shall be payable on demand, (ii) in the event of any
repayment or prepayment of any Initial Loan, Additional Loan or any other Loan, accrued interest on the principal amount repaid
or prepaid shall be payable on the date of such repayment or prepayment and (iii) in the event of any conversion of any LIBO
Rate Loan prior to the end of the current Interest Period therefor, accrued interest on such Initial Loan or Additional Loan shall
be payable on the effective date of such conversion.
(f) All
interest hereunder shall be computed on the basis of a year of 360 days, except that interest computed for ABR Loans shall be computed
on the basis of a year of 365 days (or 366 days in a leap year), and in each case shall be payable for the actual number of days
elapsed (including the first day but excluding the last day). The applicable Alternate Base Rate or LIBO Rate shall be determined
by the Administrative Agent, and such determination shall be conclusive absent manifest error. Interest shall accrue on each Loan
from, and including, the date on which such Loan is made to, but excluding, the date on which the Loan or such interest is paid;
provided that any Loan that is repaid on the same day on which it is made shall bear interest for one day.
Section 2.14. Alternate
Rate of Interest. If at least two Business Days prior to the commencement of any Interest Period for a LIBO Rate Borrowing:
(a) the
Administrative Agent determines (which determination shall be conclusive absent manifest error) that adequate and reasonable means
do not exist for ascertaining the LIBO Rate for such Interest Period; or
(b) the
Administrative Agent is advised by the Required Lenders that the LIBO Rate for such Interest Period will not adequately and fairly
reflect the cost to such Lenders of making or maintaining their Loans included in such Borrowing for such Interest Period;
then the Administrative Agent shall promptly
give notice thereof to the Borrower and the Lenders by telephone or facsimile as promptly as practicable thereafter and, until
the Administrative Agent notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist,
which the Administrative Agent agrees promptly to do, (i) any Interest Election Request that requests the conversion of any
Borrowing to, or continuation of any Borrowing as, a LIBO Rate Borrowing shall be ineffective and such Borrowing shall be converted
to an ABR Borrowing on the last day of the Interest Period applicable thereto, and (ii) if any Borrowing Request requests
a LIBO Rate Borrowing, such Borrowing shall be made as an ABR Borrowing.
Section 2.15. Increased
Costs.
(a) If
any Change in Law:
(i) imposes,
modifies or deems applicable any reserve, special deposit or similar requirement against assets of, deposits with or for the account
of, or credit extended by, any Lender (except any such reserve requirement reflected in the LIBO Rate), or
(ii) subjects
any Lender to any Taxes (other than Indemnified Taxes, Other Taxes and Excluded Taxes) on its loans, commitments, or other obligations,
or its deposits, reserves, other liabilities or capital attributable thereto, or
(iii) imposes
on any Lender or the London interbank market any other condition (other than Taxes) affecting this Agreement or LIBO Rate Loans
made by any Lender,
and the result of any of the foregoing
is to increase the cost to the relevant Lender of making or maintaining any LIBO Rate Loan (or of maintaining its obligation to
make any such Loan) or to reduce the amount of any sum received or receivable by such Lender (whether of principal, interest or
otherwise) in respect of any LIBO Rate Loan in an amount deemed by such Lender to be material, then, within 30 days after the Borrower’s
receipt of the certificate contemplated by paragraph (c) of this Section 2.15, the Borrower will pay to
such Lender, such additional amount or amounts as will compensate such Lender, for such additional costs incurred or reduction
suffered; provided that the Borrower shall not be liable for such compensation if (x) the relevant Change in Law occurs
on a date prior to the date such Lender becomes a party hereto, (y) such Lender invokes Section 2.20 or (z) in
the case of requests for reimbursement under clause (iii) of Section 2.15(a) resulting from a market
disruption, (A) the relevant circumstances are not generally affecting the banking market or (B) the applicable request
has not been made by Lenders constituting Required Lenders.
(b) If
any Lender determines that any Change in Law regarding liquidity or capital requirements has or would have the effect of reducing
the rate of return on such Lender’s capital or on the capital of such Lender’s holding company, if any, as a consequence
of this Agreement or the Loans made by such Lender to a level below that which such Lender or such Lender’s holding company
could have achieved but for such Change in Law (other than due to Taxes which shall be dealt with exclusively pursuant to Section 2.17)
(taking into consideration such Lender’s policies and the policies of such Lender’s holding company with respect to
capital adequacy), then within 30 days of receipt by the Borrower of the certificate contemplated by paragraph (c) of
this Section 2.15 the Borrower will pay to such Lender, as applicable, such additional amount or amounts as will compensate
such Lender or such Lender’s holding company for any such reduction suffered.
(c) A
certificate of a Lender setting forth the amount or amounts necessary to compensate such Lender or its holding company, as applicable,
as specified in paragraph (a) or (b) of this Section 2.15 and setting forth in reasonable detail
the manner in which such amount or amounts were determined and certifying that such Lender is generally charging such amounts to
similarly situated borrowers shall be delivered to the Borrower and shall be conclusive absent manifest error.
(c) Failure
or delay on the part of any Lender to demand compensation pursuant to this Section 2.15 shall not constitute a waiver
of such Lender’s right to demand such compensation; provided that the Borrower shall not be required to compensate
a Lender pursuant to this Section 2.15 for any increased costs or reductions incurred more than 180 days prior to the
date that such Lender notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such
Lender’s intention to claim compensation therefor; provided further that if the Change in Law giving rise to such
increased costs or reductions is retroactive, then the 180-day period referred to above shall be extended to include the period
of retroactive effect thereof.
Section 2.16. Break
Funding Payments. In the event of (a) the conversion or prepayment of any principal of any LIBO Rate Loan other than on
the last day of an Interest Period applicable thereto (whether voluntary, mandatory, automatic, by reason of acceleration or otherwise),
(b) the failure to borrow, convert, continue or prepay any LIBO Rate Loan on the date or in the amount specified in any notice
delivered pursuant hereto or (c) the assignment of any LIBO Rate Loan of any Lender other than on the last day of the Interest
Period applicable thereto as a result of a request by the Borrower pursuant to Section 2.19, then, in any such event,
the Borrower shall compensate each Lender for the loss, cost and expense incurred by such Lender that is attributable to such event
(other than loss of profit). In the case of a LIBO Rate Loan, the loss, cost or expense of any Lender shall be the amount reasonably
determined by such Lender to be the excess, if any, of (i) the amount of interest which would have accrued on the principal
amount of such Loan had such event not occurred, at the LIBO Rate that would have been applicable to such Loan, for the period
from the date of such event to the last day of the then current Interest Period therefor (or, in the case of a failure to borrow,
convert or continue, for the period that would have been the Interest Period for such Loan), over (ii) the amount of interest
which would accrue on such principal amount for such period at the interest rate which such Lender would bid were it to bid, at
the commencement of such period, for deposits in the applicable currency of a comparable amount and period from other banks in
the Eurodollar market; it being understood that such loss, cost or expense shall in any case exclude any interest rate floor and
all administrative, processing or similar fees. A certificate of any Lender (i) setting forth any amount or amounts that such
Lender is entitled to receive pursuant to this Section 2.16, the basis therefor and, in reasonable detail, the manner
in which such amount or amounts were determined and (ii) certifying that such Lender is generally charging the relevant amounts
to similarly situated borrowers shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower
shall pay such Lender the amount shown as due on any such certificate within 30 days after receipt thereof.
Section 2.17. Taxes.
(a) Any
and all payments by or on account of any obligation of any Loan Party under any Loan Document shall be made free and clear of and
without deduction for any Taxes, except as required by applicable Requirements of Law. If any applicable Requirements of Law require
the deduction or withholding of any Tax from any such payment, then (i) if such Tax is an Indemnified Tax and/or Other Tax,
the amount payable by the applicable Loan Party shall be increased as necessary so that after all required deductions and withholdings
have been made (including deductions and withholdings applicable to additional sums payable under this Section 2.17),
each Lender or, in the case of any payment made to the Administrative Agent for its own account, the Administrative Agent, receives
an amount equal to the sum it would have received had no such deductions or withholdings been made, (ii) the applicable withholding
agent shall make such deductions and (iii) the applicable withholding agent shall timely pay the full amount deducted to the
relevant Governmental Authority in accordance with applicable Requirements of Law.
(b) In
addition, and without duplication of other amounts payable by a Loan Party under this Section 2.17, the Loan Parties
shall pay any Other Taxes to the relevant Governmental Authority in accordance with applicable Requirements of Law.
(c) Each
Loan Party shall jointly and severally indemnify the Administrative Agent and each Lender within 30 days after receipt of the certificate
described in the succeeding sentence, for the full amount of any Indemnified Taxes or Other Taxes payable or paid by the Administrative
Agent or such Lender, as applicable (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts
payable under this Section 2.17) (other than any penalties attributable to the gross negligence, bad faith or willful
misconduct of the Administrative Agent or such Lender), and, in each case, any reasonable expenses arising therefrom or with respect
thereto; provided that if such Loan Party reasonably believes that such Taxes were not correctly or legally asserted, the
Administrative Agent or such Lender, as applicable, will use reasonable efforts to cooperate with such Loan Party to obtain a refund
of such Taxes (which shall be repaid to such Loan Party in accordance with Section 2.17(h)) so long as such efforts
would not, in the sole determination of the Administrative Agent or such Lender, result in any additional out-of-pocket costs or
expenses not reimbursed by such Loan Party or be otherwise materially disadvantageous to the Administrative Agent or such Lender,
as applicable. In connection with any request for reimbursement under this Section 2.17(c), the relevant Lender or
the Administrative Agent, as applicable, shall deliver a certificate to the Borrower (i) setting forth, in reasonable detail,
the basis and calculation of the amount of the relevant payment or liability and (ii) certifying that it is generally charging
the relevant amounts to similarly situated borrowers, which certificate shall be conclusive absent manifest error. Notwithstanding
anything to the contrary contained in this Section 2.17(c), the Loan Parties shall not be required to indemnify the
Administrative Agent or any Lender pursuant to this Section 2.17 for any Indemnified Taxes or Other Taxes, to the extent
the Administrative Agent or such Lender fails to notify the Borrower of such possible indemnification claim within 180 days after
the event; provided further that, if the event is a 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.
(d) Each
Lender shall severally indemnify the Administrative Agent, within 30 days after demand therefor, for (i) any Indemnified Taxes
or Other Taxes imposed on or with respect to any payment under any Loan Document that is attributable to such Lender (but only
to the extent that no Loan Party has already indemnified the Administrative Agent for such Indemnified Taxes or Other Taxes and
without limiting the obligation of the Loan Parties to do so), (ii) any Taxes attributable to such Lender’s failure
to comply with the provisions of Section 9.05(c) relating to the maintenance of a Participant Register and (iii) any
Excluded Taxes attributable to such Lender that are payable or paid by the Administrative Agent in connection with any Loan Document
and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed
or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any
Lender by the Administrative Agent shall be conclusive absent manifest error. Each Lender hereby authorizes the Administrative
Agent to set off and apply any and all amounts at any time owing to such Lender under any Loan Document or otherwise payable by
the Administrative Agent to any Lender under any Loan Document or otherwise payable by the Administrative Agent to any Lender from
any other source against any amount due to the Administrative Agent under this clause (d).
(e) As
soon as practicable after any payment of Indemnified Taxes or Other Taxes by any Loan Party to a Governmental Authority, such Loan
Party shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority
evidencing such payment, a copy of the return reporting such payment or other evidence of such payment that is reasonably satisfactory
to the Administrative Agent.
(f) Status
of Lenders.
(i) Any
Lender that is entitled to an exemption from or reduction of any withholding Tax with respect to any payments made under any Loan
Document shall deliver to the Borrower and the Administrative Agent, at the time or times reasonably requested by the Borrower
or the Administrative Agent, such properly completed and executed documentation as the Borrower or the Administrative Agent may
reasonably request to permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any
Lender, if reasonably requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed
by applicable Requirements of Law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower
or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements.
Each Lender hereby authorizes the Administrative Agent to deliver to the Borrower and to any successor Administrative Agent any
documentation provided to the Administrative Agent pursuant to this Section 2.17(f).
(ii) Without
limiting the generality of the foregoing:
(A) each
Lender that is not a Foreign Lender shall deliver to the Borrower and the Administrative Agent on or prior to the date on which
such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower
or the Administrative Agent), two executed copies of IRS Form W-9 certifying that such Lender is exempt from U.S. federal
backup withholding tax;
(B) each
Foreign Lender, to the extent it is legally entitled to do so, shall deliver to the Borrower and the Administrative Agent on or
prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the
reasonable request of the Borrower or the Administrative Agent), whichever of the following is applicable:
(1) in
the case of any Foreign Lender claiming the benefits of an income tax treaty to which the U.S. is a party, two executed copies
of IRS Form W-8BEN or IRS Form W-8BEN-E establishing an exemption from, or reduction of, U.S. federal withholding Tax
pursuant to such tax treaty;
(2) two
executed copies of IRS Form W-8ECI;
(3) in
the case of any Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 871(h) or
881(c) of the Code, (x) a certificate substantially in the form of Exhibit J-1 to the effect that such Foreign
Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder”
of the Borrower within the meaning of Section 871(h)(3)(B) of the Code, or a “controlled foreign corporation”
described in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and (y) executed
copies of IRS Form W-8BEN or IRS Form W-8BEN-E; or
(4) to
the extent any Foreign Lender is not the beneficial owner, two executed copies of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS
Form W-8BEN, IRS Form W-8BEN-E, a U.S. Tax Compliance Certificate substantially in the form of Exhibit J-2
or Exhibit J-3, IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable;
provided that if such Foreign Lender is a partnership and one or more partners of such Foreign Lender are claiming the portfolio
interest exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate substantially in the form of Exhibit J-4
on behalf of each such partner;
(C) each
Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent on or
prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the
reasonable request of the Borrower or the Administrative Agent), two executed copies of any other form prescribed by applicable
Requirements of Law as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax, duly completed, together
with such supplementary documentation as may be prescribed by applicable Requirements of Law to permit the Borrower or the Administrative
Agent to determine the withholding or deduction required to be made; and
(D) if
a payment made to any Lender under any Loan Document would be subject to Tax imposed by FATCA if such Lender were to fail to comply
with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of
the Code, as applicable), such Lender shall deliver to the Borrower and the Administrative Agent at the time or times prescribed
by applicable Requirements of Law and at such time or times reasonably requested by the Borrower or the Administrative Agent such
documentation as is prescribed by applicable Requirements of Law (including as prescribed by Section 1471(b)(3)(C)(i) of
the Code) and may be necessary for the Borrower and the Administrative Agent to comply with their obligations under FATCA, to determine
whether such Lender has complied with such Lender’s obligations under FATCA, or to determine the amount, if any, to deduct
and withhold from such payment. Solely for purposes of this clause (D), “FATCA” shall include any amendments made to
FATCA after the date of this Agreement.
Each Lender agrees that if any form or
certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification,
provide such successor form, or promptly notify the Borrower and the Administrative Agent in writing of its legal inability to
do so. Notwithstanding anything to the contrary in this Section 2.17(f), no Lender shall be required to provide any
documentation that such Lender is not legally eligible to deliver.
(g) On
or prior to the date on which the Administrative Agent becomes the Administrative Agent under this Agreement (and from time to
time thereafter upon the reasonable request of the Borrower or if any form or certification it previously delivered expires or
becomes obsolete), the Administrative Agent will deliver to the Borrower either (i) an executed copy of IRS Form W-9,
or (ii) (x) with respect to any amounts received on its own account, an executed copy of an applicable IRS Form W-8,
and (y) with respect to any amounts received for or on account of any Lender, an executed copy of IRS Form W-8IMY certifying
on Part I, Part II and Part VI thereof that it is a U.S. branch that has agreed to be treated as a U.S. person for
U.S. federal tax purposes with respect to payments received by it from the Borrower in its capacity as Administrative Agent, as
applicable. The Administrative Agent shall promptly notify the Borrower at any time it determines that it is no longer in a position
to provide the certification described in the prior sentence.
(h) If
the Administrative Agent or any Lender determines, in its sole discretion exercised in good faith, that it has received a refund
of any Indemnified Taxes or Other Taxes as to which it has been indemnified by any Loan Party or with respect to which such Loan
Party has paid additional amounts pursuant to this Section 2.17, it shall pay over such refund to such Loan Party (but
only to the extent of indemnity payments made, or additional amounts paid, by such Loan Party under this Section 2.17
with respect to the Indemnified Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of the Administrative
Agent or such Lender (including any Taxes imposed with respect to such refund), and without interest (other than any interest paid
by the relevant Governmental Authority with respect to such refund); provided that such Loan Party, upon the request of
the Administrative Agent or such Lender, agrees to repay the amount paid over to such Loan Party (plus any penalties, interest
or other charges imposed by the relevant Governmental Authority) to the Administrative Agent or such Lender in the event the Administrative
Agent or such Lender is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary
in this paragraph (h), in no event shall the Administrative Agent or any Lender be required to pay any amount to a Loan
Party pursuant to this paragraph (h) to the extent that the payment thereof would place the Administrative Agent or
such Lender in a less favorable net after-Tax position than the position that the Administrative Agent or such Lender would have
been in if the Tax subject to indemnification had not been deducted, withheld or otherwise imposed and the indemnification payments
or additional amounts giving rise to such refund had never been paid. This Section 2.17 shall not be construed to require
the Administrative Agent or any Lender to make available its Tax returns (or any other information relating to its Taxes which
it deems confidential) to the relevant Loan Party or any other Person.
(i) Survival.
Each party’s obligations under this Section 2.17 shall survive the resignation or replacement of the Administrative
Agent or any assignment of rights by, or the replacement of, any Lender, the termination of the Commitments and the repayment,
satisfaction or discharge of all obligations under any Loan Document.
Section 2.18. Payments
Generally; Allocation of Proceeds; Sharing of Payments.
(a) Unless
otherwise specified, the Borrower shall make each payment required to be made by it hereunder (whether of principal, interest or
fees or of amounts payable under Section 2.15, 2.16 or 2.17, or otherwise) prior to the time expressed
hereunder or under such Loan Document (or, if no time is expressly required, by 2:00 p.m.) on the date when due, in immediately
available funds, without set-off (except as otherwise provided in Section 2.17) or counterclaim. Any amounts received
after such time on any date may, in the discretion of the Administrative Agent, be deemed to have been received on the next succeeding
Business Day and any applicable interest or fee shall continue to accrue until deemed received. If any payment to be made by any
Borrower shall come due on a day other than a Business Day, payment shall be made on the next following Business Day, and such
extension of time shall be reflected in computing interest or fees, as the case may be. All such payments shall be made to the
Administrative Agent to the applicable account designated to the Borrower by the Administrative Agent, except that payments pursuant
to Sections 2.15, 2.16 or 2.17 and 9.03 shall be made directly to the Persons entitled thereto. The
Administrative Agent shall distribute any such payments received by it for the account of any other Person to the appropriate recipient
promptly following receipt thereof. Each Lender agrees that in computing such Lender’s portion of any Borrowing to be made
hereunder, the Administrative Agent may, in its discretion, round such Lender’s percentage of such Borrowing to the next
higher or lower whole dollar amount. All payments (including accrued interest) hereunder shall be made in Dollars. Any payment
required to be made by the Administrative Agent hereunder shall be deemed to have been made by the time required if the Administrative
Agent shall, at or before such time, have taken the necessary steps to make such payment in accordance with the regulations or
operating procedures of the clearing or settlement system used by the Administrative Agent to make such payment.
(b) Subject
in all respects to the provisions of the Intercreditor Agreements (and any other applicable Acceptable Intercreditor Agreement),
all proceeds of Collateral received by the Administrative Agent at any time when an Event of Default exists and all or any portion
of the Loans have been accelerated hereunder pursuant to Section 7.01 or otherwise received in connection with any
foreclosure on or other exercise of remedies with respect to the Collateral pursuant to the Collateral Documents shall, upon election
by the Administrative Agent or at the direction of the Required Lenders, be applied first, to the payment of all costs and
expenses then due incurred by the Administrative Agent in connection with any collection, sale or realization on Collateral or
otherwise in connection with this Agreement, any other Loan Document or any of the Secured Obligations, including all court costs
and the fees and expenses of agents and legal counsel, the repayment of all advances made by the Administrative Agent hereunder
or under any other Loan Document on behalf of any Loan Party and any other costs or expenses incurred in connection with the exercise
of any right or remedy hereunder or under any other Loan Document, second, on a pro rata basis, to pay any fees,
indemnities or expense reimbursements then due to the Administrative Agent (other than those covered in clause first above) from
the Borrower constituting Secured Obligations, third, on a pro rata basis in accordance with the amounts of the Secured
Obligations (other than any Secured Obligations incurred after the date hereof that are either junior in right of payment or are
secured by a Lien that is junior to the Liens securing the Second Priority Secured Obligations) (other than contingent indemnification
obligations for which no claim has yet been made) owed to the Secured Parties on the date of any such distribution, to the payment
in full of such Secured Obligations, fourth, on a pro rata basis in accordance with the amounts of all other Secured
Obligations (other than contingent indemnification obligations for which no claim has yet been made) owed to the applicable Secured
Parties on the date of any such distribution, to the payment in full of such Secured Obligations and fifth, to, or at the
direction of, the Borrower or as a court of competent jurisdiction may otherwise direct.
(c) If
any Lender obtains payment (whether voluntary, involuntary, through the exercise of any right of set-off or otherwise) in respect
of any principal of or interest on any of its Loans of any Class resulting in such Lender receiving payment of a greater proportion
of the aggregate amount of its Loans of such Class and accrued interest thereon than the proportion received by any other
Lender with Loans of such Class, then the Lender receiving such greater proportion shall purchase (for Cash at face value) participations
in the Loans of such Class at such time outstanding to the extent necessary so that the benefit of all such payments shall
be shared by the Lenders of such Class ratably in accordance with the aggregate amount of principal of and accrued interest
on their respective Loans of such Class; provided that (i) if any such participations are purchased and all or any
portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored
to the extent of such recovery, without interest, and (ii) the provisions of this paragraph shall not apply to (x) any
payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement or (y) any payment obtained
by any Lender as consideration for the assignment of or sale of a participation in any of its Loans to any permitted assignee or
participant, including any payment made or deemed made in connection with Sections 2.22, 2.23 and 9.02(c).
If any Lender obtains payment (whether voluntary, involuntary, through exercise of any right of set-off or otherwise) in respect
of any principal of or interest on any of its Loans of any Class that is junior in right of payment to any other Class of
Loans that has not been repaid in full, such Lender shall promptly remit such payment to the Administrative Agent for application
is accordance with clause (b). The Borrower consents to the foregoing and agrees, to the extent it may effectively do so
under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the
Borrower rights of set-off and counterclaim with respect to such participation as fully as if such Lender were a direct creditor
of the Borrower in the amount of such participation. The Administrative Agent will keep records (which shall be conclusive and
binding in the absence of manifest error) of participations purchased under this Section 2.18(c) and will, in
each case, notify the Lenders following any such purchases or repayments. Each Lender that purchases a participation pursuant to
this Section 2.18(c) shall from and after such purchase have the right to give all notices, requests, demands,
directions and other communications under this Agreement with respect to the portion of the Obligations purchased to the same extent
as though the purchasing Lender were the original owner of the Obligations purchased.
(d) Unless
the Administrative Agent has received notice from the Borrower prior to the date on which any payment is due to the Administrative
Agent for the account of any Lender hereunder that the Borrower will not make such payment, the Administrative Agent may assume
that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute
to the applicable Lender the amount due. In such event, if the Borrower has not in fact made such payment, then each Lender severally
agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender with interest thereon,
for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative
Agent, at the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with
banking industry rules on interbank compensation.
(e) If
any Lender fails to make any payment required to be made by it pursuant to Section 2.07(b) or Section 2.18(d),
then the Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof), apply any amounts thereafter
received by the Administrative Agent for the account of such Lender to satisfy such Lender’s obligations under such Sections
until all such unsatisfied obligations are fully paid.
Section 2.19. Mitigation
Obligations; Replacement of Lenders.
(a) If
any Lender requests compensation under Section 2.15 or such Lender determines it can no longer make or maintain LIBO
Rate Loans pursuant to Section 2.20, or the Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.17, then such Lender shall use reasonable
efforts to designate a different lending office for funding or booking its Loans hereunder affected by such event, or to assign
its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the reasonable judgment of such
Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.15
or 2.17, as applicable, in the future or mitigate the impact of Section 2.20, as the case may be, and (ii) would
not subject such Lender to any material unreimbursed out-of-pocket cost or expense and would not otherwise be disadvantageous to
such Lender in any material respect. The Borrower hereby agrees to pay all reasonable out-of-pocket costs and expenses incurred
by any Lender in connection with any such designation or assignment.
(b) If
(i) any Lender requests compensation under Section 2.15 or such Lender determines it can no longer make or maintain
LIBO Rate Loans pursuant to Section 2.20, (ii) the Borrower is required to pay any additional amount to any Lender
or any Governmental Authority for the account of any Lender pursuant to Section 2.17, (iii) any Lender is a Defaulting
Lender or (iv) in connection with any proposed amendment, waiver or consent requiring the consent of “each Lender”
or “each Lender directly affected thereby” (or any other Class or group of Lenders other than the Required Lenders)
with respect to which Required Lender consent (or the consent of Lenders holding loans or commitments of such Class or lesser
group representing more than 50% of the sum of the total loans and unused commitments of such Class or lesser group at such
time) has been obtained, as applicable, any Lender is a non-consenting Lender (each such Lender described in this clause (iv),
a “Non-Consenting Lender”), then the Borrower may, at its sole expense and effort, upon notice to such Lender
and the Administrative Agent, (x) terminate the applicable Commitments and/or Additional Commitments of such Lender, and repay
all Obligations of the Borrower owing to such Lender relating to the applicable Loans and participations held by such Lender as
of such termination date or (y) replace such Lender by requiring such Lender to assign and delegate (and such Lender shall
be obligated to assign and delegate), without recourse (in accordance with and subject to the restrictions contained in Section 9.05),
all of its interests, rights and obligations under this Agreement to an Eligible Assignee that shall assume such obligations (which
Eligible Assignee may be another Lender, if any Lender accepts such assignment); provided that (A) such Lender shall
have received payment of an amount equal to the outstanding principal amount of its Loans, in each case of such Class of Loans,
Commitments and/or Additional Commitments, accrued interest thereon, accrued fees and all other amounts payable to it under any
Loan Document with respect to such Class of Loans, Commitments and/or Additional Commitments, (B) in the case of any
assignment resulting from a claim for compensation under Section 2.15 or payments required to be made pursuant to Section 2.17,
such assignment will result in a reduction in such compensation or payments and (C) such assignment does not conflict with
applicable law. No Lender (other than a Defaulting Lender) shall be required to make any such assignment and delegation, and the
Borrower may not repay the Obligations of such Lender or terminate its Commitments or Additional Commitments, if, prior thereto,
as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation
cease to apply. Each Lender agrees that if it is replaced pursuant to this Section 2.19, it shall execute and deliver
to the Administrative Agent an Assignment and Assumption to evidence such sale and purchase and shall deliver to the Administrative
Agent any Promissory Note (if the assigning Lender’s Loans are evidenced by one or more Promissory Notes) subject to such
Assignment and Assumption (provided that the failure of any Lender replaced pursuant to this Section 2.19 to
execute an Assignment and Assumption or deliver any such Promissory Note shall not render such sale and purchase (and the corresponding
assignment) invalid), such assignment shall be recorded in the Register, any such Promissory Note shall be deemed cancelled. Each
Lender hereby irrevocably appoints the Administrative Agent (such appointment being coupled with an interest) as such Lender’s
attorney-in-fact, with full authority in the place and stead of such Lender and in the name of such Lender, from time to time in
the Administrative Agent’s discretion, with prior written notice to such Lender, to take any action and to execute any such
Assignment and Assumption or other instrument that the Administrative Agent may deem reasonably necessary to carry out the provisions
of this clause (b).
Section 2.20. Illegality.
If any Lender reasonably determines that any Change in Law has made it unlawful, or that any Governmental Authority has asserted
after the Closing Date that it is unlawful, for such Lender or its applicable lending office to make, maintain or fund Loans whose
interest is determined by reference to the Published LIBO Rate, or to determine or charge interest rates based upon the Published
LIBO Rate, or any Governmental Authority has imposed material restrictions on the authority of such Lender to purchase or sell,
or to take deposits of Dollars in the applicable interbank market, then, on notice thereof by such Lender to the Borrower through
the Administrative Agent, (i) any obligation of such Lender to make or continue LIBO Rate Loans in Dollars or to convert ABR
Loans to LIBO Rate Loans shall be suspended and (ii) if such notice asserts the illegality of such Lender making or maintaining
ABR Loans the interest rate on which is determined by reference to the Published LIBO Rate component of the Alternate Base Rate,
the interest rate on which ABR Loans of such Lender, shall, if necessary to avoid such illegality, be determined by the Administrative
Agent without reference to the Published LIBO Rate component of the Alternate Base Rate, in each case until such Lender notifies
the Administrative Agent and the Borrower that the circumstances giving rise to such determination no longer exist (which notice
such Lender agrees to give promptly). Upon receipt of such notice, (x) the Borrower shall, upon demand from such Lender (with
a copy to the Administrative Agent), prepay or convert all of such Lender’s LIBO Rate Loans to ABR Loans (the interest rate
on which ABR Loans of such Lender shall, if necessary to avoid such illegality, be determined by the Administrative Agent without
reference to the Published LIBO Rate component of the Alternate Base Rate) either on the last day of the Interest Period therefor,
if such Lender may lawfully continue to maintain such LIBO Rate Loans to such day, or immediately, if such Lender may not lawfully
continue to maintain such LIBO Rate Loans (in which case the Borrower shall not be required to make payments pursuant to Section 2.16
in connection with such payment) and (y) if such notice asserts the illegality of such Lender determining or charging interest
rates based upon the Published LIBO Rate, the Administrative Agent shall during the period of such suspension compute the Alternate
Base Rate applicable to such Lender without reference to the Published LIBO Rate component thereof until the Administrative Agent
is advised in writing by such Lender that it is no longer illegal for such Lender to determine or charge interest rates based upon
the Published LIBO Rate. Upon any such prepayment or conversion, the Borrower shall also pay accrued interest on the amount so
prepaid or converted. Each Lender agrees to designate a different lending office if such designation will avoid the need for such
notice and will not, in the determination of such Lender, otherwise be materially disadvantageous to such Lender.
Section 2.21. Defaulting
Lenders. Notwithstanding any provision of this Agreement to the contrary, if any Lender becomes a Defaulting Lender, then the
following provisions shall apply for so long as such Lender is a Defaulting Lender:
(a) The
Commitments of such Defaulting Lender shall not be included in determining whether all Lenders, each affected Lender, the Required
Lenders or such other number of Lenders as may be required hereby or under any other Loan Document have taken or may take any action
hereunder (including any consent to any waiver, amendment or modification pursuant to Section 9.02); provided
that any waiver, amendment or modification requiring the consent of all Lenders or each affected Lender which affects such Defaulting
Lender disproportionately and adversely relative to other affected Lenders shall require the consent of such Defaulting Lender.
(b) Any
payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of any Defaulting Lender
(whether voluntary or mandatory, at maturity, pursuant to Section 2.11, Section 2.15, Section 2.16,
Section 2.17, Section 2.18, Article 7, Section 9.05 or otherwise, and including
any amounts made available to the Administrative Agent by such Defaulting Lender pursuant to Section 9.09), shall be
applied at such time or times as may be determined by the Administrative Agent and, where relevant, the Borrower as follows: first,
to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder; second, so long as
no Default or Event of Default exists as the Borrower may request, to the funding of any Loan in respect of which such Defaulting
Lender has failed to fund its portion thereof as required by this Agreement; third, as the Administrative Agent or the Borrower
may elect, to be held in a deposit account and released in order to satisfy obligations of such Defaulting Lender to fund Loans
that such Defaulting Lender has committed to fund (if any) under this Agreement; fourth, to the payment of any amounts owing
to the non-Defaulting Lenders as a result of any judgment of a court of competent jurisdiction obtained by any non-Defaulting Lender
against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; fifth,
to the payment of any amounts owing to the Borrower as a result of any judgment of a court of competent jurisdiction obtained by
the Borrower against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this
Agreement; and sixth, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction. Any payments,
prepayments or other amounts paid or payable to any Defaulting Lender that are applied (or held) to pay amounts owed by any Defaulting
Lender shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.
Section 2.22. Incremental
Credit Extensions.
(a) The
Borrower may, at any time, on one or more occasions deliver a written request to the Administrative Agent (whereupon the Administrative
Agent shall promptly deliver a copy of such request to each of the Lenders) to add one or more new Classes of Credit Facilities
and/or increase the principal amount of the Loans under any Credit Facility by requesting new term loan commitments to be added
to such Loans (any such new Class or increase, an “Incremental Facility” and any loans made pursuant to
an Incremental Facility, “Incremental Loans”) in an aggregate principal amount not to exceed the Incremental
Cap; provided that:
(i) no
Incremental Commitment may be less than $5,000,000;
(ii) except
as separately agreed from time to time between the Borrower and any Lender, no Lender shall be obligated to provide any Incremental
Commitment, and the determination to provide such commitments shall be within the sole and absolute discretion of such Lender;
(iii) no
Incremental Facility or Incremental Loan (or the creation, provision or implementation thereof) shall require the approval of any
existing Lender (other than in its capacity, if any, as a Lender providing all or part of any Incremental Commitment or Incremental
Loan), the Administrative Agent (unless its rights and interests are adversely affected in any material respect) or any other agent
or arranger;
(iv) [Reserved].
(v) the
interest rate and any fees applicable to any Incremental Facility or Incremental Loans will be determined by the Borrower and the
lenders providing such Incremental Facility or Incremental Loans; provided, that solely with respect to any Incremental
Facility or Incremental Loans which are pari passu with the Initial Loans in right of payment and with respect to security,
the All-In Yield will not be more than 0.50% higher than the corresponding All-In Yield applicable to the Initial Loans unless
the All-In Yield with respect to the Initial Loans is adjusted to be equal to the All-In Yield with respect to the relevant Incremental
Facility or Incremental Loans minus 0.50%; provided, that this clause (v) shall not apply to any Incremental
Loans that do not exceed an aggregate principal amount, together with all other Incremental Facilities then outstanding, of $75,000,000;
(vi) the
final maturity date with respect to any Incremental Loans shall be no earlier than the Latest Maturity Date at the time of the
incurrence thereof;
(vii) the
Weighted Average Life to Maturity of any Incremental Facility shall be no shorter than the remaining Weighted Average Life to Maturity
of any then-existing Class of Loans (without giving effect to any prepayments thereof) except as may be required to achieve
fungibility with any existing Loans hereunder to the extent intended to be fungible;
(viii) (A) any
Incremental Facility may rank pari passu with or junior to any then-existing Class of Loans in right of payment and
may be secured by the Collateral pari passu with or junior to any then-existing Class of Loans with respect to security
or be unsecured (and to the extent the relevant Incremental Facility is pari passu with or subordinated to the Loans in
right of security with respect to the Collateral, shall be subject to the Intercreditor Agreements (and/or any other applicable
Acceptable Intercreditor Agreement), it being understood that any terms of subordination in right of payment of any Incremental
Facility to any Indebtedness may be determined solely by the Borrower in its sole discretion) and (B) no Incremental Facility
may be (x) guaranteed by any Person which is not a Loan Party or (y) secured by any assets other than the Collateral;
(ix) (A) any
prepayment (other than any scheduled amortization payment) of Incremental Loans that are pari passu with any then-existing
Loans in right of payment and security (1) shall with respect to mandatory prepayments, be made on a pro rata basis
or less than pro rata basis (but not greater than a pro rata basis) with such existing Loans and (2) may, with
respect to voluntary prepayments, share on a pro rata basis, greater than pro rata basis or less than pro rata
basis with the Initial Loans, as determined by the Borrower, and (B) any Incremental Loans that are subordinated to any then-existing
Loans in right of payment or security shall not receive any mandatory prepayments other than Declined Proceeds prior to the repayment
in full of the existing Loans (and all other then-existing Loans that are Second Priority Secured Obligations requiring ratable
prepayment), except, in each case that the Borrower and the lenders providing the relevant Incremental Loans shall be permitted,
in their sole discretion, to elect to prepay or receive, as applicable, any prepayments on a less than pro rata basis (but
not on a greater than pro rata basis);
(x) except
as otherwise agreed by the Lenders providing the relevant Incremental Facility in connection with any acquisition, investments
and repayments, repurchases and redemptions of indebtedness not prohibited by this Agreement, no Event of Default shall exist immediately
prior to or after giving effect to such Incremental Facility;
(xi) except
as otherwise required or permitted in this Section 2.22, all other terms of any Incremental Facility, if not consistent
with the terms of the Initial Loans, shall be reasonably satisfactory to the Borrower and the Administrative Agent (it being understood
that any terms which are not consistent with the terms of the Initial Loans and are applicable only after the then-existing Latest
Maturity Date are deemed to be reasonably acceptable to the Administrative Agent);
(xii) the
proceeds of any Incremental Facility may be used for working capital, general corporate purposes and any other purpose not prohibited
by this Agreement;
(xiii) on
the date of the making of any Incremental Loans that will be added to any existing Class of Loans, and notwithstanding anything
to the contrary set forth in Sections 2.08 or 2.13, such Incremental Loans shall be added to (and constitute a part
of) each borrowing of outstanding Loans of such Class, as applicable, of the same type with the same Interest Period of the respective
Class on a pro rata basis (based on the relative sizes of the various outstanding Borrowings), so that each Lender
providing such Incremental Loans will participate proportionately in each then outstanding borrowing of the applicable Loans of
the same type with the same Interest Period of the respective Class;
(xiv) any
increase in the Incremental Cap from voluntary prepayments, redemptions, repurchases or other retirements of unsecured Indebtedness
of unsecured Indebtedness incurred under clause (c) of the definition of “Incremental Cap” (and any refinancings
thereof), shall only increase the Incremental Cap with respect to the amount available for unsecured Indebtedness;
(xv) Incremental
Facilities shall be permitted regardless of the amount available under the Incremental Cap and shall not constitute a utilization
of any component of the Incremental Cap if any such Incremental Facility serves to effectively replace or extend the maturity of
or replaces any Loans or Commitments under (including as may have been terminated under Section 2.19) any then existing
Credit Facility or any Replacement Notes, in each case, without increasing the principal amount thereof except with respect to
any related premium, penalties, fees and expenses; provided, the amount of any Loans and Commitments so extended or replaced
shall not increase the Incremental Cap; and
(xvi) the
Borrower may select, in its sole discretion, that any Incremental Facility be issued, incurred and/or established under one or
more of any available components of the Incremental Cap (as provided in Section 1.10) and if no selection shall have
been made, such Incremental Facility shall be deemed to have been incurred in reliance on first, clause (c) of
the definition of “Incremental Cap” up to the maximum amount permitted thereunder, second, to the extent applicable,
clause (b) of the definition of “Incremental Cap”, and thereafter, to the Shared Fixed Incremental Amount.
(b) Incremental
Commitments may be provided by any existing Lender, or by any other lender (other than any Disqualified Institution) who would
be permitted to become a Lender (including any required consents) under Section 9.05 (any such other lender being called
an “Additional Lender”); provided that any Additional Lender that is an Affiliated Lender shall be subject
to the provisions of Section 9.05(h), mutatis mutandis, to the same extent as if Incremental Commitments and
related Obligations had been obtained by such Lender by way of assignment.
(c) Each
Lender or Additional Lender providing a portion of any Incremental Commitment shall execute and deliver to the Administrative Agent
and the Borrower all such documentation (including an amendment to this Agreement or any other Loan Document) as may be reasonably
required by the Administrative Agent to evidence and effectuate such Incremental Commitment. On the effective date of such Incremental
Commitment, each Additional Lender shall become a Lender for all purposes in connection with this Agreement.
(d) As
a condition precedent to the effectiveness of any Incremental Facility or the making of any Incremental Loans, (i) upon its
reasonable request, the Administrative Agent shall have received customary written opinions of counsel, as well as such reaffirmation
agreements, supplements and/or amendments as it shall reasonably require, (ii) the Administrative Agent shall have received,
from each Additional Lender, an administrative questionnaire, in the form provided to such Additional Lender by the Administrative
Agent (the “Administrative Questionnaire”) and such other documents as it shall reasonably and customarily require
from such Additional Lender, (iii) the Lenders shall have received all fees required to be paid in respect of such Incremental
Facility or Incremental Loans and (iv) the Administrative Agent shall have received a certificate of the Borrower signed by
a Responsible Officer thereof:
(A) certifying
and attaching a copy of the resolutions adopted by the governing body of the Borrower approving or consenting to such Incremental
Facility or Incremental Loans, and
(B) to
the extent applicable, certifying that the condition set forth in clause (a)(x) above has been satisfied.
(e) The
Lenders hereby irrevocably authorize such amendments to this Agreement and the other Loan Documents as may be necessary in order
to establish new Classes or sub-Classes in respect of Loans or commitments increased or extended pursuant to this Section 2.22
and authorize the Administrative Agent and the Borrower to enter into such technical amendments as may be necessary or appropriate
in the reasonable opinion of the Administrative Agent and the Borrower in connection with the establishment of such new Classes
or sub-Classes, in each case on terms consistent with this Section 2.22.
(f) To
the extent the provisions of clause (a)(xiii) above require that Lenders making new Incremental Loans add such Incremental
Loans to the then outstanding borrowings of LIBO Rate Loans of the respective Class of Initial Loans or Additional Loans,
as applicable, it is acknowledged that the effect thereof may result in such new Incremental Loans having short Interest Periods
(i.e., an Interest Period that began during an Interest Period then applicable to outstanding LIBO Rate Loans of the respective
Class and which will end on the last day of such Interest Period).
(g) Notwithstanding
anything to the contrary in this Section 2.22 or in any other provision of any Loan Document, if the proceeds of any
Incremental Facility are intended to be applied to finance an acquisition and the Lenders or Additional Lenders providing such
Incremental Facility so agree, the availability thereof shall be subject to customary “SunGard” or “certain funds”
conditionality.
(h) This
Section 2.22 shall supersede any provision in Section 2.18 or 9.02 to the contrary and shall, to
extent applicable, be subject in all respects to Section 1.10.
Section 2.23. Extensions
of Loans.
(a) Notwithstanding
anything to the contrary in this Agreement, pursuant to one or more offers (each, an “Extension Offer”) made
from time to time by the Borrower to all Lenders holding Loans or Commitments of any Class or Classes (as determined by the
Borrower), in each case on a pro rata basis (based on the aggregate outstanding principal amount of the respective Loans
or Commitments with respect to each such Class) and on the same terms to each such Lender, the Borrower is hereby permitted from
time to time to consummate transactions with any individual Lender who accepts the terms contained in any such Extension Offer
to extend the Maturity Date of such Lender’s Loans and/or commitments and otherwise modify the terms of such Loans and/or
commitments pursuant to the terms of the relevant Extension Offer (including by increasing the interest rate or fees payable in
respect of such Loans and/or commitments (and related outstandings) and/or modifying the amortization schedule in respect of such
Loans) (each, an “Extension”; any Extended Loans shall constitute a separate Class of Loans from the Class of
Loans from which they were converted), so long as the following terms are satisfied:
(i) no
Default under Sections 7.01(a), (f) or (g) or Event of Default shall exist at the time the notice
in respect of an Extension Offer is delivered to the applicable Lenders, and no Default under Sections 7.01(a), (f) or
(g) or Event of Default shall exist immediately prior to or after giving effect to the effectiveness of any Extension;
(ii) [Reserved];
(iii) except
as to (x) interest rates, fees, amortization, final maturity date, premiums, required prepayment dates and participation in
prepayments (which shall, subject to immediately succeeding clauses (iv), (v) and (vi), be determined
by the Borrower and any Lender who agrees to an Extension and set forth in the relevant Extension Offer) and (y) any covenants
or other provisions applicable only to periods after the Latest Maturity Date (in each case, as of the date of such Extension),
the Loans of any Lender extended pursuant to any Extension (any such extended Loans, the “Extended Loans”) shall
have the same terms as the Class of Loans subject to the relevant Extension Offer; provided, however, that with
respect to representations and warranties, affirmative and negative covenants and events of default that are applicable to any
such Class of Extended Loans, such provisions may be more favorable to the lenders of the applicable Class of Extended
Loans than those originally applicable to the Class of Loans subject to the relevant Extension Offer, so long as (and only
so long as) such provisions also expressly apply to (and for the benefit of) the Class of Loans subject to the relevant Extension
Offer and each other Class of Loans hereunder;
(iv) the
final maturity date of any Extended Loans shall be no earlier than the then applicable Latest Maturity Date at the time of extension;
(v) the
Weighted Average Life to Maturity of any Extended Loans shall be no shorter than the remaining Weighted Average Life to Maturity
of the Loans or any other Extended Loans extended thereby;
(vi) any
Extended Loans may participate, with respect to mandatory prepayments or repayments (but, for purposes of clarity, not scheduled
amortization payments) on a pro rata basis or a less than pro rata basis (but not greater than a pro rata
basis) and with respect to voluntary prepayments or repayments on a pro rata basis, a less than pro rata basis or
a greater than a pro rata basis in respect of the Initial Loans (and any Additional Loans then subject to ratable repayment
requirements), in each case as specified in the respective Extension Offer;
(vii) if
the aggregate principal amount of Loans or commitments, as the case may be, in respect of which Lenders shall have accepted the
relevant Extension Offer exceeds the maximum aggregate principal amount of Loans or commitments, as the case may be, offered to
be extended by the Borrower pursuant to such Extension Offer, then the Loans or commitments, as the case may be, of such Lenders
shall be extended ratably up to such maximum amount based on the respective principal amounts (but not to exceed actual holdings
of record) with respect to which such Lenders have accepted such Extension Offer;
(viii) each
Extension shall be in a minimum amount of $5,000,000;
(ix) any
applicable Minimum Extension Condition shall be satisfied or waived by the Borrower; and
(x) all
documentation in respect of such Extension shall be consistent with the foregoing.
(b) With
respect to any Extension consummated pursuant to this Section 2.23, (i) no such Extension shall constitute a voluntary
or mandatory prepayment for purposes of Section 2.11 and (ii) except as set forth in clause (a)(viii) above,
no Extension Offer is required to be in any minimum amount or any minimum increment; provided that the Borrower may, at
its election, specify as a condition (a “Minimum Extension Condition”) to consummating such Extension that a
minimum amount (to be determined and specified in the relevant Extension Offer in the Borrower’s sole discretion and which
may be waived by the Borrower) of Loans or commitments (as applicable) of any or all applicable Classes be tendered. The Administrative
Agent and the Lenders hereby consent to the transactions contemplated by this Section 2.23 (including, for the avoidance
of doubt, any payment of any interest, fees or premium in respect of any Class of Extended Loans on such terms as may be set
forth in the relevant Extension Offer) and hereby waive the requirements of any provision of this Agreement (including Section 2.10,
2.11 or 2.18) or any other Loan Document that may otherwise prohibit any Extension or any other transaction contemplated
by this Section 2.23.
(c) No
consent of any Lender or the Administrative Agent shall be required to effectuate any Extension, other than the consent of each
Lender agreeing to such Extension with respect to one or more of its Loans and/or commitments under any Class (or a portion
thereof). All Extended Loans and all obligations in respect thereof shall constitute Secured Obligations under this Agreement and
the other Loan Documents that are secured by the Collateral and guaranteed on a pari passu basis with all other applicable
Secured Obligations under this Agreement and the other Loan Documents. The Lenders hereby irrevocably authorize the Administrative
Agent to enter into such amendments to this Agreement and the other Loan Documents with the Borrower as may be necessary in order
to establish new Classes or sub-Classes in respect of Loans or commitments so extended and such technical amendments as may be
necessary or appropriate in the reasonable opinion of the Administrative Agent and the Borrower in connection with the establishment
of such new Classes or sub-Classes, in each case on terms consistent with this Section 2.23.
(d) In
connection with any Extension, the Borrower shall provide the Administrative Agent at least ten Business Days’ (or such shorter
period as may be agreed by the Administrative Agent) prior written notice thereof, and shall agree to such procedures (including
regarding timing, rounding and other adjustments and to ensure reasonable administrative management of the credit facilities hereunder
after such Extension), if any, as may be established by, or acceptable to, the Administrative Agent, in each case acting reasonably
to accomplish the purposes of this Section 2.23.
ARTICLE III
REPRESENTATIONS
AND WARRANTIES
On the dates and to the
extent required pursuant to Section 4.01, each of (i) in the case of Holdings, solely with respect to Sections
3.01, 3.02, 3.03, 3.07, 3.08, 3.09, 3.13, 3.14, 3.16 and 3.17,
and (ii) the Borrower hereby represent and warrant to the Lenders that:
Section 3.01. Organization;
Powers. Each of the Loan Parties and each of its Restricted Subsidiaries (a) is (i) duly organized and validly existing
and (ii) in good standing (to the extent such concept exists in the relevant jurisdiction) under the laws of its jurisdiction
of organization, (b) has all requisite organizational power and authority to own its property and assets and to carry on its
business as now conducted and (c) is qualified to do business in, and is in good standing (to the extent such concept exists
in the relevant jurisdiction) in, every jurisdiction where its ownership, lease or operation of properties or conduct of its business
requires such qualification; except, in each case referred to in this Section 3.01 (other than clause (a)(i) with
respect to the Borrower and clause (b) with respect to the Loan Parties) where the failure to do so, individually
or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect.
Section 3.02. Authorization;
Enforceability. The execution, delivery and performance of each of the Loan Documents are within each applicable Loan Party’s
corporate or other organizational power and have been duly authorized by all necessary corporate or other organizational action
of such Loan Party. Each Loan Document to which any Loan Party is a party has been duly executed and delivered by such Loan Party
and is a legal, valid and binding obligation of such Loan Party, enforceable in accordance with its terms, subject to the Legal
Reservations.
Section 3.03. Governmental
Approvals; No Conflicts. The execution and delivery of the Loan Documents by each Loan Party party thereto and the performance
by such Loan Party thereof (a) do not require any consent or approval of, registration or filing with, or any other action
by, any Governmental Authority, except (i) such as have been obtained or made and are in full force and effect, (ii) in
connection with the Perfection Requirements and (iii) such consents, approvals, registrations, filings, or other actions the
failure to obtain or make which would not be reasonably expected to have a Material Adverse Effect, (b) will not violate any
(i) of such Loan Party’s Organizational Documents or (ii) Requirements of Law applicable to such Loan Party which
violation, in the case of this clause (b)(ii), would reasonably be expected to have a Material Adverse Effect and (c) will
not violate or result in a default under (i) the ABL Credit Agreement, (ii) the First Lien Credit Agreement, or (iii) any
other material Contractual Obligation to which such Loan Party is a party which violation, in the case of this clause (c),
would reasonably be expected to result in a Material Adverse Effect.
Section 3.04. Financial
Condition; No Material Adverse Effect.
(a) The
financial statements most recently provided pursuant to Section 5.01(a) or (b), as applicable, present
fairly, in all material respects, the financial position and results of operations and cash flows of the Borrower on a consolidated
basis as of such dates and for such periods in accordance with GAAP, (x) except as otherwise expressly noted therein, (y) subject,
in the case of financial statements provided pursuant to Section 5.01(a), to the absence of footnotes and normal year-end
adjustments and (z) except as may be necessary to reflect any differing entities and organizational structure prior to giving
effect to the Transactions.
(b) Since
the Closing Date, there have been no events, developments or circumstances that have had, or could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
Section 3.05. Properties.
(a) As
of the Closing Date, Schedule 3.05 sets forth the address of each Real Estate Asset (or each set of such assets that
collectively comprise one operating property) that is owned in fee simple by any Loan Party.
(b) The
Borrower and each of its Restricted Subsidiaries have good and valid fee simple title to or rights to purchase, or valid leasehold
interests in, or easements or other limited property interests in, all of their respective Real Estate Assets and have good title
to their personal property and assets, in each case, except (i) for defects in title that do not materially interfere with
their ability to conduct their business as currently conducted or to utilize such properties and assets for their intended purposes
or (ii) where the failure to have such title would not reasonably be expected to have a Material Adverse Effect. All such
properties and assets are free and clear of Liens, other than Permitted Liens.
(c) The
Borrower and its Restricted Subsidiaries own or otherwise have a license or right to use all rights in Patents, Trademarks, Copyrights
and other rights in works of authorship (including all copyrights embodied in software) and all other intellectual property rights
(“IP Rights”) used to conduct the businesses of the Borrower and its Restricted Subsidiaries as presently conducted
without, to the knowledge of the Borrower, any infringement, dilution, or misappropriation or other violation of the IP Rights
of third parties, except to the extent such failure to own or license or have rights to use would not, or where such infringement,
misappropriation or violation would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
Section 3.06. Litigation
and Environmental Matters.
(a) There
are no actions, suits or proceedings by or before any arbitrator or Governmental Authority pending against or, to the knowledge
of the Borrower, threatened in writing against or affecting the Loan Parties or any of their Restricted Subsidiaries which would
reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect.
(b) Except
for any matters that, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect,
(i) no Loan Party nor any of its Restricted Subsidiaries is subject to or has received notice of any Environmental Claim or
any Environmental Liability and knows of no basis for such Environmental Claim or Environmental Liability and (ii) no Loan
Party nor any of its Restricted Subsidiaries has failed to comply with any Environmental Law or to obtain, maintain or comply with
any permit, license or other approval required under any Environmental Law.
(c) Neither
any Loan Party nor any of its Restricted Subsidiaries has treated, stored, transported or Released any Hazardous Materials on,
at or from any currently or formerly operated real estate or facility and no Hazardous Materials are otherwise present at any currently
owned or operated real estate or facility, in either case, in a manner that would reasonably be expected to have a Material Adverse
Effect.
Section 3.07. Compliance
with Laws. Each of Holdings, the Borrower and each of its Restricted Subsidiaries is in compliance with all Requirements of
Law applicable to it or its property, except, in each case where the failure to do so, individually or in the aggregate, would
not reasonably be expected to result in a Material Adverse Effect, it being understood and agreed that this Section 3.07
shall not apply to the Requirements of Law covered by Section 3.17.
Section 3.08. Investment
Company Status. No Loan Party is an “investment company” as defined in, or is required to be registered under,
the Investment Company Act of 1940.
Section 3.09. Taxes.
Each of Holdings, the Borrower and each of its Restricted Subsidiaries has timely filed or caused to be filed all Tax returns and
reports required to have been filed and has paid or caused to be paid all Taxes required to have been paid by it that are due and
payable, including in its capacity as a withholding agent, except (a) Taxes (or any requirement to file Tax returns with respect
thereto) that are being contested in good faith by appropriate proceedings and for which Holdings, the Borrower or such Restricted
Subsidiary, as applicable, has set aside on its books adequate reserves in accordance with GAAP or (b) to the extent that
the failure to file or pay, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse
Effect.
Section 3.10. ERISA.
(a) Each
Plan is in compliance in form and operation with its terms and with ERISA and the Code and all other applicable laws and regulations,
except where any failure to comply would not reasonably be expected to result in a Material Adverse Effect.
(b) No
ERISA Event has occurred and is continuing or is reasonably expected to occur that, when taken together with all other such ERISA
Events for which liability is reasonably expected to occur, would reasonably be expected to result in a Material Adverse Effect.
Section 3.11. Disclosure.
(a) As
of the Closing Date, and with respect to information relating to the Company and its subsidiaries, to the knowledge of the Initial
Borrower, all written information (other than the Projections, other forward-looking information and information of a general economic
or industry-specific nature) concerning Holdings, the Borrower and its Restricted Subsidiaries and the Transactions and that was
prepared by or on behalf of Holdings or its subsidiaries or their respective representatives and made available to any Lender or
the Administrative Agent in connection with the Transactions on or before the Closing Date (the “Information”),
when taken as a whole, did not, when furnished, contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements contained therein not materially misleading in light of the circumstances under which
such statements are made (after giving effect to all supplements and updates thereto from time to time).
(b) The
Projections have been prepared in good faith based upon assumptions believed by the Borrower to be reasonable at the time furnished
(it being recognized that such Projections are not to be viewed as facts and are subject to significant uncertainties and contingencies
many of which are beyond the Borrower’s control, that no assurance can be given that any particular financial projections
(including the Projections) will be realized, that actual results may differ from projected results and that such differences may
be material).
Section 3.12. Solvency.
As of the Closing Date, immediately after the consummation of the Transactions to occur on the Closing Date and the incurrence
of Indebtedness and obligations on the Closing Date in connection with this Agreement, the First Lien Credit Agreement and the
ABL Credit Agreement, (i) the sum of the debt (including contingent liabilities) of the Borrower and its Restricted Subsidiaries,
taken as a whole, does not exceed the fair value of the assets of the Borrower and its Restricted Subsidiaries, taken as a whole;
(ii) the present fair saleable value of the assets of the Borrower and its Restricted Subsidiaries, taken as a whole, is not
less than the amount that will be required to pay the probable liabilities of the Borrower and its Restricted Subsidiaries, taken
as a whole, on their debts as they become absolute and matured; (iii) the capital of the Borrower and its Restricted Subsidiaries,
taken as a whole, is not unreasonably small in relation to the business of the Borrower and its Restricted Subsidiaries, taken
as a whole, contemplated as of the Closing Date; and (iv) the Borrower and its Restricted Subsidiaries, taken as a whole,
do not intend to incur, or believe that they will incur, debts (including current obligations and contingent liabilities) beyond
their ability to pay such debts as they mature in the ordinary course of business. For the purposes hereof, 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
liability meets the criteria for accrual under Statement of Financial Accounting Standards No. 5).
Section 3.13. Capitalization
and Subsidiaries. Schedule 3.13 sets forth, in each case as of the Closing Date, (a) a correct and complete
list of the name of each subsidiary of Holdings and the ownership interest therein held by Holdings or its applicable subsidiary,
and (b) the type of entity of each Loan Party and each subsidiary of Holdings with respect to which a portion of such subsidiary’s
equity is pledged by a Loan Party as Collateral.
Section 3.14. Security
Interest in Collateral. Subject to the terms of the last paragraph of Section 4.01 and any limitations and exceptions
set forth in any Loan Document, the Legal Reservations, the Perfection Requirements, the provisions of this Agreement and the other
relevant Loan Documents (including the Intercreditor Agreements (and any other applicable Acceptable Intercreditor Agreement))
and/or any other applicable intercreditor arrangement, the Collateral Documents create legal, valid and enforceable Liens on all
of the Collateral in favor of the Administrative Agent, for the benefit of itself and the other Secured Parties, and upon the satisfaction
of the Perfection Requirements, such Liens constitute perfected Liens (with the priority that such Liens are expressed to have
under the relevant Collateral Documents, unless otherwise permitted hereunder or under any Collateral Document) on the Collateral
(to the extent such Liens are required to be perfected under the terms of the Loan Documents) securing the Secured Obligations,
in each case as and to the extent set forth therein.
Section 3.15. Labor
Disputes. Except as individually or in the aggregate would not reasonably be expected to have a Material Adverse Effect or
to the extent otherwise disclosed on Schedule 3.15 hereto: (a) there are no strikes, lockouts or slowdowns against
the Borrower or any of its Restricted Subsidiaries pending or, to the knowledge of the Borrower or any of its Restricted Subsidiaries,
threatened by any union or labor organization purporting to act as exclusive bargaining representative and (b) the hours worked
by and payments made to employees of the Borrower and its Restricted Subsidiaries have not been in violation of the Fair Labor
Standards Act or any other applicable Federal, state, local or foreign law dealing with such matters.
Section 3.16. Federal
Reserve Regulations. No part of the proceeds of any Loan will be used, whether directly or indirectly, and whether immediately,
incidentally or ultimately, for any purpose that results in a violation of the provisions of Regulation T, U or X.
Section 3.17. Economic
and Trade Sanctions and Anti-Corruption Laws.
(a) (i) None
of Holdings, the Borrower nor any of its Restricted Subsidiaries nor, to the knowledge of the Borrower, any director, officer,
agent, employee or Affiliate of any of the foregoing is (A) a person on the list of “Specially Designated Nationals
and Blocked Persons” or (B) currently the subject of any U.S. sanctions administered by the Office of Foreign Assets
Control of the U.S. Treasury Department (“OFAC”) or the U.S. State Department (collectively, “Sanctions”);
and (ii) the Borrower will not directly or, to the Borrower’s knowledge, indirectly, use the proceeds of the Loans or
otherwise make available such proceeds to any Person, for the purpose of financing activities of or with any Person or in any country
or territory that, at the time of such financing, is the subject of Sanctions, except to the extent permissible for a Person required
to comply with Sanctions.
(a) To
the extent applicable, each Loan Party is in compliance in all material respects with (i) each of the foreign assets control
regulations of the U.S. Treasury Department (31 CFR, Subtitle B, Chapter V), and any other enabling legislation or executive
order relating thereto, (ii) the USA PATRIOT Act, and, to its knowledge, other anti-terrorism and anti-money laundering laws,
and (iii) the U.S. Foreign Corrupt Practices Act of 1977 (the “FCPA”).
(b) No
part of the proceeds of any Loan will be used, directly or, to the knowledge of the Borrower, indirectly, for any payments to any
governmental official or employee, political party, official of a political party, candidate for political office, or anyone else
acting in an official capacity, in order to improperly obtain, retain or direct business or obtain any improper advantage, in violation
of the FCPA.
ARTICLE IV
CONDITIONS
Section 4.01. Closing
Date. The obligations of any Lender to make Loans shall not become effective until the date on which each of the following
conditions is satisfied (or waived in accordance with Section 9.02), subject in all respects to the last paragraph
of this Section 4.01:
(a) Credit
Agreement and Loan Documents. The Administrative Agent (or its counsel) shall have received from the Borrower, Holdings and
each other Loan Party party thereto on the Closing Date: (i) a counterpart signed by each such Loan Party (or written evidence
reasonably satisfactory to the Administrative Agent (which may include a copy transmitted by facsimile or other electronic method)
that such party has signed a counterpart and, in the case of any Subsidiary Guarantors, may be delivered in escrow pending the
consummation of the Acquisition) of (A) this Agreement, (B) the Security Agreement, (C) any Intellectual Property
Security Agreement, (D) the Loan Guaranty, (E) the Intercreditor Agreements, and (F) any Promissory Note requested
by a Lender at least three Business Days prior to the Closing Date and (ii) a Borrowing Request pursuant to Section 2.03.
(b) Legal
Opinions. The Administrative Agent (or its counsel) shall have received a favorable customary written opinion of (i) Ropes &
Gray LLP, in its capacity as special counsel for Holdings and (ii) Lowenstein Sandler LLP, as local New Jersey counsel for
the Loan Parties organized under the laws of New Jersey, in each case, dated the Closing Date, addressed to the Administrative
Agent and the Lenders.
(c) Financial
Statements and Pro Forma Financial Statements. The Administrative Agent shall have received (i) (A) the audited consolidated
balance sheets of Company and its subsidiaries and the related audited consolidated statements of income and retained earnings,
shareholders’ equity and cash flows as of, and for each of the fiscal years ended, December 31, 2014, December 31,
2015 and December 31, 2016 and (B) the unaudited consolidated quarterly balance sheets of the Company and its subsidiaries
and the related unaudited consolidated statements of income and retained earnings of the Company for each Fiscal Quarter ended
at least 60 days prior to the Closing Date and (ii) the unaudited pro forma consolidated balance sheet as of and for
the most recently ended fiscal period pursuant to clause (i)(A) or (i)(B) above, which need not be prepared
in compliance with Regulation S-X of the Securities Act of 1933, as amended, or include adjustments for purchase accounting.
(d) Closing
Certificates; Certified Charters; Good Standing Certificates. The Administrative Agent (or its counsel) shall have received
(i) a certificate of each Loan Party, dated the Closing Date and executed by a secretary, assistant secretary or other Responsible
Officer (as the case may be) thereof, which shall (A) certify that attached thereto is a true and complete copy of the resolutions
or written consents of its shareholders, board of directors, board of managers, members or other governing body authorizing the
execution, delivery and performance of the Loan Documents to which it is a party and, in the case of the Borrower, the borrowings
hereunder, and that such resolutions or written consents have not been modified, rescinded or amended (other than as attached thereto)
and are in full force and effect, (B) identify by name and title and bear the signatures of the officers, managers, directors
or authorized signatories of such Loan Party authorized to sign the Loan Documents to which it is a party on the Closing Date and
(C) certify (x) that attached thereto is a true and complete copy of the certificate or articles of incorporation or
organization (or memorandum of association or other equivalent thereof) of such Loan Party certified by the relevant authority
of the jurisdiction of organization of such Loan Party and a true and correct copy of its by-laws or operating, management, partnership
or similar agreement and (y) that such documents or agreements have not been amended (except as otherwise attached to such
certificate and certified therein as being the only amendments thereto as of such date) and (ii) a good standing (or equivalent)
certificate as of a recent date for such Loan Party from its jurisdiction of organization, to the extent available.
(e) Representations
and Warranties. The (i) Specified Merger Agreement Representations shall be true and correct solely to the extent required
by the terms of the definition thereof and (ii) the Specified Representations shall be true and correct in all material respects
on and as of the Closing Date; provided that (A) in the case of any Specified Representation which expressly relates
to a specific date or period, such representation and warranty shall be true and correct in all material respects as of the respective
date or for the respective period, as the case may be and (B) if any Specified Representation is qualified by or subject to
a “material adverse effect”, “material adverse change” or similar term or qualification, the definition
thereof shall be the definition of “Closing Date Material Adverse Effect” for purposes of the making or deemed making
of such Specified Representation on, or as of, the Closing Date (or any date prior thereto).
(f) Fees.
Prior to or substantially concurrently with the funding of the Initial Loans hereunder, the Administrative Agent shall have received
(i) all fees required to be paid by the Borrower on the Closing Date pursuant to the Fee Letter and (ii) all expenses
required to be paid by the Borrower for which invoices have been presented at least three Business Days prior to the Closing Date
or such later date to which the Borrower may agree (including the reasonable fees and expenses of legal counsel), in each case
on or before the Closing Date, which amounts may be offset against the proceeds of the Loans.
(g) Equity
Contribution. Prior to or substantially concurrently with the initial funding of the Loans hereunder, the Borrower shall have
received the Equity Contribution (to the extent not otherwise applied to the Transactions).
(h) Solvency.
The Administrative Agent (or its counsel) shall have received a certificate dated as of the Closing Date in substantially the form
of Exhibit K from the chief financial officer (or other officer with reasonably equivalent responsibilities) of the
Borrower certifying as to the matters set forth therein.
(i) Perfection
Certificate. The Administrative Agent (or its counsel) shall have received a completed Perfection Certificate dated the Closing
Date and signed by a Responsible Officer of each Loan Party, together with all attachments contemplated thereby.
(j) Pledged
Stock; Stock Powers; Pledged Notes. Subject to the terms of the Intercreditor Agreements, the Administrative Agent (or the
First Lien Agent as its bailee and agent, or their respective counsels) shall have received (i) the certificates representing
the Capital Stock required to be pledged pursuant to the Security Agreement, together with an undated stock or similar power for
each such certificate executed in blank by a duly authorized officer of the pledgor thereof, and (ii) each Material Debt Instrument
(if any) endorsed (without recourse) in blank (or accompanied by an executed transfer form in blank) by the pledgor thereof.
(k) Filings
Registrations and Recordings. Each document (including any UCC (or similar) financing statement) required by any Collateral
Document or under law to be filed, registered or recorded in order to create in favor of the Administrative Agent, for the benefit
of the Secured Parties, a perfected Lien on the Collateral required to be delivered pursuant to such Collateral Document, prior
and superior in right of security to any other Person (subject to the terms of the Intercreditor Agreements and other than with
respect to Permitted Liens), shall have been received by the Administrative Agent and be in proper form for filing, registration
or recordation.
(l) Transactions.
Substantially concurrently with the initial funding of the Loans hereunder, the Acquisition shall be consummated in accordance
with the terms of the Merger Agreement, but without giving effect to any amendments, waivers or consents by Holdings or the Borrower
that are materially adverse to the interests of the Initial Committed Lenders on the Closing Date without the consent of the Initial
Committed Lenders, such consent not to be unreasonably withheld, delayed or conditioned.
(m) Closing
Date Material Adverse Effect. Since April 1, 2017, there shall not have been any Closing Date Material Adverse Effect.
(n) USA
PATRIOT Act. No later than three (3) Business Days in advance of the Closing Date, the Administrative Agent shall have
received all documentation and other information required pursuant to applicable “know your customer” and anti-money
laundering rules and regulations, including the USA PATRIOT Act with respect to any Loan Party to the extent reasonably requested
by any Initial Committed Lender in writing at least ten (10) Business Days in advance of the Closing Date.
(o) Officer’s
Certificate. The Administrative Agent shall have received a certificate signed by a Responsible Officer of the Borrower certifying
as of the Closing Date to the matters set forth in Section 4.01(e) and Section 4.01(m).
(p) Refinancing.
Prior to or substantially concurrently with the initial funding of the Loans hereunder, all Indebtedness for borrowed money of
the Company and its subsidiaries under that certain Second Amended and Restated Credit Agreement, dated as of November 9,
2012, among the Company, certain subsidiaries of the Company, the lenders party thereto and Bank of America, N.A., as administrative
agent, will be repaid, redeemed, defeased, discharged, refinanced or terminated, and all related commitments, guaranties and security
interests will be terminated and released or arrangements therefor to the reasonable satisfaction of the Administrative Agent shall
have been made (the actions described in this Section 4.01(p), the “Refinancing”).
For purposes of determining
whether the conditions specified in this Section 4.01 have been satisfied on the Closing Date, by funding the Loans
hereunder, the Administrative Agent and each Lender that has executed this Agreement (or an Assignment and Assumption on the Closing
Date) shall be deemed to have consented to, approved or accepted, or to be satisfied with, each document or other matter required
hereunder to be consented to or approved by or acceptable or satisfactory to the Administrative Agent or such Lender, as the case
may be.
Notwithstanding the foregoing,
to the extent the Lien on any Collateral (including the granting or perfection of any security interest) or Guarantee is not or
cannot be provided on the Closing Date (other than (i) a pledge of the Capital Stock of the Borrower to the extent such pledge
may be perfected on the Closing Date by the delivery to the First Lien Agent as bailee and agent for the Administrative Agent of
a stock or equivalent certificate representing such Capital Stock (together with a stock power or similar instrument endorsed in
blank for the relevant certificate), (ii) the granting of liens in the Collateral owned by Holdings, the Borrower and each
Subsidiary Guarantor pursuant to a New York law security agreement (and the perfection thereof solely to the extent such liens
may be perfected by the filing of a UCC-1 financing statement), (iii) a pledge of the Capital Stock of each Subsidiary Guarantor
to the extent such pledge may be perfected on the Closing Date by the delivery to the First Lien Agent as bailee and agent for
the Administrative Agent of a stock or equivalent certificate representing such Capital Stock (together with a stock power or similar
instrument endorsed in blank for the relevant certificate), but solely to the extent such stock or equivalent certificates have
been delivered to the Initial Borrower prior to or substantially concurrently with the consummation of the Transactions on the
Closing Date after use of commercially reasonable efforts by the Initial Borrower to procure delivery thereof without undue burden
or expense, and (iv) the Guarantee by Holdings and each Subsidiary Guarantor that is a material Domestic Subsidiary), then
the provision (and/or perfection) of such Collateral and/or Guarantee shall not constitute a condition precedent to the availability
or initial funding of the Credit Facilities on the Closing Date but may instead be provided (and/or perfected) within ninety (90)
days after the Closing Date or such later date as the Administrative Agent may reasonably agree. For the avoidance of doubt, no
Guarantees or Collateral by or of any Foreign Subsidiaries that are Loan Parties shall be required to be delivered, granted opt
perfected on the Closing Date.
ARTICLE V
AFFIRMATIVE
COVENANTS
From the Closing Date
until the Termination Date, (i) in the case of Holdings, solely with respect to Sections 5.01, 5.02, 5.03,
5.08, and 5.12, and (ii) the Borrower hereby covenant and agree with the Lenders that:
Section 5.01. Financial
Statements and Other Reports. The Borrower will deliver to the Administrative Agent for delivery to each Lender:
(a) Quarterly
Financial Statements. Within 45 days (or 60 days in the case of the Fiscal Quarters ending on or around June 30,
2017, September 30, 2017, March 31, 2018 and June 30, 2018) after the end of each of the first three Fiscal Quarters
of each Fiscal Year, commencing with the Fiscal Quarter ending June 30, 2017, the consolidated balance sheet of the Borrower
as at the end of such Fiscal Quarter and the related consolidated statements of income and cash flows of the Borrower for such
Fiscal Quarter and for the period from the beginning of the then current Fiscal Year to the end of such Fiscal Quarter, and setting
forth (commencing with the Fiscal Quarter ending on or around March 31, 2019), in reasonable detail, in comparative form the
corresponding figures for the corresponding periods of the previous Fiscal Year, all in reasonable detail, together with a Responsible
Officer Certification (which may be included in the applicable Compliance Certificate) with respect thereto and, at the option
of the Borrower, either (i) a Narrative Report with respect thereto or (ii) a conference call with the Lenders, hosted
by the Administrative Agent, which call shall be held after delivery of the applicable financial statements, during normal business
hours and otherwise at a time mutually agreed between the Borrower and the Administrative Agent for the applicable Fiscal Quarter
(it being agreed that at least one such conference call with the Lenders shall be held in each calendar year, commencing with 2018);
(b) Annual
Financial Statements. Within 120 days after the end of the first Fiscal Year following the Closing Date and within 90 days
after the end of each Fiscal Year thereafter, (i) the consolidated balance sheet of the Borrower as at the end of such Fiscal
Year and the related consolidated statements of income, shareholders’ equity and cash flows of the Borrower for such Fiscal
Year and setting forth (commencing with the Fiscal Year ending on or around December 31, 2018), in reasonable detail, in comparative
form the corresponding figures for the previous Fiscal Year (which, for comparison against the figures for the Fiscal Year ending
on or around December 31, 2017, may be based on figures derived from a combined or other pro forma presentation of
any predecessor and successor periods as reasonably determined by the Borrower) and (ii) with respect to such consolidated
financial statements, (A) a report thereon from the Company’s certified public accountant commencing with the Fiscal
Year ending on or around December 31, 2017, or any nationally recognized independent certified public accountant of recognized
national standing (which report shall be unqualified as to “going concern” (other than resulting from the impending
maturity of any Indebtedness or any actual or prospective breach of any financial covenant) and scope of audit, and shall state
that such consolidated financial statements fairly present, in all material respects, the consolidated financial position of the
Borrower as at the dates indicated and its income and cash flows for the periods indicated in conformity with GAAP and (B) at
the option of the Borrower, either (i) a Narrative Report with respect to such Fiscal Year, or (ii) a conference call
with the Lenders, hosted by the Administrative Agent, which call shall be held after delivery of the applicable financial statements,
during normal business hours and otherwise at a time mutually agreed between the Borrower and the Administrative Agent for the
applicable Fiscal Year (it being agreed that at least one such conference call with the Lenders shall be held in each calendar
year, commencing with 2018);
(c) Compliance
Certificate. Together with each delivery of financial statements of the Borrower pursuant to Sections 5.01(a) and
5.01(b), (i) a duly executed and completed Compliance Certificate (A) certifying that no Default or Event of Default
exists (or if a Default or Event of Default exists, describing in reasonable detail such Default or Event of Default and the steps
being taken to cure, remedy or waive the same) and (B) in the case of financial statements delivered pursuant to Section 5.01(b),
setting forth reasonably detailed calculations of Excess Cash Flow of the Borrower and its Restricted Subsidiaries for each Fiscal
Year beginning with the financial statements for the Fiscal Year ending December 31, 2018, (ii) (A) a summary of
pro forma or consolidating adjustments necessary to eliminate the accounts of Unrestricted Subsidiaries (if any) from such
financial statements and (B) a list identifying each subsidiary of the Borrower as a Restricted Subsidiary or an Unrestricted
Subsidiary as of the date of delivery of such Compliance Certificate or confirming that there is no change in such information
since the later of the Closing Date and the date of the last such list, and (iii) a Perfection Certificate Supplement;
(d) [Reserved];
(e) Notice
of Default. Promptly upon, and in any event within five (5) Business Days after, any Responsible Officer of the Borrower
obtaining knowledge of (i) the occurrence of any Default or Event of Default or (ii) the occurrence of any event or change
that has caused or evidences or would reasonably be expected to cause or evidence, either individually or in the aggregate, a Material
Adverse Effect, a reasonably-detailed notice specifying the nature and period of existence of such condition, event or change and
what action the Borrower has taken, is taking and proposes to take with respect;
(f) Notice
of Litigation. Promptly upon, and in any event within five (5) Business Days after, any Responsible Officer of the Borrower
obtaining knowledge of (i) the institution of, or threat of, any Adverse Proceeding not previously disclosed in writing by
the Borrower to the Administrative Agent, or (ii) any material development in any Adverse Proceeding that, in the case of
either of clause (i) or (ii), would reasonably be expected to have a Material Adverse Effect, written notice
thereof from the Borrower together with such other non-privileged information as may be reasonably available to the Loan Parties
to enable the Lenders to evaluate such matters;
(g) ERISA.
Promptly upon, and in any event within five (5) Business Days after, any Responsible Officer of the Borrower becoming aware
of the occurrence of any ERISA Event that could reasonably be expected to have a Material Adverse Effect, a written notice specifying
the nature thereof;
(h) Financial
Plan. As soon as available and in any event no later than 90 days after the beginning of each Fiscal Year, commencing in respect
of the Fiscal Year ending December 31, 2017, a consolidated plan and financial forecast for each Fiscal Quarter of such Fiscal
Year, including a forecasted consolidated statement of the Borrower’s financial position and forecasted consolidated statements
of income and cash flows of the Borrower for such Fiscal Year, prepared in reasonable detail setting forth, with appropriate discussion,
the principal assumptions on which the financial plan is based;
(i) Information
Regarding Collateral. Prompt (and in any event, within 30 days of the relevant change) written notice of any change (i) in
any Loan Party’s legal name, (ii) in any Loan Party’s type of organization, (iii) in any Loan Party’s
jurisdiction of organization or (iv) in any Loan Party’s organizational identification number (if any), in each case,
to the extent such information is necessary to enable the Administrative Agent to perfect or maintain the perfection and priority
of its security interest in the Collateral of the relevant Loan Party, together with a certified copy of the applicable Organizational
Document reflecting the relevant change;
(j) Environmental
Matters. Prompt (and in any event within five (5) Business Days after any Responsible Officer of the Borrower obtaining
knowledge thereof) written notice of any Release or other Hazardous Material Activity that would reasonably be expected to have
a Material Adverse Effect;
(k) Certain
Reports. Promptly upon their becoming available and without duplication of any obligations with respect to any such information
that is otherwise required to be delivered under the provisions of any Loan Document, copies of (i) following an initial public
offering, all financial statements, reports, notices and proxy statements sent or made available generally by Holdings or its applicable
Parent Company to its security holders acting in such capacity and (ii) all regular and periodic reports and all registration
statements (other than on Form S-8 or a similar form) and prospectuses, if any, filed by Holdings or its applicable Parent
Company with any securities exchange or with the SEC or any analogous governmental or private regulatory authority with jurisdiction
over matters relating to securities;
(l) [Reserved];
and
(m) Other
Information. Such other certificates, reports and information (financial or otherwise) as the Administrative Agent may reasonably
request from time to time in connection with the financial condition or business of Holdings and its Restricted Subsidiaries; provided,
however, that none of Holdings, the Borrower nor any Restricted Subsidiary shall be required to disclose or provide any
information (i) that constitutes non-financial trade secrets or non-financial proprietary information of Holdings, the Borrower
and/or any of their respective subsidiaries, customers and/or suppliers, (ii) in respect of which disclosure to the Administrative
Agent or any Lender (or any of their respective representatives or contractors) is prohibited by applicable Requirements of Law,
(iii) that is subject to attorney-client or similar privilege or constitutes attorney work product or (iv) in respect
of which Holdings, the Borrower or any Restricted Subsidiary owes confidentiality obligations to any third party; provided
that, with respect to this clause (iv), the Borrower shall (A) make the Administrative Agent aware of such confidentiality
obligations (to the extent permitted under the applicable confidentiality obligation) and (B) use commercially reasonable
efforts to communicate the relevant information in a way that does not violate such confidentiality obligations.
Documents required to
be delivered pursuant to this Section 5.01 may be delivered electronically and if so delivered, shall be deemed to
have been delivered on the date (i) on which the Borrower (or a representative thereof) (x) posts such documents or (y) provides
a link thereto on the website of the Borrower on the Internet at the website address listed on Schedule 9.01; provided
that, other than with respect to items required to be delivered pursuant to Section 5.01(k), the Borrower shall promptly
notify (which may be by facsimile or electronic mail) the Administrative Agent of the posting of any such documents on the website
of the Borrower (or its applicable subsidiary) and provide to the Administrative Agent by electronic mail electronic versions (i.e.,
soft copies) of such documents; (ii) on which such documents are delivered by the Borrower to the Administrative Agent for
posting on behalf of the Borrower on SyndTrak or another relevant website, if any, to which each Lender and the Administrative
Agent have access (whether a commercial, third-party website or whether sponsored by the Administrative Agent); (iii) on which
executed certificates or other documents are faxed to the Administrative Agent (or electronically mailed to an address provided
by the Administrative Agent); or (iv) in respect of the items required to be delivered pursuant to Section 5.01(k) in
respect of information filed by Holdings or its applicable Parent Company with any securities exchange or with the SEC or any analogous
governmental or private regulatory authority with jurisdiction over matters relating to securities (other than Form 10-Q reports
and Form 10-K reports described in Sections 5.01(a) and (b), respectively), on which such items have
been made available on the SEC website or the website of the relevant analogous governmental or private regulatory authority or
securities exchange.
Notwithstanding the foregoing,
the obligations in paragraphs (a), (b) and (h) of this Section 5.01 may be satisfied
with respect to any financial statements of the Borrower by furnishing (A) the applicable financial statements of Holdings
(or any other Parent Company) or (B) Holdings’ (or any other Parent Company’s), as applicable, Form 10-K
or 10-Q, as applicable, filed with the SEC or any securities exchange, in each case, within the time periods specified in such
paragraphs; provided that, with respect to each of clauses (A) and (B), (i) to the extent such financial
statements relate to any Parent Company, such financial statements shall be accompanied by consolidating information that summarizes
in reasonable detail the differences between the information relating to such Parent Company, on the one hand, and the information
relating to the Borrower and its consolidated subsidiaries on a standalone basis, on the other hand, which consolidating information
shall be certified by a Responsible Officer of the Borrower as having been fairly presented in all material respects and (ii) to
the extent such statements are in lieu of statements required to be provided under Section 5.01(b), such statements
shall be accompanied by a report and opinion of an independent registered public accounting firm of nationally recognized standing,
which report and opinion shall satisfy the applicable requirements set forth in Section 5.01(b).
Any financial statement
required to be delivered pursuant to Section 5.01(a) or (b) shall not be required to include acquisition
accounting adjustments relating to the Transactions or any Permitted Acquisition to the extent it is not practicable to include
any such adjustments in such financial statement.
Section 5.02. Existence.
Except as otherwise permitted under Section 6.07, Holdings and the Borrower will, and the Borrower will cause each
of its Restricted Subsidiaries to, at all times preserve and keep in full force and effect its existence and all rights, franchises,
licenses and permits material to its business except, other than with respect to the preservation of the existence of the Borrower,
to the extent that the failure to do so could not reasonably be expected to result in a Material Adverse Effect; provided
that neither Holdings nor the Borrower nor any of the Borrower’s Restricted Subsidiaries shall be required to preserve any
such existence (other than with respect to the preservation of existence of the Borrower), right, franchise, license or permit
if a Responsible Officer of such Person or such Person’s board of directors (or similar governing body) determines that the
preservation thereof is no longer desirable in the conduct of the business of such Person, and that the loss thereof is not disadvantageous
in any material respect to such Person or to the Lenders.
Section 5.03. Payment
of Taxes. Holdings and the Borrower will, and the Borrower will cause each of its Restricted Subsidiaries to, pay all Taxes
imposed upon it or any of its properties or assets or in respect of any of its income or businesses or franchises before any penalty
or fine accrues thereon; provided that no such Tax need be paid if (a) it is being contested in good faith by appropriate
proceedings promptly instituted and diligently conducted, so long as (i) adequate reserves or other appropriate provisions,
as are required in conformity with GAAP, have been made therefor, and (ii) in the case of a Tax which has or may become a
Lien against any of the Collateral, such contest proceedings conclusively operate to stay the sale of any portion of the Collateral
to satisfy such Tax or (b) the failure to pay or discharge the same could not reasonably be expected to result in a Material
Adverse Effect.
Section 5.04. Maintenance
of Properties. The Borrower will, and will cause each of its Restricted Subsidiaries to, maintain or cause to be maintained
in good repair, working order and condition, ordinary wear and tear and casualty and condemnation excepted, all property reasonably
necessary to the normal conduct of business of the Borrower and its Restricted Subsidiaries and from time to time will make or
cause to be made all needed and appropriate repairs, renewals and replacements thereof except as expressly permitted by this Agreement
or where the failure to maintain such properties or make such repairs, renewals or replacements could not reasonably be expected
to have a Material Adverse Effect.
Section 5.05. Insurance.
Except where the failure to do so would not reasonably be expected to have a Material Adverse Effect, the Borrower will maintain
or cause to be maintained, with financially sound and reputable insurers, such insurance coverage with respect to liabilities,
losses or damage in respect of the assets, properties and businesses of the Borrower and its Restricted Subsidiaries as may customarily
be carried or maintained under similar circumstances by Persons of established reputation engaged in similar businesses, in each
case in such amounts (giving effect to self-insurance), with such deductibles, covering such risks and otherwise on such terms
and conditions as shall be customary for such Persons. Each such policy of insurance shall (i) name the Administrative Agent
on behalf of the Lenders as an additional insured thereunder as its interests may appear and (ii) to the extent available
from the relevant insurance carrier, in the case of each casualty insurance policy (excluding any business interruption insurance
policy), contain a loss payable clause or endorsement that names the Administrative Agent, on behalf of the Lenders as the lender
loss payee thereunder and, to the extent available, provide for at least 30 days’ prior written notice to the Administrative
Agent of any modification or cancellation of such policy (or 10 days’ prior written notice in the case of the failure to
pay any premiums thereunder).
Section 5.06. Inspections.
The Borrower will, and will cause each of its Restricted Subsidiaries to, permit any authorized representative designated by the
Administrative Agent to visit and inspect any of the properties of the Borrower and any of its Restricted Subsidiaries at which
the principal financial records and executive officers of the applicable Person are located, to inspect, copy and take extracts
from its and their respective financial and accounting records, and to discuss its and their respective affairs, finances and accounts
with its and their Responsible Officers and independent public accountants (provided that the Borrower (or any of its subsidiaries)
may, if it so chooses, be present at or participate in any such discussion), all upon reasonable notice and at reasonable times
during normal business hours; provided that, (x) only the Administrative Agent (or a representative designated by the
Administrative Agent) on behalf of the Lenders may exercise the rights of the Administrative Agent and the Lenders under this Section 5.06,
(y) subject to the immediately succeeding proviso, the Administrative Agent shall not exercise such rights more often than
one time during any calendar year and (z) subject to the immediately succeeding proviso, only one such time per calendar year
shall be at the expense of the Borrower; provided further that when an Event of Default exists, the Administrative Agent
(or any of its representatives or independent contractors) may do any of the foregoing at the expense of the Borrower at any time
during normal business hours and upon reasonable advance notice; provided further that, notwithstanding anything to the
contrary herein, neither the Borrower nor any Restricted Subsidiary shall be required to disclose, permit the inspection, examination
or making of copies of or taking abstracts from, or discuss any document, information, or other matter (i) that constitutes
non-financial trade secrets or non-financial proprietary information of the Borrower and its subsidiaries and/or any of its customers
and/or suppliers, (ii) in respect of which disclosure to the Administrative Agent or any Lender (or any of their respective
representatives or contractors) is prohibited by applicable law, (iii) that is subject to attorney-client or similar privilege
or constitutes attorney work product or (iv) in respect of which Holdings, the Borrower or any Restricted Subsidiary owes
confidentiality obligations to any third party; provided that, with respect to this clause (iv), the Borrower shall (A) make
the Administrative Agent aware of such confidentiality obligations (to the extent permitted under the applicable confidentiality
obligation) and (B) use commercially reasonable efforts to communicate the relevant information in a way that does not violate
such confidentiality obligations.
Section 5.07. Maintenance
of Books and Records. The Borrower will, and will cause its Restricted Subsidiaries to, maintain proper books of record and
account containing entries of all material financial transactions and matters involving the assets and business of the Borrower
and its Restricted Subsidiaries that are full, true and correct in all material respects and permit the preparation of consolidated
financial statements in accordance with GAAP.
Section 5.08. Compliance
with Laws.
(a) Holdings
and the Borrower will, and will cause each of their Restricted Subsidiaries to, (i) materially comply with the applicable
requirements of Sanctions and the FCPA and (ii) comply with the requirements of all other applicable laws, rules, regulations
and orders of any Governmental Authority (including ERISA, the USA PATRIOT Act and, to its knowledge, anti-money laundering and
anti-terrorism laws), except, in the case of clause (ii), to the extent the failure to so comply would not reasonably be
expected to have a Material Adverse Effect.
(b) The
Borrower will not directly nor, to its knowledge, indirectly, use the proceeds of the Loans or otherwise make available such proceeds
to any Person, (i) for the purpose of financing the activities of any Person or in any country or territory that, at the time
of such financing, is the subject of Sanctions, except to the extent permissible for a Person required to comply with Sanctions;
or (ii) in a manner that violates any applicable requirements under the FCPA.
Section 5.09. Compliance
with Environmental Laws. Except, in each case, to the extent that the failure to do so would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect, (a) comply, and take all commercially reasonable actions
to cause any lessees and other Persons operating or occupying its properties to comply, with all applicable Environmental Laws
and environmental permits (including any investigation, notification, cleanup, removal or remedial obligations with respect to
or arising out of any Hazardous Materials Activity), (b) obtain and renew all environmental permits required to conduct its
operations or in connection with its properties and (c) respond timely to any Environmental Claim against the Borrower or
any of its Restricted Subsidiaries and discharge or duly contest any obligations it may have to any Person thereunder.
Section 5.10. Designation
of Subsidiaries. The board of directors (or equivalent governing body) of the Borrower may at any time after the Closing Date
designate (or redesignate) any subsidiary as an Unrestricted Subsidiary or any Unrestricted Subsidiary as a Restricted Subsidiary;
provided that (i) immediately before and after such designation or redesignation, no Default or Event of Default exists
(including after giving effect to the reclassification of Investments in, Indebtedness of and Liens on the assets of, the
applicable Restricted Subsidiary or Unrestricted Subsidiary), (ii) in the case of designating a Restricted Subsidiary to be
an Unrestricted Subsidiary or redesignating an Unrestricted Subsidiary to be a Restricted Subsidiary, the applicable Investment
is permitted under one or more clauses in Section 6.06 (as selected by the Borrower in its sole discretion), (iii) no
subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes of the ABL
Credit Agreement or the First Lien Credit Agreement unless also being designated as an Unrestricted Subsidiary thereunder, and
(iv) as of the date of the designation or redesignation thereof, no Unrestricted Subsidiary shall own any Capital Stock in
any Restricted Subsidiary of the Borrower (unless such Restricted Subsidiary is also designated as an Unrestricted Subsidiary)
or hold any Indebtedness of or any Lien on any property of the Borrower or its Restricted Subsidiaries (unless the Borrower or
such Restricted Subsidiary is permitted to incur such Indebtedness or Liens in favor of such Unrestricted Subsidiary pursuant to
Sections 6.01 and 6.02). The designation of any subsidiary as an Unrestricted Subsidiary shall constitute an Investment
by the Borrower (or its applicable Restricted Subsidiary) therein at the date of designation in an amount equal to the portion
of the Fair Market Value of the net assets of such Restricted Subsidiary attributable to the Borrower’s (or its applicable
Restricted Subsidiary’s) equity interest therein as reasonably estimated by the Borrower (and such designation shall only
be permitted to the extent such Investment is permitted under Section 6.06). The designation of any Unrestricted Subsidiary
as a Restricted Subsidiary shall constitute the incurrence or making, as applicable, at the time of designation of any then-existing
Investment, Indebtedness or Lien of such Restricted Subsidiary, as applicable; provided that upon a redesignation of
any Unrestricted Subsidiary as a Restricted Subsidiary, the Borrower shall be deemed to continue to have an Investment in the resulting
Restricted Subsidiary in an amount (if positive) equal to (a) the Borrower’s “Investment” in such Restricted
Subsidiary at the time of such redesignation, less (b) the portion of the Fair Market Value of the net assets of such
Restricted Subsidiary attributable to the Borrower’s equity therein at the time of such redesignation. As of the Closing
Date, the subsidiaries listed on Schedule 5.10 have been designated as Unrestricted Subsidiaries.
Section 5.11. Use
of Proceeds. The Borrower shall use the proceeds of the Initial Loans solely to finance a portion of the Transactions (including
working capital and/or purchase price adjustments and the payment of Transaction Costs). No part of the proceeds of any Loan will
be used, whether directly or indirectly, for any purpose that would violate Regulation T, U or X.
Section 5.12. Covenant
to Guarantee Obligations and Give Security. Upon (i) the formation or acquisition after the Closing Date of any Restricted
Subsidiary that is a Domestic Subsidiary, (ii) the designation of any Unrestricted Subsidiary that is a Domestic Subsidiary
as a Restricted Subsidiary, (iii) any Restricted Subsidiary that is a Domestic Subsidiary ceasing to be an Immaterial Subsidiary
or (iv) any Restricted Subsidiary that was an Excluded Subsidiary ceasing to be an Excluded Subsidiary, on or before the date
that is 60 days after the end of such Fiscal Quarter in which such transaction or designation occurred (or such longer period as
the Administrative Agent may reasonably agree), the Borrower shall (A) cause such Restricted Subsidiary (other than any Excluded
Subsidiary) to comply with the requirements set forth in the definition of “Collateral and Guarantee Requirement” and
(B) upon the reasonable request of the Administrative Agent, cause the relevant Restricted Subsidiary to deliver to the Administrative
Agent a signed copy of a customary opinion of counsel for such Restricted Subsidiary, addressed to the Administrative Agent and
the other relevant Secured Parties.
Notwithstanding anything
to the contrary herein or in any other Loan Document, (i)(A) the Administrative Agent may grant extensions of time or any
period in this Agreement or in any other Loan Document (at any time, including, in each case, after the expiration of any relevant
time or period, which will be retroactive) for the creation and perfection of security interests in, or obtaining of title insurance,
legal opinions, surveys or other deliverables with respect to, particular assets or the provision of any Loan Guaranty by any
Restricted Subsidiary (in connection with assets acquired, or Restricted Subsidiaries formed or acquired, after the Closing Date)
where it reasonably determines, in consultation with the Borrower, that such action cannot be accomplished without undue effort
or expense by the time or times at which it would otherwise be required to be accomplished by this Agreement or the Collateral
Documents, and each Lender hereby consents to any such extension of time, and (B) any extension granted by the First Lien
Agent under the First Lien Credit Agreement or any other Loan Document (as defined in the First Lien Credit Agreement) shall automatically
constitute an extension the corresponding time or period in this Agreement or the corresponding Loan Document; (ii) any Lien
required to be granted from time to time pursuant to the Collateral and Guarantee Requirement shall be subject to the exceptions
and limitations set forth therein and in the Collateral Documents, (iii) no Loan Party shall be required to seek any landlord
lien waiver, bailee letter, estoppel, warehouseman waiver or other collateral access or similar letter or agreement, (iv) no
Loan Party will be required to take any action that is limited or restricted by the Collateral and Guarantee Requirement or any
Loan Document, (v) in no event will the Collateral include any Excluded Assets, (vi) no action shall be required to
perfect a Lien in any asset in respect of which the perfection of a security interest therein would (1) violate the terms
of any contract relating to such asset that is permitted or otherwise not prohibited by the terms of this Agreement and is binding
on such asset on the Closing Date or at the time of its acquisition and not incurred in contemplation thereof (other than in the
case of capital leases, purchase money and similar financings), in each case, after giving effect to the applicable anti-assignment
provisions of the UCC or other applicable law or (2) trigger termination of any contract relating to such asset that is permitted
or otherwise not prohibited by the terms of this Agreement and is binding on such asset on the Closing Date or at the time of
its acquisition and not incurred in contemplation thereof (other than in the case of capital leases, purchase money and similar
financings) pursuant to any “change of control” or similar provision; it being understood that the Collateral shall
include any proceeds and/or receivables arising out of any contract described in this clause to the extent the assignment of such
proceeds or receivables is expressly deemed effective under the UCC or other applicable law notwithstanding the relevant prohibition,
violation or termination right; and (vii) any joinder or supplement to any Loan Guaranty, any Collateral Document and/or
any other Loan Document executed by any Restricted Subsidiary that is required to become a Loan Party pursuant to Section 5.12
above may, with the consent of the Administrative Agent, include such schedules (or updates to schedules) as may be necessary
to qualify any representation or warranty set forth in any Loan Document to the extent necessary to ensure that such representation
or warranty is true and correct to the extent required thereby or by the terms of any other Loan Document.
Section 5.13. [Reserved].
Section 5.14. Further
Assurances. Promptly upon request of the Administrative Agent and subject to the limitations described in Section 5.12:
(a) Holdings
and the Borrower will, and will cause each other Loan Party to, execute any and all further documents, financing statements, agreements,
instruments, certificates, notices and acknowledgments and take all such further actions (including the filing and recordation
of financing statements and/or amendments thereto and other documents), that may be required under any applicable law and which
the Administrative Agent may reasonably request to ensure the creation, perfection and priority of the Liens created or intended
to be created under the Collateral Documents, all at the expense of the relevant Loan Parties.
(b) Holdings
and the Borrower will, and will cause each other Loan Party to, (i) correct any material defect or error that may be discovered
in the execution, acknowledgment, filing or recordation of any Collateral Document or other document or instrument relating to
any Collateral and (ii) do, execute, acknowledge, deliver, record, re-record, file, re-file, register and re-register any
and all such further acts (including notices to third parties), deeds, certificates, assurances and other instruments as the Administrative
Agent may reasonably request from time to time in order to carry out more effectively the purposes of the Collateral Documents.
ARTICLE VI
NEGATIVE
COVENANTS
From the Closing Date
until the Termination Date, (i) in the case of Holdings, solely with respect to Sections 6.04(b) and 6.14
and (ii) the Borrower covenant and agree with the Lenders that:
Section 6.01. Indebtedness.
The Borrower shall not, nor shall it permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, assume
or otherwise become or remain liable with respect to any Indebtedness, except:
(a) the
Secured Obligations (including any Loans and/or Commitments);
(b) Indebtedness
of the Borrower to any Restricted Subsidiary and/or of any Restricted Subsidiary to the Borrower or any other Restricted Subsidiary;
provided that in the case of any Indebtedness of any Restricted Subsidiary that is not a Loan Party owing to a Loan Party,
such Indebtedness shall be permitted as an Investment by Section 6.06; provided further that any Indebtedness
of any Loan Party to any Restricted Subsidiary that is not a Loan Party must be expressly subordinated to the Obligations of such
Loan Party;
(c) [reserved];
(d) (d) (i) Indebtedness
arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent
earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated
prior to the Closing Date or any other purchase of assets or Capital Stock; and (ii) Indebtedness arising from guaranties,
letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower
or any such Restricted Subsidiary pursuant to any such agreement;
(e) Indebtedness
of the Borrower and/or any Restricted Subsidiary (i) pursuant to tenders, statutory obligations, bids, leases, governmental
contracts, trade contracts, surety, stay, customs, appeal, performance and/or return of money bonds or other similar obligations
incurred in the ordinary course of business, (ii) in respect of letters of credit, bank guaranties, surety bonds, performance
bonds or similar instruments to support any of the foregoing items and (iii) in respect of commercial and trade letters of
credit;
(f) Indebtedness
of the Borrower and/or any Restricted Subsidiary in respect of commercial credit cards, stored value cards, purchasing cards, treasury
management services, netting services, overdraft protections, check drawing services, automated payment services (including depository,
overdraft, controlled disbursement, ACH transactions, return items and interstate depository network services), employee credit
card programs, cash pooling services and any arrangements or services similar to any of the foregoing and/or otherwise in connection
with Cash management and Deposit Accounts, including Banking Services Obligations (as defined in the First Lien Credit Agreement
(or any equivalent term under any First Lien Facilities)) and dealer incentive, supplier finance or similar programs;
(g) (g) (i) guaranties
by the Borrower and/or any Restricted Subsidiary of the obligations of suppliers, customers and licensees in the ordinary course
of business, (ii) Indebtedness incurred in the ordinary course of business in respect of obligations of the Borrower and/or
any Restricted Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such
goods and services and (iii) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties or
similar instruments supporting trade payables, warehouse receipts or similar facilities entered into in the ordinary course of
business;
(h) Guarantees
by the Borrower and/or any Restricted Subsidiary of Indebtedness or other obligations of the Borrower and/or any Restricted Subsidiary
with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 or other obligations
not prohibited by this Agreement; provided that in the case of any Guarantee by any Loan Party of the obligations of any
Person that is not a Loan Party, the related Investment is permitted under Section 6.06;
(i) Indebtedness
of the Borrower and/or any Restricted Subsidiary existing, or pursuant to commitments existing, on the Closing Date and described
on Schedule 6.01;
(j) Indebtedness
of Restricted Subsidiaries that are not Loan Parties in an aggregate outstanding principal amount of such Indebtedness not to exceed
the greater of $90,000,000 and 53.0% of Consolidated Adjusted EBITDA, provided that the outstanding principal amount of
Indebtedness incurred by Canadian Restricted Subsidiaries shall not exceed the greater of $60,000,000 and 36.0% of Consolidated
Adjusted EBITDA;
(k) Indebtedness
of the Borrower and/or any Restricted Subsidiary consisting of obligations owing under incentive, supply, license or similar agreements
entered into in the ordinary course of business;
(l) Indebtedness
of the Borrower and/or any Restricted Subsidiary consisting of (i) the financing of insurance premiums, (ii) take-or-pay
obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to
reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of business;
(m) Indebtedness
of the Borrower and/or any Restricted Subsidiary with respect to Capital Leases and purchase money Indebtedness incurred prior
to or within 270 days of the acquisition, lease, completion of construction, repair of, replacement, improvement to or installation
of assets in an aggregate outstanding principal amount not to exceed the greater of $60,000,000 and 36.0% of Consolidated Adjusted
EBITDA;
(n) Indebtedness
of any Person that becomes a Restricted Subsidiary or Indebtedness assumed, in each case, in connection with an acquisition permitted
hereunder after the Closing Date; provided that (i) such Indebtedness (A) existed at the time such Person became
a Restricted Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation
thereof, (ii) no Event of Default exists or would result after giving pro forma effect to such acquisition and (iii) the
Total Leverage Ratio does not exceed 6.75:1.00, calculated on a Pro Forma Basis;
(o) Indebtedness
consisting of promissory notes issued by the Borrower or any Restricted Subsidiary to any stockholder of any Parent Company or
any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower
or any subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any
Parent Company permitted by Section 6.04(a);
(p) the
Borrower and its Restricted Subsidiaries may become and remain liable for any Indebtedness refinancing, refunding or replacing
any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r),
(u), (w), (x), (y), (z), (aa) and (jj) and this clause (p) of this Section 6.01
(in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”)
and any subsequent Refinancing Indebtedness in respect of existing Refinancing Indebtedness under this clause (p); provided,
that:
(i) the
principal amount of such Indebtedness does not exceed the principal amount of the Indebtedness being refinanced, refunded or replaced,
except by (A) an amount equal to unpaid accrued interest, penalties and premiums (including tender premiums) thereon plus
commitment, underwriting, arrangement and similar fees, other reasonable and customary fees, commissions and expenses (including
upfront fees, original issue discount or initial yield payments) incurred in connection with the relevant refinancing, refunding
or replacement, (B) an amount equal to any existing commitments unutilized thereunder and (C) additional amounts permitted
to be incurred pursuant to this Section 6.01 (provided that (1) any additional Indebtedness referenced
in this clause (C) satisfies the other applicable requirements of this Section 6.01 (with additional
amounts incurred in reliance on this clause (C) constituting a utilization of the relevant basket or exception
pursuant to which such additional amount is permitted) and (2) if such additional Indebtedness is secured, the Lien securing
such Indebtedness satisfies the applicable requirements of Section 6.02);
(ii) (x) other
than in the case of Refinancing Indebtedness with respect to clauses (a), (i), (m), (n) and
(z) of this Section 6.01 (and other than customary bridge loans with a maturity date of not longer than
one year which are converted into, exchanged for, extended to or otherwise refinanced with Indebtedness subject to the requirements
of this clause (ii)), (A) such Indebtedness has a final maturity on or later than the final maturity of the Indebtedness
being refinanced, refunded or replaced and (B) a Weighted Average Life to Maturity equal to or greater than the Weighted Average
Life to Maturity of the Indebtedness being refinanced, refunded or replaced and (y) in the case of Refinancing Indebtedness
incurred with respect to Indebtedness permitted under clause (a) of this Section 6.01, such Indebtedness
shall satisfy the requirements of Section 9.02(c);
(iii) in
the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (j), (m) and
(u) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding
in reliance on the relevant clause and after the incurrence thereof, shall constitute amounts outstanding under such clause;
(iv) except
in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this
Section 6.01 (it being understood that Holdings may not be the primary obligor of the applicable Refinancing Indebtedness
if Holdings was not the primary obligor on the relevant refinanced Indebtedness), (A) such Indebtedness, if secured, is secured
only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness
may be refinanced with unsecured Indebtedness), (B) such Indebtedness is incurred by the obligor or obligors in respect of
the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to Section 6.01,
and (C) if the Indebtedness being refinanced, refunded or replaced was originally contractually subordinated to the Obligations
in right of payment (or the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral
securing the Secured Obligations), such Refinancing Indebtedness is contractually subordinated to the Obligations in right of
payment (or the Refinancing Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Secured
Obligations and subject to an Acceptable Intercreditor Agreement), except to the extent the refinancing, refunding or replacement
thereof constitutes a Restricted Debt Payment permitted under Section 6.04(b) (other than Section 6.04(b)(i))
or does not constitute a Restricted Debt Payment;
(v) no
Event of Default exists or would result therefrom;
(vi) in
the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01,
(A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu
or junior basis with respect to the remaining Obligations hereunder and shall be subject to an Acceptable Intercreditor Agreement,
or is unsecured, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets
other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed
by any Person other than a Loan Party and (D) such Indebtedness shall satisfy the requirements of Section 9.02(c);
and
(vii) any
such Refinancing Indebtedness that is pari passu with the Second Priority Secured Obligations hereunder in right of payment
and secured by the Collateral on a pari passu basis with respect to the Second Priority Secured Obligations may participate,
with respect to voluntary prepayments on a pro rata basis, a less than pro rata basis or greater than pro rata
basis, and with respect to mandatory prepayments, on a pro rata basis or a less than pro rata basis (but not greater
than a pro rata basis), in each case, in respect of the Initial Loans (and any other Loans then subject to ratable repayment
requirements), in each case as the Borrower and the relevant lender may agree;
(q) Indebtedness
incurred to finance, or assumed in connection with, any acquisition permitted hereunder after the Closing Date; provided,
that (i) before and after giving effect to such acquisition on a Pro Forma Basis, no Event of Default exists or would result
therefrom, (ii) after giving effect to such acquisition on a Pro Forma Basis (without “netting” the Cash proceeds
of such Indebtedness), (A) if such Indebtedness is secured by a Lien on the Collateral that is senior in priority to, or
pari passu with, or junior to, the Lien securing the Second Priority Secured Obligations (1) such Indebtedness shall
be subject to an Acceptable Intercreditor Agreement and (2) the Secured Leverage Ratio does not exceed the greater of 6.75:
1.00 and the Secured Leverage Ratio as of the last day of the most recently ended Test Period, and (B) if such Indebtedness
is not secured by a Lien on the Collateral (including all Indebtedness of any Non-Guarantor Subsidiary), either (1) the Total
Leverage Ratio does not exceed the greater of 6.75:1.00 and the Total Leverage Ratio as of the last day of the most recently ended
Test Period or (2) the Net Interest Coverage Ratio is not less than 1.75:1.00, (iii) such Indebtedness does not mature
prior to the date which is 91 days after the Latest Maturity Date as of the date of incurrence thereof, (iv) the aggregate
outstanding principal amount of such Indebtedness of Restricted Subsidiaries that are not Loan Parties incurred pursuant to this
Section 6.01(q), together with any such Indebtedness incurred pursuant to Section 6.01(w), collectively,
shall not exceed the greater of $90,000,000 and 53.0% of Consolidated Adjusted EBITDA, (v) no such Indebtedness that is secured
by a Lien on the Collateral shall be guaranteed by any Person that is not a Loan Party or secured by any assets other than the
Collateral and (vi) the Weighted Average Life to Maturity of any such Indebtedness shall be no shorter than the remaining
Weighted Average Life to Maturity of any then-existing Class of Loans (without giving effect to any prepayment thereof);
(r) Indebtedness
of the Borrower and/or any Restricted Subsidiary in an aggregate outstanding principal amount not to exceed 100% of the amount
of Net Proceeds received by the Borrower (“Contribution Indebtedness”) from (i) the issuance or sale of
Qualified Capital Stock or (ii) any cash contribution to its Capital Stock, in each case, (A) other than any Net Proceeds
received from the sale of Capital Stock to, or contributions from, the Borrower or any of its Restricted Subsidiaries, (B) to
the extent the relevant Net Proceeds have not otherwise been applied to make Investments, Restricted Payments or Restricted Debt
Payments hereunder and (C) other than “Cure Amounts” under (and as defined in) the ABL Credit Agreement;
(s) Indebtedness
of the Borrower and/or any Restricted Subsidiary under any Derivative Transaction not entered into for speculative purposes;
(t) [reserved];
(u) Indebtedness
of the Borrower and/or any Subsidiary Guarantor in an aggregate outstanding principal amount not to exceed the sum of (i) the
greater of $90,000,000 and 53.0% of Consolidated Adjusted EBITDA and (ii) any amounts reallocated to this Section 6.01(u) from
Section 6.04(a)(xi);
(v) [reserved];
(w) Indebtedness
of the Borrower and/or any Restricted Subsidiary so long as, no Event of Default exists or would result therefrom and on a Pro
Forma Basis (without “netting” the Cash proceeds of such Indebtedness), (i) if such Indebtedness is secured by
a Lien on the Collateral that is senior in priority to, pari passu with or junior to, the Lien securing the Second Priority
Secured Obligations, (A) such Indebtedness shall be subject to an Acceptable Intercreditor Agreement, (B) the Secured
Leverage Ratio would not exceed 6.75:1.00 and (C) any such Indebtedness consisting of syndicated term loans (other than “bridge
loans”) that is secured by a Lien on the Collateral that is pari passu with (but not senior or junior to) the Lien
securing the Second Priority Secured Obligations and pari passu in right of payment with the Obligations shall be subject
to clause (v) of the proviso to Section 2.22(a) (including with respect to exceptions thereunder)
and (ii) if such Indebtedness is not secured by the Collateral (including all Indebtedness of any Non-Guarantor Subsidiary),
either (A) the Total Leverage Ratio would not exceed 6.75:1.00 or (B) the pro forma Net Interest Coverage Ratio
would not be less than 2.00:1.00; provided, that (1) the aggregate outstanding principal amount of such Indebtedness
of Restricted Subsidiaries that are not Loan Parties incurred pursuant to this Section 6.01(w) shall not exceed
the greater of $50,000,000 and 30.0% of Consolidated Adjusted EBITDA, at any time outstanding and (2) no such Indebtedness
that is secured by a Lien on the Collateral shall be guaranteed by any Person that is not a Loan Party or secured by any assets
other than the Collateral, (3) the aggregate outstanding principal amount of such Indebtedness of Restricted Subsidiaries
that are not Loan Parties incurred pursuant to this Section 6.01(w), together with any such Indebtedness incurred pursuant
to Section 6.01(q), collectively, shall not exceed the greater of $90,000,000 and 53.0% of Consolidated Adjusted EBITDA,
(4) such Indebtedness does not mature prior to the date which is 91 days after the Latest Maturity Date as of the date of
incurrence thereof and (5) the Weighted Average Life to Maturity of any such Indebtedness shall be no shorter than the remaining
Weighted Average Life to Maturity of any then-existing Class of Loans (without giving effect to any prepayment thereof);
(x) Indebtedness
of the Borrower under the First Lien Facilities (including any “Incremental Loans” and “Refinancing Indebtedness”
(each as defined in the First Lien Credit Agreement)) and any Indebtedness constituting “Incremental Equivalent Debt”
(as defined in the First Lien Credit Agreement or any equivalent term under the documentation governing the First Lien Facilities)
in an aggregate principal amount that does not exceed at any time the sum of (A) $850,000,000 plus (B) the aggregate
outstanding principal amount of “Incremental Loans” and “Incremental Equivalent Debt” (each as defined
in the First Lien Credit Agreement or any equivalent term under the documentation governing the First Lien Facilities) permitted
under the First Lien Credit Agreement as in effect on the Closing Date (as amended, restated, modified, replaced or substituted
after the Closing Date to conform to any amendment, restatement, modification, replacement or substitution of this Agreement relating
to the Incremental Cap) plus (C) “Banking Services Obligations” and “Secured Hedging Obligations”
(each as defined in the First Lien Credit Agreement);
(y) Indebtedness
of the Borrower under the ABL Facility in an aggregate principal amount that does not exceed at any time the sum of (A) $275,000,000
plus (B) the aggregate outstanding principal amount of “Incremental Revolving Loans” (as defined in the
ABL Credit Agreement) permitted under the ABL Credit Agreement as in effect on the Closing Date;
(z) Indebtedness
of the Borrower and/or any Restricted Subsidiary comprised of Capital Lease obligations or rental payments in respect of any property
Disposed of pursuant to any Sale and Lease-Back Transactions permitted pursuant to Section 6.08;
(aa) Indebtedness
(and/or commitments in respect thereof), including secured or unsecured notes, loans or other indebtedness, issued or incurred
by the Borrower or any Guarantors in lieu of any Incremental Facility (such Indebtedness, “Incremental Equivalent Debt”);
provided that (i) the aggregate outstanding principal amount (or committed amount, if applicable) of all Incremental
Equivalent Debt, together with the aggregate outstanding principal amount (or committed amount, if applicable) of all Incremental
Facilities shall not exceed the Incremental Cap to the extent constituting a utilization thereof as provided pursuant to Section 2.22,
(ii) any Incremental Equivalent Debt incurred in the form of floating rate term loans and notes (other than notes registered,
issued pursuant to Rule 144A of the Securities Exchange Act of 1933 or otherwise issued and intended for resale) secured by
a Lien on the Collateral on a senior basis pari passu with the Second Priority Secured Obligations and pari passu
in right of payment with the Obligations shall be subject to clause (v) of the proviso to Section 2.22(a),
(iii) Incremental Equivalent Debt shall be subject to clauses (vi), (vii), (viii), (ix) and
(x) (except, in the case of clause (x), as otherwise agreed by the Persons providing such Incremental Equivalent
Debt) of the proviso to Section 2.22(a) and (iv) Incremental Equivalent Debt shall not be secured by any
assets other than the Collateral or guaranteed by any subsidiaries of the Borrower other than the Subsidiary Guarantors;
(bb) Indebtedness (including obligations in respect of letters of credit, bank guaranties, surety
bonds, performance bonds or similar instruments with respect to such Indebtedness) incurred by the Borrower and/or any
Restricted Subsidiary in respect of workers compensation claims, unemployment insurance (including premiums related thereto),
other types of social security, pension obligations, vacation pay, health, disability or other employee benefits;
(cc) Indebtedness
of the Borrower and/or any Restricted Subsidiary representing (i) deferred compensation to directors, officers, employees,
members of management, managers, and consultants of any Parent Company, the Borrower and/or any Restricted Subsidiary in the ordinary
course of business and (ii) deferred compensation or other similar arrangements in connection with the Transactions, any Permitted
Acquisition or any other Investment permitted hereby;
(dd) Indebtedness
of the Borrower and/or any Restricted Subsidiary in respect of any letter of credit or bank guarantee issued in favor of any issuing
lender under the ABL Facility or the First Lien Credit Agreement to support any defaulting lender’s participation in letters
of credit made under the ABL Facility or the First Lien Credit Agreement, as applicable;
(ee) Indebtedness
of the Borrower and/or any Restricted Subsidiary supported by any letter of credit otherwise permitted to be incurred hereunder;
(ff) unfunded
pension fund and other employee benefit plan obligations and liabilities incurred by the Borrower and/or any Restricted Subsidiary
in the ordinary course of business to the extent that the unfunded amounts would not otherwise cause an Event of Default to exist
under Section 7.01(i);
(gg) without
duplication of any other Indebtedness, all premiums (if any), interest (including post-petition interest and payment in kind interest),
accretion or amortization of original issue discount, fees, expenses and charges with respect to Indebtedness of the Borrower and/or
any Restricted Subsidiary hereunder;
(hh) to
the extent constituting Indebtedness, obligations under the Merger Agreement;
(ii) customer
deposits and advance payments received in the ordinary course of business from customers for goods and services purchased in the
ordinary course of business; and
(jj) Indebtedness
of the Borrower and/or any Restricted Subsidiary relating to any factoring or similar arrangements entered into in the ordinary
course of business.
Section 6.02. Liens.
The Borrower shall not, nor shall it permit any of its Restricted Subsidiaries to, create, incur, assume or permit or suffer to
exist any Lien on or with respect to any property of any kind owned by it, whether now owned or hereafter acquired, or any income
or profits therefrom, except:
(a) Liens
securing the Secured Obligations created pursuant to the Loan Documents;
(b) Liens
for Taxes which are (i) for amounts not yet overdue by more than 30 days or (ii) which are not required to be paid pursuant
to Section 5.03;
(c) statutory
Liens (and rights of set-off) of landlords, banks, carriers, warehousemen, mechanics, repairmen, workmen and materialmen, and other
Liens imposed by law, in each case incurred in the ordinary course of business (i) for amounts not yet overdue by more than
30 days or (ii) for amounts that are overdue by more than 30 days and that are being contested in good faith by appropriate
proceedings, so long as adequate reserves or other appropriate provisions required by GAAP shall have been made for any such contested
amounts;
(d) Liens
incurred (i) in the ordinary course of business in connection with workers’ compensation, unemployment insurance and
other types of social security laws and regulations, (ii) in the ordinary course of business to secure the performance of
tenders, statutory obligations, surety, stay, customs and appeal bonds, bids, leases, government contracts, trade contracts, performance
and return-of-money bonds and other similar obligations (exclusive of obligations for the payment of borrowed money), (iii) pursuant
to pledges and deposits of Cash or Cash Equivalents in the ordinary course of business securing (x) any liability for reimbursement
or indemnification obligations of insurance carriers providing property, casualty, liability or other insurance to Holdings and
its subsidiaries or (y) leases or licenses of property otherwise permitted by this Agreement and (iv) to secure obligations
in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments posted with respect to
the items described in clauses (i) through (iii) above;
(e) Liens
consisting of easements, rights-of-way, restrictions, encroachments, protrusions and other similar encumbrances and other minor
defects or irregularities affecting any Real Estate Assets, in each case which do not, in the aggregate, materially interfere with
the ordinary conduct of the business of the Borrower and/or its Restricted Subsidiaries, taken as a whole, or the use of the affected
property for its intended purpose;
(f) Liens
consisting of any (i) interest or title of a lessor or sub-lessor under any lease of real estate not prohibited hereunder,
(ii) landlord lien permitted by the terms of any lease, (iii) restriction or encumbrance to which the interest or title
of such lessor or sub-lessor may be subject or (iv) subordination of the interest of the lessee or sub-lessee under such lease
to any restriction or encumbrance referred to in the preceding clause (iii);
(g) Liens
(i) solely on any Cash earnest money deposits made by the Borrower and/or any of its Restricted Subsidiaries in connection
with any letter of intent or purchase agreement with respect to any Investment permitted hereunder or (ii) consisting of an
agreement to Dispose or any property in a Disposition permitted under Section 6.07;
(h) purported
Liens evidenced by the filing of precautionary UCC financing statements relating solely to operating leases or consignment or bailee
arrangements entered into in the ordinary course of business;
(i) 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;
(j) Liens
in connection with any zoning, building or similar law or right reserved to or vested in any Governmental Authority to control
or regulate the use of any or dimensions of real property or the structure thereon, including Liens in connection with any condemnation
or eminent domain proceeding or compulsory purchase order;
(k) Liens
securing Refinancing Indebtedness permitted pursuant to Section 6.01(p), subject, to the extent required thereby, to
an Acceptable Intercreditor Agreement; provided that no such Lien extends to any asset not covered by the Lien securing
the Indebtedness that is being refinanced (unless (except in the case of Sections 6.01(a), (x), (y) and
(aa) which shall be limited to the Collateral and in the case of Section 6.01(y), ABL Canadian Collateral and other
current assets of Canadian Restricted Subsidiaries), such Lien is a Permitted Lien, except as otherwise provided in Section 6.01(p));
(l) Liens
existing on the Closing Date securing obligations not exceeding $3,000,000 in the aggregate and Liens described on Schedule 6.02
and, in each case, together with any modification, replacement, refinancing, renewal or extension thereof; provided
that (i) no such Lien extends to any additional property other than (A) after-acquired property that is affixed or incorporated
into the property covered by such Lien or financed by Indebtedness permitted under Section 6.01, and (B) proceeds
and products thereof, accessions, replacements or additions thereto and improvements thereon (it being understood that individual
financings of the type permitted under Section 6.01(m) provided by any lender may be cross-collateralized to
other financings of such type provided by such lender or its affiliates), and (ii) such modification, replacement, refinancing,
renewal or extension of the obligations secured or benefited by such Liens, if constituting Indebtedness, is permitted by Section 6.01;
(m) Liens
arising out of Sale and Lease-Back Transactions permitted under Section 6.08 and securing Indebtedness permitted pursuant
to Section 6.01(z);
(n) Liens
securing Indebtedness permitted pursuant to Section 6.01(m); provided that any such Lien shall encumber only
the asset acquired with the proceeds of such Indebtedness and proceeds and products thereof, accessions, replacements or additions
thereto and improvements thereon (it being understood that individual financings of the type permitted under Section 6.01(m) provided
by any lender may be cross-collateralized to other financings of such type provided by such lender or its affiliates);
(o) (i) Liens
securing Indebtedness permitted pursuant to Section 6.01(n) on the relevant acquired assets or on the Capital
Stock and assets of the relevant newly acquired Restricted Subsidiary; provided that no such Lien (x) extends to or
covers any other assets (other than the proceeds or products thereof, accessions, replacements or additions thereto and improvements
thereon) or (y) was created in contemplation of the applicable acquisition of assets or Capital Stock, and (ii) Liens
securing Indebtedness incurred pursuant to clause (ii)(A) of the proviso in Section 6.01(q) subject,
to the extent required thereby, to an Acceptable Intercreditor Agreement;
(p) (i) Liens
that are contractual rights of set-off or netting relating to (A) the establishment of depositary relations with banks not
granted in connection with the issuance of Indebtedness, (B) pooled deposit or sweep accounts of the Borrower and/or any Restricted
Subsidiary to permit satisfaction of overdraft or similar obligations incurred in the ordinary course of business of the Borrower
and/or any Restricted Subsidiary, (C) purchase orders and other agreements entered into with customers of the Borrower and/or
any Restricted Subsidiary in the ordinary course of business and (D) commodity trading or other brokerage accounts incurred
in the ordinary course of business, (ii) Liens encumbering reasonable customary initial deposits and margin deposits, (iii) bankers
Liens and rights and remedies as to Deposit Accounts, (iv) Liens of a collection bank arising under Section 4-208 of
the UCC on items in the ordinary course of business, (v) Liens in favor of banking or other financial institutions arising
as a matter of Law or under customary general terms and conditions encumbering deposits or other funds maintained with a financial
institution and that are within the general parameters customary in the banking industry or arising pursuant to such banking institution’s
general terms and conditions, (vi) Liens on the proceeds of any Indebtedness incurred in connection with any transaction permitted
hereunder, which proceeds have been deposited into an escrow account on customary terms to secure such Indebtedness pending the
application of such proceeds to finance such transaction and (vii) Liens of the type described in the foregoing clauses
(i), (ii), (iii), (iv) and (v) securing obligations under Sections 6.01(f) and/or
6.01(s);
(q) Liens
on assets and Capital Stock of Restricted Subsidiaries that are not Loan Parties (including Capital Stock owned by such Persons
but excluding any Capital Stock that is required to be pledged as Collateral) securing Indebtedness of Restricted Subsidiaries
that are not Loan Parties permitted pursuant to Section 6.01;
(r) Liens
securing obligations (other than obligations representing Indebtedness for borrowed money) under operating, reciprocal easement
or similar agreements entered into in the ordinary course of business of the Borrower and/or its Restricted Subsidiaries;
(s) Liens
securing Indebtedness (and related obligations) incurred pursuant to Section 6.01(y); provided that such Liens
are subject to an ABL Intercreditor Agreement if secured on a Split Collateral Basis or an Acceptable Intercreditor Agreement
of the type described in clause (a) of the definition thereof if secured by the Collateral on a senior pari passu
basis with the First Priority Secured Obligations;
(t) Liens
securing (i) Indebtedness (and related obligations) incurred pursuant to Section 6.01(x) and (ii) Indebtedness
(and related obligations) incurred pursuant to Section 6.01(aa), subject, in each case, if applicable, to an Acceptable
Intercreditor Agreement;
(u) Liens
on assets securing Indebtedness or other obligations in an aggregate principal amount at any time outstanding not to exceed the
sum of (i) the greater of $90,000,000 and 53.0% of Consolidated Adjusted EBITDA and (ii) to the extent any amounts are
reallocated from Section 6.04(a)(xi) to Section 6.01(u), an amount equal to such reallocated amount,
subject, to the extent applicable, to an Acceptable Intercreditor Agreement;
(v) Liens
on assets securing judgments, awards, attachments and/or decrees and notices of lis pendens and associated rights relating
to litigation being contested in good faith not constituting an Event of Default under Section 7.01(h);
(w) leases,
licenses, subleases or sublicenses granted to others in the ordinary course of business which do not (i) interfere in any
material respect with the business of the Borrower and its Restricted Subsidiaries (other than any Immaterial Subsidiary) or (ii) secure
any Indebtedness;
(x) Liens
on Securities that are the subject of repurchase agreements constituting Investments permitted under Section 6.06 arising
out of such repurchase transaction;
(y) Liens
securing obligations in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments permitted
under Sections 6.01(d), (e), (g), (bb) and (dd);
(z) Liens
arising (i) out of conditional sale, title retention, consignment or similar arrangements for the sale of any assets or property
in the ordinary course of business and permitted by this Agreement or (ii) by operation of law under Article 2 of the
UCC (or similar law of any jurisdiction);
(aa) Liens
(i) in favor of any Loan Party and/or (ii) granted by any non-Loan Party in favor of any Restricted Subsidiary that is
not a Loan Party, in the case of each of clauses (i) and (ii), securing intercompany Indebtedness permitted
under Section 6.01;
(bb) Liens
on insurance policies and the proceeds thereof securing the financing of the premiums with respect thereto;
(cc) Liens
on specific items of inventory or other goods and the proceeds thereof securing the relevant Person’s obligations in respect
of documentary letters of credit or banker’s acceptances issued or created for the account of such Person to facilitate the
purchase, shipment or storage of such inventory or goods;
(dd) Liens
securing (i) obligations under Hedge Agreements in connection with any Derivative Transaction of the type described in Section 6.01(s) and/or
(ii) obligations of the type described in Section 6.01(f);
(ee) (ee) (i) Liens
on Capital Stock of joint ventures or Unrestricted Subsidiaries securing capital contributions to, or obligations of, such Persons
and (ii) customary rights of first refusal and tag, drag and similar rights in joint venture agreements and agreements with
respect to non-Wholly-Owned Subsidiaries;
(ff) Liens
on cash or Cash Equivalents arising in connection with the defeasance, discharge or redemption of Indebtedness;
(gg) Liens
evidenced by the filing of UCC financing statements relating to any factoring or similar arrangements entered into in the ordinary
course of business;
(hh) Liens
securing Indebtedness incurred in reliance on Section 6.01(w), so long as the condition described in clause (i) of
Section 6.01(w) has been satisfied and subject, to the extent required thereby, to an Acceptable Intercreditor
Agreement; and
(ii) Liens
on assets of Restricted Subsidiaries that are not Loan Parties securing commercial and trade letters of credit permitted under
Section 6.01(e)(iii).
Section 6.03. No
Further Negative Pledges. The Borrower shall not, nor shall it permit any of its Restricted Subsidiaries to, enter into any
agreement prohibiting the creation or assumption of any Lien upon any Collateral, whether now owned or hereafter acquired, for
the benefit of the Secured Parties with respect to the Obligations, except with respect to:
(a) specific
property to be sold pursuant to any Disposition permitted by Section 6.07;
(b) restrictions
contained in any agreement with respect to Indebtedness permitted by Section 6.01 that is secured by a Permitted Lien,
but only if such restrictions apply only to the Person or Persons obligated under such Indebtedness and its or their Restricted
Subsidiaries or the property or assets securing such Indebtedness;
(c) restrictions
contained in any ABL Facility, any First Lien Facilities and the documentation governing Indebtedness permitted by clauses (j),
(m), (p), (q), (u), (w), (x), (y) and/or (aa) of Section 6.01,
in each case, to the extent such restriction does not restrict the Secured Obligations from being secured by assets that constitute
Collateral;
(d) restrictions
by reason of customary provisions restricting assignments, subletting or other transfers (including the granting of any Lien) contained
in leases, subleases, licenses, sublicenses and other agreements entered into in the ordinary course of business (provided
that such restrictions are limited to the relevant leases, subleases, licenses, sublicenses or other agreements and/or the property
or assets secured by such Liens or the property or assets subject to such leases, subleases, licenses, sublicenses or other agreements,
as the case may be);
(e) Permitted
Liens and restrictions in the agreements relating thereto that limit the right of the Borrower or any of its Restricted Subsidiaries
to Dispose of, or encumber the assets subject to such Liens;
(f) provisions
limiting the Disposition or distribution of assets or property in joint venture agreements, sale-leaseback agreements, stock sale
agreements and other similar agreements, which limitation is applicable only to the assets that are the subject of such agreements
(or the Persons the Capital Stock of which is the subject of such agreement);
(g) any
encumbrance or restriction assumed in connection with an acquisition of the property or Capital Stock of any Person, so long as
such encumbrance or restriction relates solely to the property so acquired (or to the Person or Persons (and its or their subsidiaries)
bound thereby) and was not created in connection with or in anticipation of such acquisition;
(h) restrictions
imposed by customary provisions in partnership agreements, limited liability company organizational governance documents, joint
venture agreements and other similar agreements that restrict the transfer of the assets of, or ownership interests in, the relevant
partnership, limited liability company, joint venture or any similar Person;
(i) restrictions
on Cash or other deposits imposed by Persons under contracts entered into in the ordinary course of business or for whose benefit
such Cash or other deposits exist;
(j) restrictions
set forth in documents which exist on the Closing Date;
(k) restrictions
set forth in any Loan Document, any Hedge Agreement and/or any agreement relating to any Banking Services Obligations (as defined
in the First Lien Credit Agreement (or any equivalent term under the documentation governing any First Lien Facilities));
(l) restrictions
contained in documents governing Indebtedness permitted hereunder of any Restricted Subsidiary that is not a Loan Party;
(m) restrictions
on any asset (or all of the assets) of and/or the Capital Stock of the Borrower and/or any Restricted Subsidiary which is imposed
pursuant to an agreement entered into in connection with any Disposition of such asset (or assets) and/or all or a portion of the
Capital Stock of the relevant Person that is permitted or not restricted by this Agreement;
(n) restrictions
set forth in any agreement relating to any Permitted Lien that limits the right of the Borrower or any Restricted Subsidiary to
Dispose of or encumber the assets subject thereto; and
(o) restrictions
or encumbrances imposed by any amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing
of the contracts, instruments or obligations referred to in clauses (a) through (n) above; provided
that no such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing is, in
the good faith judgment of the Borrower, more restrictive with respect to such encumbrances and other restrictions, taken as a
whole, than those in effect prior to the relevant amendment, modification, restatement, renewal, increase, supplement, refunding,
replacement or refinancing.
Section 6.04. Restricted
Payments; Certain Payments of Indebtedness.
(a) The
Borrower shall not pay or make, directly or indirectly, any Restricted Payment, except that:
(i) the
Borrower may make Restricted Payments to the extent necessary to permit any Parent Company:
(A) to
pay general administrative costs and expenses (including corporate overhead, legal or similar expenses and customary salary, bonus
and other benefits payable to directors, officers, employees, members of management, managers and/or consultants of any Parent
Company) and franchise fees and Taxes and similar fees, Taxes and expenses required to enable such Parent Company to maintain
its organizational existence or qualification to do business, in each case, which are reasonable and customary and incurred in
the ordinary course of business, plus any reasonable and customary indemnification claims made by directors, officers,
members of management, managers, employees or consultants of any Parent Company, in each case, to the extent attributable to the
ownership or operations of any Parent Company and its subsidiaries (but excluding the portion of such amount that is attributable
to the ownership or operations of any subsidiary of any Parent Company other than the Borrower and its subsidiaries);
(B) to
pay scheduled and overdue interest and payments as part of an AHYDO catch-up payment, in each case, in respect of any Indebtedness
of any Parent Company to the extent the Net Proceeds thereof were contributed to the Borrower;
(C) to
pay audit and other accounting and reporting expenses of such Parent Company to the extent attributable to any Parent Company (but
excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or operations of
any subsidiary of any Parent Company other than the Borrower and/or its subsidiaries), the Borrower and its subsidiaries;
(D) for
the payment of insurance premiums to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt,
the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other
than the Borrower and/or its subsidiaries), the Borrower and its subsidiaries;
(E) pay
(x) fees and expenses related to debt or equity offerings by any Parent Company, investments or acquisitions permitted or
not restricted by this Agreement (whether or not consummated) and (y) Public Company Costs;
(F) to
finance any Investment permitted under Section 6.06 (provided that (x) any Restricted Payment under this
clause (a)(i)(F) shall be made substantially concurrently with the closing of such Investment and (y) the relevant
Parent Company shall, promptly following the closing thereof, cause (I) all property acquired to be contributed to the Borrower
or one or more of its Restricted Subsidiaries, or (II) the merger, consolidation or amalgamation of the Person formed or acquired
into the Borrower or one or more of its Restricted Subsidiaries, in order to consummate such Investment in compliance with the
applicable requirements of Section 6.06 as if undertaken as a direct Investment by the Borrower or the relevant Restricted
Subsidiary); and
(G) to
pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of management,
managers, employees or consultants of any Parent Company (or any Immediate Family Member of any of the foregoing) to the extent
such salary, bonuses and other benefits are attributable and reasonably allocated to the operations of the Borrower and/or its
subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such purpose;
(ii) the
Borrower may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption, retirement or
other acquisition or retirement for value of Capital Stock of any Parent Company or any subsidiary held by any future, present
or former employee, director, member of management, officer, manager or consultant (or any Affiliate or Immediate Family Member
thereof) of any Parent Company, the Borrower or any subsidiary:
(A) in
accordance with the terms of promissory notes issued pursuant to Section 6.01(o), so long as the aggregate amount of
all Cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments made pursuant
to sub-clause (D) of this clause (ii) below, does not exceed in any Fiscal Year the greater of $24,000,000
and 14.0% of Consolidated Adjusted EBITDA, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years;
(B) with
the proceeds of any sale or issuance of the Capital Stock of the Borrower or any Parent Company (to the extent such proceeds are
contributed in respect of Qualified Capital Stock to the Borrower or any Restricted Subsidiary);
(C) with
the net proceeds of any key-man life insurance policies; or
(D) with
Cash and Cash Equivalents in an amount not to exceed in any Fiscal Year, together with the aggregate amount of all cash payments
made pursuant to sub-clause (A) of this clause (ii) in respect of promissory notes issued pursuant to Section 6.01(o),
the greater of $24,000,000 and 14.0% of Consolidated Adjusted EBITDA, which, if not used in any Fiscal Year, may be carried forward
to subsequent Fiscal Years;
(iii) the
Borrower may make Restricted Payments in an amount not to exceed the portion, if any, of the Available Amount on such date that
the Borrower elects to apply to this clause (iii);
(iv) the
Borrower may make Restricted Payments (i) to any Parent Company to enable such Parent Company to make Cash payments in lieu
of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into
or exchangeable for Capital Stock of such Parent Company and (ii) consisting of (A) payments made or expected to be made
in respect of withholding or similar Taxes payable by any future, present or former officers, directors, employees, members of
management, managers or consultants of the Borrower, any Restricted Subsidiary or any Parent Company or any of their respective
Immediate Family Members and/or (B) repurchases of Capital Stock in consideration of the payments described in sub-clause
(A) above, including demand repurchases in connection with the exercise of stock options;
(v) the
Borrower may repurchase (or make Restricted Payments to any Parent Company to enable it to repurchase) Capital Stock upon the exercise
of warrants, options or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represents all
or a portion of the exercise price of, or tax withholdings with respect to, such warrants, options or other securities convertible
into or exchangeable for Capital Stock as part of a “cashless” exercise;
(vi) for
any taxable period (or portion thereof) that a Parent Company is treated as a corporation for U.S. federal income tax purposes
and for which Borrower and/or any of its subsidiaries are members (or are pass-through entities of such members) of a consolidated,
combined, unitary or similar income Tax group for U.S. federal, state, local or foreign income Tax purposes for which such Parent
Company is the common parent, the Borrower may make Restricted Payments to such Parent Company to pay the portion of any U.S.
federal, state, local or foreign income Taxes (as applicable) of such Parent Company for such taxable period that are attributable
to the income of the Borrower and/or its applicable subsidiaries; provided that the aggregate amount of such distributions
shall not exceed the aggregate Taxes the Borrower and/or its subsidiaries, as applicable, would be required to pay in respect
of such U.S. federal, state, local and foreign Taxes on a stand-alone basis for such taxable period; provided further that
the amount of such distributions with respect to any Unrestricted Subsidiary for any taxable period shall be limited to the amount
actually paid by such Unrestricted Subsidiary for such purpose;
(vii) the
Borrower may make Restricted Payments to consummate the Transactions on the Closing Date and to the extent not paid on the Closing
Date, thereafter to pay working capital and purchase price adjustments and other payment obligations owing under the Merger Agreement
and the Transaction Costs;
(viii) so
long as no Event of Default exists at the time of declaration of such Restricted Payment, following the consummation of the first
Qualifying IPO, the Borrower may (or may make Restricted Payments to any Parent Company to enable it to) make Restricted Payments
with respect to any Capital Stock in an amount of 6% per annum of the net Cash proceeds received by or contributed to the Borrower
from any Qualifying IPO;
(ix) the
Borrower may make Restricted Payments to (i) redeem, repurchase, retire or otherwise acquire any (A) Capital Stock (“Treasury
Capital Stock”) of the Borrower and/or any Restricted Subsidiary or (B) Capital Stock of any Parent Company, in
the case of each of subclauses (A) and (B), in exchange for, or out of the proceeds of the substantially concurrent
sale (other than to the Borrower and/or any Restricted Subsidiary) of, Qualified Capital Stock of the Borrower or any Parent Company
to the extent any such proceeds are contributed to the capital of the Borrower and/or any Restricted Subsidiary in respect of Qualified
Capital Stock (“Refunding Capital Stock”) and (ii) declare and pay dividends on any Treasury Capital Stock
out of the proceeds of the substantially concurrent sale (other than to the Borrower or a Restricted Subsidiary) of any Refunding
Capital Stock;
(x) to
the extent constituting a Restricted Payment, the Borrower may consummate any transaction permitted by Section 6.06
(other than Sections 6.06(j) and (t)), Section 6.07 (other than Section 6.07(g)) and
Section 6.09 (other than Section 6.09(d));
(xi) the
Borrower may make Restricted Payments in an aggregate amount not to exceed the greater of $48,000,000 and 28.0% of Consolidated
Adjusted EBITDA minus the sum of (i) any amounts under this Section 6.04(a)(xi) reallocated to make
Restricted Debt Payments pursuant to Section 6.04(b)(iv)(B), (ii) any amounts under this Section 6.04(a)(xi) reallocated
to make Investments pursuant to Section 6.06(q), and (iii) any amounts under this Section 6.04(a)(xi) reallocated
to incur Indebtedness pursuant to Section 6.01(u);
(xii) the
Borrower may pay any dividend or consummate any redemption within 60 days after the date of the declaration thereof or the provision
of a redemption notice with respect thereto, as the case may be, if at the date of such declaration or notice, the dividend or
redemption notice would have complied with the provisions hereof;
(xiii) the
Borrower may make Restricted Payments so long as (A) no Event of Default exists or would result therefrom and (B) the
Total Leverage Ratio, calculated on a Pro Forma Basis at the time of declaration thereof, would not exceed 5.50:1.00;
(xiv) the
Borrower may make Restricted Payments to enable any Parent Company to make Restricted Payments solely in the Qualified Capital
Stock of such Parent Company; and
(xv) the
Borrower may make Restricted Payments to pay amounts permitted under Section 6.09(f) and (g).
(b) Holdings
and the Borrower shall not, nor shall they permit any Restricted Subsidiary to, make any payment (whether in Cash, securities or
other property) on or in respect of principal of or interest on (x) any Junior Lien Indebtedness, or (y) any Subordinated
Indebtedness, in each cases of clauses (x), and (y), with an individual outstanding principal amount in excess of
the Threshold Amount (such Indebtedness under clauses (x) and (y), in each case, with an individual outstanding
principal amount in excess of the Threshold Amount, the “Restricted Debt”), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Restricted Debt prior
to its scheduled maturity (collectively, “Restricted Debt Payments”), except:
(i) any
purchase, defeasance, redemption, repurchase, repayment or other acquisition or retirement of any Restricted Debt made by exchange
for, or out of the proceeds of, Refinancing Indebtedness permitted by Section 6.01 (except to the extent subject to
clause (iv)(C) of the proviso to Section 6.01(p);
(ii) payments
as part of an AHYDO catch-up payment;
(iii) payments
of regularly scheduled interest as and when due in respect of any Restricted Debt, except for any payments with respect to any
such Subordinated Indebtedness that are prohibited by the subordination provisions thereof;
(iv) so
long as, at the time of delivery of irrevocable notice with respect thereto, no Event of Default exists or would result therefrom,
Restricted Debt Payments in an aggregate amount not to exceed (i) the sum of (A) the greater of $48,000,000 and 28.0%
of Consolidated Adjusted EBITDA and (B) any amounts reallocated to this Section 6.04(b)(iv) from Section 6.04(a)(xi) and
Section 6.06(q), minus (ii) any amounts reallocated from Section 6.04(b)(iv)(A) to make
Investments pursuant to Section 6.06(q);
(v) (A) Restricted
Debt Payments in exchange for, or with proceeds of any issuance of, Qualified Capital Stock of the Borrower and/or any Restricted
Subsidiary and/or any capital contribution in respect of Qualified Capital Stock of the Borrower or any Restricted Subsidiary,
(B) Restricted Debt Payments as a result of the conversion of all or any portion of any Restricted Debt into Qualified Capital
Stock of the Borrower and/or any Restricted Subsidiary and (C) to the extent constituting a Restricted Debt Payment, payment-in-kind
interest with respect to any Restricted Debt that is permitted under Section 6.01;
(vi) Restricted
Debt Payments in an amount not to exceed the portion, if any, of the Available Amount on such date that the Borrower elects to
apply to this clause (vi);
(vii) Restricted
Debt Payments; provided that the Total Leverage Ratio, calculated on a Pro Forma Basis, would not exceed 6.00:1.00; and
(viii) mandatory
prepayments of Restricted Debt (and related payments of interest) made with Declined Proceeds (it being understood that any Declined
Proceeds applied to make Restricted Debt Payments in reliance on this Section 6.04(b)(viii) shall not increase
the amount available under clause (a)(viii) of the definition of “Available Amount” to the extent so applied).
Section 6.05. Restrictions
on Subsidiary Distributions. Except as provided herein or in any other Loan Document, the First Lien Credit Agreement, any
document with respect to any First Lien Incremental Equivalent Debt and/or in agreements with respect to refinancings, renewals
or replacements of such Indebtedness that are permitted by Section 6.01, the Borrower shall not, nor shall it permit
any of its Restricted Subsidiaries to, enter into or cause to exist any agreement restricting the ability of (i) any subsidiary
of the Borrower to pay dividends or other distributions to the Borrower or any Subsidiary Guarantor or (ii) any Restricted
Subsidiary to make cash loans or advances to the Borrower or any Subsidiary Guarantor, except:
(a) in
any agreement evidencing (i) Indebtedness of a Restricted Subsidiary that is not a Loan Party permitted by Section 6.01,
(ii) Indebtedness permitted by Section 6.01 that is secured by a Permitted Lien if the relevant restriction applies
only to the Person obligated under such Indebtedness and its Restricted Subsidiaries or the property or assets intended to secure
such Indebtedness and (iii) Indebtedness permitted pursuant to clauses (j), (m), (p), (q), (u),
(w), (x), (y) and/or (aa) of Section 6.01;
(b) by
reason of customary provisions restricting assignments, subletting or other transfers (including the granting of any Lien) contained
in leases, subleases, licenses, sublicenses, joint venture agreements and similar agreements entered into in the ordinary course
of business;
(c) that
are or were created by virtue of any Lien granted upon, transfer of, agreement to transfer or grant of, any option or right with
respect to any property, assets or Capital Stock not otherwise prohibited under this Agreement;
(d) assumed
in connection with any acquisition of property or the Capital Stock of any Person, so long as the relevant encumbrance or restriction
relates solely to the Person and its subsidiaries (including the Capital Stock of the relevant Person or Persons) and/or property
so acquired (or to the Person or Persons (and its or their subsidiaries) bound thereby) and was not created in connection with
or in anticipation of such acquisition;
(e) in
any agreement for any Disposition of any Restricted Subsidiary (or all or substantially all of the property and/or assets thereof)
that restricts the payment of dividends or other distributions or the making of cash loans or advances by such Restricted Subsidiary
pending such Disposition;
(f) in
provisions in agreements or instruments which prohibit the payment of dividends or the making of other distributions with respect
to any class of Capital Stock of a Person other than on a pro rata basis;
(g) imposed
by customary provisions in partnership agreements, limited liability company organizational governance documents, joint venture
agreements, sale-leaseback agreements, stock sale agreements and other similar agreements;
(h) on
Cash, other deposits or net worth or similar restrictions imposed by any Person under any contract entered into in the ordinary
course of business or for whose benefit such Cash, other deposits or net worth or similar restrictions exist;
(i) set
forth in documents which exist on the Closing Date and not created in contemplation thereof;
(j) those
arising pursuant to an agreement or instrument relating to any Indebtedness permitted to be incurred after the Closing Date if
the relevant restrictions, taken as a whole, are not materially less favorable to the Lenders than the restrictions contained in
this Agreement, taken as a whole (as determined in good faith by the Borrower);
(k) those
arising under or as a result of applicable law, rule, regulation or order or the terms of any license, authorization, concession
or permit;
(l) those
arising in any Loan Document and/or any Loan Document (as defined in the First Lien Credit Agreement), any Hedge Agreement and/or
any agreement relating to any Banking Services Obligation (as defined in the First Lien Credit Agreement (or equivalent term under
any documentation governing the First Lien Facilities));
(m) any
Indebtedness permitted under Section 6.01; provided that no such restrictions are, in the good faith judgment
of the Borrower, more restrictive with respect to such restrictions, taken as a whole, than those in any Indebtedness existing
on the Closing Date (including under this Agreement and the First Lien Credit Agreement); and/or
(n) those
imposed by any amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing of any
contract, instrument or obligation referred to in clauses (a) through (m) above; provided that no
such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing is, in the good
faith judgment of the Borrower, more restrictive with respect to such restrictions, taken as a whole, than those in existence prior
to such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing.
Section 6.06. Investments.
The Borrower shall not, nor shall it permit any of its Restricted Subsidiaries to, make or own any Investment in any other Person
except:
(a) Cash
or Investments that were Cash Equivalents at the time made;
(b) (i) Investments
existing on the Closing Date in any subsidiary, (ii) Investments made after the Closing Date among the Borrower and/or one
or more Restricted Subsidiaries that are Loan Parties (other than Holdings), (iii) Investments made after the Closing Date
by any Loan Party in any Restricted Subsidiary that is not a Loan Party in an aggregate outstanding amount not to exceed the sum
of (A) the greater of $72,000,000 and 42.0% of Consolidated Adjusted EBITDA and (B) the amounts reallocated to this Section 6.06(b) from
Section 6.06(d), (iv) Investments made by Holdings, the Borrower and/or any Restricted Subsidiary in the form
of any contribution or Disposition of the Capital Stock of any Person that is not a Loan Party, and (v) Investments made by
any Restricted Subsidiary that is not a Loan Party in any Loan Party (other than Holdings) or any other Restricted Subsidiary of
the Borrower;
(c) Investments
(i) constituting deposits, prepayments and/or other credits to suppliers, (ii) made in connection with obtaining, maintaining
or renewing client and customer contracts and/or (iii) in the form of advances made to distributors, suppliers, licensors
and licensees, in each case, in the ordinary course of business or, in the case of clause (iii), to the extent necessary
to maintain the ordinary course of supplies to the Borrower or any Restricted Subsidiary;
(d) Investments
in Unrestricted Subsidiaries or in joint ventures (including in connection with the creation, formation and/or acquisition of any
joint venture, or in any Restricted Subsidiary to enable such Restricted Subsidiary to make an Investment in joint ventures, including
to create, form and/or acquire any joint venture) in an aggregate outstanding amount not to exceed (i) the greater of $60,000,000
and 36.0% of Consolidated Adjusted EBITDA minus (ii) any amounts reallocated from this Section 6.06(d) to
Section 6.06(b)(iii);
(e) (i) Permitted
Acquisitions and (ii) Investments in Restricted Subsidiaries that are not Loan Parties in amounts required to permit such
Restricted Subsidiaries to consummate Permitted Acquisitions (subject to any applicable limitations in clause (b) of
the first proviso in the definition of “Permitted Acquisition”);
(f) Investments
(i) existing on, or contractually committed to or contemplated as of, the Closing Date and described on Schedule 6.06
and (ii) any modification, replacement, renewal or extension of any Investment described in clause (i) above so
long as no such modification, renewal or extension thereof increases the amount of such Investment except by the terms thereof
or as otherwise permitted by this Section 6.06);
(g) Investments
received in lieu of Cash in connection with any Disposition permitted by Section 6.07 or any other disposition of assets
not constituting a Disposition;
(h) loans
or advances to present or former employees, directors, members of management, officers, managers or consultants or independent
contractors (or their respective Immediate Family Members) of any Parent Company, the Borrower and its subsidiaries and/or any
joint venture to the extent permitted by Requirements of Law, in connection with such Person’s purchase of Capital Stock
of any Parent Company, either (i) in an aggregate principal amount not to exceed $9,000,000 at any one time outstanding or
(ii) so long as the proceeds of such loan or advance are substantially contemporaneously contributed to the Borrower for the
purchase of such Capital Stock;
(i) Investments
consisting of extensions of credit in the nature of accounts receivable or notes receivable arising from the grant of trade credit
in the ordinary course of business;
(j) Investments
consisting of Indebtedness permitted under Section 6.01 (other than Indebtedness permitted under Sections 6.01(b) and
(h)), Permitted Liens, Restricted Payments permitted under Section 6.04 (other than Section 6.04(a)(x)),
Restricted Debt Payments permitted by Section 6.04 and mergers, consolidations, amalgamations, liquidations, windings
up, dissolutions or Dispositions permitted by Section 6.07 (other than Section 6.07(a) (if made in
reliance on subclause (ii)(y) of the proviso thereto), Section 6.07(c)(ii) (if made in reliance on
clause (B) therein) and Section 6.07(g)) and affiliate transactions permitted by Section 6.09
(other than Section 6.09(d));
(k) Investments
in the ordinary course of business consisting of endorsements for collection or deposit and customary trade arrangements with customers;
(l) Investments
(including debt obligations and Capital Stock) received (i) in connection with the bankruptcy or reorganization of any Person,
(ii) in settlement of delinquent obligations of, or other disputes with, customers, suppliers and other account debtors arising
in the ordinary course of business, (iii) upon foreclosure with respect to any secured Investment or other transfer of title
with respect to any secured Investment and/or (iv) as a result of the settlement, compromise, resolution of litigation, arbitration
or other disputes;
(m) loans
and advances of payroll payments or other compensation to present or former employees, directors, members of management, officers,
managers or consultants of any Parent Company (to the extent such payments or other compensation relate to services provided to
such Parent Company (but excluding, for the avoidance of doubt, the portion of any such amount, if any, attributable to the ownership
or operations of any subsidiary of any Parent Company other than the Borrower and/or its subsidiaries)), the Borrower and/or any
subsidiary in the ordinary course of business;
(n) Investments
to the extent that payment therefor is made solely with Capital Stock of any Parent Company or Capital Stock (other than Disqualified
Capital Stock) of the Borrower or any Restricted Subsidiary, in each case, to the extent not resulting in a Change of Control;
(o) (i) Investments
of any Restricted Subsidiary acquired after the Closing Date, or of any Person acquired by, or merged into or consolidated or amalgamated
with, the Borrower or any Restricted Subsidiary after the Closing Date, in each case as part of an Investment otherwise permitted
by this Section 6.06 to the extent that such Investments were not made in contemplation of or in connection with such
acquisition, merger, amalgamation or consolidation and were in existence on the date of the relevant acquisition, merger, amalgamation
or consolidation and (ii) any modification, replacement, renewal or extension of any Investment permitted under clause
(i) of this Section 6.06(o) so long as no such modification, replacement, renewal or extension thereof
increases the amount of such Investment except as otherwise permitted by this Section 6.06;
(p) Investments
made in connection with the Transactions;
(q) Investments
made after the Closing Date by the Borrower and/or any of its Restricted Subsidiaries in an aggregate amount not to exceed at any
time outstanding an amount equal to (i) the sum of (A) the greater of $90,000,000 and 53.0% of Consolidated Adjusted
EBITDA, (B) any amounts reallocated to this Section 6.06(q) from Section 6.04(a)(xi) or
Section 6.04(b)(iv), and (C) with respect to any Person that becomes a Restricted Subsidiary of the Borrower if
the Borrower or any of its Restricted Subsidiaries made an Investment in such Person after the Closing Date prior to such Person
becoming a Restricted Subsidiary, the Fair Market Value of such Investments as of the date on which such Person becomes a Restricted
Subsidiary, minus (ii) any amounts reallocated from this this Section 6.06(q) to make Restricted Debt
Payments pursuant to Section 6.04(b)(iv);
(r) Investments
made after the Closing Date by the Borrower and/or any of its Restricted Subsidiaries in an amount not to exceed the portion, if
any, of the Available Amount on such date that the Borrower elects to apply to this clause (r);
(s) (i) Guarantees
of leases (other than Capital Leases) or of other obligations not constituting Indebtedness and (ii) Guarantees of the lease
obligations of suppliers, customers, franchisees and licensees of the Borrower and/or its Restricted Subsidiaries, in each case,
in the ordinary course of business;
(t) Investments
in any Parent Company in amounts and for purposes for which Restricted Payments to such Parent Company are permitted under Section 6.04(a);
provided that any Investment made as provided above in lieu of any such Restricted Payment shall reduce availability under
the applicable Restricted Payment basket under Section 6.04(a);
(u) Investments
made by any Restricted Subsidiary that is not a Loan Party with the proceeds received by such Restricted Subsidiary from an Investment
made by any Loan Party in such Restricted Subsidiary pursuant to this Section 6.06 (other than Investments made pursuant
to clause (ii) of Section 6.06(e) or Investments made in Unrestricted Subsidiaries that are not otherwise
permitted hereunder);
(v) Investments
in subsidiaries and joint ventures in connection with reorganizations and related activities related to tax planning; provided
that, after giving effect to any such reorganization and/or related activity, the security interest of the Administrative Agent
in the Collateral, taken as a whole, is not materially impaired;
(w) Investments
under any Derivative Transaction of the type permitted under Section 6.01(s);
(x) [Reserved];
(y) Investments
made in joint ventures as required by, or made pursuant to, buy/sell arrangements between the joint venture parties set forth in
joint venture agreements and similar binding arrangements in effect on the Closing Date (other than any modification, replacement,
renewal or extension of such Investments so long as no such modification, renewal or extension thereof increased the amount of
any such Investment except by the terms thereof or as otherwise permitted by this Section 6.06);
(z) unfunded
pension fund and other employee benefit plan obligations and liabilities to the extent that they are permitted to remain unfunded
under applicable law;
(aa) Investments
in the Borrower, any subsidiary and/or any joint venture in connection with intercompany cash management arrangements and related
activities in the ordinary course of business;
(bb) Investments
so long as, after giving effect thereto on a Pro Forma Basis, the Total Leverage Ratio does not exceed 6.25:1.00;
(cc) Investments
consisting of the licensing of IP Rights or contribution of non-exclusive IP Rights pursuant to joint marketing arrangements with
other Persons, in each case, in the ordinary course of business; and
(dd) Investments
in similar businesses in an aggregate outstanding principal amount not to exceed the greater of $72,000,000 and 42.0% of Consolidated
Adjusted EBITDA.
Section 6.07. Fundamental
Changes; Disposition of Assets. The Borrower shall not, nor shall it permit any of its Restricted Subsidiaries to, enter into
any transaction of merger, consolidation or amalgamation, or liquidate, wind up or dissolve themselves (or suffer any liquidation
or dissolution), or make any Disposition of any assets in a single transaction or in a series of related transactions, except:
(a) any
Restricted Subsidiary may be merged, consolidated or amalgamated with or into the Borrower or any other Restricted Subsidiary;
provided that (i) in the case of any such merger, consolidation or amalgamation with or into the Borrower, (A) the
Borrower shall be the continuing or surviving Person or (B) if the Person formed by or surviving any such merger, consolidation
or amalgamation is not the Borrower (any such Person, the “Successor Borrower”), (x) the Successor Borrower
shall be an entity organized or existing under the law of the U.S., any state thereof or the District of Columbia, (y) the
Successor Borrower shall expressly assume the Obligations of the Borrower in a manner reasonably satisfactory to the Administrative
Agent and concurrently with the consummation of such merger, consolidation or amalgamation, 100% of the Capital Stock of the Successor
Borrower shall be pledged to the Administrative Agent for the benefit of the Secured Parties and (z)(1) except as the Administrative
Agent may otherwise agree, each Guarantor, unless it is the other party to such merger, consolidation or amalgamation, shall have
executed and delivered a reaffirmation agreement with respect to its obligations under the Loan Guaranty and the other Loan Documents
and (2) upon its reasonable request, the Administrative Agent shall have received customary legal opinions; it being understood
and agreed that if the foregoing conditions under clauses (x) through (z) are satisfied, the Successor
Borrower will succeed to, and be substituted for, the Borrower under this Agreement and the other Loan Documents, and (ii) in
the case of any such merger, consolidation or amalgamation with or into any Subsidiary Guarantor, either (x) such Subsidiary
Guarantor shall be the continuing or surviving Person or the continuing or surviving Person shall expressly assume the guarantee
obligations of the Subsidiary Guarantor in a manner reasonably satisfactory to the Administrative Agent or (y) the relevant
transaction shall be treated as an Investment and shall comply with Section 6.06;
(b) Dispositions
(including of Capital Stock) among the Borrower and/or any Restricted Subsidiary (upon voluntary liquidation or otherwise); provided
that any such Disposition by any Loan Party to any Person that is not a Loan Party shall be (i) for Fair Market Value with
at least 75% of the consideration for such Disposition consisting of Cash or Cash Equivalents at the time of such Disposition or
(ii) treated as an Investment and otherwise made in compliance with Section 6.06 (other than in reliance on clause
(j) thereof);
(c) (i) the
liquidation or dissolution of any Restricted Subsidiary if the Borrower determines in good faith that such liquidation or dissolution
is in the best interests of the Borrower, is not materially disadvantageous to the Lenders and the Borrower or any Restricted Subsidiary
receives any assets of the relevant dissolved or liquidated Restricted Subsidiary; provided that in the case of any liquidation
or dissolution of any Loan Party that results in a distribution of assets to any Restricted Subsidiary that is not a Loan Party,
such distribution shall be treated as an Investment and shall comply with Section 6.06 (other than in reliance on clause
(j) thereof); (ii) any merger, amalgamation, dissolution, liquidation or consolidation, the purpose of which is to
effect (A) any Disposition otherwise permitted under this Section 6.07 (other than clause (a), clause
(b) or this clause (c)) or (B) any Investment permitted under Section 6.06; and (iii) the
Borrower or any Restricted Subsidiary may be converted into another form of entity, in each case, so long as such conversion does
not adversely affect the value of the Loan Guaranty or Collateral, if any;
(d) (x) Dispositions
of inventory or equipment in the ordinary course of business (including on an intercompany basis) and (y) the leasing or subleasing
of real property in the ordinary course of business;
(e) Dispositions
of surplus, obsolete, used or worn out property or other property that, in the reasonable judgment of the Borrower, is (A) no
longer useful in its business (or in the business of any Restricted Subsidiary of the Borrower) or (B) otherwise economically
impracticable to maintain;
(f) Dispositions
of Cash Equivalents or other assets that were Cash Equivalents when the relevant original Investment was made;
(g) Dispositions,
mergers, amalgamations, consolidations or conveyances that constitute Investments permitted pursuant to Section 6.06
(other than Section 6.06(j)), Permitted Liens, Restricted Payments permitted by Section 6.04(a) (other
than Section 6.04(a)(x)) and Sale and Lease-back Transactions permitted by Section 6.08;
(h) Dispositions
for Fair Market Value; provided that with respect to any such Disposition with a purchase price in excess of the greater
of $78,000,000 and 46.0% of Consolidated Adjusted EBITDA, at least 75% of the consideration for such Disposition shall consist
of Cash or Cash Equivalents; provided, that for purposes of the 75% Cash consideration requirement, (w) the amount
of any Indebtedness or other liabilities (other than Indebtedness or other liabilities that are subordinated to the Obligations
or that are owed to the Borrower or any Restricted Subsidiary) of the Borrower or any Restricted Subsidiary (as shown on such Person’s
most recent balance sheet or statement of financial position (or in the notes thereto)) that are assumed by the transferee of any
such assets and for which the Borrower and/or its applicable Restricted Subsidiary have been validly released by all relevant creditors
in writing, (x) the amount of any trade-in value applied to the purchase price of any replacement assets acquired in connection
with such Disposition, (y) any Securities received by the Borrower or any Restricted Subsidiary from such transferee that
are converted by such Person into Cash or Cash Equivalents (to the extent of the Cash or Cash Equivalents received) within 180
days following the closing of the applicable Disposition and (z) any Designated Non-Cash Consideration received in respect
of such Disposition having an aggregate fair market value, taken together with all other Designated Non-Cash Consideration received
pursuant to this clause (z) and Section 6.08(B)(1)(z) that is at that time outstanding, not in excess
of the greater of $60,000,000 and 36.0% of Consolidated Adjusted EBITDA, in each case, shall be deemed to be Cash; provided,
further, that (x) as determined on the date on which the agreement governing such Disposition is executed, no Event
of Default shall exist and (y) the Net Proceeds of such Disposition shall be applied and/or reinvested as (and to the extent)
required by the First Lien Credit Agreement, the documentation governing any other First Lien Facility and/or Section 2.11(b)(ii);
(i) to
the extent that (i) the relevant property is exchanged for credit against the purchase price of similar replacement property
or (ii) the proceeds of the relevant Disposition are promptly applied to the purchase price of such replacement property;
(j) Dispositions
of Investments in joint ventures to the extent required by, or made pursuant to, buy/sell arrangements between joint venture or
similar parties set forth in the relevant joint venture arrangements and/or similar binding arrangements;
(k) Dispositions
of accounts receivable in the ordinary course of business (including any discount and/or forgiveness thereof) and any factoring
or similar arrangement or in connection with the collection or compromise of any of the foregoing;
(l) Dispositions
and/or terminations of leases, subleases, licenses or sublicenses (including the provision of software under any open source license),
which (i) do not materially interfere with the business of the Borrower and its Restricted Subsidiaries or (ii) relate
to closed facilities or the discontinuation of any product line;
(m) (m) (i) any
termination of any lease in the ordinary course of business, (ii) any expiration of any option agreement in respect of real
or personal property and (iii) any surrender or waiver of contractual rights or the settlement, release or surrender of contractual
rights or litigation claims (including in tort) in the ordinary course of business;
(n) Dispositions
of property subject to foreclosure, casualty, eminent domain or condemnation proceedings (including in lieu thereof or any similar
proceeding);
(o) Dispositions
or consignments of equipment, inventory or other assets (including leasehold interests in real property) with respect to facilities
that are temporarily not in use, held for sale or closed;
(p) Dispositions
in connection with the Transactions;
(q) Dispositions
of non-core assets acquired in connection with any acquisition permitted hereunder and sales of Real Estate Assets acquired in
any acquisition permitted hereunder; provided that (i) the Net Proceeds received in connection with any such Disposition
shall be applied and/or reinvested as (and to the extent) required by the First Lien Credit Agreement, the documentation governing
any other First Lien Facility and/or Section 2.11(b)(ii) and (ii) no Event of Default exists on the date
on which the definitive agreement governing the relevant Disposition is executed;
(r) exchanges
or swaps, including transactions covered by Section 1031 of the Code (or any comparable provision of any foreign jurisdiction),
of property or assets so long as any such exchange or swap is made for fair value (as reasonably determined by the Borrower) for
like property or assets; provided that (i) upon the consummation of any such exchange or swap by any Loan Party, to
the extent the property received does not constitute an Excluded Asset, the Administrative Agent has a perfected Lien with the
same priority as the Lien held on the Real Estate Assets so exchanged or swapped and (ii) any Net Proceeds received as “cash
boot” in connection with any such transaction shall be applied and/or reinvested as (and to the extent) required by the First
Lien Credit Agreement, the documentation governing any other First Lien Facility and/or Section 2.11(b)(ii);
(s) Dispositions
set forth on Schedule 6.07(s);
(t) (i) licensing
and cross-licensing arrangements involving any technology, intellectual property or IP Rights of the Borrower or any Restricted
Subsidiary in the ordinary course of business and (ii) Dispositions, abandonments, cancellations or lapses of IP Rights, or
issuances or registrations, or applications for issuances or registrations, of IP Rights, which, in the reasonable good faith determination
of the Borrower, are not material to the conduct of the business of the Borrower or its Restricted Subsidiaries, or are no longer
economical to maintain in light of its use;
(u) terminations
or unwinds of Derivative Transactions;
(v) Dispositions
of Capital Stock of, or sales of Indebtedness or other Securities of, Unrestricted Subsidiaries;
(w) Dispositions
of Real Estate Assets and related assets in the ordinary course of business in connection with relocation activities for directors,
officers, employees, members of management, managers or consultants of any Parent Company, the Borrower and/or any Restricted Subsidiary;
(x) Dispositions
made to comply with any order of any agency of the U.S. Federal government, any state, authority or other regulatory body or any
applicable Requirement of Law;
(y) any
merger, amalgamation, consolidation, Disposition or conveyance the sole purpose of which is to reincorporate or reorganize (i) any
Domestic Subsidiary in another jurisdiction in the U.S. and/or (ii) any Foreign Subsidiary in the U.S. or any other jurisdiction;
(z) any
sale of motor vehicles and information technology equipment purchased at the end of an operating lease and resold thereafter; and
(aa) Dispositions
involving assets having a Fair Market Value in the aggregate since the Closing Date of not more than the greater of $72,000,000
and 42.0% of Consolidated Adjusted EBITDA.
To the extent that any
Collateral is Disposed of as expressly permitted by this Section 6.07 to any Person other than a Loan Party, such Collateral
shall be sold free and clear of the Liens created by the Loan Documents, which Liens shall be automatically released upon the consummation
of such Disposition; it being understood and agreed that the Administrative Agent shall be authorized to take, and shall take,
any actions deemed appropriate in order to effect the foregoing in accordance with Article 8.
Section 6.08. Sale
and Lease-Back Transactions. The Borrower shall not, nor shall it permit any of its Restricted Subsidiaries to, directly or
indirectly, become or remain liable as lessee or as a guarantor or other surety with respect to any lease of any property (whether
real, personal or mixed), whether now owned or hereafter acquired, which the Borrower or the relevant Restricted Subsidiary (a) has
sold or transferred or is to sell or to transfer to any other Person (other than the Borrower or any of its Restricted Subsidiaries)
and (b) intends to use for substantially the same purpose as the property which has been or is to be sold or transferred by
the Borrower or such Restricted Subsidiary to any Person (other than the Borrower or any of its Restricted Subsidiaries) in connection
with such lease (such a transaction described herein, a “Sale and Lease-Back Transaction”); provided
that any Sale and Lease-Back Transaction shall be permitted so long as (i) the Net Proceeds of such Disposition are applied
and/or reinvested as (and to the extent) required by the First Lien Credit Agreement, the documentation governing any other First
Lien Facility, Section 2.11(b)(ii) and the documentation governing any other Credit Facilities, (ii) such
Sale and Lease-Back Transaction is (A) permitted by the First Lien Credit Agreement, the documentation governing any other
First Lien Facility and Section 6.01(m) and/or (B) (1) made in exchange for not less than 75% cash consideration
(provided that for purposes of the foregoing 75% Cash consideration requirement, (w) the amount of any Indebtedness
or other liabilities (other than Indebtedness or other liabilities that are subordinated to the Obligations or that are owed to
the Borrower or any Restricted Subsidiary) of the Borrower or any Restricted Subsidiary (as shown on such Person’s most recent
balance sheet or statement of financial position (or in the notes thereto) that are assumed by the transferee of any such assets
and for which the Borrower and/or its applicable Restricted Subsidiary have been validly released by all relevant creditors in
writing, (x) the amount of any trade-in value applied to the purchase price of any replacement assets acquired in connection
with such Sale and Lease-Back Transaction, (y) any Securities received by the Borrower or any Restricted Subsidiary from such
transferee that are converted by such Person into Cash or Cash Equivalents (to the extent of the Cash or Cash Equivalents received)
within 180 days following the closing of the applicable Sale and Lease-Back Transaction and (z) any Designated Non-Cash Consideration
received in respect of the relevant Sale and Lease-Back Transaction having an aggregate fair market value, taken together with
all other Designated Non-Cash Consideration received pursuant to this clause (z) and Section 6.07(h)(z) that
is at that time outstanding, not in excess of the greater of $60,000,000 and 36.0% of Consolidated Adjusted EBITDA), (2) the
Borrower or its applicable Restricted Subsidiary would otherwise be permitted to enter into, and remain liable under, the applicable
underlying lease and (3) the aggregate Fair Market Value of the assets sold subject to all Sale and Lease-Back Transactions
under this clause (B) shall not exceed the greater of $72,000,000 and 42.0% of Consolidated Adjusted EBITDA as of the
last day of the most recently ended Test Period.
Section 6.09. Transactions
with Affiliates. The Borrower shall not, nor shall it permit any of its Restricted Subsidiaries to, enter into any transaction
(including the purchase, sale, lease or exchange of any property or the rendering of any service) involving payment in excess of
$12,000,000 with any of their respective Affiliates on terms that are less favorable to the Borrower or such Restricted Subsidiary,
as the case may be (as reasonably determined by the Borrower), than those that might be obtained at the time in a comparable arm’s-length
transaction from a Person who is not an Affiliate; provided that the foregoing restriction shall not apply to:
(a) any
transaction between or among the Borrower and/or one or more Restricted Subsidiaries (or any entity that becomes a Restricted Subsidiary
as a result of such transaction) to the extent not prohibited by this Agreement;
(b) any
issuance, sale or grant of securities or other payments, awards or grants in cash, securities or otherwise pursuant to, or the
funding of employment arrangements, stock options and stock ownership plans approved by the board of directors (or equivalent governing
body) of any Parent Company or of the Borrower or any Restricted Subsidiary;
(c) (i) any
collective bargaining, employment or severance agreement or compensatory (including profit sharing) arrangement entered into by
the Borrower or any of its Restricted Subsidiaries with their respective current or former officers, directors, members of management,
managers, employees, consultants or independent contractors or those of any Parent Company, (ii) any subscription agreement
or similar agreement pertaining to the repurchase of Capital Stock pursuant to put/call rights or similar rights with current or
former officers, directors, members of management, managers, employees, consultants or independent contractors and (iii) transactions
pursuant to any employee compensation, benefit plan, stock option plan or arrangement, any health, disability or similar insurance
plan which covers current or former officers, directors, members of management, managers, employees, consultants or independent
contractors or any employment contract or arrangement;
(d) (i) transactions
permitted by Sections 6.01(b), (d), (h), (o), (cc), (dd), (ff) and (hh),
6.02 (to the extent securing Indebtedness under any of preceding clauses of Section 6.01), 6.04, 6.06
and 6.07(a), (g), (j) and (y) and (ii) issuances of Capital Stock and Indebtedness
not restricted by this Agreement;
(e) transactions
in existence on the Closing Date or pursuant to any agreements or arrangements in effect on the Closing Date and any amendment,
modification or extension thereof to the extent such amendment, modification or extension, taken as a whole, is not (i) materially
adverse to the Lenders or (ii) more disadvantageous to the Lenders than the relevant transaction in existence on the Closing
Date;
(f) (i) the
payment of management, monitoring, consulting, advisory, Transaction and similar fees to any Investor pursuant to any management
agreement entered into by the Borrower (and/or any Parent Company) on the Closing Date (without giving effect to any amendment
materially increasing such fees) and (ii) the payment or reimbursement of all indemnification obligations and expenses owed
to any Investor and any of their respective directors, officers, members of management, managers, employees and consultants pursuant
to such management agreement or similar agreement, in each case of clauses (i) and (ii) whether currently
due or paid in respect of accruals from prior periods; provided that, so long as an Event of Default exists under Section 7.01(a) (solely
with respect to principal, interest and fees), (f) or (g) (with respect to the Borrower), the payment of
such management, monitoring, consulting, advisory and similar fees in clause (i) may be restricted, in which case,
such fees shall continue to accrue and be payable upon the waiver, termination or cure of the relevant Event of Default;
(g) the
Transactions, including the payment of Transaction Costs and payments required under the Merger Agreement (as in effect on the
Closing Date);
(h) customary
compensation to Affiliates in connection with financial advisory, financing, underwriting or placement services or in respect of
other investment banking activities and other transaction fees, which payments are approved by the majority of the members of the
board of directors (or similar governing body) or a majority of the disinterested members of the board of directors (or similar
governing body) of the Borrower in good faith;
(i) transactions
and payments required under the definitive agreement for any acquisition or Investment permitted under this Agreement (to the extent
any seller, employee, officer or director of the acquired entities becomes an Affiliate in connection with such transaction);
(j) transactions
among the Loan Parties to the extent permitted under this Article 6;
(k) the
payment of customary fees and reasonable out-of-pocket costs to, and indemnities provided on behalf of, members of the board of
directors (or similar governing body), officers, employees, members of management, managers, consultants and independent contractors
of the Borrower and/or any of its Restricted Subsidiaries in the ordinary course of business and, in the case of payments to such
Person in such capacity on behalf of any Parent Company, to the extent attributable to the operations of the Borrower or its Restricted
Subsidiaries;
(l) transactions
with customers, clients, suppliers, joint ventures, purchasers or sellers of goods or services or providers of employees or other
labor entered into in the ordinary course of business, which are (i) fair to the Borrower and/or its applicable Restricted
Subsidiary in the good faith determination of the board of directors (or similar governing body) of the Borrower or the senior
management thereof or (ii) on terms at least as favorable as might reasonably be obtained from a Person other than an Affiliate;
(m) the
payment of reasonable out-of-pocket costs and expenses related to registration rights and customary indemnities provided to shareholders
under any shareholder agreement;
(n) (i) any
purchase by Holdings of the Capital Stock of (or contribution to the equity capital of) the Borrower and (ii) any intercompany
loans made by Holdings to the Borrower or any Restricted Subsidiary; and
(o) any
transaction in respect of which the Borrower delivers to the Administrative Agent a letter addressed to the board of directors
(or equivalent governing body) of the Borrower from an accounting, appraisal or investment banking firm of nationally recognized
standing stating that such transaction is on terms that are no less favorable to the Borrower or the applicable Restricted Subsidiary
than might be obtained at the time in a comparable arm’s length transaction from a Person who is not an Affiliate.
Section 6.10. Conduct
of Business. From and after the Closing Date, the Borrower shall not, nor shall it permit any of its Restricted Subsidiaries
to, engage in any material line of business other than (a) the businesses engaged in by the Borrower or any Restricted Subsidiary
on the Closing Date and similar, complementary, ancillary or related businesses and (b) such other lines of business to which
the Administrative Agent may consent.
Section 6.11. [Reserved].
Section 6.12. Amendments
of or Waivers with Respect to Restricted Debt. The Borrower shall not, nor shall it permit any of its Restricted Subsidiaries
to, amend or otherwise modify the terms of any Restricted Debt (or the documentation governing any Restricted Debt) if the effect
of such amendment or modification, together with all other amendments or modifications made, is in the reasonable judgment of the
Borrower materially adverse to the interests of the Lenders (in their capacities as such); provided that, (a) for purposes
of clarity, it is understood and agreed that the foregoing limitation shall not otherwise prohibit any Refinancing Indebtedness
or any other replacement, refinancing, amendment, supplement, modification, extension, renewal, restatement or refunding of any
Restricted Debt, in each case, that is permitted under this Agreement in respect thereof, and (b) at the request of the Borrower,
the form of any documentation governing any Restricted Debt shall be deemed acceptable to the Lenders if posted to the Lenders
and not objected to by the Required Lenders within five (5) Business Days thereafter.
Section 6.13. Fiscal
Year. The Borrower shall not change its Fiscal Year-end to a date other than December 31 in each calendar year; provided
that, the Borrower may, upon written notice to the Administrative Agent, change the Fiscal Year-end of the Borrower to another
date, in which case the Borrower and the Administrative Agent will, and are hereby authorized to, make any adjustments to this
Agreement that are necessary to reflect such change in Fiscal Year.
Section 6.14. Permitted
Activities of Holdings. Holdings shall not:
(a) incur
any Indebtedness for borrowed money other than (i) Indebtedness in connection with the Transactions, (ii) Indebtedness
of the type permitted under Sections 6.01(a), (o), (x), (y) and (aa) and any Refinancing
Indebtedness in respect thereof (including any Guarantees thereof) and (iii) Indebtedness that is not guaranteed by the Borrower
or any Restricted Subsidiary that are otherwise permitted hereunder;
(b) create
or suffer to exist any Lien on any property or asset now owned or hereafter acquired other than the Liens securing Indebtedness
of the type permitted under Sections 6.01(a), (o), (x), (y) and (aa) and any Refinancing
Indebtedness in respect thereof (including any Guarantees thereof), subject, if applicable, to the Intercreditor Agreements (and
any other Acceptable Intercreditor Agreement);
(c) engage
in any business activity or own any material assets other than (i) holding the Capital Stock of the Borrower, as applicable,
and, indirectly, any other subsidiary of the Borrower, (ii) performing its obligations under the Loan Documents, the First
Lien Credit Agreement, the documentation governing any other First Lien Facility and other Indebtedness, Liens (including the granting
of Liens) and Guarantees permitted to be incurred, granted or made, as applicable, by it hereunder; (iii) issuing its own
Capital Stock (including, for the avoidance of doubt, the making of any dividend or distribution on account of, or any redemption,
retirement, sinking fund or similar payment, purchase or other acquisition for value of, any shares of any class of Capital Stock);
(iv) filing Tax reports and paying Taxes and other customary obligations in the ordinary course (and contesting any Taxes);
(v) preparing reports to Governmental Authorities and to its shareholders; (vi) holding director and shareholder meetings,
preparing organizational records and other organizational activities required to maintain its separate organizational structure
or to comply with applicable Requirements of Law; (vii) effecting any initial public offering of its Capital Stock; (viii) holding
(A) Cash, Cash Equivalents and other assets received in connection with permitted distributions or dividends received from,
or permitted Investments or permitted Dispositions made by, any of its subsidiaries or permitted contributions to the capital of,
or proceeds from the issuance of Capital Stock of, Holdings pending the application thereof and (B) the proceeds of Indebtedness
permitted to be incurred by it hereunder; (ix) providing indemnification for its officers, directors, members of management,
employees and advisors or consultants; (x) participating in tax, accounting and other administrative matters; (xi) making
payments of the type permitted under Section 6.09(f) and the performance of its obligations under any document,
agreement and/or Investment contemplated by the Transactions or otherwise not prohibited under this Agreement; (xii) complying
with applicable Requirements of Law (including with respect to the maintenance of its existence); (xiii) making and holding
intercompany loans to the Borrower and/or the Restricted Subsidiaries of the Borrower, as applicable; (xiv) making and holding
Investments of the type permitted under Section 6.06(h); (xv) making Investments in the Borrower (and other Investment
contemplated by Section 6.04(a) and making any Restricted Payment (assuming for such purpose that the definition
thereof applies to the Capital Stock of Holdings), and (xvi) activities incidental to any of the foregoing; or
(d) consolidate
or amalgamate with, or merge with or into, or convey, sell or otherwise transfer all or substantially all of its assets to, any
Person; provided that, so long as no Default or Event of Default exists or would result therefrom, (A) Holdings may
consolidate or amalgamate with, or merge with or into, any other Person (other than the Borrower and any of its subsidiaries) so
long as (i) Holdings is the continuing or surviving Person or (ii) if the Person formed by or surviving any such consolidation,
amalgamation or merger is not Holdings, (x) the successor Person expressly assumes all obligations of Holdings under this
Agreement and the other Loan Documents to which Holdings is a party pursuant to a supplement hereto and/or thereto in a form reasonably
satisfactory to the Administrative Agent and (y) the Borrower delivers a certificate of a Responsible Officer with respect
to the satisfaction of the conditions set forth in clause (x) of this clause (A) and (z) upon its
reasonable request, the Administrative Agent shall have received a customary legal opinion, (B) Holdings may convey, sell
or otherwise transfer all or substantially all of its assets (including the Capital Stock of the Borrower) to any other Person
so long as (w) no Change of Control results therefrom, (x)(1) the Person acquiring such assets expressly assumes all
of the obligations of Holdings under this Agreement and the other Loan Documents to which Holdings is a party pursuant to a supplement
hereto and/or thereto in a form reasonably satisfactory to the Administrative Agent and (2) concurrently with the consummation
of such transfer, causes 100% of the Capital Stock of the Borrower to be pledged to the Administrative Agent for the benefit of
the Secured Parties, (y) the Borrower delivers a certificate of a Responsible Officer with respect to the satisfaction of
the conditions under clause (w) set forth in this clause (B) and (z) upon its reasonable
request, the Administrative Agent shall have received a customary legal opinion; provided, further, that if the conditions
set forth in the preceding proviso are satisfied, the successor to Holdings will succeed to, and be substituted for, Holdings under
this Agreement and Holdings shall be released from all obligations under the Loan Documents, and (C) Holdings may convert
into another form of entity so long as such conversion does not adversely affect the value of the Loan Guaranty or the pledge of
the Capital Stock in the Borrower.
Section 6.15. Anti-Layering.
Notwithstanding anything herein to the contrary, except for any ABL Facility subject to an ABL Intercreditor Agreement, Borrower
shall not, nor shall it permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, assume or otherwise
become or remain liable with respect to any Indebtedness pursuant to a ratio-based incurrence test under the First Lien Credit
Agreement that would be senior in right of payment or secured by a Lien that is senior to the Liens securing the Second Priority
Secured Obligations and junior in right of payment to any First Priority Secured Obligations or secured by a Lien that is junior
to the Liens securing any First Priority Secured Obligations.
ARTICLE VII
EVENTS
OF DEFAULT
Section 7.01. Events
of Default. If any of the following events (each, an “Event of Default”) shall occur:
(a) Failure
To Make Payments When Due. Failure by the Borrower to pay (i) any installment of principal of any Loan when due, whether
at stated maturity, by acceleration, by notice of voluntary prepayment, by mandatory prepayment or otherwise; or (ii) any
interest on any Loan or any fee or any other amount due hereunder within five Business Days after the date due; or
(b) Default
in Other Agreements. (i) Failure by any Loan Party or any of its Restricted Subsidiaries to pay when due any principal
of or interest on or any other amount payable in respect of one or more items of Indebtedness (other than Indebtedness referred
to in clause (a) above) with an aggregate outstanding principal amount exceeding the Threshold Amount, in each case
beyond the grace period, if any, provided therefor; or (ii) breach or event of default by any Loan Party or any of its Restricted
Subsidiaries with respect to any other term of (A) one or more items of Indebtedness with an aggregate outstanding principal
amount exceeding the Threshold Amount or (B) any loan agreement, mortgage, indenture or other agreement relating to such item(s) of
Indebtedness (other than, for the avoidance of doubt, with respect to Indebtedness consisting of Hedging Obligations, termination
events or equivalent events pursuant to the terms of the relevant Hedge Agreement which are not the result of any default thereunder
by any Loan Party or any Restricted Subsidiary), in each case, beyond the grace or cure period, if any, provided therefor, but
solely to the extent the effect of such breach or event of default is to cause, or to permit the holder or holders of such Indebtedness
(or a trustee or agent on behalf of such holder or holders) to cause, such Indebtedness to become or be declared due and payable
(or mandatorily redeemable) prior to its stated maturity or the stated maturity of any underlying obligation, as the case may be;
provided that clause (ii) of this paragraph (b) shall not apply to secured Indebtedness that becomes
due as a result of the voluntary sale or transfer of the property securing such Indebtedness if such sale or transfer is permitted
hereunder; provided, further, with respect to any default or event or condition referred to under clause (i) or
(ii) above with respect to the obligations under the ABL Credit Agreement, the documentation governing any ABL Facility, the
First Lien Credit Agreement, any First Lien Incremental Equivalent Debt or the documentation governing any First Lien Facilities,
such default, event or condition shall only constitute an Event of Default if such default, event or condition results in the acceleration
of the obligations thereunder prior to the stated maturity thereof; provided, further, that any failure described
under clause (i) or (ii) above is unremedied and is not waived by the holders of such Indebtedness
prior to any termination of the Commitments or acceleration of the Loans pursuant to Article 7; provided, still
further, that notwithstanding the foregoing provisions of this Section 7.01(b), any financial maintenance covenants
in any ABL Facility or any other revolving credit facility shall be solely for the benefit of the lenders under such ABL Facility
or other revolving credit facility, and any breach or violation of any such financial maintenance covenants (x) may be subject
to cure rights and (y) shall not be or constitute a Default or Event of Default with respect to any Credit Facility unless
and until the lenders under such ABL Facility or other revolving credit facility have declared all amounts outstanding thereunder
to be immediately due and payable and terminated all outstanding commitments to provide revolving credit extensions thereunder
in accordance with the terms of the documentation governing such ABL Facility or other revolving credit facility and such declaration
has not been rescinded; or
(c) Breach
of Certain Covenants. Failure of any Loan Party, as required by the relevant provision, to perform or comply with any term
or condition contained in Section 5.01(e)(i), Section 5.02 (solely as it applies to the preservation of
the existence of the Borrower), or Article 6; or
(d) Breach
of Representations, Etc. Any representation, warranty or certification made or deemed made by any Loan Party in any Loan Document
or in any certificate required to be delivered in connection herewith or therewith (including, for the avoidance of doubt, any
Perfection Certificate and any Perfection Certificate Supplement) being untrue in any material respect as of the date made or deemed
made, it being understood and agreed that any breach of representation, warranty or certification resulting from the failure of
the Administrative Agent to file any Uniform Commercial Code continuation statement shall not result in an Event of Default under
this Section 7.01(d) or any other provision of any Loan Document; or
(e) Other
Defaults Under Loan Documents. Default by any Loan Party in the performance of or compliance with any term contained herein
or any of the other Loan Documents, other than any such term referred to in any other Section of this Article 7,
which default has not been remedied or waived within 30 days after receipt by the Borrower of written notice thereof from the Administrative
Agent; or
(f) Involuntary
Bankruptcy; Appointment of Receiver, Etc. (i) The entry by a court of competent jurisdiction of a decree or order for
relief in respect of Holdings, the Borrower or any of its Restricted Subsidiaries (other than any Immaterial Subsidiary) in an
involuntary case under any Debtor Relief Law now or hereafter in effect, which decree or order is not stayed; or any other similar
relief shall be granted under any applicable federal, state or local law; or (ii) the commencement of an involuntary case
against Holdings, the Borrower or any of its Restricted Subsidiaries (other than any Immaterial Subsidiary) under any Debtor Relief
Law; the entry by a court having jurisdiction in the premises of a decree or order for the appointment of a receiver, receiver
and manager, (preliminary) insolvency receiver, liquidator, sequestrator, trustee, custodian or other officer having similar powers
over Holdings, the Borrower or any of its Restricted Subsidiaries (other than any Immaterial Subsidiary), or over all or a substantial
part of its property; or the involuntary appointment of an interim receiver, trustee or other custodian of Holdings, the Borrower
or any of its Restricted Subsidiaries (other than any Immaterial Subsidiary) for all or a substantial part of its property, which
remains undismissed, unvacated, unbounded or unstayed pending appeal for 60 consecutive days; or
(g) Voluntary
Bankruptcy; Appointment of Receiver, Etc. (i) The entry against Holdings, the Borrower or any of its Restricted Subsidiaries
(other than any Immaterial Subsidiary) of an order for relief, the commencement by Holdings, the Borrower or any of its Restricted
Subsidiaries (other than any Immaterial Subsidiary) of a voluntary case under any Debtor Relief Law, or the consent by Holdings,
the Borrower or any of its Restricted Subsidiaries (other than any Immaterial Subsidiary) to the entry of an order for relief in
an involuntary case or to the conversion of an involuntary case to a voluntary case, under any Debtor Relief Law, or the consent
by the Borrower or any of its Restricted Subsidiaries (other than any Immaterial Subsidiary) to the appointment of or taking possession
by a receiver, receiver and manager, trustee or other custodian for all or a substantial part of its property; (ii) the making
by Holdings, the Borrower or any of its Restricted Subsidiaries (other than any Immaterial Subsidiary) of a general assignment
for the benefit of creditors; or (iii) the admission by Holdings, the Borrower or any of its Restricted Subsidiaries (other
than any Immaterial Subsidiary) in writing of their inability to pay their respective debts as such debts become due; or
(h) Judgments
and Attachments. The entry or filing of one or more final money judgments, writs or warrants of attachment or similar process
against Holdings, the Borrower or any of its Restricted Subsidiaries or any of their respective assets involving in the aggregate
at any time an amount in excess of the Threshold Amount (in either case to the extent not adequately covered by indemnity from
a third party as to which the relevant indemnitor has been notified and not denied coverage, by self-insurance (if applicable)
or by insurance as to which the relevant third party insurance company has been notified and not denied coverage), which judgment,
writ, warrant or similar process remains unpaid, undischarged, unvacated, unbonded or unstayed pending appeal for a period of 60
days; or
(i) Employee
Benefit Plans. The occurrence of one or more ERISA Events, which individually or in the aggregate result in liability of Holdings,
the Borrower or any of its Restricted Subsidiaries in an aggregate amount which would reasonably be expected to result in a Material
Adverse Effect; or
(j) Change
of Control. The occurrence of a Change of Control; or
(k) Guaranties,
Collateral Documents and Other Loan Documents. At any time after the execution and delivery thereof (i) any material Loan
Guaranty for any reason ceasing to be in full force and effect (other than in accordance with its terms or as a result of the occurrence
of the Termination Date) or being declared, by a court of competent jurisdiction, to be null and void or the repudiation in writing
by any Loan Party of its obligations thereunder (other than as a result of the discharge of such Loan Party in accordance with
the terms thereof and other than solely as a result of acts or omissions by the Administrative Agent or any Lender), (ii) this
Agreement or any material Collateral Document ceasing to be in full force and effect (other than solely by reason of (x) the
failure of the Administrative Agent to maintain possession of any Collateral actually delivered to it or the failure of the Administrative
Agent to file UCC (or equivalent) continuation statements, (y) a release of Collateral in accordance with the terms hereof
or thereof or (z) the occurrence of the Termination Date or any other termination of such Collateral Document in accordance
with the terms thereof) or being declared null and void or (iii) the contesting by any Loan Party of the validity or enforceability
of any material provision of any Loan Document (or any Lien purported to be created by the Collateral Documents or Loan Guaranty)
in writing or denial by any Loan Party in writing that it has any further liability (other than by reason of the occurrence of
the Termination Date), including with respect to future advances by the Lenders, under any Loan Document to which it is a party;
it being understood and agreed that the failure of the Administrative Agent to maintain possession of any Collateral actually delivered
to it or file any UCC (or equivalent) continuation statement shall not result in an Event of Default under this clause (k) or
any other provision of any Loan Document; or
(l) Subordination.
(i) The Liens on the Collateral securing the Second Priority Secured Obligations (other than Liens on any ABL US Priority
Collateral) ceasing to have senior “second priority” status relative to the Liens securing any First Priority Secured
Obligations, and (ii) with respect to the provisions in any Acceptable Intercreditor Agreement subordinating the Liens on
the Collateral securing any Junior Lien Indebtedness with an aggregate principal amount outstanding in excess of the Threshold
Amount to the Liens on the Collateral securing the Second Priority Secured Obligations, (A) any Loan Party contests in writing
the validity or enforceability thereof, (B) any court of competent jurisdiction in a final non-appealable order determines
such subordination provisions to be invalid or unenforceable, or (C) such subordination provisions otherwise cease to be valid,
binding and enforceable obligations of the parties to such Acceptable Intercreditor Agreement;
then, and in every such event (other than
an event with respect to the Borrower described in clause (f) or (g) of this Article) and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at the request of the Required Lenders shall, by notice
to the Borrower, take any of the following actions, at the same or different times: (i) terminate any Commitments and/or Additional
Commitments, and thereupon such Additional Commitments shall terminate immediately and (ii) declare the Loans then outstanding
to be due and payable in whole (or in part, in which case any principal not so declared to be due and payable may thereafter be
declared to be due and payable), and thereupon the principal of the Loans so declared to be due and payable, together with accrued
interest thereon and all fees and other obligations of the Borrower accrued hereunder, shall become due and payable immediately,
without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower; provided
that upon the occurrence of an event with respect to the Borrower described in clauses (f) or (g) of this
Article, any such Commitments and/or Additional Commitments shall automatically terminate and the principal of the Loans then outstanding,
together with accrued interest thereon and all fees and other obligations of the Borrower accrued hereunder, shall automatically
become due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the
Borrower, in each case without further action of the Administrative Agent or any Lender. Upon the occurrence and during the continuance
of an Event of Default, the Administrative Agent may, and at the request of the Required Lenders shall, exercise any rights and
remedies provided to the Administrative Agent under the Loan Documents or at law or equity, including all remedies provided under
the UCC.
ARTICLE VIII
THE
ADMINISTRATIVE AGENT
Each of the Lenders hereby
irrevocably appoints Bank of America (or any successor appointed pursuant hereto) as Administrative Agent hereunder and under the
other Loan Documents and authorizes the Administrative Agent to take such actions on its behalf, including execution of the other
Loan Documents, and to exercise such powers as are delegated to the Administrative Agent by the terms of the Loan Documents, together
with such actions and powers as are reasonably incidental thereto.
Any Person serving as
Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise
the same as though it were not the Administrative Agent, and the term “Lender” or “Lenders” shall, unless
otherwise expressly indicated, unless the context otherwise requires or unless such Person is in fact not a Lender, include each
Person serving as Administrative Agent hereunder in its individual capacity. Such Person and its Affiliates may accept deposits
from, lend money to, own securities of, act as the financial advisor or in any other advisory capacity for and generally engage
in any kind of business with any Loan Party or any subsidiary of any Loan Party or other Affiliate thereof as if it were not the
Administrative Agent hereunder. The Lenders acknowledge that, pursuant to such activities, the Administrative Agent or its Affiliates
may receive information regarding any Loan Party or any of its Affiliates (including information that may be subject to confidentiality
obligations in favor of such Loan Party or such Affiliate) and acknowledge that the Administrative Agent shall not be under any
obligation to provide such information to them.
The Administrative Agent
shall not have any duties or obligations except those expressly set forth in the Loan Documents and its duties hereunder shall
be administrative in nature. Without limiting the generality of the foregoing, (a) the Administrative Agent shall not be subject
to any fiduciary or other implied duties, regardless of whether a Default or Event of Default exists, and the use of the term “agent”
herein and in the other Loan Documents with reference to the Administrative Agent is not intended to connote any fiduciary or other
implied (or express) obligations arising under agency doctrine of any applicable law; it being understood that such term is used
merely as a matter of market custom, and is intended to create or reflect only an administrative relationship between independent
contracting parties, (b) the Administrative Agent shall not have any duty to take any discretionary action or exercise any
discretionary power, except discretionary rights and powers that are expressly contemplated by the Loan Documents and which the
Administrative Agent is required to exercise in writing as directed by the Required Lenders (or such other number or percentage
of the Lenders as shall be necessary under the relevant circumstances as provided in Section 9.02); provided
that the Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may
expose the Administrative Agent to liability or that is contrary to any Loan Document or applicable laws including for the avoidance
of doubt any action that may be in violation of the automatic stay under any Debtor Relief Law or that may effect a forfeiture,
modification or termination of property of a Defaulting Lender in violation of any Debtor Relief Law, and (c) except as expressly
set forth in the Loan Documents, the Administrative Agent shall not have any duty to disclose, and shall not be liable for the
failure to disclose, any information relating to the Borrower or any of its Restricted Subsidiaries that is communicated to or
obtained by the Person serving as Administrative Agent or any of its Affiliates in any capacity. The Administrative Agent shall
not be liable to the Lenders or any other Secured Party for any action taken or not taken by it with the consent or at the request
of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent
shall believe in good faith shall be necessary, under the relevant circumstances as provided in Section 9.02) or in
the absence of its own gross negligence or willful misconduct, as determined by the final and non-appealable judgment of a court
of competent jurisdiction, in connection with its duties expressly set forth herein. The Administrative Agent shall not be deemed
to have knowledge of the existence of any Default or Event of Default unless and until written notice thereof is given to the Administrative
Agent by the Borrower or any Lender, and the Administrative Agent shall not be responsible for or have any duty to ascertain or
inquire into (i) any statement, warranty or representation made in or in connection with any Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or in connection with any Loan Document, (iii) the
performance or observance of any covenant, agreement or other term or condition set forth in any Loan Document or the occurrence
of any Default or Event of Default, (iv) the validity, enforceability, effectiveness or genuineness of any Loan Document or
any other agreement, instrument or document, (v) the creation, perfection or priority of any Lien on the Collateral or the
existence, value or sufficiency of the Collateral, (vi) the satisfaction of any condition set forth in Article 4
or elsewhere in any Loan Document, other than to confirm receipt of items expressly required to be delivered to the Administrative
Agent or (vii) any property, book or record of any Loan Party or any Affiliate thereof.
If any Lender acquires
knowledge of the existence of a Default or Event of Default, it shall promptly notify the Administrative Agent and the other Lenders
thereof in writing. Each Lender agrees that, except with the written consent of the Administrative Agent, it will not take any
enforcement action hereunder or under any other Loan Document, accelerate the Obligations under any Loan Document, or exercise
any right that it might otherwise have under applicable law or otherwise to credit bid at any foreclosure sale, UCC sale, any sale
under Section 363 of the Bankruptcy Code or other similar Dispositions of Collateral. Notwithstanding the foregoing, however,
a Lender may take action to preserve or enforce its rights against a Loan Party where a deadline or limitation period is applicable
that would, absent such action, bar enforcement of the Obligations held by such Lender, including the filing of a proof of claim
in a case under the Bankruptcy Code.
Notwithstanding anything
to the contrary contained herein or in any of the other Loan Documents, the Borrower, the Administrative Agent and each Secured
Party agree that (i) no Secured Party shall have any right individually to realize upon any of the Collateral or to enforce
the Loan Guaranty; it being understood and agreed that all powers, rights and remedies hereunder may be exercised solely by, the
Administrative Agent, on behalf of the Secured Parties in accordance with the terms hereof and all powers, rights and remedies
under the other Loan Documents may be exercised solely by, the Administrative Agent, and (ii) in the event of a foreclosure
by the Administrative Agent on any of the Collateral pursuant to a public or private sale or in the event of any other Disposition
(including pursuant to Section 363 of the Bankruptcy Code), (A) the Administrative Agent, as agent for and representative
of the Secured Parties, shall be entitled, for the purpose of bidding and making settlement or payment of the purchase price for
all or any portion of the Collateral sold at any such sale, to use and apply any of the Obligations as a credit on account of the
purchase price for any Collateral payable by the Administrative Agent at such Disposition and (B) the Administrative Agent
or any Lender may be the purchaser or licensor of any or all of such Collateral at any such Disposition.
Each of the Lenders hereby
irrevocably authorizes the Administrative Agent, on behalf of all Secured Parties to take any of the following actions upon the
instruction of the Required Lenders:
(a) consent
to the Disposition of all or any portion of the Collateral free and clear of the Liens securing the Secured Obligations in connection
with any Disposition pursuant to the applicable provisions of the Bankruptcy Code, including Section 363 thereof;
(b) credit
bid all or any portion of the Secured Obligations, or purchase all or any portion of the Collateral (in each case, either directly
or through one or more acquisition vehicles), in connection with any Disposition of all or any portion of the Collateral pursuant
to the applicable provisions of the Bankruptcy Code, including under Section 363 thereof;
(c) credit
bid all or any portion of the Secured Obligations, or purchase all or any portion of the Collateral (in each case, either directly
or through one or more acquisition vehicles), in connection with any Disposition of all or any portion of the Collateral pursuant
to the applicable provisions of the UCC, including pursuant to Sections 9-610 or 9-620 of the UCC;
(d) credit
bid all or any portion of the Secured Obligations, or purchase all or any portion of the Collateral (in each case, either directly
or through one or more acquisition vehicles), in connection with any foreclosure or other Disposition conducted in accordance with
applicable law following the occurrence and continuation of an Event of Default, including by power of sale, judicial action or
otherwise; and/or
(e) estimate
the amount of any contingent or unliquidated Secured Obligations of such Lender or other Secured Party;
it being understood that no Lender shall
be required to fund any amount in connection with any purchase of all or any portion of the Collateral by the Administrative Agent
pursuant to the foregoing clause (b), (c) or (d) without its prior written consent.
Each Secured Party agrees
that the Administrative Agent is under no obligation to credit bid any part of the Secured Obligations or to purchase or retain
or acquire any portion of the Collateral; provided that, in connection with any credit bid or purchase described under clause (b),
(c) or (d) of the preceding paragraph, the Secured Obligations owed to all of the Secured Parties (other
than with respect to contingent or unliquidated liabilities as set forth in the next succeeding paragraph) may be, and shall be,
credit bid by the Administrative Agent on a ratable basis.
With respect to each
contingent or unliquidated claim that is a Secured Obligation, the Administrative Agent is hereby authorized, but is not required,
to estimate the amount thereof for purposes of any credit bid or purchase described in the second preceding paragraph so long as
the estimation of the amount or liquidation of such claim would not unduly delay the ability of the Administrative Agent to credit
bid the Secured Obligations or purchase the Collateral in the relevant Disposition. In the event that the Administrative Agent,
in its sole and absolute discretion, elects not to estimate any such contingent or unliquidated claim or any such claim cannot
be estimated without unduly delaying the ability of the Administrative Agent to consummate any credit bid or purchase in accordance
with the second preceding paragraph, then any contingent or unliquidated claims not so estimated shall be disregarded, shall not
be credit bid, and shall not be entitled to any interest in the portion or the entirety of the Collateral purchased by means of
such credit bid.
Each Secured Party whose
Secured Obligations are credit bid under clause (b), (c) or (d) of the third preceding paragraph
shall be entitled to receive interests in the Collateral or any other asset acquired in connection with such credit bid (or in
the Capital Stock of the acquisition vehicle or vehicles that are used to consummate such acquisition) on a ratable basis in accordance
with the percentage obtained by dividing (x) the amount of the Secured Obligations of such Secured Party that were credit
bid in such credit bid or other Disposition, by (y) the aggregate amount of all Secured Obligations that were credit bid in
such credit bid or other Disposition.
In addition, in case
of the pendency of any proceeding under any Debtor Relief Law or any other judicial proceeding relative to any Loan Party, each
Secured Party agrees that the Administrative Agent (irrespective of whether the principal of any Loan is then due and payable as
herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand
on the Borrower) shall be entitled and empowered, by intervention in such proceeding or otherwise:
(i) to
file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans and all other
Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims
of the Lenders and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances
of the Lenders and the Administrative Agent and their respective agents and counsel and all other amounts to the extent due to
the Lenders and the Administrative Agent under Sections 2.12 and 9.03) allowed in such judicial proceeding; and
(ii) to
collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same.
Any custodian, receiver,
assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each
Lender to make such payments to the Administrative Agent and, in the event that the Administrative Agent consents to the making
of such payments directly to the Lenders, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses,
disbursements and advances of the Administrative Agent and its agents and counsel, and any other amount due to the Administrative
Agent under Sections 2.12 and 9.03.
Nothing contained herein
shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender any
plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or to authorize
the Administrative Agent to vote in respect of the claim of any Lender in any such proceeding.
The Administrative Agent
shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or
other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person.
The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made
by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder
to the making of a Loan that by its terms must be fulfilled to the satisfaction of a Lender, the Administrative Agent may presume
that such condition is satisfactory to such Lender unless the Administrative Agent has received notice to the contrary from such
Lender prior to the making of such Loan. The Administrative Agent may consult with legal counsel (who may be counsel for the Borrower),
independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance
with the advice of any such counsel, accountants or experts.
The Administrative Agent
may perform any and all of its duties and exercise its rights and powers by or through any one or more sub-agents appointed by
it; provided, however, that any such sub-agent receiving payments from the Loan Parties shall be a “U.S. person”
and a “financial institution” within the meaning of Treasury Regulations Section 1.1441-1 (or has validly agreed
to be treated as a “U.S. person” pursuant to Treasury Regulations Section 1.1441-1(b)(2)(iv)(A)). The Administrative
Agent and any such sub-agent may perform any and all of their respective duties and exercise their respective rights and powers
through their respective Related Parties. The exculpatory provisions of this Article shall apply to any such sub-agent and
to the Related Parties of the Administrative Agent and any such sub-agent and shall apply to their respective activities as the
Administrative Agent.
The Administrative Agent
may resign at any time by giving thirty days’ prior written notice to the Lenders and the Borrower. If the Administrative
Agent becomes subject to an insolvency proceeding, either the Required Lenders or the Borrower may, upon thirty days’ notice,
remove the Administrative Agent. Upon receipt of any such notice of resignation or delivery of any such notice of removal, the
Required Lenders shall have the right, with the consent of the Borrower (not to be unreasonably withheld or delayed), to appoint
a successor Administrative Agent which shall be a commercial bank or trust company with offices in the U.S. having combined capital
and surplus in excess of $1,000,000,000 and who shall be a “U.S. person” and a “financial institution”
within the meaning of Treasury Regulations Section 1.1441-1 (or has validly agreed to be treated as a “U.S. person”
pursuant to Treasury Regulations Section 1.1441-1(b)(2)(iv)(A)); provided that during the existence and continuation
of an Event of Default under Section 7.01(a) or, with respect to Holdings or the Borrower, Section 7.01(f) or
(g), no consent of the Borrower shall be required. If no successor shall have been appointed as provided above and accepted
such appointment within thirty days after the retiring Administrative Agent gives notice of its resignation or the Administrative
Agent receives notice of removal, then (a) in the case of a retirement, the retiring Administrative Agent may (but shall not
be obligated to), on behalf of the Lenders, appoint a successor Administrative Agent meeting the qualifications set forth above
(including, for the avoidance of doubt, consent of the Borrower) or (b) in the case of a removal, the Borrower may, after
consulting with the Required Lenders, appoint a successor Administrative Agent meeting the qualifications set forth above; provided
that (x) in the case of a retirement, if the Administrative Agent notifies the Borrower, the Lenders that no qualifying Person
has accepted such appointment or (y) in the case of a removal, the Borrower notifies the Required Lenders that no qualifying
Person has accepted such appointment, then, in each case, such resignation or removal shall nonetheless become effective in accordance
with and on the 30th day following delivery of such notice and (i) the retiring or removed Administrative Agent shall be discharged
from its duties and obligations hereunder and under the other Loan Documents (except that in the case of any collateral security
held by the Administrative Agent in its capacity as collateral agent for the Secured Parties for perfection purposes, the retiring
Administrative Agent shall continue to hold such collateral security until such time as a successor Administrative Agent is appointed)
and (ii) all payments, communications and determinations required to be made by, to or through the Administrative Agent shall
instead be made by or to each Lender directly (and each Lender will cooperate with the Borrower to enable the Borrower to take
such actions), until such time as the Required Lenders or the Borrower, as applicable, appoint a successor Administrative Agent
who shall be a “U.S. person” and a “financial institution” within the meaning of Treasury Regulations Section 1.1441-1
(or has validly agreed to be treated as a “U.S. person” pursuant to Treasury Regulations Section 1.1441-1(b)(2)(iv)(A)),
as provided for above in this Article 8. Upon the acceptance of its appointment as Administrative Agent hereunder as
a successor Administrative Agent, such successor Administrative Agent shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring or removed Administrative Agent (other than any rights to indemnity payments owed to the
retiring Administrative Agent), and the retiring or removed Administrative Agent shall be discharged from its duties and obligations
hereunder (other than its obligations under Section 9.13). The fees payable by the Borrower to a successor Administrative
Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor Administrative
Agent. After the Administrative Agent’s resignation or removal hereunder, the provisions of this Article and Section 9.03
shall continue in effect for the benefit of such retiring or removed Administrative Agent, its sub-agents and their respective
Related Parties in respect of any action taken or omitted to be taken by any of them while the relevant Person was acting as Administrative
Agent (including for this purpose holding any collateral security following the retirement or removal of the Administrative Agent).
Notwithstanding anything to the contrary herein, no Disqualified Institution (nor any Affiliate thereof) may be appointed as a
successor Administrative Agent.
Each Lender acknowledges
that it has, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties
and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into
this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or
any other Lender or any of their respective Related Parties and based on such documents and information as it shall from time to
time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any
other Loan Document or related agreement or any document furnished hereunder or thereunder. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the Administrative Agent herein, the Administrative Agent shall
not have any duty or responsibility to provide any Lender with any credit or other information concerning the business, prospects,
operations, property, financial and other condition or creditworthiness of any of the Loan Parties or any of their respective Affiliates
which may come into the possession of the Administrative Agent or any of its Related Parties.
Each Secured Party irrevocably
authorizes and instructs the Administrative Agent to, and the Administrative Agent,
(a) shall
release any Lien on any property granted to or held by Administrative Agent under any Loan Document (i) upon the occurrence
of the Termination Date, (ii) that is sold or to be sold or transferred as part of or in connection with any Disposition permitted
under the Loan Documents to a Person that is not a Loan Party, (iii) that does not constitute (or ceases to constitute) Collateral
(including as a result of being or becoming an Excluded Asset), (iv) if the property subject to such Lien is owned by a Subsidiary
Guarantor, upon the release of such Subsidiary Guarantor from its Loan Guaranty otherwise in accordance with the Loan Documents,
(v) as required under clause (d) below, (vi) immediately upon the release of the Lien on such property under
the First Lien Credit Agreement or any Loan Documents (as defined in the First Lien Credit Agreement) and, if applicable, the documentation
governing any other First Lien Facility, other than, in each case, upon payment in full thereof, or (vii) if approved, authorized
or ratified in writing by the Required Lenders in accordance with Section 9.02;
(b) shall
subject to Section 9.22, release any Subsidiary Guarantor from its obligations under the Loan Guaranty (x) if
such Person ceases to be a Restricted Subsidiary (or becomes an Excluded Subsidiary as a result of a single transaction or series
of related transactions permitted hereunder), as certified by a Responsible Officer of the Borrower or (y) immediately if
such Person is released as a Subsidiary Guarantor under the First Lien Credit Agreement or any Loan Documents (as defined in the
First Lien Credit Agreement) and, if applicable, the documentation governing any other First Lien Facility, other than, in each
case, upon payment in full of all First Lien Facilities;
(c) subject
to the terms of the Intercreditor Agreements, may subordinate any Lien on any property granted to or held by the Administrative
Agent under any Loan Document to the holder of any Lien on such property that is permitted by Sections 6.02(d), 6.02(e),
6.02(g), 6.02(m), 6.02(n), 6.02(o)(i) (other than any Lien on the Capital Stock of any Subsidiary
Guarantor), 6.02(q), 6.02(r), 6.02(x), 6.02(y), 6.02(z)(i), 6.02(bb), 6.02(cc),
6.02(ee) and 6.02(ff) (and any Refinancing Indebtedness in respect of any thereof to the extent such Refinancing
Indebtedness is permitted to be secured under Section 6.02(k)); provided that the subordination of any Lien
on any property granted to or held by the Administrative Agent shall only be required with respect to any Lien on such property
that is permitted by Sections 6.02(o)(i), 6.02(q), 6.02(r) and/or 6.02(bb) to the extent that
the Lien of the Administrative Agent with respect to such property is required to be subordinated to the relevant Permitted Lien
in accordance with applicable law or the documentation governing the Indebtedness that is secured by such Permitted Lien; and
(d) shall,
unless expressly contemplated or required under Section 6.01 or 6.02, with the consent and upon the instruction
of the Required Lenders, enter into subordination, intercreditor and/or similar agreements with respect to Indebtedness (including
any Acceptable Intercreditor Agreement) that is (i) required or permitted to be subordinated hereunder and/or (ii) secured
by Liens, and with respect to which Indebtedness, this Agreement contemplates an intercreditor, subordination or collateral trust
agreement; provided that, for the avoidance of doubt, the Administrative Agent shall not be required to subordinate any
Lien pursuant to this clause (d)(ii) other than to the extent contemplated by clause (c) of this paragraph.
Upon the request of the
Administrative Agent at any time, the Required Lenders will confirm in writing the Administrative Agent’s authority to release
or subordinate its interest in particular types or items of property, or to release any Loan Party from its obligations under the
Guarantee or its Lien on any Collateral pursuant to this Article 8. In each case as specified in this Article 8,
the Administrative Agent will (and each Lender hereby authorizes the Administrative Agent to), at the Borrower’s expense,
execute and deliver to the applicable Loan Party such documents as such Loan Party may reasonably request to evidence the release
of such item of Collateral from the assignment and security interest granted under the Collateral Documents or to subordinate its
interest therein, or to release such Loan Party from its obligations under the Loan Guaranty, in each case in accordance with the
terms of the Loan Documents and this Article 8; provided that upon the request of the Administrative Agent,
the Borrower shall deliver a certificate of a Responsible Officer certifying that the relevant transaction has been consummated
in compliance with the terms of this Agreement.
The Administrative Agent
is authorized to enter into any Acceptable Intercreditor Agreement and any other intercreditor, subordination, collateral trust
or similar agreement contemplated hereby with respect to Indebtedness that is (i) required or permitted to be subordinated
hereunder and/or (ii) secured by Liens and which Indebtedness contemplates an intercreditor, subordination or collateral trust
agreement, so long as the terms of such agreements are reasonably satisfactory to the Required Lenders (any such other intercreditor
agreement, an “Additional Agreement”), and the parties hereto acknowledge that each Acceptable Intercreditor
Agreement (including any Additional Agreement) is binding upon them. Each Lender (a) hereby consents to the subordination
of the Liens on the Collateral securing the Secured Obligations on the terms set forth in the Intercreditor Agreements, (b) hereby
agrees that it will be bound by, and will not take any action contrary to the provisions of any Acceptable Intercreditor Agreement
(including any Additional Agreement) and (c) hereby authorizes and instructs the Administrative Agent to enter into any Acceptable
Intercreditor Agreement (including any Additional Agreement), as applicable, and to subject the Liens on the Collateral securing
the Secured Obligations to the provisions thereof. The foregoing provisions are intended as an inducement to the Secured Parties
to extend credit to the Borrower, and the Secured Parties are intended third-party beneficiaries of such provisions and the provisions
of any applicable Acceptable Intercreditor Agreement (including any Additional Agreement).
To the extent that the
Administrative Agent (or any Affiliate thereof) is not reimbursed and indemnified by the Borrower, the Lenders will reimburse and
indemnify the Administrative Agent (and any Affiliate thereof) in proportion to their respective Applicable Percentages (determined
as if there were no Defaulting Lenders) for and against any and all liabilities, obligations, losses, damages, penalties, claims,
actions, judgments, costs, expenses or disbursements of whatsoever kind or nature which may be imposed on, asserted against or
incurred by the Administrative Agent (or any Affiliate thereof) in performing its duties hereunder or under any other Loan Document
or in any way relating to or arising out of this Agreement or any other Loan Document; provided that, no Lender shall be
liable for any portion of such liabilities, obligations, losses, damages, penalties, claims, actions, judgments, suits, costs,
expenses or disbursements resulting from the Administrative Agent’s (or such affiliate’s) gross negligence or willful
misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision).
ARTICLE IX
MISCELLANEOUS
Section 9.01. Notices.
(a) Except
in the case of notices and other communications expressly permitted to be given by telephone (and subject to paragraph (b) below),
all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier
service, mailed by certified or registered mail or sent by facsimile or email, as follows:
(i) if
to any Loan Party, to such Loan Party in the care of the Borrower at:
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620 Division Street
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Elizabeth, New Jersey 07207
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Attention:
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Co-Chairman of the Board
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Facsimile:
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(908) 351-4492
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Email:
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rdavis@hayward.com
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with copy to (which shall not constitute notice to any Loan Party):
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CCMP Capital Advisors, LLC
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277 Park Avenue, 37th Floor
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New York, NY 10172
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Attention:
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Richard Jansen,Esq.
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Facsimile:
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(212) 599-3481
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Email:
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richard.jansen@ccmpcapital.com
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and
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c/o MSD Partners, L.P.
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645 Fifth Avenue, 21st Floor
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New York, New York 10022
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Attention:
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Marcello Liguori
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Fax No.:
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(212) 303-1772
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Email:
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mliguori@msdcapital.com
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and
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c/o Alberta Investment Management Corporation
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First Canadian Place
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100 King Street West
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Suite 5120, P.O. Box 51
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Toronto, Ontario M5X 1B1, Canada
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Attention: Jason Peters
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and
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c/o Alberta Investment Management Corporation
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1100 – 10830 Jasper Avenue
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Edmonton, Alberta T5J 2B3, Canada
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Attention: Christina Luison
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and
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Ropes & Gray LLP
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1211 Avenue of the Americas
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New York, NY 10036
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Attention:
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Jay Kim
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Telephone:
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(212) 497-3626
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Facsimile:
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(646) 728-1667
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Email:
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Jay.Kim@ropesgray.com
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and
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Dechert LLP
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2929 Arch Street
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Philadelphia, Pennsylvania 19104
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Attention:
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Geraldine Sinatra and Eric Siegel
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Facsimile:
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(215) 994-2222
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Email:
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geraldine.sinatra@dechert.com
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eric.siegel@dechert.com
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and
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Torys LLP
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The Grace Building
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1114 Avenue of the Americas
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New York, New York 10036
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Attention:
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Jared Fontaine
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Facsimile:
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(212) 682-0200
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Email:
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jfontaine@torys.com
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(ii) if
to the Administrative Agent, at:
(iii) if
to the Administrative Agent, at:
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Administrative Agent’s Office
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(for payments, advances, rates and Lender requests):
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Bank of America, N.A.
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101 N. Tryon Street
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Mail Code: NC1-001-05-46
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Charlotte, NC 28255
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Attention:
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Robert Garvey
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Telephone:
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980-387-9468
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Facsimile:
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617-310-3288
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Email:
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Robert.garvey@baml.com
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(for financials, communications)
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Bank of America, N.A. Agency Management
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135 S. LaSalle Street
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Mail Code: IL4-135-09-61
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Chicago, Illinois 60603
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Attention:
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Denise Jones
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Telephone:
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312.828.1846
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Facsimile:
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877.206.8413
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Email:denise.j.jones@baml.com
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with a copy to (which shall not constitute notice to the Administrative Agent):
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Davis Polk & Wardwell LLP
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Attention:
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John (JW) Perry
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Telephone:
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(212) 450-4949
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Facsimile:
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(212) 701-5949
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Email:
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john.perry@davispolk.com
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Paul, Weiss, Rifkind, Wharton & Garrison LLP
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Attention:
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Monica Thurmond
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Telephone:
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(212) 373-3055
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Facsimile:
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(212) 492-0055
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Email:
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mthurmond@paulweiss.com
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(iv) if
to any Lender, pursuant to its contact information set forth in its Administrative Questionnaire.
All such notices and
other communications (A) sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed
to have been given when delivered in person or by courier service and signed for against receipt thereof or three Business Days
after dispatch if sent by certified or registered mail, in each case, delivered, sent or mailed (properly addressed) to the relevant
party as provided in this Section 9.01 or in accordance with the latest unrevoked direction from such party given in
accordance with this Section 9.01 or (B) sent by facsimile shall be deemed to have been given when sent and when
receipt has been confirmed by telephone; provided that received notices and other communications sent by telecopier shall
be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, such notices
or other communications shall be deemed to have been given at the opening of business on the next Business Day for the recipient).
Notices and other communications delivered through electronic communications to the extent provided in clause (b) below
shall be effective as provided in such clause (b).
(b) Notices
and other communications to the Lenders hereunder may be delivered or furnished by electronic communications (including email,
FpML messaging and Internet or Intranet websites) pursuant to procedures set forth herein or otherwise approved by the Administrative
Agent. The Administrative Agent or the Borrower (on behalf of any Loan Party) may, in its discretion, agree to accept notices and
other communications to it hereunder by electronic communications pursuant to procedures set forth herein or otherwise approved
by it; provided that approval of such procedures may be limited to particular notices or communications. All such notices
and other communications (i) sent to an email address shall be deemed received upon the sender’s receipt of an acknowledgement
from the intended recipient (such as by the “return receipt requested” function, as available, return email or other
written acknowledgement); provided that if not given during the normal business hours of the recipient, such notice or communication
shall be deemed to have been given at the opening of business on the next Business Day for the recipient, and (ii) posted
to an Internet or Intranet website shall be deemed received upon the deemed receipt by the intended recipient at its email address
as described in the foregoing clause (b)(i) of notification that such notice or communication is available and
identifying the website address therefor.
(c) Any
party hereto may change its address or facsimile number or other notice information hereunder by notice to the other parties hereto.
(d) (i) The
Borrower hereby acknowledges that (A) the Administrative Agent will make available to the Lenders materials and/or information
provided by or on behalf of the Borrower hereunder (collectively, “Borrower Materials”) by posting the Borrower
Materials on IntraLinks or another similar electronic system (the “Platform”) and (B) certain of the Lenders
(each, a “Public Lender”) may have personnel who do not wish to receive material non-public information and
who may be engaged in investment and other market-related activities with respect to such Persons’ securities. The Borrower
hereby agrees that (x) by marking Borrower Materials “PUBLIC,” the Borrower shall be deemed to have authorized
the Administrative Agent and the Lenders to treat such Borrower Materials as not containing any material non-public information
(although it may be sensitive and proprietary) subject to the confidentiality provisions of this Agreement (provided, however,
that to the extent such Borrower Materials constitute Confidential Information, they shall be treated as set forth in Section 9.13);
(y) all Borrower Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform
designated “Public Side Information”; and (z) the Administrative Agent shall treat any Borrower Materials that
are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform not designated “Public
Side Information”; provided that, for purposes of the foregoing, all information and materials provided pursuant to
Section 5.01(a) or (b) shall be deemed to be suitable for posting to Public Lenders.
(i) Each
Public Lender agrees to cause at least one individual at or on behalf of such Public Lender to at all times have selected the “Private
Side Information” or similar designation on the content declaration screen of the Platform in order to enable such Public
Lender or its delegate, in accordance with such Public Lender’s compliance procedures and applicable law, including United
States Federal and state securities laws, to make reference to communications that are not made available through the “Public
Side Information” portion of the Platform and that may contain material nonpublic information with respect to the Borrower
or its securities for purposes of United States Federal or state securities laws.
(ii) THE
PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” NEITHER THE ADMINISTRATIVE AGENT NOR
ANY OF ITS RELATED PARTIES WARRANTS THE ACCURACY OR COMPLETENESS OF THE COMMUNICATIONS OR THE ADEQUACY OF THE PLATFORM AND
EACH EXPRESSLY DISCLAIMS LIABILITY FOR ERRORS OR OMISSIONS IN THE COMMUNICATIONS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED
OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD-PARTY
RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS IS MADE BY THE ADMINISTRATIVE AGENT OR ANY OF ITS RELATED PARTIES IN CONNECTION
WITH THE COMMUNICATIONS OR THE PLATFORM. IN NO EVENT SHALL THE ADMINISTRATIVE AGENT OR ANY OF ITS RELATED PARTIES HAVE ANY LIABILITY
TO ANY LOAN PARTY, ANY LENDER OR ANY OTHER PERSON FOR DAMAGES OF ANY KIND, WHETHER OR NOT BASED ON STRICT LIABILITY AND INCLUDING
DIRECT OR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, LOSSES OR EXPENSES (WHETHER IN TORT, CONTRACT OR OTHERWISE)
ARISING OUT OF ANY LOAN PARTY’S OR THE ADMINISTRATIVE AGENT’S TRANSMISSION OF COMMUNICATIONS THROUGH THE INTERNET,
EXCEPT TO THE EXTENT THE LIABILITY OF ANY SUCH PERSON IS FOUND IN A FINAL RULING BY A COURT OF COMPETENT JURISDICTION TO HAVE RESULTED
FROM SUCH PERSON’S GROSS NEGLIGENCE, WILLFUL MISCONDUCT OR MATERIAL BREACH OF ANY LOAN DOCUMENT.
(d) The
Administrative Agent and the Lenders shall be entitled to rely and act upon any notices (including telephonic notices and Borrowing
Requests) purportedly given by or on behalf of any Borrower even if (i) such notices were not made in a manner specified herein,
were incomplete or were not preceded or followed by any other form of notice specified herein, or (ii) the terms thereof,
as understood by the recipient, varied from any confirmation thereof. The Borrower shall indemnify the Administrative Agent, its
Related Parties and each Lender from all losses, costs, expenses and liabilities resulting from the reliance by such Person on
each notice purportedly given by or on behalf of any Borrower in the absence of gross negligence or willful misconduct as determined
by a final and non-appealable judgment by a court of competent jurisdiction. All telephonic notices to and other telephonic communications
with the Administrative Agent may be recorded by the Administrative Agent, and each of the parties hereto hereby consents to such
recording.
Section 9.02. Waivers;
Amendments.
(a) No
failure or delay by the Administrative Agent or any Lender in exercising any right or power hereunder or under any other Loan Document
shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance
of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or
power. The rights and remedies of the Administrative Agent and the Lenders hereunder and under any other Loan Document are cumulative
and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of any Loan Document
or consent to any departure by any Loan Party therefrom shall in any event be effective unless the same is permitted by paragraph
(b) of this Section 9.02, and then such waiver or consent shall be effective only in the specific instance
and for the purpose for which given. Without limiting the generality of the foregoing, to the extent permitted by law, the making
of a Loan shall not be construed as a waiver of any existing Default or Event of Default, regardless of whether the Administrative
Agent or any Lender may have had notice or knowledge of the existence of such Default or Event of Default at the time.
(b) Subject
to clauses (A), (B), (C) and (D) of this Section 9.02(b) and Sections 9.02(c) and
(d) below, neither this Agreement nor any other Loan Document nor any provision hereof or thereof may be waived, amended
or modified, except (i) in the case of this Agreement, pursuant to an agreement or agreements in writing entered into by the
Borrower and the Required Lenders (or the Administrative Agent with the consent of the Required Lenders) or (ii) in the case
of any other Loan Document (other than any waiver, amendment or modification to effectuate any modification thereto expressly contemplated
by the terms of such other Loan Documents), pursuant to an agreement or agreements in writing entered into by the Administrative
Agent and each Loan Party that is party thereto, with the consent of the Required Lenders; provided that, notwithstanding
the foregoing:
(A) except
with the consent of each Lender directly and adversely affected thereby (but without the consent of the Required Lenders or any
other Lender, the Administrative Agent or agent (except to the extent that the rights and obligations of the Administrative Agent
would be adversely affected thereby)), no such waiver, amendment or modification shall:
(1) increase
the Commitment or Additional Commitment of such Lender (other than with respect to any Incremental Facility pursuant to Section 2.22
in respect of which such Lender has agreed to be an Additional Lender); it being understood that no amendment, modification or
waiver of, or consent to departure from, any condition precedent, representation, warranty, covenant, Default, Event of Default,
mandatory prepayment or mandatory reduction of the Commitments or Additional Commitments shall constitute an increase of any Commitment
or Additional Commitment of such Lender;
(2) reduce
or forgive the principal amount of any Loan;
(3) (x) extend
the scheduled final maturity of any Loan or (y) postpone any Interest Payment Date or the date of any scheduled payment of
any fee payable hereunder (in each case, other than any extension for administrative reasons agreed by the Administrative Agent);
(4) reduce
the rate of interest (other than to waive any existing Default or Event of Default or obligation of the Borrower to pay interest
at the default rate of interest under Section 2.13(d), which shall only require the consent of the Required Lenders)
or the amount of any fee owed to such Lender;
(5) extend
the expiry date of such Lender’s Commitment or Additional Commitment; it being understood that no amendment, modification
or waiver of, or consent to departure from, any condition precedent, representation, warranty, covenant, Default, Event of Default,
mandatory prepayment or mandatory reduction of the Commitments or Additional Commitments shall constitute an extension of any Commitment
or Additional Commitment of any Lender; and
(6) waive,
amend or modify the provisions of Sections 2.11(b)(vi), 2.18(b) or 2.18(c) of this Agreement in
a manner that would by its terms alter the pro rata sharing of payments required thereby (except in connection with any
transaction permitted under Sections 2.22, 2.23, 9.02(c), 9.05(g) and/or 9.05(h) or
as otherwise provided in this Section 9.02);
(B) no
such waiver, amendment or modification shall:
(1) change
any of the provisions of Section 9.02(a) or Section 9.02(b) or the definition of “Required
Lenders” to reduce any voting percentage required to waive, amend or modify any right thereunder or make any determination
or grant any consent thereunder, without the prior written consent of each Lender;
(2) release
all or substantially all of the Collateral from the Lien granted pursuant to the Loan Documents (except as otherwise permitted
herein or in the other Loan Documents, including as contemplated by or pursuant to Article 8 or Section 9.22),
without the prior written consent of each Lender directly and adversely affected thereby, and it being understood that only the
consent of the Lenders whose Loans are secured by the Collateral shall be required; or
(3) release
all or substantially all of the value of the Guarantees under the Loan Guaranty (except as otherwise permitted herein or in the
other Loan Documents, including pursuant to Section 9.22 hereof), without the prior written consent of each Lender
directly and adversely affected thereby,
provided, further, that no
agreement shall amend, modify or otherwise affect the rights or duties of the Administrative Agent hereunder without the prior
written consent of the Administrative Agent. The Administrative Agent may also amend the Commitment Schedule to reflect assignments
entered into pursuant to Section 9.05, incurrences of Additional Commitments or Additional Loans pursuant to Section 2.22,
2.23 or 9.02(c) and reductions or terminations of any such Additional Commitments or Additional Loans. Notwithstanding
anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent
hereunder, except that the Commitment and any Additional Commitment of any Defaulting Lender may not be increased without the consent
of such Defaulting Lender (it being understood that any Commitment, Additional Commitment or Loan held or deemed held by any Defaulting
Lender shall be excluded from any vote hereunder that requires the consent of any Lender, except as expressly provided in Section 2.21(a)).
Notwithstanding the foregoing, this Agreement may be amended (or amended and restated) with the written consent of the Required
Lenders, the Administrative Agent and the Borrower (i) to add one or more additional credit facilities permitted hereunder
to this Agreement and to permit any extension of credit from time to time outstanding thereunder and the accrued interest and fees
in respect thereof to share ratably in the relevant benefits of this Agreement and the other Loan Documents and (ii) to include
appropriately the Lenders holding such credit facilities in any determination of the Required Lenders on substantially the same
basis as the Lenders prior to such inclusion.
(c) Notwithstanding
the foregoing, this Agreement may be amended with the written consent of the Borrower and the Lenders providing the relevant Replacement
Loans to permit the refinancing or replacement of all or any portion of any outstanding Loans under one or more Classes, series
or tranches, as selected by the Borrower in its sole discretion (any such Loans being refinanced or replaced, the “Replaced
Loans”), with one or more Replacement Loans (“Replacement Loans”) pursuant to any existing or newly
established term loan facility hereunder pursuant to a Refinancing Amendment; provided that:
(i) the
aggregate principal amount of any Replacement Loans shall not exceed the aggregate principal amount of the Replaced Loans (plus
(1) any additional amounts permitted to be incurred under Section 2.22 or Section 6.01(q), (u),
(w) and/or (aa) and, to the extent any such additional amounts are secured, the related Liens are permitted
under Section 6.02(k) (with respect to Liens securing Indebtedness permitted by Section 6.01(a), or
(u)), (o)(ii), (t)(ii), (u) and/or (hh) and plus (2) the amount of accrued
interest, penalties and premium (including tender premium) thereon, any committed but undrawn amounts, and underwriting discounts,
fees (including upfront fees, original issue discount, commitment fees, underwriting fees, arrangement fees and similar fees),
commissions and expenses associated therewith),
(ii) any
Replacement Loans must have (1) a final maturity date that is equal to or later than the earlier of (x) the final maturity
date of the Replaced Loans and (y) 91 days after the then latest maturity date of any Loans that are not being refinanced
or so replaced, and (2) have a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity
of, the Replaced Loans at the time of the relevant refinancing,
(iii) any
such Replacement Loans must be pari passu with or junior to any such Replaced Loans in right of payment and with respect
to the Collateral (provided that such Replacement Loans shall be subject to an Acceptable Intercreditor Agreement and may
be, at the option of the Administrative Agent and the Borrower, documented in a separate agreement or agreements), or be unsecured,
(iv) if
any Replacement Loans are secured, such Replacement Loans may not be secured by any assets other than the Collateral,
(v) if
any Replacement Loans are guaranteed, such Replacement Loans may not be guaranteed by any Person other than one or more Loan Parties,
(vi) any
Replacement Loans that are pari passu in right of payment and pari passu in right of security may participate (x) on
a pro rata basis or a less than pro rata basis (but not greater than a pro rata basis) in any mandatory repayment
in respect of the Initial Loans (and any Additional Loans then subject to ratable repayment requirements) and (y) on a pro
rata basis, greater than pro rata basis or a less than pro rata basis in any voluntary prepayment in respect
of the Initial Loans and any Additional Loans, in each case as agreed by the Borrower and the Lenders providing the relevant Replacement
Loans,
(vii) any
Replacement Loans shall have pricing (including interest, fees and premiums) and, subject to preceding clause (F), optional
prepayment and redemption terms as the Borrower and the lenders providing such Replacement Loans may agree,
(viii) no
Default under Section 7.01(a), 7.01(f) or 7.01(g) or Event of Default shall exist immediately
prior to or after giving effect to the effectiveness of the relevant Replacement Loans, and
(ix) either
(i) the other terms and conditions of any Replacement Loans, as applicable (excluding pricing, interest, fees, rate floors,
premiums, optional prepayment or redemption terms, security and maturity, subject to preceding clauses (B) through
(G)) shall be substantially identical to, or (taken as a whole) no more favorable (as reasonably determined by the Borrower)
to the lenders providing such Replacement Loans than those applicable to the Replaced Loans (other than covenants or other provisions
applicable only to periods after the Latest Maturity Date (in each case, as of the date of incurrence of such Replacement Loans))
or (ii) such Replacement Loans shall reflect market terms and conditions (taken as a whole) at such time (as determined by
the Borrower in good faith); provided, that, if any more restrictive financial maintenance covenant is added for the benefit
of any Replacement Loans, such provisions shall also be applicable to the Credit Facilities (other than covenants or other provisions
applicable only to periods after the Latest Maturity Date (in each case, as of the date of incurrence of such Replacement Loans)),
provided, further, that,
in respect of this clause (c), any Non-Debt Fund Affiliate and Debt Fund Affiliate providing any Replacement Loans shall
be subject to the restrictions applicable to such Persons under Section 9.05 as if such Replacement Loans were Loans.
Each party hereto hereby
agrees that, upon the effectiveness of any Refinancing Amendment, this Agreement shall be amended by the Borrower, the Administrative
Agent and the lenders providing the relevant Replacement Loans, to the extent (but only to the extent) necessary to reflect the
existence and terms of such Replacement Loans, incurred or implemented pursuant thereto (including any amendment necessary to treat
the loans, notes and commitments subject thereto as a separate “Class” of Loans and/or commitments hereunder), including
any technical amendments required in connection therewith. It is understood that any Lender approached to provide all or a portion
of any Replacement Loans may elect or decline, in its sole discretion, to provide such Replacement Loans.
(d) Notwithstanding
anything to the contrary contained in this Section 9.02 or any other provision of this Agreement or any provision of
any other Loan Document:
(i) the
Borrower and the Administrative Agent may, without the input or consent of any Lender, amend, supplement and/or waive any guaranty,
collateral security agreement, pledge agreement and/or related document (if any) executed in connection with this Agreement to
(x) comply with Requirements of Law or the advice of counsel or (y) cause any such guaranty, collateral security agreement,
pledge agreement or other document to be consistent with this Agreement and/or the relevant other Loan Documents;
(ii) the
Borrower and the Administrative Agent may, without the input or consent of any other Lender (other than the relevant Lenders (including
Additional Lenders) providing Loans under such Sections), (1) effect amendments to this Agreement and the other Loan Documents
as may be necessary in the reasonable opinion of the Borrower and the Administrative Agent to effect the provisions of Sections 2.22,
2.23, 5.12, 6.13 or 9.02(c), or any other provision specifying that any waiver, amendment or modification
may be made with the consent or approval of the Administrative Agent and/or (2) to add terms (including representations and
warranties, conditions, prepayments, covenants or events of default), in connection with the addition of any Loan or Commitment
hereunder, that are favorable to the then-existing Lenders, as reasonably determined by the Administrative Agent;
(iii) if
the Administrative Agent and the Borrower have jointly identified any ambiguity, mistake, defect, inconsistency, obvious error
or any error or omission of a technical nature or any necessary or desirable technical change, in each case, in any provision of
any Loan Document, then the Administrative Agent and the Borrower shall be permitted to amend such provision solely to address
such matter as reasonably determined by them acting jointly;
(iv) the
Administrative Agent, with the consent and upon the instruction of the Required Lenders, and the Borrower may amend, restate, amend
and restate or otherwise modify any applicable Acceptable Intercreditor Agreement as provided therein;
(v) the
Administrative Agent may amend the Commitment Schedule to reflect assignments entered into pursuant to Section 9.05,
Commitment reductions or terminations pursuant to Section 2.09, implementations of Additional Commitments or incurrences
of Additional Loans pursuant to Sections 2.22, 2.23 or 9.02(c) and reductions or terminations of any
such Additional Commitments or Additional Loans;
(vi) no
amendment, termination or waiver of any provision of this Agreement and other Loan Documents, or consent to any departure by any
Loan Party therefrom, shall be made other than by a solicitation of, or offer to, all Lenders (or in the case of any Class, all
Lenders of such Class) and if any consent fee or other consideration is required to be paid in connection therewith to Lenders
who consent to the requested amendment, termination, waiver or consent on a timely basis, such fees or consideration shall be paid
ratably to the applicable Lenders entitled to such fees or compensation; and
(vii) any
amendment, waiver or modification of any term or provision that directly affects Lenders under one or more Classes and does not
directly affect Lenders under one or more other Classes (unless such amendment, waiver or modification benefits the Lenders under
such other Classes) may be effected with solely the consent of the Required Facility Lenders of such directly affected Class (but
not the consent of the Required Lenders or any other Lender).
Section 9.03. Expenses;
Indemnity.
(a) The
Borrower shall pay (i) all reasonable and documented out-of-pocket expenses incurred by (x) the Administrative Agent
and its Affiliates (including applicable travel expenses but limited, in the case of legal fees and expenses, to the actual reasonable
and documented out-of-pocket fees, disbursements and other charges of one firm of outside counsel to all such Persons taken as
a whole and, if reasonably necessary, of one local counsel in any relevant jurisdiction to all such Persons, taken as a whole)
and (y) by the Lenders (including applicable travel expenses but limited, in the case of legal fees and expenses, to the actual
reasonable and documented out-of-pocket fees, disbursements and other charges of one firm of outside counsel to all such Persons
taken as a whole and, if reasonably necessary, of one local counsel in any relevant jurisdiction to all such Persons, taken as
a whole), in each case, in connection with the preparation, execution, delivery and administration of the Loan Documents and any
related documentation, including in connection with any amendment, modification or waiver of any provision of any Loan Document
(whether or not the transactions contemplated thereby are consummated, but only to the extent the preparation of any such amendment,
modification or waiver was requested by the Borrower and except as otherwise provided separately in writing between the Borrower
and the Administrative Agent or the Lenders, as applicable) and (ii) all reasonable and documented out-of-pocket expenses
incurred by the Administrative Agent or the Lenders or any of their respective Affiliates (but limited, in the case of legal fees
and expenses, to the actual reasonable and documented out-of-pocket fees, disbursements and other charges of one firm of outside
counsel to all such Persons taken as a whole and, if reasonably necessary, of one local counsel in any relevant jurisdiction to
all such Persons, taken as a whole) in connection with the enforcement, collection or protection of their respective rights in
connection with the Loan Documents, including their respective rights under this Section 9.03, or in connection with
the Loans made hereunder. Except to the extent required to be paid on the Closing Date (and invoiced two (2) Business Days
prior thereto), all amounts due under this paragraph (a) shall be payable by the Borrower within 30 days of receipt
by the Borrower of an invoice setting forth such expenses in reasonable detail, together with backup documentation supporting the
relevant reimbursement request.
(b) The
Borrower shall indemnify the Administrative Agent, each Lender, and each Related Party of any of the foregoing Persons (each such
Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims,
damages and liabilities (but limited, in the case of legal fees and expenses, to the actual reasonable and documented out-of-pocket
fees, disbursements and other charges of one legal counsel to all Indemnitees taken as a whole and, if reasonably necessary, one
local counsel in any relevant jurisdiction to all Indemnitees, taken as a whole and solely in the case of an actual or potential
conflict of interest, (x) one additional counsel to all affected Indemnitees, taken as a whole, and (y) one additional
local counsel in each relevant jurisdiction to all affected Indemnitees, taken as a whole), incurred by or asserted against any
Indemnitee arising out of, in connection with, or as a result of (i) the execution or delivery of the Loan Documents or any
agreement or instrument contemplated thereby and/or the enforcement of the Loan Documents, the performance by the parties hereto
of their respective obligations thereunder or the consummation of the Transactions or any other transactions contemplated hereby
or thereby, (ii) the use of the proceeds of the Loans, (iii) any actual or alleged Release or presence of Hazardous Materials
on, at, under or from any property currently or formerly owned or operated by the Borrower, any of its Restricted Subsidiaries
or any other Loan Party or any Environmental Liability related to the Borrower, any of its Restricted Subsidiaries or any other
Loan Party and/or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory and regardless of whether any Indemnitee is a party thereto (and regardless
of whether such matter is initiated by a third party or by the Borrower, any other Loan Party or any of their respective Affiliates);
provided that such indemnity shall not, as to any Indemnitee, be available to the extent that any such loss, claim, damage,
or liability (i) results from the gross negligence, bad faith or willful misconduct or material breach of the Loan Documents
by such Indemnitee, in each case, as determined by a final non-appealable judgment of a court of competent jurisdiction or (ii) arises
out of any claim, litigation, investigation or proceeding brought by such Indemnitee against another Indemnitee (other than any
claim, litigation, investigation or proceeding (x) that is brought by or against the Administrative Agent, acting in its capacity
or fulfilling its role as the Administrative Agent or similar role or (y) that involves any act or omission of the Sponsors,
Holdings, the Borrower or any of its subsidiaries). Each Indemnitee shall be obligated to refund or return any and all amounts
paid by the Borrower pursuant to this Section 9.03(b) to such Indemnitee for any fees, expenses, or damages to
the extent such Indemnitee is not entitled to payment thereof in accordance with the terms hereof. All amounts due under this paragraph
(b) shall be payable by the Borrower within 30 days (x) after receipt by the Borrower of a written demand therefor,
in the case of any indemnification obligations and (y) in the case of reimbursement of costs and expenses, after receipt by
the Borrower of an invoice, setting forth such costs and expenses in reasonable detail, together with backup documentation supporting
the relevant reimbursement request. This Section 9.03(b) shall not apply to Taxes other than any Taxes that represent
losses, claims, damages or liabilities in respect of a non-Tax claim.
(c) The
Borrower shall not be liable for any settlement of any proceeding effected without its written consent (which consent shall not
be unreasonably withheld, delayed or conditioned), but if any proceeding is settled with the Borrower’s written consent,
or if there is a final judgment against any Indemnitee in any such proceeding, the Borrower agrees to indemnify and hold harmless
each Indemnitee to the extent and in the manner set forth above. The Borrower shall not, without the prior written consent of the
affected Indemnitee (which consent shall not be unreasonably withheld, conditioned or delayed), effect any settlement of any pending
or threatened claim, litigation, investigation or proceeding against any Indemnitee in respect of which indemnity could have been
sought hereunder by such Indemnitee unless (i) such settlement includes an unconditional release of such Indemnitee from all
liability or claims that are the subject matter of such proceeding and (ii) such settlement does not include any statement
as to any admission of fault or culpability.
Section 9.04. Waiver
of Claim. To the extent permitted by applicable law, no party to this Agreement shall assert, and each hereby waives, any claim
against any other party hereto or any Related Party thereof, on any theory of liability, for special, indirect, consequential or
punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement
or any agreement or instrument contemplated hereby, the Transactions, any Loan or the use of the proceeds thereof, except, to the
extent such damages would otherwise be subject to indemnification pursuant to the terms of Section 9.03.
Section 9.05. Successors
and Assigns.
(a) The
provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors
and permitted assigns; provided that (i) except as provided under Section 6.07, the Borrower may not assign
or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Administrative Agent
and each Lender (and any attempted assignment or transfer by the Borrower without such consent shall be null and void) and (ii) no
Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance with the terms of this Section 9.05
(any attempted assignment or transfer not complying with the terms of this Section 9.05 shall be subject to Sections
9.05(f) and 9.05(g), as applicable). Nothing in this Agreement, expressed or implied, shall be construed to confer
upon any Person (other than the parties hereto, their respective successors and permitted assigns, Participants (to the extent
provided in paragraph (c) of this Section 9.05) and, to the extent expressly contemplated hereby,
the Related Parties of the Administrative Agent and the Lenders) any legal or equitable right, remedy or claim under or by reason
of this Agreement.
(b) (i) Subject
to the conditions set forth in paragraph (b)(ii) below, any Lender may assign to one or more Eligible Assignees
all or a portion of its rights and obligations under this Agreement (including all or a portion of any Loan or Additional Commitment
added pursuant to Section 2.22, 2.23 or 9.02(c) at the time owing to it) with the prior written
consent (not to be unreasonably withheld or delayed) of:
(A) the
Borrower; provided that (1) the Borrower shall be deemed to have consented to any such assignment of any Loans unless
it has objected thereto by written notice to the Administrative Agent within fifteen (15) Business Days after receiving written
notice thereof; (2) [reserved], (3) no consent of the Borrower shall be required for the assignment of Loans to another
Lender, an Affiliate of any Lender or an Approved Fund, (4) no consent of the Borrower shall be required during the continuation
of an Event of Default under Section 7.01(a) or Section 7.01(f) or (g) (solely with
respect to the Borrower); (5) the Borrower may withhold its consent to any assignment to any Person that is not a Disqualified
Institution but is known by the Borrower to be an Affiliate of a Disqualified Institution regardless of whether such Person is
identifiable as an Affiliate of a Disqualified Institution on the basis of such Affiliate’s name (other than in respect of
a Company Competitor, a Debt Fund Affiliate that is not itself a Disqualified Institution), and (6) the investment objective
or history of any prospective Lender or its Affiliates shall be a reasonable basis to withhold the Borrower’s consent;
(B) the
Administrative Agent; provided that no consent of the Administrative Agent shall be required for any assignment to another
Lender, any Affiliate of a Lender or any Approved Fund;
(ii) Assignments
shall be subject to the following additional conditions:
(A) except
in the case of any assignment to another Lender, any Affiliate of any Lender or any Approved Fund or any assignment of the entire
remaining amount of the relevant assigning Lender’s Loans or commitments of any Class, the principal amount of Loans or commitments
of the assigning Lender subject to the relevant assignment (determined as of the date on which the Assignment and Assumption with
respect to such assignment is delivered to the Administrative Agent and determined on an aggregate basis in the event of concurrent
assignments to Related Funds or by Related Funds) shall not be less than $1,000,000, in the case of Initial Loans, Additional Loans, Initial
Loan Commitments and Additional Commitments unless the Borrower and the Administrative Agent otherwise consent;
(B) any
partial assignment shall be made as an assignment of a proportionate part of all the relevant assigning Lender’s rights and
obligations in respect of any Facility under this Agreement;
(C) the
parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption via an electronic
settlement system acceptable to the Administrative Agent (or, if previously agreed with the Administrative Agent, manually), and
shall pay to the Administrative Agent a processing and recordation fee of $3,500 (which fee may be waived or reduced in the sole
discretion of the Administrative Agent); and
(D) the
relevant Eligible Assignee, if it is not a Lender, shall deliver on or prior to the effective date of such assignment, to the Administrative
Agent (1) an Administrative Questionnaire and (2) any IRS form required under Section 2.17.
(iii) Subject
to the acceptance and recording thereof pursuant to paragraph (b)(iv) of this Section 9.05, from and
after the effective date specified in any Assignment and Assumption, the Eligible Assignee thereunder shall be a party hereto and,
to the extent of the interest assigned pursuant to such Assignment and Assumption, have the rights and obligations of a Lender
under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and
Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all
of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall
continue to be (A) entitled to the benefits of Sections 2.15, 2.16, 2.17 and 9.03 with respect
to facts and circumstances occurring on or prior to the effective date of such assignment and (B) subject to its obligations
thereunder and under Section 9.13). If any assignment by any Lender holding any Promissory Note is made after the issuance
of such Promissory Note, the assigning Lender shall, upon the effectiveness of such assignment or as promptly thereafter as practicable,
surrender such Promissory Note to the Administrative Agent for cancellation, and, following such cancellation, if requested by
either the assignee or the assigning Lender, the Borrower shall issue and deliver a new Promissory Note to such assignee and/or
to such assigning Lender, with appropriate insertions, to reflect the new commitments and/or outstanding Loans of the assignee
and/or the assigning Lender.
(iv) The
Administrative Agent, acting for this purpose as a non-fiduciary agent of the Borrower, shall maintain at one of its offices a
copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders
and their respective successors and assigns, and the commitment of, and principal amount of and interest on the Loans owing to,
each Lender pursuant to the terms hereof from time to time (the “Register”). Failure to make any such recordation,
or any error in such recordation, shall not affect the Borrower’s obligations in respect of such Loans. The entries in the
Register shall be conclusive, absent manifest error, and the Borrower, the Administrative Agent and the Lenders shall treat each
Person whose name is recorded in the Register pursuant to the terms hereof as a Lender and the owner of the amounts owing to it
under the Loan Documents as reflected in the Register for all purposes of the Loan Documents, notwithstanding notice to the contrary.
The Register shall be available for inspection by the Borrower and each Lender, at any reasonable time and from time to time upon
reasonable prior notice.
(v) Upon
its receipt of a duly completed Assignment and Assumption executed by an assigning Lender and an Eligible Assignee, the Eligible
Assignee’s completed Administrative Questionnaire and any tax certification required by Section 9.05(b)(ii)(D)(2) (unless
the assignee is already a Lender hereunder), the processing and recordation fee referred to in paragraph (b) of this
Section 9.05, if applicable, and any written consent to the relevant assignment required by paragraph (b) of
this Section 9.05, the Administrative Agent shall promptly accept such Assignment and Assumption and record the information
contained therein in the Register. No assignment shall be effective for purposes of this Agreement unless it has been recorded
in the Register as provided in this paragraph.
(vi) By
executing and delivering an Assignment and Assumption, the assigning Lender and the Eligible Assignee thereunder shall be deemed
to confirm and agree with each other and the other parties hereto as follows: (A) such assigning Lender warrants that it is
the legal and beneficial owner of the interest being assigned thereby free and clear of any adverse claim and that the amount of
its commitments, and the outstanding balances of its Loans, in each case without giving effect to any assignment thereof which
has not become effective, are as set forth in such Assignment and Assumption, (B) except as set forth in clause (A) above,
such assigning Lender makes no representation or warranty and assumes no responsibility with respect to any statement, warranty
or representation made in or in connection with this Agreement, or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement, any other Loan Document or any other instrument or document furnished pursuant hereto,
or the financial condition of the Borrower or any Restricted Subsidiary or the performance or observance by the Borrower or any
Restricted Subsidiary of any of its obligations under this Agreement, any other Loan Document or any other instrument or document
furnished pursuant hereto; (C) such assignee represents and warrants that it is an Eligible Assignee, legally authorized to
enter into such Assignment and Assumption; (D) such assignee confirms that it has received a copy of this Agreement and the
Intercreditor Agreements (and any other applicable Acceptable Intercreditor Agreement), together with copies of the financial statements
referred to in Section 4.01(c) or the most recent financial statements delivered pursuant to Section 5.01
and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into
such Assignment and Assumption; (E) such assignee will independently and without reliance upon the Administrative Agent, the
assigning Lender or any other Lender and based on such documents and information as it deems appropriate at the time, continue
to make its own credit decisions in taking or not taking action under this Agreement; (F) such assignee appoints and authorizes
the Administrative Agent to take such action as agent on its behalf and to exercise such powers under this Agreement as are delegated
to the Administrative Agent, by the terms hereof, together with such powers as are reasonably incidental thereto; and (G) such
assignee agrees that it will perform in accordance with their terms all the obligations which by the terms of this Agreement are
required to be performed by it as a Lender.
(c) (i) Any
Lender may, without the consent of the Borrower, the Administrative Agent or any other Lender, sell participations to any bank
or other entity (other than to any Disqualified Institution, any natural Person or, other than with respect to any participation
to any Debt Fund Affiliate (any such participations to a Debt Fund Affiliate being subject to the limitation set forth in the first
proviso of the penultimate paragraph set forth in Section 9.05(h), as if the limitation applied to such participations),
the Borrower or any of its Affiliates) (a “Participant”) in all or a portion of such Lender’s rights and
obligations under this Agreement (including all or a portion of its commitments and the Loans owing to it); provided that
(A) such Lender’s obligations under this Agreement shall remain unchanged, (B) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations and (C) the Borrower, the Administrative Agent
and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights
and obligations under this Agreement. Any agreement or instrument pursuant to which any Lender sells such a participation shall
provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver
of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without
the consent of the relevant Participant, agree to any amendment, modification or waiver described in (x) clause (A) of
the first proviso to Section 9.02(b) that directly and adversely affects the Loans or commitments in which such
Participant has an interest and (y) clause (B)(1), (2) or (3) of the first proviso to
Section 9.02(b). Subject to paragraph (c)(ii) of this Section 9.05, the Borrower agrees
that each Participant shall be entitled to the benefits of Sections 2.15, 2.16 and 2.17 (subject to the
limitations and requirements of such Sections and Section 2.19) to the same extent as if it were a Lender and had acquired
its interest by assignment pursuant to paragraph (b) of this Section 9.05 (it being understood that the
documentation required under Section 2.17(f) shall be delivered to the participating Lender, and if additional
amounts are required to be paid pursuant to Section 2.17(a) or Section 2.17(c), to the Borrower and
the Administrative Agent upon reasonable written request by the Borrower). To the extent permitted by law, each Participant also
shall be entitled to the benefits of Section 9.09 as though it were a Lender; provided that such Participant
agrees to be subject to Section 2.18(c) as though it were a Lender.
(ii) `No
Participant shall be entitled to receive any greater payment under Section 2.15, 2.16 or 2.17 than the
participating Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the
sale of the participation to such Participant is made with the Borrower’s prior written consent expressly acknowledging that
such Participant’s entitlement to benefits under Sections 2.15, 2.16 and 2.17 is not limited to what
the participating Lender would have been entitled to receive absent the participation.
Each Lender that sells
a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it
enters the name and address of each Participant and their respective successors and assigns, and the principal amounts and stated
interest of each Participant’s interest in the Loans or other obligations under the Loan Documents (the “Participant
Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant
Register (including the identity of any Participant or any information relating to a Participant’s interest in any commitments,
loans, letters of credit or its other obligations under any Loan Document) to any Person except to the extent that such disclosure
is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under Section 5f.103-1(c) of
the Treasury Regulation or is otherwise required hereunder. The entries in the Participant Register shall be conclusive absent
manifest error, and each Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such
participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, the Administrative
Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.
(b) Any
Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement (other than
to any Disqualified Institution or any natural person) to secure obligations of such Lender, including without limitation any pledge
or assignment to secure obligations to any Federal Reserve Bank or other central bank having jurisdiction over such Lender, and
this Section 9.05 shall not apply to any such pledge or assignment of a security interest; provided that no
such pledge or assignment of a security interest shall release any Lender from any of its obligations hereunder or substitute any
such pledgee or assignee for such Lender as a party hereto.
(c) Notwithstanding
anything to the contrary contained herein, any Lender (a “Granting Lender”) may grant to a special purpose funding
vehicle (an “SPC”), identified as such in writing from time to time by the Granting Lender to the Administrative
Agent and the Borrower, the option to provide to the Borrower all or any part of any Loan that such Granting Lender would otherwise
be obligated to make to the Borrower pursuant to this Agreement; provided that (i) nothing herein shall constitute
a commitment by any SPC to make any Loan and (ii) if an SPC elects not to exercise such option or otherwise fails to provide
all or any part of such Loan, the Granting Lender shall be obligated to make such Loan pursuant to the terms hereof. The making
of any Loan by an SPC hereunder shall utilize the Commitment or Additional Commitment of the Granting Lender to the same extent,
and as if, such Loan were made by such Granting Lender. Each party hereto hereby agrees that (i) neither the grant to any
SPC nor the exercise by any SPC of such option shall increase the costs or expenses or otherwise increase or change the obligations
of the Borrower under this Agreement (including its obligations under Section 2.15, 2.16 or 2.17) and
no SPC shall be entitled to any greater amount under Section 2.13, 2.14 or 2.15 or any other provision
of this Agreement or any other Loan Document that the Granting Lender would have been entitled to receive, (ii) no SPC shall
be liable for any indemnity or similar payment obligation under this Agreement (all liability for which shall remain with the Granting
Lender) and (iii) the Granting Lender shall for all purposes including approval of any amendment, waiver or other modification
of any provision of the Loan Documents, remain the Lender of record hereunder. In furtherance of the foregoing, each party hereto
hereby agrees (which agreement shall survive the termination of this Agreement) that, prior to the date that is one year and one
day after the payment in full of all outstanding commercial paper or other senior indebtedness of any SPC, it will not institute
against, or join any other Person in instituting against, such SPC any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings under the laws of the U.S. or any State thereof; provided that (i) such SPC’s Granting Lender is
in compliance in all material respects with its obligations to the Borrower hereunder and (ii) each Lender designating any
SPC hereby agrees to indemnify, save and hold harmless each other party hereto for any loss, cost, damage or expense arising out
of its inability to institute such a proceeding against such SPC during such period of forbearance. In addition, notwithstanding
anything to the contrary contained in this Section 9.05, any SPC may (i) with notice to, but without the prior
written consent of, the Borrower or the Administrative Agent and without paying any processing fee therefor, assign all or a portion
of its interests in any Loan to the Granting Lender and (ii) disclose on a confidential basis any non-public information relating
to its Loans to any rating agency, commercial paper dealer or provider of any surety, guaranty or credit or liquidity enhancement
to such SPC. If a Granting Lender grants an option to an SPC as described herein and such grant is not reflected in the Register,
the Granting Lender shall maintain a separate register on which it records the name and address of each SPC and the principal amounts
(and related interest) of each SPC’s interest with respect to the Loans, Commitments or other interests hereunder, which
entries shall be conclusive absent manifest error and each Lender shall treat such SPC that is recorded in the register as the
owner of such interests for all purposes of the Loan Documents notwithstanding any notice to the contrary; provided, further,
that no Lender shall have any obligation to disclose any portion of such register to any Person except to the extent disclosure
is necessary to establish that the Loans, Commitments or other interests hereunder are in registered form for U.S. federal income
tax purposes (or as is otherwise required thereunder).
(d) (i) Any
assignment or participation by a Lender without the Borrower’s consent, to the extent the Borrower’s consent is required
under this Section 9.05, to any other Person shall, at the Borrower’s election, be treated in accordance with
Section 9.05(g) below or the Borrower shall be entitled to seek specific performance to unwind any such assignment
or participation in addition to injunctive relief or any other remedies available to the Borrower at law or in equity. Upon the
request of any Lender, the Borrower shall make available to such Lender the list of Disqualified Institutions at the relevant time
on a confidential basis and such Lender may provide the list to any potential assignee or participant on a confidential basis in
accordance with Section 9.13 for the purpose of verifying whether such Person is a Disqualified Institution.
(ii) Without
limiting the foregoing, the Administrative Agent, in its capacity as such, shall not be responsible or have any liability for,
or have any duty to ascertain, inquire into, monitor or enforce, compliance with the provisions hereof relating to Disqualified
Institutions (other than with respect to updating the list with names of Disqualified Institutions provided in writing to the Administrative
Agent in accordance with the definition of “Disqualified Institution” or providing the list (with such updates) upon
request in accordance with this Section 9.05). Without limiting the generality of the foregoing, the Administrative
Agent, in its capacity as such, shall not (i) be obligated to ascertain, monitor or inquire as to whether any Lender
or Participant or prospective Lender or Participant is a Disqualified Institution or (ii) have any liability with respect
to or arising out of any assignment or participation of Loans, or disclosure of confidential information, to any Disqualified
Institution.
(e) If
any assignment or participation under this Section 9.05 is made to any Person that is a Disqualified Institution or
to any Person that cannot be reasonably identified as a Disqualified Institution pursuant to clause (a)(ii) or (c)(ii) of
the definition thereof as of the date of such assignment or participation and subsequently becomes reasonably identifiable as a
Disqualified Institution, then, notwithstanding any other provision of this Agreement (i) the Borrower may, at the Borrower’s
sole expense and effort, upon notice to such Person and the Administrative Agent, (A) terminate any Commitment of such Person
and repay all obligations of the Borrower owing to such Person, (B) in the case of any outstanding Loans, held by such Person,
purchase such Loans by paying the lesser of (I) par and (II) the amount that such Person paid to acquire such Loans,
plus accrued interest thereon, accrued fees and all other amounts payable to it hereunder and/or (C) require such Person
to assign, without recourse (in accordance with and subject to the restrictions contained in this Section 9.05), all
of its interests, rights and obligations under this Agreement to one or more Eligible Assignees; provided that in the case
of clause (C) above, the relevant assignment shall otherwise comply with this Section 9.05 (except that
no registration and processing fee required under this Section 9.05 shall be required with respect to any assignment
pursuant to this paragraph); (ii) the Loans and Commitments held by such Person shall be deemed not to be outstanding for
purposes of any amendment, waiver or consent hereunder, and such Person shall not be permitted to attend meetings of the Lenders
or receive information prepared by the Administrative Agent or any Lender in connection with this Agreement and will not be permitted
to attend or participate in conference calls or meetings attended solely by the Lenders and the Administrative Agent, (iii) such
Person shall be otherwise deemed to be a Defaulting Lender, and (iv) in no event shall such Person be entitled to receive
amounts set forth in Section 2.13(d). Nothing in this Section 9.05(g) shall be deemed to prejudice
any right or remedy that Holdings or the Borrower may otherwise have at law or equity. Each Lender acknowledges and agrees that
Holdings and its subsidiaries will suffer irreparable harm if such Lender breaches any obligation under this Section 9.05
insofar as such obligation relates to any assignment, participation or pledge to any Disqualified Institution without the Borrower’s
prior written consent and, therefore, each Lender agrees that Holdings and/or the Borrower may seek to obtain specific performance
or other equitable or injunctive relief to enforce this Section 9.05(g) against such Lender with respect to such
breach without posting a bond or presenting evidence of irreparable harm.
(f) Notwithstanding
anything to the contrary contained herein, any Lender may, at any time, assign all or a portion of its rights and obligations under
this Agreement in respect of its Initial Loans or Additional Loans to an Affiliated Lender on a non-pro rata basis (A) through
Dutch Auctions open to all Lenders holding the relevant Initial Loans or such Additional Loans, as applicable, on a pro rata
basis or (B) through open market purchases, in each case with respect to clauses (A) and (B), without the
consent of the Administrative Agent; provided that:
(g) any
Initial Loans or Additional Loans acquired by Holdings, the Borrower or any of its subsidiaries shall be retired and cancelled
to the extent permitted by applicable law; provided that upon any such retirement and cancellation, the aggregate outstanding
principal amount of the Initial Loans or Additional Loans, as applicable, shall be deemed reduced by the full par value of the
aggregate principal amount of the Initial Loans or Additional Loans so retired and cancelled;
(i) any
Initial Loans or Additional Loans acquired by any Non-Debt Fund Affiliate may (but shall not be required to) be contributed to
the Borrower or any of its subsidiaries for purposes of cancelling such Indebtedness (it being understood that any such Initial
Loans or Additional Loans shall be retired and cancelled immediately upon such contribution to the extent permitted by applicable
law); provided that upon any such cancellation, the aggregate outstanding principal amount of the Initial Loans or Additional
Loans, as applicable, shall be deemed reduced, as of the date of such contribution, by the full par value of the aggregate principal
amount of the Initial Loans or Additional Loans so contributed and cancelled;
(ii) the
relevant Affiliated Lender and assigning Lender shall have executed an Affiliated Lender Assignment and Assumption and the Affiliated
Lender Assignment and Assumption shall have been recorded in the Register;
(iii) after
giving effect to such assignment and to all other assignments to all Affiliated Lenders, the aggregate principal amount of all
Initial Loans and Additional Loans then held by all Affiliated Lenders shall not exceed 25% of the aggregate principal amount of
the Initial Loans and Additional Loans then outstanding (after giving effect to any substantially simultaneous cancellations thereof)
(the “Affiliated Lender Cap”); provided that (x) each party hereto acknowledges and agrees that
the Administrative Agent shall not be liable for any losses, damages, penalties, claims, demands, actions, judgments, suits, costs,
expenses and disbursements of any kind or nature whatsoever incurred or suffered by any Person in connection with any compliance
or non-compliance with this clause (g)(iv) or any purported assignment exceeding the Affiliated Lender Cap (it
being understood and agreed that the Affiliated Lender Cap is intended to apply to any Loans made available to Affiliated Lenders
by means other than formal assignment (e.g., as a result of an acquisition of another Lender (other than any Debt Fund Affiliate))
by any Affiliated Lender or the provision of Additional Loans by any Affiliated Lender); and (y) that to the extent that any
assignment to any Affiliated Lender would result in the aggregate principal amount of all Initial Loans and Additional Loans held
by Affiliated Lenders exceeding the Affiliated Lender Cap (after giving effect to any substantially simultaneous cancellations
thereof), the assignment of the relevant excess amount shall be deemed to have been contributed directly or indirectly to the Borrower
and cancelled;
(iv) in
connection with any assignment effected pursuant to a Dutch Auction and/or open market purchase conducted by Holdings, the Borrower
or any of its subsidiaries, no Event of Default exists at the time of acceptance of bids for the Dutch Auction or the confirmation
of such open market purchase, as applicable; and
(v) by
its acquisition of Loans, each relevant Affiliated Lender shall be deemed to have acknowledged and agreed that:
(A) subject
to clause (iv) above, the Loans held by such Affiliated Lender shall be disregarded in both the numerator and denominator
in the calculation of any Required Lender or other Lender vote (and the Loans held by such Affiliated Lender shall be deemed to
be voted pro rata along with the other Lenders that are not Affiliated Lenders); provided that (x) such Affiliated
Lender shall have the right to vote (and the Loans held by such Affiliated Lender shall not be so disregarded) with respect to
any amendment, modification, waiver, consent or other action that requires the vote of all Lenders or all Lenders directly and
adversely affected thereby, as the case may be, and (y) no amendment, modification, waiver, consent or other action shall
(1) disproportionately affect such Affiliated Lender in its capacity as a Lender as compared to other Lenders of the same
Class that are not Affiliated Lenders or (2) deprive any Affiliated Lender of its share of any payments which the Lenders
are entitled to share on a pro rata basis hereunder, in each case without the consent of such Affiliated Lender; and
(B) such
Affiliated Lender, solely in its capacity as an Affiliated Lender, will not be entitled to (i) attend (including by telephone)
or participate in any meeting or discussion (or portion thereof) among the Administrative Agent or any Lender or among Lenders
to which the Loan Parties or their representatives are not invited or (ii) receive any information or material prepared by
the Administrative Agent or any Lender or any communication by or among the Administrative Agent and one or more Lenders, except
to the extent such information or materials have been made available by the Administrative Agent or any Lender to any Loan Party
or its representatives (and in any case, other than the right to receive notices of Borrowings, prepayments and other administrative
notices in respect of its Initial Loans or Additional Loans required to be delivered to Lenders pursuant to Article 2);
and
(vi) no
Affiliated Lender shall be required to represent or warrant that it is not in possession of material non-public information with
respect to Holdings, the Borrower and/or any subsidiary thereof and/or their respective securities in connection with any assignment
permitted by this Section 9.05(h).
Notwithstanding anything
to the contrary contained herein, any Lender may, at any time, assign all or a portion of its rights and obligations under this
Agreement in respect of its Initial Loans or Additional Loans to any Debt Fund Affiliate, and any Debt Fund Affiliate may, from
time to time, purchase Initial Loans or Additional Loans (x) on a non-pro rata basis through Dutch Auctions open to
all applicable Lenders or (y) on a non-pro rata basis through open market purchases without the consent of the Administrative
Agent, in each case, notwithstanding the requirements set forth in subclauses (i) through (vii) of this
clause (g); provided that the Initial Loans, Additional Loans of all Debt Fund Affiliates shall not account for
more than 49.9% of the amounts included in determining whether the Required Lenders have (A) consented to any amendment,
modification, waiver, consent or other action with respect to any of the terms of any Loan Document or any departure by any Loan
Party therefrom, or subject to the immediately succeeding paragraph, any plan of reorganization pursuant to the Bankruptcy Code,
(B) otherwise acted on any matter related to any Loan Document or (C) directed or required the Administrative Agent
or any Lender to undertake any action (or refrain from taking any action) with respect to or under any Loan Document. Any Initial
Loans or Additional Loans acquired by any Debt Fund Affiliate may (but shall not be required to) be contributed to the Borrower
or any of its subsidiaries for purposes of cancelling such Indebtedness (it being understood that any Initial Loans or Additional
Loans so contributed shall be retired and cancelled immediately to the extent permitted by applicable law); provided that
upon any such cancellation, the aggregate outstanding principal amount of the Initial Loans or other Loans shall be deemed reduced,
as of the date of such contribution, by the full par value of the aggregate principal amount of the Initial Loans or Additional
Loans so contributed and cancelled.
Notwithstanding anything
in this Agreement or any other Loan Document to the contrary, each Affiliated Lender hereby agrees that, if a proceeding under
any Debtor Relief Law is commenced by or against the Borrower or any other Loan Party at a time when such Lender is an Affiliated
Lender, such Affiliated Lender irrevocably authorizes and empowers the Administrative Agent to vote on behalf of such Affiliated
Lender with respect to the Initial Loans or Additional Loans held by such Affiliated Lender in the same proportion as the vote
of Lenders that are not Affiliated Lenders on the relevant matter; provided that in connection with any matter that proposes
to treat any Obligations held by such Affiliated Lender in a manner that is different than the proposed treatment of similar Obligations
held by Lenders that are not Affiliates, (a) such Affiliated Lender shall be entitled to vote in accordance with its sole
discretion and (b) the Administrative Agent shall not be entitled to vote on behalf of such Affiliated Lender. Each Affiliated
Lender hereby irrevocably appoints the Administrative Agent (such appointment being coupled with an interest) as such Affiliated
Lender’s attorney-in-fact, with full authority in the place and stead of such Affiliated Lender and in the name of such
Affiliated Lender (solely in respect of Initial Loans or Additional Loans and participations therein and not in respect of any
other claim or status that such Affiliated Lender may otherwise have), from time to time in the Administrative Agent’s discretion
to take any action and to execute any instrument that the Administrative Agent may deem reasonably necessary to carry out the
provisions of (but subject to the limitations set forth in) this paragraph.
Section 9.06. Survival.
All covenants, agreements, representations and warranties made by the Loan Parties in the Loan Documents and in the certificates
or other instruments delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered
to have been relied upon by the other parties hereto and shall survive the execution and delivery of the Loan Documents and the
making of any Loans regardless of any investigation made by any such other party or on its behalf and notwithstanding that the
Administrative Agent may have had notice or knowledge of any existing Default or Event of Default or incorrect representation
or warranty at the time any credit is extended hereunder, and shall continue in full force and effect until the Termination Date.
The provisions of Sections 2.15, 2.16, 2.17, 9.03 and 9.13 and Article 8 shall
survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment
of the Loans, the expiration or termination of any Additional Commitment, the occurrence of the Termination Date or the termination
of this Agreement or any provision hereof but in each case, subject to the limitations set forth in this Agreement.
Section 9.07. Counterparts;
Integration; Effectiveness; Electronic Execution.
(a) This
Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute
an original, but all of which when taken together shall constitute a single contract. This Agreement, the other Loan Documents,
the Intercreditor Agreements (and any other Acceptable Intercreditor Agreement) and the Fee Letter and any separate letter agreements
with respect to fees payable to the Administrative Agent constitute the entire agreement among the parties relating to the subject
matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter
hereof. This Agreement shall become effective when it has been executed by Holdings, the Borrower and the Administrative Agent
and when the Administrative Agent has received counterparts hereof which, when taken together, bear the signatures of each of
the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns. Delivery of an executed counterpart of a signature page to this Agreement by facsimile
or by email as a “.pdf” or “.tiff” attachment shall be effective as delivery of a manually executed counterpart
of this Agreement.
(b) The
words “execute,” “execution,” “signed,” “signature,” and words of like import
in or related to any document to be signed in connection with this Agreement and the transactions contemplated hereby (including
without limitation Assignment and Assumptions, amendments or other modifications, Borrowing Requests, waivers and consents) shall
be deemed to include electronic signatures, the electronic matching of assignment terms and contract formations on electronic
platforms approved by the Administrative Agent, or the keeping of records in electronic form, each of which shall be of the same
legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as
the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global
and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on
the Uniform Electronic Transactions Act; provided, that notwithstanding anything contained herein to the contrary, the
Administrative Agent is under no obligation to agree to accept electronic signatures in any form or in any format unless expressly
agreed to by the Administrative Agent pursuant to procedures approved by it.
Section 9.08. Severability.
To the extent permitted by law, any provision of any Loan Document held to be invalid, illegal or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting
the validity, legality and enforceability of the remaining provisions thereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other jurisdiction.
Section 9.09. Right
of Setoff. At any time when an Event of Default exists, upon the written consent of the Administrative Agent, each Lender
and each of their respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted
by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held
and other obligations (in any currency) at any time owing by the Administrative Agent or such Lender or Affiliate (including by
branches and agencies of the Administrative Agent or such Lender, wherever located) to or for the credit or the account of the
Borrower or any Loan Party against any of and all the Secured Obligations held by the Administrative Agent or such Lender or Affiliate,
in each case, except to the extent such amounts, deposits, obligations, credit or account constitute Excluded Assets, irrespective
of whether or not the Administrative Agent or such Lender or Affiliate shall have made any demand under the Loan Documents and
although such obligations may be contingent or unmatured or are owed to a branch or office of such Lender different than the branch
or office holding such deposit or obligation on such Indebtedness. Any applicable Lender or Affiliate shall promptly notify the
Borrower and the Administrative Agent of such set-off or application; provided that any failure to give or any delay in
giving such notice shall not affect the validity of any such set-off or application under this Section 9.09 except
to the extent such amounts, deposits, obligations, credit or account constitute Excluded Assets. The rights of each Lender, the
Administrative Agent and each Affiliate under this Section 9.09 are in addition to other rights and remedies (including
other rights of setoff) which such Lender, the Administrative Agent or such Affiliate may have.
Section 9.10. Governing
Law; Jurisdiction; Consent to Service of Process.
(a) THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS (OTHER THAN AS EXPRESSLY SET FORTH IN OTHER LOAN DOCUMENTS) AND ANY CLAIM, CONTROVERSY
OR DISPUTE ARISING UNDER OR RELATED TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (OTHER THAN AS EXPRESSLY SET FORTH IN THE OTHER
LOAN DOCUMENTS), WHETHER IN TORT, CONTRACT (AT LAW OR IN EQUITY) OR OTHERWISE, SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. Notwithstanding the foregoing or
anything to the contrary in this Agreement, interpretation of the provisions of the Merger Agreement (including with respect to
satisfaction of the conditions contained therein, whether the Acquisition has been consummated as contemplated by the Merger Agreement,
any interpretation of Closing Date Material Adverse Effect, any determination of whether a Closing Date Material Adverse Effect
has occurred or could reasonably be expected to occur, whether the representations and warranties made by the Company and its
subsidiaries in the Merger Agreement (including any Specified Merger Agreement Representations) are accurate and whether as a
result of any inaccuracy thereof any party has the right to terminate its obligations under the Merger Agreement or decline to
consummate the Acquisition) and all issues, claims and disputes concerning the construction, validity, interpretation and enforceability
of the Merger Agreement and the exhibits and schedules thereto shall, in each case, be governed by, and construed in accordance
with, the laws of the State of NEW JERsey (without regard to any jurisdiction’s conflict-of-laws principles).
(b) Each
party hereto hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction (subject
to the last sentence of this clause (b)) of any U.S. Federal or New York State court sitting in the Borough of Manhattan,
in the City of New York (or any appellate court therefrom) over any suit, action or proceeding arising out of or relating to any
Loan Documents and agrees that all claims in respect of any such action or proceeding shall (except as permitted below) be heard
and determined in such New York State or, to the extent permitted by law, federal court; provided that with respect to
any suit, action or proceeding arising out of or relating to the Merger Agreement or the transactions contemplated thereby which
does not involve any claims against the Lenders or any indemnified person, this sentence shall not override any jurisdiction provision
in the Merger Agreement. Each party hereto agrees that service of any process, summons, notice or document by registered mail
addressed to such person shall be effective service of process against such Person for any suit, action or proceeding brought
in any such court. Each party hereto agrees that a final judgment in any such action or proceeding may be enforced in other jurisdictions
by suit on the judgment or in any other manner provided by law. Each party hereto agrees that the Administrative Agent and the
Secured Parties retain the right to bring proceedings against any loan party in the courts of any other jurisdiction solely in
connection with the exercise of any rights under any Collateral Document.
(c) Each
party hereto hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection
which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this
Agreement or any other Loan Document in any court referred to in paragraph (b) of this Section 9.10. Each
party hereto hereby irrevocably waives, to the fullest extent permitted by law, any claim or defense of an inconvenient forum
to the maintenance of such action, suit or proceeding in any such court.
(d) To
the extent permitted by law, each party hereto hereby irrevocably waives personal service of any and all process upon it and agrees
that all such service of process may be made by registered mail (or any substantially similar form of mail) directed to it at
its address for notices as provided for in Section 9.01.
(e) Each
party hereto hereby waives any objection to such service of process and further irrevocably waives and agrees not to plead or
claim in any action or proceeding commenced hereunder or under any loan document that service of process was invalid and ineffective.
Nothing in this Agreement or any other Loan Document will affect the right of any party to this Agreement to serve process in
any other manner permitted by law.
Section 9.11. Waiver
of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY SUIT, ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT,
TORT OR ANY OTHER THEORY) DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY HERETO (a) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF
ANY OTHER PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION,
SEEK TO ENFORCE THE FOREGOING WAIVER AND (b) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.11.
Section 9.12. Headings.
Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part
of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.
Section 9.13. Confidentiality.
Each of the Administrative Agent, each Lender agrees (and each Lender agrees to cause its SPC, if any) to maintain the confidentiality
of the Confidential Information (as defined below), except that Confidential Information may be disclosed (a) to its and
its Affiliates’ directors, officers, managers, employees, independent auditors, or other experts and advisors, including
accountants, legal counsel and other advisors (collectively, the “Representatives”) on a “need to know”
basis solely in connection with the transactions contemplated hereby and who are informed of the confidential nature of the Confidential
Information and are or have been advised of their obligation to keep the Confidential Information of this type confidential; provided
that (x) such Person shall be responsible for its Affiliates’ and their Representatives’ compliance with
this paragraph and (y) unless the Borrower otherwise consents, no such disclosure shall be made by the Administrative Agent,
any Lender or any Affiliate or Representative thereof to any Affiliate or Representative of the Administrative Agent, or any Lender
that is a Disqualified Institution, (b) upon the demand or request of any regulatory or Governmental Authority (including
any self-regulatory body or any Federal Reserve Bank or other central bank acting as pledgee pursuant to Section 9.05)
purporting to have jurisdiction over such Person or its Affiliates (in which case such Person shall, except with respect to any
audit or examination conducted by bank accountants or any Governmental Authority or regulatory or self-regulatory authority exercising
examination or regulatory authority, to the extent practicable and permitted by law, (i) inform the Borrower promptly in
advance thereof and (ii) use commercially reasonable efforts to ensure that any information so disclosed is accorded confidential
treatment), (c) to the extent compelled by legal process in, or reasonably necessary to, the defense of such legal, judicial
or administrative proceeding, in any legal, judicial or administrative proceeding or otherwise as required by applicable Requirements
of Law (in which case such Person shall (i) to the extent practicable and permitted by law, inform the Borrower promptly
in advance thereof and (ii) use commercially reasonable efforts to ensure that any such information so disclosed is accorded
confidential treatment), (d) to any other party to this Agreement, (e) to any Lender, Participant, counterparty or prospective
Lender, Participant or counterparty, subject to an acknowledgment and agreement by the relevant recipient that the Confidential
Information is being disseminated on a confidential basis (on substantially the terms set forth in this paragraph or as otherwise
reasonably acceptable to the Borrower and the Administrative Agent) in accordance with the standard assignment process of the
Arrangers or market standards for dissemination of the relevant type of information, which shall in any event require “click
through” or other affirmative action on the part of the recipient to access the Confidential Information and acknowledge
its confidentiality obligations in respect thereof, to (i) any Eligible Assignee of or Participant in, or any prospective
Eligible Assignee of or prospective Participant in, any of its rights or obligations under this Agreement, including any SPC (in
each case other than a Disqualified Institution), (ii) any pledgee referred to in Section 9.05, (iii) any actual
or prospective, direct or indirect contractual counterparty (or its advisors) to any Derivative Transaction (including any credit
default swap) or similar derivative product to which any Loan Party is a party, (f) with the prior written consent of the
Borrower and subject to the Borrower’s prior approval of the information to be disclosed (not to be unreasonably withheld
or delayed) to one or more ratings agencies in connection with obtaining ratings (including “shadow ratings”) of the
Borrower or the Loans, (g) to the extent the Confidential Information becomes publicly available other than as a result of
a breach of this Section 9.13 by such Person, its Affiliates or their respective Representatives, (h) to insurers,
any numbering administration or settlement services providers on a “need to know” basis solely in connection with
the transactions contemplated hereby and who are informed of the confidential nature of the Confidential Information and are or
have been advised of their obligation to keep the Confidential Information of this type confidential; provided that any
disclosure made in reliance on this clause (h) is limited to the general terms of this Agreement and does not include
financial or other information relating to Holdings, the Borrower and/or any of their respective subsidiaries and (i) to
the extent required to be so disclosed in any public filings by a Lender with the SEC. For purposes of this Section 9.13,
“Confidential Information” means all information relating to the Borrower and/or any of its subsidiaries and
their respective businesses, the Sponsors or the Transactions (including any information obtained by the Administrative Agent,
any Lender, or any of their respective Affiliates or Representatives, based on a review of the books and records relating to the
Borrower and/or any of its subsidiaries and their respective Affiliates from time to time, including prior to the date hereof)
other than any such information that is publicly available to the Administrative Agent or Lender on a non-confidential basis prior
to disclosure by the Borrower or any of its subsidiaries. For the avoidance of doubt, in no event shall any disclosure of any
Confidential Information be made to Person that is a Disqualified Institution at the time of disclosure.
Section 9.14. No
Fiduciary Duty. Each of the Administrative Agent, each Lender and their respective Affiliates (collectively, solely for purposes
of this paragraph, the “Lenders”), may have economic interests that conflict with those of the Loan Parties,
their stockholders and/or their respective affiliates. Each Loan Party agrees that nothing in the Loan Documents or otherwise
will be deemed to create an advisory, fiduciary or agency relationship or fiduciary or other implied duty between any Lender,
on the one hand, and such Loan Party, its respective stockholders or its respective affiliates, on the other. Each Loan Party
acknowledges and agrees that: (i) the transactions contemplated by the Loan Documents (including the exercise of rights and
remedies hereunder and thereunder) are arm’s-length commercial transactions between the Lenders, on the one hand, and the
Loan Parties, on the other, and (ii) in connection therewith and with the process leading thereto, (x) no Lender has
assumed an advisory or fiduciary responsibility in favor of any Loan Party, its respective stockholders or its respective affiliates
with respect to the transactions contemplated hereby (or the exercise of rights or remedies with respect thereto) or the process
leading thereto (irrespective of whether any Lender has advised, is currently advising or will advise any Loan Party, its respective
stockholders or its respective Affiliates on other matters) or any other obligation to any Loan Party except the obligations expressly
set forth in the Loan Documents and (y) each Lender is acting solely as principal and not as the agent or fiduciary of such
Loan Party, its respective management, stockholders, creditors or any other Person. Each Loan Party acknowledges and agrees that
such Loan Party has consulted its own legal, tax and financial advisors to the extent it deemed appropriate and that it is responsible
for making its own independent judgment with respect to such transactions and the process leading thereto.
Section 9.15. Several
Obligations. The respective obligations of the Lenders hereunder are several and not joint and the failure of any Lender to
make any Loan or perform any of its obligations hereunder shall not relieve any other Lender from any of its obligations hereunder.
Section 9.16. USA
PATRIOT Act. Each Lender that is subject to the requirements of the USA PATRIOT Act hereby notifies the Loan Parties that
pursuant to the requirements of the USA PATRIOT Act, it is required to obtain, verify and record information that identifies each
Loan Party, which information includes the name and address of such Loan Party and other information that will allow such Lender
to identify such Loan Party in accordance with the USA PATRIOT Act.
Section 9.17. Disclosure.
Each Loan Party and each Lender hereby acknowledges and agrees that the Administrative Agent and/or its Affiliates from time to
time may hold investments in, make other loans to or have other relationships with any of the Loan Parties and their respective
Affiliates.
Section 9.18. Appointment
for Perfection. Each Lender hereby appoints each other Lender as its agent for the purpose of perfecting Liens for the benefit
of the Administrative Agent and the Lenders, in Collateral which, in accordance with Article 9 of the UCC or any other applicable
law can be perfected only by possession and such possession is required by the Perfection Requirements. If any Lender (other than
the Administrative Agent) obtains possession of any Collateral, such Lender shall notify the Administrative Agent thereof; and,
promptly upon the Administrative Agent’s request therefor shall deliver such Collateral to the Administrative Agent or otherwise
deal with such Collateral in accordance with the Administrative Agent’s instructions.
Section 9.19. Interest
Rate Limitation. Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to any Loan,
together with all fees, charges and other amounts which are treated as interest on such Loan under applicable law (collectively
the “Charged Amounts”), shall exceed the maximum lawful rate (the “Maximum Rate”) which
may be contracted for, charged, taken, received or reserved by the Lender holding such Loan in accordance with applicable law,
the rate of interest payable in respect of such Loan hereunder, together with all Charged Amounts payable in respect thereof,
shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charged Amounts that would have been payable
in respect of such Loan but were not payable as a result of the operation of this Section 9.19 shall be cumulated
and the interest and Charged Amounts payable to such Lender in respect of other Loans or periods shall be increased (but not above
the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the Federal Funds Effective Rate to
the date of repayment, shall have been received by such Lender.
Section 9.20. Intercreditor
Agreement.
REFERENCE IS MADE TO
THE INTERCREDITOR AGREEMENTS AND EACH OTHER APPLICABLE ACCEPTABLE INTERCREDITOR AGREEMENT. EACH LENDER HEREUNDER AGREES THAT IT
WILL BE BOUND BY AND WILL TAKE NO ACTIONS CONTRARY TO THE PROVISIONS OF THE INTERCREDITOR AGREEMENTS OR SUCH OTHER ACCEPTABLE
INTERCREDITOR AGREEMENT AND AUTHORIZES AND INSTRUCTS THE ADMINISTRATIVE AGENT TO ENTER INTO THE INTERCREDITOR AGREEMENTS AND ANY
OTHER ACCEPTABLE INTERCREDITOR AGREEMENT AS “SECOND LIEN AGENT” AND ON BEHALF OF SUCH LENDER. THE PROVISIONS OF THIS
SECTION 9.20 ARE NOT INTENDED TO SUMMARIZE ALL RELEVANT PROVISIONS OF THE INTERCREDITOR AGREEMENTS AND ANY OTHER ACCEPTABLE
INTERCREDITOR AGREEMENT. REFERENCE MUST BE MADE TO ANY INTERCREDITOR AGREEMENT OR ACCEPTABLE INTERCREDITOR AGREEMENT ITSELF TO
UNDERSTAND ALL TERMS AND CONDITIONS THEREOF. EACH LENDER IS RESPONSIBLE FOR MAKING ITS OWN ANALYSIS AND REVIEW OF THE INTERCREDITOR
AGREEMENTS (AND ANY OTHER ACCEPTABLE INTERCREDITOR AGREEMENT) AND THE TERMS AND PROVISIONS THEREOF, AND NEITHER THE ADMINISTRATIVE
AGENT NOR ANY OF ITS AFFILIATES MAKES ANY REPRESENTATION TO ANY LENDER AS TO THE SUFFICIENCY OR ADVISABILITY OF THE PROVISIONS
CONTAINED IN THE INTERCREDITOR AGREEMENTS OR ANY OTHER ACCEPTABLE INTERCREDITOR AGREEMENT. THE FOREGOING PROVISIONS ARE INTENDED
AS AN INDUCEMENT TO THE LENDERS UNDER THE FIRST LIEN CREDIT AGREEMENT TO EXTEND CREDIT THEREUNDER AND SUCH LENDERS ARE INTENDED
THIRD PARTY BENEFICIARIES OF SUCH PROVISIONS AND THE PROVISIONS OF THE INTERCREDITOR AGREEMENTS AND ANY OTHER ACCEPTABLE INTERCREDITOR
AGREEMENT.
Section 9.21. Conflicts.
Notwithstanding anything to the contrary contained herein or in any other Loan Document (but excluding any applicable Acceptable
Intercreditor Agreement), in the event of any conflict or inconsistency between this Agreement and any other Loan Document (excluding
any applicable Acceptable Intercreditor Agreement), the terms of this Agreement shall govern and control; provided that
in the case of any conflict or inconsistency between any applicable Acceptable Intercreditor Agreement and any other Loan Document,
the terms of such Acceptable Intercreditor Agreement shall govern and control.
Section 9.22. Release
of Guarantors. Notwithstanding anything in Section 9.02(b) to the contrary, any Subsidiary Guarantor shall
automatically be released from its obligations hereunder (and its Loan Guaranty shall be automatically released) (a) upon
the consummation of any permitted transaction or series of related transactions if as a result thereof such Subsidiary Guarantor
ceases to be a Restricted Subsidiary (or becomes an Excluded Subsidiary as a result of a single transaction or series of related
transactions permitted hereunder), as certified by the Responsible Officer of the Borrower and/or (b) upon the occurrence
of the Termination Date and/or (c) upon the release of such Subsidiary Guarantor under the First Lien Credit Agreement or
any Loan Documents (as defined in the First Lien Credit Agreement) and, if applicable, the documentation governing any other First
Lien Facility, other than upon payment in full thereof. In connection with any such release, the Administrative Agent shall promptly
execute and deliver to the relevant Loan Party, at such Loan Party’s expense, all documents that such Loan Party shall reasonably
request to evidence termination or release. Any execution and delivery of documents pursuant to the preceding sentence of this
Section 9.22 shall be without recourse to or warranty by the Administrative Agent (other than as to the Administrative
Agent’s authority to execute and deliver such documents).
Section 9.23. Acknowledgement
and Consent to Bail-In of EEA Financial Institutions. Notwithstanding anything to the contrary in any Loan Document or in
any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of
any EEA Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to the
Write-Down and Conversion Powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be
bound by:
(a) the
application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which
may be payable to it by any party hereto that is an EEA Financial Institution; and
(b) the
effects of any Bail-in Action on any such liability, including, if applicable:
(i) a
reduction in full or in part or cancellation of any such liability;
(ii) a
conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution,
its parent entity, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other
instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement
or any other Loan Document; or
(iii) the
variation of the terms of such liability in connection with the exercise of the Write-Down and Conversion Powers of any EEA Resolution
Authority.
Section 9.24. Lender
Representation. Each Lender as of the Closing Date represents and warrants as of the Closing Date to the Administrative Agent
and its Affiliates, and not, for the avoidance of doubt, for the benefit of the Borrower or any other Loan Party, that such Lender
is not and will not be (1) an employee benefit plan subject to Title I of ERISA, (2) a plan or account subject to Section 4975
of the Code; (3) an entity deemed to hold “plan assets” of any such plans or accounts for purposes of ERISA or
the Code; or (4) a “governmental plan” within the meaning of ERISA.
[Signature
Pages Follow]
IN WITNESS WHEREOF,
the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year
first above written.
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HAYWARD INTERMEDIATE, INC.,
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as Holdings
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By:
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/s/ Andrew Diamond
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Name:
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Andrew Diamond
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Title:
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Senior Vice President, Finance and Chief Financial Officer
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HAYWARD ACQUISITION CORP.,
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as the Borrower immediately prior
to the Merger
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By:
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/s/ Mark McFadden
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Name:
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Mark McFadden
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Title:
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President
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By:
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/s/ Kevin Brown
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Name:
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Kevin Brown
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Title:
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Vice President, Assistant Secretary and
Assistant Treasurer
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as the Borrower upon and following
the Merger
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By:
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/s/ Andrew Diamond
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Name:
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Andrew Diamond
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Title:
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Senior Vice President and Chief Financial Officer
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Signature
Page to Second Lien Credit Agreement (Fittings 2017)
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as
of the day and year first above written.
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HAYWARD INTERMEDIATE, INC.,
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as Holdings
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By:
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Name:
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Andrew Diamond
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Title:
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Senior Vice President, Finance
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HAYWARD ACQUISITION CORP.,
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as the Borrower immediately prior
to the Merger
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By:
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Name:
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Mark McFadden
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Title:
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President
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By:
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Name:
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Kevin Brown
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Title:
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Vice President, Assistant Secretary and Assistant Treasurer
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HAYWARD INDUSTRIES, INC.,
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as the Borrower upon and following
the Merger
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By:
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Name:
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Andrew Diamond
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Title:
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Senior Vice President and Chief Financial Officer
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Signature
Page to Second Lien Credit Agreement (Fittings 2017)
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BANK OF AMERICA, N.A.
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individually, as Administrative
Agent
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By:
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/s/ Denise Jones
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Name:
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Denise Jones
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Title:
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Vice President
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Signature
Page to Second Lien Credit Agreement (Fittings 2017)
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OWL ROCK CAPITAL CORPORATION,
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as Lender
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By:
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/s/ Alan Kirshembaum
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Name:
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Alan Kirshembaum
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Title:
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Chief Operating Officer & Chief Financial
Officer
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OWL ROCK CAPITAL CORPORATION II,
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as Lender
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By:
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/s/ Alan Kirshembaum
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Name:
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Alan Kirshembaum
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Title:
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Chief Operating Officer & Chief Financial
Officer
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Signature
Page to Second Lien Credit Agreement (Fittings 2017)
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APOLLO TACTICAL VALUE SPN INVESTMENTS,
L.P.,
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as Lender
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By:
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Apollo Tactical Value SPN Management,
LLC, its investment manager
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By:
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/s/ Joseph D. Glatt
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Name:
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Joseph D. Glatt
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Title:
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Vice President
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APOLLO CENTRE STREET PARTNERSHIP,
L.P.,
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as Lender
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By:
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Apollo Centre Street Management,
LLC, its investment manager
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By:
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/s/ Joseph D. Glatt
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Name:
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Joseph D. Glatt
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Title:
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Vice President
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ATCF S.A.R.L.,
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as Lender
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By:
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ATCF HoldCo S.a.r.l., its sole shareholder
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|
|
By: Apollo Tower Credit Management,
LLC its investment manager
|
|
|
|
|
|
|
|
By:
|
/s/ Joseph D. Glatt
|
|
|
|
Name:
|
Joseph D. Glatt
|
|
|
|
Title:
|
Vice President
|
Signature
Page to Second Lien Credit Agreement (Fittings 2017)
|
|
APOLLO MOULTRIE CREDIT FUND, L.P.,
|
|
|
as Lender
|
|
|
|
|
|
|
|
By: Apollo Moultrie Credit Fund
Management, LLC, its investment manager
|
|
|
|
|
|
|
|
By:
|
/s/ Joseph D. Glatt
|
|
|
|
Name:
|
Joseph D. Glatt
|
|
|
|
Title:
|
Vice President
|
|
|
|
|
|
|
|
APOLLO INVESTMENT CORPORATION,
|
|
|
as Lender
|
|
|
|
|
|
|
|
By: Apollo Investment Management,
L.P., its investment adviser
|
|
|
|
|
|
|
|
By: ACC Management LLC, its general
partner
|
|
|
|
|
|
|
|
By:
|
/s/ Joseph D. Glatt
|
|
|
|
Name:
|
Joseph D. Glatt
|
|
|
|
Title:
|
Vice President
|
Signature
Page to Second Lien Credit Agreement (Fittings 2017)
|
|
APOLLO LINCOLN FIXED INCOME FUND,
L.P.,
|
|
|
as Lender
|
|
|
|
|
|
|
|
By: Apollo Lincoln Fixed Income
Management, LLC, its investment adviser
|
|
|
|
|
|
|
|
By:
|
/s/ Joseph D. Glatt
|
|
|
|
Name:
|
Joseph D. Glatt
|
|
|
|
Title:
|
Vice President
|
|
|
|
|
|
|
|
PRESIDENT AND FELLOWS OF HARVARD
COLLEGE,
|
|
|
as Lender
|
|
|
|
|
|
|
|
By: Harvard Management Company, Inc.,
pursuant to delegated authority
|
|
|
|
|
|
|
|
By:
|
/s/ Michael P. Guarnieri
|
|
|
|
Name:
|
Michael P. Guarnieri
|
|
|
|
Title:
|
Authorized Signatory
|
|
|
By:
|
/s/ Joe Lu
|
|
|
|
Name:
|
Joe Lu
|
|
|
|
Title:
|
Authorized Signatory
|
Signature
Page to Second Lien Credit Agreement (Fittings 2017)
|
Schedule
1.01(a)
|
–
|
Commitment
Schedule
|
|
Schedule 3.05
|
–
|
Fee Owned Real Estate
Assets
|
|
Schedule 3.13
|
–
|
Subsidiaries
|
|
Schedule 3.15
|
|
Labor Disputes
|
|
Schedule 5.10
|
–
|
Unrestricted Subsidiaries
|
|
Schedule 6.01
|
–
|
Existing Indebtedness
|
|
Schedule 6.02
|
–
|
Existing Liens
|
|
Schedule 6.06
|
–
|
Existing Investments
|
|
Schedule 6.07(s)
|
–
|
Dispositions
|
|
Schedule 9.01
|
–
|
Borrower’s
Website Address for Electronic Delivery
|
Schedule 1.01(a)
Commitment Schedule
Initial Loan Commitments
|
Lender
|
|
Initial Loan
Commitment
|
|
|
Bank of America, N.A.
|
|
$
|
116,250,000.00
|
|
|
Apollo
|
|
|
|
|
|
ATCF S.a.r.l.
|
|
$
|
9,681,956.17
|
|
|
Apollo Investment Corporation
|
|
$
|
25,110,000.00
|
|
|
Apollo Lincoln Fixed Income Fund,
L.P.
|
|
$
|
2,790,000.00
|
|
|
Apollo Moultrie Credit Fund, L.P.
|
|
$
|
6,045,746.38
|
|
|
Apollo Centre Street Partnership,
L.P.
|
|
$
|
11,226,980.26
|
|
|
Apollo Tactical Value SPN Investments,
L.P.
|
|
$
|
14,895,317.19
|
|
|
Owl Rock
|
|
|
|
|
|
Owl Rock Capital Corporation
|
|
$
|
72,500,000.00
|
|
|
Owl Rock Capital Corporation II
|
|
$
|
6,500,000.00
|
|
|
Harvard
|
|
|
|
|
|
President and Fellows of Harvard
College
|
|
$
|
20,000,000.00
|
|
|
Total
|
|
$
|
285,000,000
|
|
Schedule 3.05
Fee Owned Real Estate Assets
|
Loan Party
|
Address
of Owned Real Property
|
|
Hayward
Industries, Inc.
|
One
Hayward Industrial Drive
Clemmons, North
Carolina
|
|
Goldline
Properties LLC
|
61
Whitecap Drive
North Kingstown, Rhode Island
|
|
Hayward
Industries, Inc.
|
2935
and 2939 Sidco Drive
Nashville, Tennessee
|
|
Hayward
Industries, Inc.
|
2869
and 2875 Pomona Boulevard (Tract 35501,
Lots 16 and 23, respectively)
2870, 2876, 2880 and 2884 Surveyor Street (Tract 35501,
Lots 18, 19, 20 and 21, respectively)
159 Voyager Street (Tract 35501, Lot 17)
126 Explorer Street (Tract 35501, Lot 22) Pomona, California
|
Schedule 3.13
Subsidiaries
|
Subsidiary
|
Type of Entity
|
Owner
|
% Ownership
|
|
Hayward Acquisition Corp.
|
Corporation
|
Hayward Intermediate, Inc.
|
100%
|
|
Hayward Industries, Inc.
|
Corporation
|
Hayward Intermediate, Inc.
|
100%
|
|
Hayward Industrial Products, Inc.
|
Corporation
|
Hayward Industries, Inc.
|
100%
|
|
Goldline Properties LLC
|
Limited Liability Company
|
Hayward Industries, Inc.
|
100%
|
|
Hayward/Wright-Austin, Inc.
|
Corporation
|
Hayward Industrial Products, Inc.
|
100%
|
|
Webster Pumps, Inc.
|
Corporation
|
Hayward Industrial Products, Inc.
|
100%
|
|
Hayward Pool Products Canada, Inc.
|
Corporation
|
Hayward Industries, Inc.
|
100%
|
|
Hayward Enterprises Europe S.A.
|
Société Anonyme
|
Hayward Industries, Inc.
|
100%
|
|
Hayward Pool Europe S.A.
|
Société Anonyme
|
Hayward Industries, Inc.
|
91%
|
|
Hayward Pool Europe S.A.
|
Société Anonyme
|
Hayward Enterprises Europe S.A.
|
9%
|
|
Hayward Consolidated Pty. Ltd.
|
Proprietary Limited Company
|
Hayward Industries, Inc.
|
100%
|
|
Hayward Pool Products (Australia) Pty. Ltd.
|
Proprietary Limited Company
|
Hayward Consolidated Pty. Ltd.
|
100%
|
|
Hayward Industries (Wuxi) Co. Ltd.
|
Chinese Limited Company
|
Hayward Industries, Inc.
|
100%
|
|
Hayward Pool Products Trading (Shanghai) Co. Ltd.
|
Chinese Limited Company
|
Hayward Industries, Inc.
|
100%
|
|
Hayward Pool Acquisition, S.L.U.
|
Sociedad de Responsabilidad Limitada
|
Hayward Industries, Inc.
|
100%
|
|
Kripsol Gestión, S.L.U.
|
Sociedad de Responsabilidad Limitada
|
Hayward Pool Acquisition, S.L.U.
|
100%
|
|
Kripsol Ibérica, S.L.U.
|
Sociedad de Responsabilidad Limitada
|
Hayward Pool Acquisition, S.L.U.
|
100%
|
|
Kripsol Industrial, S.L.U.
|
Sociedad de Responsabilidad Limitada
|
Kripsol Gestión, S.L.U.
|
100%
|
|
Fiberpool Internacional, S.L.
|
Sociedad de Responsabilidad Limitada
|
Kripsol Gestión, S.L.U.
|
84.73%
|
|
Fiberpool Internacional, S.L.
|
Sociedad de Responsabilidad Limitada
|
Hayward Pool Acquisition, S.L.U.
|
15.27%
|
|
Kripsol Export, S.L.U.
|
Sociedad de Responsabilidad Limitada
|
Kripsol Gestión, S.L.U.
|
100%
|
|
Ditecpol, S.L.U.
|
Sociedad de Responsabilidad Limitada
|
Kripsol Gestión, S.L.U.
|
100%
|
|
Kripsol Hidráulica, S.L.U.
|
Sociedad de Responsabilidad Limitada
|
Kripsol Gestión, S.L.U.
|
100%
|
|
Kripsol Aragón, S.L.U.
|
Sociedad de Responsabilidad Limitada
|
Kripsol Hidráulica, S.L.U.
|
100%
|
|
Kripsol Piscinas S.A.
|
Sociedad Anónima
|
Kripsol Ibérica, S.L.U.
|
70%
|
|
Kripsol Piscinas S.A.
|
Sociedad Anónima
|
Kripsol Gestión, S.L.U.
|
30%
|
|
Kripsol Intermark Málaga S.L.
|
Sociedad de Responsabilidad Limitada
|
Kripsol Ibérica, S.L.U.
|
77.78%
|
|
Kripsol Intermark Málaga S.L.
|
Sociedad de Responsabilidad Limitada
|
Hayward Pool Acquisition, S.L.U.
|
22.22%
|
|
Sugar Valley, S.L.U.
|
Sociedad de Responsabilidad Limitada
|
Hayward Pool Acquisition, S.L.U.
|
100%
|
Schedule 3.15
Labor Disputes
None.
Schedule 5.10
Unrestricted Subsidiaries
None.
Schedule 6.01
Existing Indebtedness
|
|
1.
|
Credit account facility (Póliza de cuenta de crédito interés variable euribor)
dated as of November 17, 2015 between Kripsol Industrial and Caixabank, S.A. in an amount not exceeding €500,000.
|
|
|
2.
|
Credit account facility dated as of November 17, 2015 between Kripsol Industrial and Caixabank,
S.A. in an amount not exceeding €500,000.
|
|
|
3.
|
Credit facility for commercial risks (Póliza de crédito para cobertura de riesgos
comerciales) dated as of November 17, 2015 between Kripsol Industrial and Caixabank, S.A. in an amount not exceeding €500,000.
|
|
|
4.
|
Bank guarantee agreement dated as of November 17, 2015 between Kripsol Industrial and Caixabank,
S.A. in an amount not exceeding €500,000.
|
|
|
5.
|
Bank guarantee dated as of March 15, 2016 issued by Banco Popular Español, S.A. in
favor of Fire-Consult, S.L. in an amount not exceeding €5,000
|
|
|
6.
|
Credit policy in the form of advance commercial documents dated as of November 17, 2015 between
Kripsol Industrial and Banco Santander, S.A. in an amount not exceeding €500,000.
|
|
|
7.
|
Finance agreement (contrato de financiación) dated as of May 11, 2015 between Kripsol
Gestión, S.L. and De Lage Landen International, B.V. in an outstanding amount of €38,341.36.
|
Schedule 6.02
Existing Liens
1. The
following UCC liens:
|
Debtor
|
Secured Party
|
Description of Collateral
|
File No. of Financing
Statement/Jurisdiction
|
|
Hayward Industries, Inc.
Hayward Manufacturing Co., Inc.
|
Regal Beloit America, Inc.
|
Specific equipment (motors).
|
24791076/ Department of Treasury/Commercial Recording, New Jersey
|
|
Hayward Industries, Inc.
|
Konica Minolta Business Solutions Inc
|
Specific equipment.
|
26319681/ Department of Treasury/Commercial Recording, New Jersey
|
|
Hayward Industries, Inc.
|
Toyota Motor Credit Corporation
TOYOTALIFT, INC.
|
Specific equipment.
|
26421995/ Department of Treasury/Commercial Recording, New Jersey
|
|
Hayward Industries, Inc.
|
KMBS Business Solutions U.S.A., INC
|
Specific equipment.
|
26700380/ Department of Treasury/Commercial Recording, New Jersey
|
|
Hayward Industries, Inc.
|
TOYOTALIFT, INC.
TOYOTA INDUSTRIES COMMERCIAL FINANCE, INC.
|
Specific equipment.
|
51407650/ Department of Treasury/Commercial Recording, New Jersey
|
|
Hayward Industries, Inc.
|
KONICA MINOLTA PREMIER FINANCE
|
Specific equipment.
|
51571450/ Department of Treasury/Commercial Recording, New Jersey
|
Schedule 6.06
Existing Investments
|
|
1.
|
Credit account facility (Póliza de cuenta de crédito interés variable euribor)
dated as of November 17, 2015 between Kripsol Industrial and Caixabank, S.A. in an amount not exceeding €500,000.
|
|
|
2.
|
Credit account facility dated as of November 17, 2015 between Kripsol Industrial and Caixabank,
S.A. in an amount not exceeding €500,000.
|
|
|
3.
|
Credit facility for commercial risks (Póliza de crédito para cobertura de riesgos
comerciales) dated as of November 17, 2015 between Kripsol Industrial and Caixabank, S.A. in an amount not exceeding €500,000.
|
|
|
4.
|
Bank guarantee agreement dated as of November 17, 2015 between Kripsol Industrial and Caixabank,
S.A. in an amount not exceeding €500,000.
|
|
|
5.
|
Bank guarantee dated as of March 15, 2016 issued by Banco Popular Español, S.A. in
favor of Fire-Consult, S.L. in an amount not exceeding €5,000.
|
|
|
6.
|
Credit policy in the form of advance commercial documents dated as of November 17, 2015 between
Kripsol Industrial and Banco Santander, S.A. in an amount not exceeding €500,000.
|
|
|
7.
|
Finance agreement (contrato de financiación) dated as of May 11, 2015 between Kripsol
Gestión, S.L. and De Lage Landen International, B.V. in an outstanding amount of €38,341.36.
|
|
|
8.
|
Revolving Credit Facility, dated as of March 18, 2014 between Hayward Industries, Inc.
and Hayward Pool Products (Australia) Pty. Ltd. in an amount not exceeding of €10,000,000.
|
|
|
9.
|
Revolving Credit Facility, dated as of March 18, 2014 between Hayward Industries, Inc.
and Hayward Pool Products Canada, Inc. in an amount not exceeding €10,000,000.
|
|
|
10.
|
Revolving Credit Facility, dated as of March 18, 2014 between Hayward Industries, Inc.
and Hayward Pool Europe S.A. in an amount not exceeding €10,000,000.
|
|
|
11.
|
Loan Agreement, dated as of July 21, 2016 between Hayward Industries, Inc. and Hayward
Pool Acquisition, S.L.U. in an outstanding amount of €38,805,733.17.
|
|
|
12.
|
Loan Agreement, dated as of November 2, 2016 between Hayward Industries, Inc. and Hayward
Pool Acquisition, S.L.U. in an outstanding amount of €17,321,502.66.
|
Schedule 6.07(s)
Dispositions
|
|
1.
|
A disposition of leasehold interests in a Spanish real estate asset valued at approximately $10
million.
|
Schedule 9.01
Borrower’s Website Address for Electronic
Delivery
None.
EXHIBIT A-1
[FORM OF]
ASSIGNMENT AND ASSUMPTION
This Assignment and
Assumption (the “Assignment and Assumption”) is dated as of the Effective Date set forth below and is entered
into by and between [Insert name of Assignor] (the “Assignor”) and [Insert name of Assignee] (the “Assignee”).
Capitalized terms used but not defined herein shall have the meanings given to them in the Second Lien Credit Agreement identified
below (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Second Lien
Credit Agreement”), receipt of a copy of which is hereby acknowledged by the Assignee. The Standard Terms and Conditions
set forth in Annex I attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment
and Assumption as if set forth herein in full.
For an agreed consideration,
the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases and assumes from
the Assignor, subject to and in accordance with the terms hereof (including the Standard Terms and Conditions attached hereto)
and the Second Lien Credit Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below, (i) all
of the Assignor’s rights and obligations in its capacity as a Lender under the Second Lien Credit Agreement and any other
documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below
of all of such outstanding rights and obligations of the Assignor under the respective facilities identified below and (ii) to
the extent permitted to be assigned under applicable Requirements of Law, all claims, suits, causes of action and any other right
of the Assignor (in its capacity as a Lender) against any Person, whether known or unknown, arising under or in connection with
the Second Lien Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed
thereby or in any way based on or related to any of the foregoing, including contract claims, tort claims, malpractice claims,
statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause
(i) above (the rights and obligations sold and assigned pursuant to clauses (i) and (ii) above
being referred to herein collectively as the “Assigned Interest”). In the case where the Assigned Interest covers
all of the Assignor’s rights and obligations under the Second Lien Credit Agreement, the Assignor shall cease to be a party
thereto but shall continue to be entitled to the benefits of Sections 2.15, 2.16, 2.17 and 9.03 of
the Second Lien Credit Agreement with respect to facts and circumstances occurring on or prior to the Effective Date and subject
to its obligations hereunder and under Section 9.13 of the Second Lien Credit Agreement.
Such sale and assignment
is (i) subject to acceptance and recording thereof in the Register by the Administrative Agent pursuant to Section 9.05(b)(iv) of
the Second Lien Credit Agreement, (ii) without recourse to the Assignor and (iii) except as expressly provided in this
Assignment and Assumption, without representation or warranty by the Assignor.
[and is an Affiliate/Approved
Fund of [identify Lender]1]
|
|
3.
|
Borrower: HAYWARD INDUSTRIES, INC., a New Jersey corporation
|
1 Select
as applicable.
|
|
4.
|
Administrative Agent: Bank of America, N.A., as administrative agent under the Second Lien Credit
Agreement
|
|
|
5.
|
Second Lien Credit Agreement: That certain Second Lien Credit Agreement dated as of August 4,
2017 (as amended, restated, amended and restated, supplemented or otherwise modified and in effect on the date hereof, the “Second
Lien Credit Agreement”), by and among Hayward Industries, Inc., a New Jersey corporation (as survivor of the Merger
(as defined in the Second Lien Credit Agreement) with Hayward Acquisition Corp., a New Jersey corporation) (the “Borrower”),
Hayward Intermediate, Inc., a Delaware corporation (“Holdings”), the Lenders from time to time party thereto
and Bank of America, N.A. in its capacities as administrative agent and collateral agent (the “Administrative Agent”).
|
|
Aggregate Amount of Commitment/Loans
|
|
|
Class of Loans
Assigned
|
|
|
Amount of
Commitment/
Loans Assigned2
|
|
|
Percentage Assigned
of Commitment/
Loans under
Relevant Class3
|
|
|
CUSIP Number
|
|
|
$
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
%
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
%
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
%
|
|
|
|
|
|
|
(a)
|
Effective Date: [●][●], 20[●] [TO BE INSERTED BY THE ADMINISTRATIVE AGENT AND
WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR].
|
|
|
7.
|
[The][Each] Assignee represents and warrants as of the Effective Date to the Administrative Agent,
[the][each] Assignor and the respective Affiliates of each, and not, for the avoidance of doubt, for the benefit of the Borrower
or any other Loan Party, that [the][such] Assignee is not and will not be (1) an employee benefit plan subject to Title I
of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), (2) a plan or account subject to
Section 4975 of the Internal Revenue Code of 1986 (the “Code”); (3) an entity deemed to hold “plan
assets” of any such plans or accounts for purposes of ERISA or the Code; or (4) a “governmental plan” within
the meaning of ERISA.
|
|
|
8.
|
THE PARTIES HERETO ACKNOWLEDGE THAT ANY ASSIGNMENT TO ANY DISQUALIFIED INSTITUTION OR, TO THE
EXTENT THE BORROWER’S CONSENT IS REQUIRED UNDER SECTION 9.05 OF THE SECOND LIEN CREDIT AGREEMENT AND HAS NOT
BEEN OBTAINED (OR DEEMED OBTAINED PURSUANT TO THE FIRST PROVISO OF SECTION 9.05(b)(i)(A)), TO ANY OTHER PERSON, SHALL, AT
THE BORROWER’S ELECTION, BE TREATED IN ACCORDANCE WITH SECTIONS 9.05(f) and 9.05(g), AS APPLICABLE, OR THE BORROWER
SHALL BE ENTITLED TO SEEK SPECIFIC PERFORMANCE TO UNWIND ANY SUCH ASSIGNMENT IN ADDITION TO INJUNCTIVE RELIEF OR ANY OTHER REMEDIES
AVAILABLE TO THE BORROWER AT LAW OR IN EQUITY, INCLUDING THE REMEDIES SPECIFIED IN SECTION 9.05 OF THE SECOND LIEN CREDIT
AGREEMENT.
|
2
Not to be less than $1,000,000 in the case of Initial Loans, Additional Loans, Initial Commitments and Additional
Commitments unless otherwise agreed by the Borrower and the Administrative Agent.
3 Set forth, to
at least 9 decimals, as a percentage of the Commitment/Loans of all Lenders thereunder.
[Signature Page Follows]
The terms set forth
in this Assignment and Assumption are hereby agreed to:
|
|
ASSIGNOR
|
|
|
|
|
|
[NAME OF ASSIGNOR]
|
|
|
|
|
|
|
|
|
By:
|
|
|
|
|
Name:
|
|
|
|
Title:
|
[Signature Page to
Assignment and Assumption]
[ASSIGNEE HAS EXAMINED THE LIST OF DISQUALIFIED
INSTITUTIONS AND (I) REPRESENTS AND WARRANTS THAT (A) IT IS NOT IDENTIFIED ON SUCH LIST AND (B) IT IS NOT AN AFFILIATE
OF ANY INSTITUTION IDENTIFIED ON SUCH LIST AND (II) ACKNOWLEDGES THAT ANY ASSIGNMENT MADE TO AN AFFILIATE OF A DISQUALIFIED
INSTITUTION SHALL BE SUBJECT TO SECTION 9.05(g) OF THE SECOND LIEN CREDIT AGREEMENT.]1
|
|
ASSIGNEE
|
|
|
|
|
|
[NAME
OF ASSIGNEE]
|
|
|
|
|
|
|
|
|
By:
|
|
|
|
|
Name:
|
|
|
|
Title:
|
|
|
[Consented to and]2
Accepted:
|
|
|
|
|
|
BANK OF AMERICA, N.A., as Administrative Agent3
|
|
|
|
|
|
|
|
|
By:
|
|
|
|
|
Name:
|
|
|
|
Title:
|
|
|
[Consented to:
|
|
|
|
|
|
HAYWARD INDUSTRIES, INC.,
|
|
|
|
|
|
|
|
|
By:
|
|
|
|
|
Name:
|
|
|
|
Title:4]
|
1
To be completed by Assignee.
2
To be added only if the consent of the Administrative Agent is required.
3
To be added only if the consent of the Administrative Agent is required.
4 To be added
only if the consent of the Borrower is required by Section 9.05(b)(i)(A) of the Second Lien Credit Agreement.
[Signature Page to Assignment and Assumption]
Annex I
STANDARD
TERMS AND CONDITIONS FOR ASSIGNMENT AND ASSUMPTION
1. Representations
and Warranties.
1.1 Assignor.
The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the
Assigned Interest is free and clear of any lien, encumbrance or other adverse claim, (iii) its Commitment, and the outstanding
balances of its Loans, in each case without giving effect to assignments thereof which have not become effective, are as set forth
herein and (iv) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment
and Assumption and to consummate the transactions contemplated hereby; and (b) makes no representation or warranty and assumes
no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Second
Lien Credit Agreement, any other Loan Document or any other instrument or document furnished pursuant thereto (other than this
Assignment and Assumption) or any collateral thereunder, (ii) the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of the Borrower, any
of its Restricted Subsidiaries or Affiliates or any other Person obligated in respect of any Loan Document or (iv) the performance
or observance by Holdings, the Borrower, any of its Restricted Subsidiaries or Affiliates or any other Person of any of their respective
obligations under any Loan Document.
1.2 Assignee.
The Assignee (a) represents and warrants that (i) it is an Eligible Assignee and has full power and authority, and has
taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated
hereby and to become a Lender under the Second Lien Credit Agreement, (ii) it satisfies the requirements, if any, specified
in the Second Lien Credit Agreement that are required to be satisfied by it in order to acquire the Assigned Interest and become
a Lender, (iii) from and after the Effective Date, it shall be bound by the provisions of the Second Lien Credit Agreement
and the other Loan Documents as a Lender thereunder and, to the extent of the Assigned Interest, shall have the obligations of
a Lender thereunder and (iv) it has received a copy of the Second Lien Credit Agreement, the ABL Intercreditor Agreement and
the Term Intercreditor Agreement, together with copies of the most recent financial statements referred to in Section 4.01(c) or
the most recent financial statements delivered pursuant to Section 5.01 thereof, as applicable, and such other documents
and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption
and to purchase the Assigned Interest on the basis of which it has made such analysis and decision independently and without reliance
on the Administrative Agent or any other Lender, (v) it has examined the list of Disqualified Institutions and it is not (A) a
Disqualified Institution or (B) an Affiliate of a Disqualified Institution and (vi) if it is a Foreign Lender, attached
to the Assignment and Assumption is any documentation required to be delivered by it pursuant to Section 2.17 of the
Second Lien Credit Agreement, duly completed and executed by the Assignee and (b) agrees that (i) it will, independently
and without reliance on the Administrative Agent, the Assignor or any other Lender, and based on such documents and information
as it deems appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents,
(ii) it appoints and authorizes the Administrative Agent to take such action on its behalf and to exercise such powers and
discretion under the Second Lien Credit Agreement, the ABL Intercreditor Agreement and the Term Intercreditor Agreement, the other
Loan Documents or any other instrument or document furnished pursuant hereto or thereto as are delegated to the Administrative
Agent by the terms thereof, together with such powers as are reasonably incidental thereto, and (iii) it will perform in accordance
with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender.
2. Payments.
From and after the Effective Date, the Administrative Agent shall make all payments in respect of the Assigned Interest (including
payments of principal, interest, fees and other amounts) to the Assignor for amounts which have accrued to but excluding the Effective
Date and to the Assignee for amounts which have accrued from and after the Effective Date.
3. General
Provisions. This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their
respective successors and permitted assigns. This Assignment and Assumption may be executed in any number of counterparts, which
together shall constitute one instrument. Delivery of an executed counterpart of a signature page of this Assignment and Assumption
by facsimile or by email as a “.pdf” or “.tiff” attachment shall be effective as delivery of a manually
executed counterpart of this Assignment and Assumption. This Assignment and Assumption shall be construed in accordance with and
governed by the laws of the State of New York. The Administrative Agent, acting as a non-fiduciary agent of the Borrower, shall
record this Assignment and Assumption in the Register as of the Effective Date.
EXHIBIT A-2
[FORM OF]
AFFILIATED LENDER ASSIGNMENT AND ASSUMPTION
This Affiliated Lender
Assignment and Assumption (the “Affiliated Lender Assignment and Assumption”) is dated as of the Effective Date
set forth below and is entered into by and between [Insert name of Assignor] (the “Assignor”) and [Insert name
of Affiliated Lender] (the “Assignee”). Capitalized terms used but not defined herein shall have the meanings
given to them in the Second Lien Credit Agreement identified below (as amended, restated, amended and restated, supplemented or
otherwise modified from time to time, the “Second Lien Credit Agreement”), receipt of a copy of which is hereby
acknowledged by the Assignee. The Standard Terms and Conditions set forth in Annex I attached hereto are hereby agreed to
and incorporated herein by reference and made a part of this Affiliated Lender Assignment and Assumption as if set forth herein
in full.
For an agreed consideration,
the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases and assumes from
the Assignor, subject to and in accordance with the terms hereof (including the Standard Terms and Conditions attached hereto)
and the Second Lien Credit Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below, (i) all
of the Assignor’s rights and obligations in its capacity as a Lender under the Second Lien Credit Agreement and any other
documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below
of all of such outstanding rights and obligations of the Assignor under the respective facilities identified below and (ii) to
the extent permitted to be assigned under applicable Requirements of Law, all claims, suits, causes of action and any other right
of the Assignor (in its capacity as a Lender) against any Person, whether known or unknown, arising under or in connection with
the Second Lien Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed
thereby or in any way based on or related to any of the foregoing, including contract claims, tort claims, malpractice claims,
statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause
(i) above (the rights and obligations sold and assigned pursuant to clauses (i) and (ii) above
being referred to herein collectively as the “Assigned Interest”). In the case where the Assigned Interest covers
all of the Assignor’s rights and obligations under the Second Lien Credit Agreement, the Assignor shall cease to be a party
thereto but shall continue to be entitled to the benefits of Sections 2.15, 2.16, 2.17 and 9.03 of
the Second Lien Credit Agreement with respect to facts and circumstances occurring on or prior to the Effective Date and subject
to its obligations hereunder and under Section 9.13 of the Second Lien Credit Agreement. Such sale and assignment is
(i) subject to acceptance and recording thereof in the Register by the Administrative Agent pursuant to Section 9.05(h)(iii) of
the Second Lien Credit Agreement, (ii) without recourse to the Assignor and (iii) except as expressly provided in this
Affiliated Lender Assignment and Assumption, without representation or warranty by the Assignor.
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2.
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Assignee: [●] and is an Affiliated Lender [that is a Non-Debt Fund Affiliate/the Borrower/Holdings
or a subsidiary thereof].
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3.
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Borrower: Hayward Industries, Inc., a New Jersey corporation
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4.
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Administrative Agent: Bank of America, N.A., as administrative agent under the Second Lien Credit
Agreement
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5.
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Second Lien Credit Agreement: That certain Second Lien Credit Agreement dated as of August 4,
2017 (as amended, restated, amended and restated, supplemented or otherwise modified and in effect on the date hereof, the “Second
Lien Credit Agreement”), by and among Hayward Industries, Inc., a New Jersey corporation (as survivor of the Merger
(as defined in the Second Lien Credit Agreement) with Hayward Acquisition Corp., a New Jersey corporation) (the “Borrower”),
Hayward Intermediate, Inc., a Delaware corporation (“Holdings”), the Lenders from time to time party thereto
and Bank of America, N.A. in its capacities as administrative agent and collateral agent (the “Administrative Agent”).
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Aggregate Amount of Commitment/Loans
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Class of Loans
Assigned
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Amount of
Commitment/
Loans Assigned1
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Percentage Assigned
of Commitment/
Loans under
Relevant Class2
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CUSIP Number
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$
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$
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%
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$
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$
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%
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$
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$
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%
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7.
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[The][Each] Assignee represents and warrants as of the Effective Date to the Administrative Agent,
[the][each] Assignor and the respective Affiliates of each, and not, for the avoidance of doubt, for the benefit of the Borrower
or any other Loan Party, that [the][such] Assignee is not and will not be (1) an employee benefit plan subject to Title I
of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), (2) a plan or account subject to
Section 4975 of the Internal Revenue Code of 1986 (the “Code”); (3) an entity deemed to hold “plan
assets” of any such plans or accounts for purposes of ERISA or the Code; or (4) a “governmental plan” within
the meaning of ERISA.
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8.
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THE PARTIES HERETO ACKNOWLEDGE THAT, SUBJECT TO SECTION 9.05(h) OF THE SECOND LIEN CREDIT
AGREEMENT, ANY ASSIGNMENT TO AN AFFILIATED LENDER WHICH RESULTS IN THE AGGREGATE PRINCIPAL AMOUNT OF LOANS THEN HELD BY ALL AFFILIATED
LENDERS EXCEEDING THE AFFILIATED LENDER CAP (AFTER GIVING EFFECT TO ANY SUBSTANTIALLY SIMULTANEOUS CANCELLATION OF LOANS) SHALL
BE DEEMED TO HAVE BEEN CONTRIBUTED DIRECTLY OR INDIRECTLY TO THE BORROWER AND CANCELLED WITH RESPECT TO THE AMOUNT IN EXCESS OF
THE AFFILIATED LENDER CAP. Effective Date: [●] [●], 20[●] [TO BE INSERTED BY THE ADMINISTRATIVE AGENT AND WHICH
SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR].
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[Signature Page Follows]
1
Not to be less than $1,000,000 in the case of Initial Loans, Additional Loans, Initial Commitments and Additional Commitments unless
the Borrower and the Administrative Agent otherwise consent.
2 Set forth, to
at least 9 decimals, as a percentage of the Commitment/Loans of all Lenders thereunder.
The terms set forth
in this Affiliated Lender Assignment and Assumption are hereby agreed to:
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ASSIGNOR
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[NAME OF ASSIGNOR]
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By:
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Name:
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Title:
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[Signature Page to Affiliated Lender
Assignment and Assumption]
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ASSIGNEE
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[NAME
OF ASSIGNEE]
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By:
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Name:
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Title:
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[Consented to]:1
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HAYWARD INDUSTRIES, INC.,
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By:
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Name:
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Title:]
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1 To
be added only if the consent of the Borrower is required by Section 9.05(b)(i)(A) of the Second Lien Credit Agreement.
[Signature Page to Affiliated Lender Assignment and Assumption]
ANNEX I TO EXHIBIT A-2
STANDARD
TERMS AND CONDITIONS FOR
AFFILIATED LENDER ASSIGNMENT AND ASSUMPTION
1. Representations
and Warranties.
1.1 Assignor.
The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the
Assigned Interest is free and clear of any lien, encumbrance or other adverse claim, (iii) its Commitment in respect of Loans,
and the outstanding balances of its Loans, in each case without giving effect to assignments thereof which have not become effective,
are as set forth herein, and (iv) it has full power and authority, and has taken all action necessary, to execute and deliver
this Affiliated Lender Assignment and Assumption and to consummate the transactions contemplated hereby; and (b) makes no
representation or warranty and assumes no responsibility with respect to (i) any statements, warranties or representations
made in or in connection with the Second Lien Credit Agreement, any other Loan Document or any other instrument or document furnished
pursuant thereto (other than this Affiliated Lender Assignment and Assumption) or any collateral thereunder, (ii) the execution,
legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the
financial condition of the Borrower, any of its Restricted Subsidiaries or Affiliates or any other Person obligated in respect
of any Loan Document or (iv) the performance or observance by Holdings, the Borrower, any of its Restricted Subsidiaries or
Affiliates or any other Person of any of their respective obligations under any Loan Document. In connection with any Dutch Auction,
the Assignor acknowledges and agrees that in connection with this Affiliated Lender Assignment and Assumption, (1) the applicable
Affiliated Lender or its Affiliates may have, and later may come into possession of, material non-public information with respect
to Holdings, the Borrower and/or any subsidiary thereof and/or their respective Securities (“MNPI”), (2) the
Assignor has independently, without reliance on the applicable Affiliated Lender, the Investors, Holdings, the Borrower, any of
their respective subsidiaries, the Administrative Agent or any of their respective Affiliates, made its own analysis and determination
to participate in such assignment notwithstanding the Assignor’s lack of knowledge of the MNPI, (3) none of the applicable
Affiliated Lenders, the Investors, Holdings, the Borrower, any of their respective subsidiaries, the Administrative Agent or any
of their respective Affiliates shall have any liability to the Assignor, and the Assignor hereby waives and releases, to the extent
permitted by applicable Requirements of Law, any claims it may have against the applicable Affiliated Lender, the Investors, Holdings,
the Borrower, each of their respective subsidiaries, the Administrative Agent and their respective Affiliates, under applicable
laws or otherwise, with respect to the nondisclosure of the MNPI and (4) the MNPI may not be available to the Administrative
Agent or the other Lenders.
Annex
I to Exhibit A-2-1
1.2 Assignee.
The Assignee (a) represents and warrants that (i) it is an Affiliated Lender and has full power and authority, and has
taken all action necessary, to execute and deliver this Affiliated Lender Assignment and Assumption and to consummate the transactions
contemplated hereby and to become a Lender under the Second Lien Credit Agreement, (ii) it satisfies the requirements, if
any, specified in the Second Lien Credit Agreement that are required to be satisfied by it in order to acquire the Assigned Interest
and become a Lender, (iii) from and after the Effective Date, it shall be bound by the provisions of the Second Lien Credit
Agreement and the other Loan Documents as a Lender (and as an Affiliated Lender) thereunder and, to the extent of the Assigned
Interest, shall have the obligations of a Lender (and as an Affiliated Lender) thereunder, (iv) it has received a copy of
the Second Lien Credit Agreement, the ABL Intercreditor Agreement and the Term Intercreditor Agreement, together with copies of
the most recent financial statements referred to in Section 4.01(c) of the Second Lien Credit Agreement or delivered
pursuant to Section 5.01 of the Second Lien Credit Agreement, as applicable, and such other documents and information
as it has deemed appropriate to make its own credit analysis and decision to enter into this Affiliated Lender Assignment and Assumption
and to purchase the Assigned Interest on the basis of which it has made such analysis and decision independently and without reliance
on the Administrative Agent or any other Lender, (v) if it is a Foreign Lender, attached to the Affiliated Lender Assignment
and Assumption is any documentation required to be delivered by it pursuant to Section 2.17 of the Second Lien Credit
Agreement, duly completed and executed by the Assignee, (vi) after giving effect to this Affiliated Lender Assignment and
Assumption and subject to the provisions of Section 9.05(h)(iv), the aggregate principal amount of all Initial Loans
and Additional Loans then held by all Affiliated Lenders does not exceed the Affiliated Lender Cap (after giving effect to any
substantially simultaneous cancellations thereof) and (vii) in the case of Holdings or any of its subsidiaries, (1) no
Default or Event of Default exists at the time of acceptance of bids for any Dutch Auction or the confirmation of any open market
purchase and (2) the Loans in respect of such Assigned Interest shall, to the extent permitted by applicable Requirement of
Law, be retired and cancelled immediately after the Effective Date; and (b) agrees that (i) it will, independently and
without reliance on the Administrative Agent, the Assignor or any other Lender, and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan
Documents, (ii) it appoints and authorizes the Administrative Agent to take such action on its behalf and to exercise such
powers and discretion under the Second Lien Credit Agreement, the other Loan Documents or any other instrument or document furnished
pursuant hereto or thereto as are delegated to the Administrative Agent, by the terms thereof, together with such powers as are
reasonably incidental thereto, and (iii) it will perform in accordance with their terms all of the obligations which by the
terms of the Loan Documents are required to be performed by it as a Lender. The Assignee agrees that, solely in its capacity as
an Affiliated Lender, it will not be entitled to (a) attend (including by telephone) or participate in any meeting or discussions
(or portion thereof) among the Administrative Agent or any Lender or among Lenders to which the Loan Parties or their representatives
are not invited or (b) receive any information or material prepared by the Administrative Agent or any Lender or any communication
by or among the Administrative Agent and one or more Lenders, except to the extent such information or materials have been made
available by the Administrative Agent or any Lender to any Loan Party or its representatives (and in any case, other than the right
to receive notices of Borrowings, prepayments and other administrative notices in respect of its Initial Loans or Additional Loans
required to be delivered to Lenders pursuant to Article 2 of the Second Lien Credit Agreement).
2. Payments.
From and after the Effective Date, the Administrative Agent shall make all payments in respect of the Assigned Interest (other
than Assigned Interests assigned to Holdings, the Borrower or any of its Restricted Subsidiaries) (including payments of principal,
interest, fees and other amounts) to the Assignor for amounts which have accrued to but excluding the Effective Date and to the
Assignee for amounts which have accrued from and after the Effective Date.
3. General
Provisions. This Affiliated Lender Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties
hereto and their respective successors and permitted assigns. This Affiliated Lender Assignment and Assumption may be executed
in any number of counterparts, which together shall constitute one instrument. Delivery of an executed counterpart of a signature
page of this Affiliated Lender Assignment and Assumption by facsimile or by email as a “.pdf” or “.tiff”
attachment shall be effective as delivery of a manually executed counterpart of this Affiliated Lender Assignment and Assumption.
This Affiliated Lender Assignment and Assumption shall be construed in accordance with and governed by the laws of the State of
New York. The Administrative Agent, acting as a non-fiduciary agent of the Borrower, shall record this Assignment and Assumption
in the Register as of the Effective Date.
Annex
I to Exhibit A-2-2
EXHIBIT B
[FORM OF]
BORROWING REQUEST
Bank of America, N.A.
101 N. Tryon Street
Mail Code: NC1-001-05-46
Charlotte, NC 28255
Attention: Robert Garvey
Telephone: 980-387-9468; Telecopier: 617-310-3288
Electronic Mail: Robert.garvey@baml.com
[●] [●], 20[●]1
Ladies and Gentlemen:
[Reference is hereby
made to that certain Second Lien Credit Agreement, dated as of August 4, 2017 (as the same may be amended, restated, amended
and restated, supplemented or otherwise modified from time to time, the “Second Lien Credit Agreement”), by
and among Hayward Industries, Inc., a New Jersey corporation (as survivor of the Merger (as defined in the Second Lien Credit
Agreement) with Hayward Acquisition Corp., a New Jersey corporation) (the “Borrower”), Hayward Intermediate, Inc.,
a Delaware corporation (“Holdings”), the Lenders from time to time party thereto and Bank of America, N.A. in
its capacities as administrative agent and collateral agent (the “Administrative Agent”).
The undersigned hereby
gives you notice (the “Borrowing Request”) pursuant to Section 2.03 of the Second Lien Credit Agreement
of its request of a Borrowing (the “Requested Borrowing”) under the Second Lien Credit Agreement, and in that
connection sets forth below the terms on which the Requested Borrowing is requested to be made:
(A) Date
of Requested Borrowing (which shall be a Business Day) [●]
(B) Aggregate
Amount of Requested Borrowing $[●]
1 For Borrowings after the Closing Date, must be
in writing or by telephone (and promptly confirmed in writing) and must be received by the Administrative Agent (by hand delivery,
fax or other electronic transmission (including “.pdf” or “.tiff”)) not later than (i) 2:00 p.m. three
(3) Business Days prior to the requested day of any Borrowing, conversion or continuation of LIBO Rate Loans (or two Business
Days in the case of any Borrowing of LIBO Rate Loans to be made on the Closing Date) or (ii) by 12:00 p.m. (Noon) on the requested
date of any Borrowing of ABR Loans (or, in each case, such later time as shall be acceptable to the Administrative Agent); provided,
however, that if the Borrower wishes to request LIBO Rate Loans having an Interest Period of other than one, two, three or six
months in duration as provided in the definition of “Interest Period,” (A) the applicable notice from the Borrower
must be received by the Administrative Agent not later than 2:00 p.m. four (4) Business Days prior to the requested date of such
Borrowing (or such later time as shall be reasonably acceptable to the Administrative Agent), conversion or continuation, whereupon
the Administrative Agent shall give prompt notice to the appropriate Lenders of such request and determine whether the requested
Interest Period is acceptable to them and (B) not later than 12:00 p.m. (Noon) three (3) Business Days before the requested date
of such Borrowing, conversion or continuation, the Administrative Agent shall notify the Borrower whether or not the requested
Interest Period has been consented to by all the appropriate Lenders.
(C) Type
of Requested Borrowing2 [●]
(D) Class of
Requested Borrowing [●]
(E) Interest
Period3 (in the case [●] of
a LIBO Rate Borrowing)
(F) Amount,
Account Number and Location
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Wire Transfer Instructions:
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Amount
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$[●]
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Bank:
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[●]
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ABA No.:
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[●]
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Account No.:
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[●]
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Account Name:
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[●]
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[The undersigned hereby
certifies that the following statements are true on the date hereof, and will be true on the date of the Requested Borrowing:
(A) The
representations and warranties of the Loan Parties set forth in the Second Lien Credit Agreement and the other Loan Documents are
true and correct in all material respects on and as of the date of the Requested Borrowing with the same effect as though such
representations and warranties had been made on and as of the date of such Requested Borrowing; provided that (A) to
the extent that any representation and warranty specifically refers to a given date or period, it is true and correct in all material
respects as of such date or for such period and (B) if any such representation is qualified by or subject to a Material Adverse
Effect or other “materiality” qualification, such representation is true and correct in all respects.
(B) At
the time of and immediately after giving effect to the Requested Borrowing, no Default or Event of Default exists.]4
[This Borrowing Request
(and the Requested Borrowing) is conditioned on the consummation of [ ]5
prior to or substantially simultaneously with the Requested Borrowing.]6
2 State whether a LIBO Rate Borrowing or ABR Borrowing.
If no Type of Borrowing is specified, then the Requested Borrowing shall be an ABR Borrowing.
3 Must be a period contemplated by the definition
of “Interest Period”. If no Interest Period is specified, then the Interest Period shall be of one-month’s duration.
4 Include bracketed language only for Borrowings
after Closing Date other than (i) Incremental Loans made in connection with any acquisition to the extent not otherwise required
by the applicable Additional Lenders and (ii) Borrowings under any Refinancing Amendment and/or Extension to the extent not otherwise
required by the applicable lenders in respect thereof.
5 Identify applicable permitted acquisition, investment
or irrevocable repayment or redemption of Indebtedness that such Requested Borrowing is being used to fund.
6 To be included for a Borrowing Request made in
connection with any permitted acquisition, investment or irrevocable repayment or redemption of Indebtedness.
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Very truly yours,
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[HAYWARD INDUSTRIES, INC.
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By:
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Name:
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Title:
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]
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[HAYWARD ACQUISITION CORP.
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By:
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Name:
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Title:
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]
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[Signature Page to Borrowing Request]
EXHIBIT C
[FORM OF]
COMPLIANCE CERTIFICATE
[●]
[●], 20[●]
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To:
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The Administrative Agent and each of the Lenders party to the Second Lien Credit Agreement described
below
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This Compliance Certificate
is furnished pursuant to that certain Second Lien Credit Agreement dated as of August 4, 2017 (as amended, restated, amended
and restated, supplemented or otherwise modified and in effect on the date hereof, the “Second Lien Credit Agreement”),
by and among Hayward Industries, Inc., a New Jersey corporation (as survivor of the Merger (as defined in the Second Lien
Credit Agreement) with Hayward Acquisition Corp., a New Jersey corporation) (the “Borrower”), Hayward Intermediate, Inc.,
a Delaware corporation (“Holdings”), the Lenders from time to time party thereto and Bank of America, N.A. in
its capacities as administrative agent and collateral agent (the “Administrative Agent”). Unless otherwise defined
herein, capitalized terms used in this Compliance Certificate have the meanings ascribed thereto in the Second Lien Credit Agreement.
THE UNDERSIGNED HEREBY
CERTIFIES, AS A RESPONSIBLE OFFICER OF THE BORROWER, IN SUCH CAPACITY AND NOT IN AN INDIVIDUAL CAPACITY, THAT:
1. I
am the duly elected [●] of the Borrower and a Responsible Officer of the Borrower;
2. I
have reviewed the terms of the Second Lien Credit Agreement and I have made, or have caused to be made under my supervision, a
review in reasonable detail of the transactions and conditions of the Borrower and its Restricted Subsidiaries, on a consolidated
basis, during the [Fiscal Quarter][Fiscal Year] covered by the attached financial statements;
3. [The
attached financial statements fairly present, in all material respects, in accordance with GAAP, the consolidated financial condition
of the Borrower as at the dates indicated and its income and cash flows for the periods indicated, subject to the absence of footnotes
and changes resulting from audit and normal year-end adjustments.]1
4. [Except
as described in the disclosure set forth below, the][The] examinations described in paragraph 2 did not disclose, and I
have no knowledge of the existence of any condition or event which constitutes a Default or Event of Default that exists as of
the date of this Compliance Certificate [and the disclosure set forth below specifies, in reasonable detail, the nature of any
such condition or event and any action taken or proposed to be taken with respect thereto.]
5. [Schedule
1 attached hereto sets forth reasonably detailed calculations of Excess Cash Flow for such Fiscal Year.]2
1 Include to the extent the relevant Compliance
Certificate is delivered in connection with unaudited quarterly financials.
2 Only required to the extent the relevant Compliance
Certificate is delivered in connection with audited annual financial statements (commencing with the Fiscal Year ending December
31, 2018), it being agreed that the first payment under Section 2.11(b)(i) of the Second Lien Credit Agreement, if any, shall
be in respect of the Fiscal Year ending December 31, 2018.
6. [Attached
as Schedule 2 hereto is a list of the subsidiaries of the Borrower that identifies each subsidiary as a Restricted Subsidiary
or an Unrestricted Subsidiary as of the date hereof.] [There is no change in the list of Restricted Subsidiaries and Unrestricted
Subsidiaries since the later of the Closing Date and the date of the last Compliance Certificate.]
7. [Attached
as Schedule 3 hereto are [[(i)] a summary of the pro forma adjustments necessary to eliminate the accounts of Unrestricted
Subsidiaries from the attached financial statements]3
[[and (ii)] if the attached financial statements relate to any Parent Company, consolidating financial information summarizing
in reasonable detail the information related to such Parent Company, on the one hand, and the information relating to the Borrower
and its consolidated subsidiaries on a standalone basis, on the other hand]4.]
8. [Attached
hereto as Schedule 4 is the Narrative Report required to be delivered with the attached financial statements in accordance
with Section 5.01(a) or (b) of the Second Lien Credit Agreement, as applicable]5.
[Signature Page Follows]
3 Only required if a subsidiary
of the Borrower is or has been designated as an Unrestricted Subsidiary at the time of delivery of the applicable Compliance Certificate.
4 Only include to the extent
the applicable financial statements cover any Parent Company (i.e., Holdings or any Person above Holdings as to which the Borrower
is an indirect Wholly-Owned Subsidiary).
5 Only include to the extent
the Borrower has opted to include a Narrative Report instead of holding a conference call for the applicable Fiscal Quarter.
The foregoing certifications,
together with the information set forth in the Schedules hereto and the financial statements delivered with this Compliance Certificate
in support hereof, are made and delivered as of the date first written above.1
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HAYWARD INDUSTRIES, INC.
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By:
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Title:
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1 Please note the deadlines
for satisfaction of the following requirements correspond with the delivery of each Compliance Certificate (unless otherwise indicated):
1. The delivery of documents and deliverables required under Section 4.02(a) of the Security Agreement relating
to any (i) certificated Pledged Stock and/or (ii) Material Debt Instruments, in each case to the extent the same constitutes Collateral
and acquired during the Fiscal Quarter covered by the attached financial statements. NOTE: If any Loan Party acquires such (i) certificated
Pledged Stock and/or (ii) Material Debt Instruments during the fourth Fiscal Quarter of any Fiscal Year, the documents and deliverables
required under Section 4.02(a) of the Security Agreement must be delivered within 60 days after the end of such Fiscal Quarter.
2. The
delivery of documents and deliverables required under Section 4.03(c) of the Security Agreement relating to any registration (or any application
for registration of) any Patent, Trademark or Copyright with the United States Patent and Trademark Office or the United States Copyright
Office, as applicable, filed or acquired during the Fiscal Quarter covered by the attached financial statements. NOTE: If any Loan Party
acquires any registration (or files any application for registration) of any Patent, Trademark or Copyright with the United States Patent
and Trademark Office or the United States Copyright Office, as applicable, during the fourth Fiscal Quarter of any Fiscal Year, to the
extent the same constitutes Collateral, the documents and deliverables required under Section 4.03(c) of the Security Agreement must be
delivered within 60 days after the end of such Fiscal Quarter.
3. To the extent the relevant Compliance Certificate is delivered in connection
with audited annual or unaudited quarterly financial statements, delivery of the Perfection Certificate Supplement required by Section
5.01(c) of the Second Lien Credit Agreement.
4. The delivery of the documents required to be delivered under Section 5.12 of the Second
Lien Credit Agreement as a result of (i) the formation or acquisition after the Closing Date of any Restricted Subsidiary that is a Domestic
Subsidiary (other than an Excluded Subsidiary), (ii) the designation of any Unrestricted Subsidiary as a Restricted Subsidiary (other
than an Excluded Subsidiary), (iii) any Restricted Subsidiary that is a Domestic Subsidiary ceasing to be an Immaterial Subsidiary and/or
(iv) any Restricted Subsidiary that was an Excluded Subsidiary ceasing to be an Excluded Subsidiary, in each case during the Fiscal Quarter
covered by the attached financial statements. NOTE: upon the taking of any action or the occurrence of any event described in clauses
(i) through (iv) during the fourth Fiscal Quarter of any Fiscal Year, the documents required to be delivered under Section 5.12(a) of
the Second Lien Credit Agreement must be delivered within 60 days after the end of such Fiscal Quarter.
[Signature Page to Compliance Certificate]
SCHEDULE 1
[Calculation of Excess Cash Flow]
Schedule1
to Exhibit C
SCHEDULE 2
[List of Restricted Subsidiaries and
Unrestricted Subsidiaries]
Schedule 2
to Exhibit C
SCHEDULE 3
[Summary of Pro Forma Adjustments/Consolidating
Information]
Schedule
3 to Exhibit C
SCHEDULE 4
[Narrative Report]
Schedule 4
to Exhibit C
EXHIBIT D
[FORM OF]
INTEREST
ELECTION REQUEST
Bank of America, N.A.
101 N. Tryon Street
Mail Code: NC1-001-05-46
Charlotte, NC 28255
Attention: Robert Garvey
Telephone: 980-387-9468; Telecopier: 617-310-3288
Electronic Mail: Robert.garvey@baml.com
[●] [●], 20[●]1
Ladies and Gentlemen:
Reference is hereby
made to that certain Second Lien Credit Agreement dated as of August 4, 2017 (as amended, restated, amended and restated,
supplemented or otherwise modified and in effect on the date hereof, the “Second Lien Credit Agreement”), by
and among Hayward Industries, Inc., a New Jersey corporation (as survivor of the Merger (as defined in the Second Lien Credit
Agreement) with Hayward Acquisition Corp., a New Jersey corporation) (the “Borrower”), Hayward Intermediate, Inc.,
a Delaware corporation (“Holdings”), the Lenders from time to time party thereto and Bank of America, N.A. in
its capacities as administrative agent and collateral agent (the “Administrative Agent”). Terms defined in the
Second Lien Credit Agreement are used herein with the same meanings unless otherwise defined herein.
The undersigned hereby
gives you notice pursuant to Section 2.08 of the Second Lien Credit Agreement of an interest rate election, and in
that connection sets forth below the terms thereof:
1 The Administrative Agent must be notified in writing
or by telephone (and promptly confirmed in writing), which must be received by the Administrative Agent (by hand delivery, fax
or other electronic transmission (including “.pdf” or “.tiff”)) not later than (i) 2:00 p.m. three (3)
Business Days prior to the requested day of any Borrowing, conversion or continuation of LIBO Rate Loans (or two Business Days
in the case of any Borrowing of LIBO Rate Loans to be made on the Closing Date) or (ii) by 12:00 p.m. (Noon) on the requested
date of any Borrowing of ABR Loans (or, in each case, such later time as shall be acceptable to the Administrative Agent); provided,
however, that if the Borrower wishes to request LIBO Rate Loans having an Interest Period of other than one, two, three or six
months in duration as provided in the definition of “Interest Period,” (A) the applicable notice from the Borrower
must be received by the Administrative Agent not later than 2:00 p.m. four (4) Business Days prior to the requested date of such
Borrowing (or such later time as shall be reasonably acceptable to the Administrative Agent), conversion or continuation, whereupon
the Administrative Agent shall give prompt notice to the appropriate Lenders of such request and determine whether the requested
Interest Period is acceptable to them and (B) not later than 12:00 p.m. (Noon) three (3) Business Days before the requested date
of such Borrowing, conversion or continuation, the Administrative Agent shall notify the Borrower whether or not the requested
Interest Period is available to the appropriate Lenders.
(A) [on
[insert applicable date] (which is a Business Day), the undersigned will convert $[●]2
of the aggregate outstanding principal amount of the Loans, bearing interest at the [ABR][LIBO] Rate, into a [LIBO][ABR] Loan [and,
in the case of a LIBO Rate Loan, having an Interest Period of [●] month(s)]3
[; and][.]]
(B) [on
[insert applicable date] (which is a Business Day), the undersigned will continue $[●] of the aggregate outstanding principal
amount of the Loans bearing interest at the LIBO Rate, as LIBO Rate Loans having an Interest Period of [●] month(s)4.]
[Signature Page Follows]
2 Subject to Section 2.02(c) of the Second Lien
Credit Agreement.
3 Must be a period contemplated by the definition
of “Interest Period”. If no Interest Period is specified, then the Interest Period shall be of one month’s duration.
4 Must be a period contemplated by the definition
of “Interest Period”. If no Interest Period is specified, then the Interest Period shall be of one month’s duration.
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HAYWARD INDUSTRIES, INC.
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By:
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Name:
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Title:
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[Signature Page to Interest Election Request]
EXHIBIT E
[FORM OF]
PERFECTION CERTIFICATE
[ATTACHED]
PERFECTION CERTIFICATE
August 4, 2017
Reference is hereby
made to (i) that certain First Lien Credit Agreement, dated as of August 4, 2017 (as amended, restated, amended and restated,
supplemented or otherwise modified and in effect on the date hereof, the “First Lien Credit Agreement”), by
and among Hayward Intermediate, Inc., a Delaware corporation (“Holdings”), Hayward Acquisition Corp., a New Jersey
corporation (the “Initial Borrower”), Hayward Industries, Inc., a New Jersey corporation (upon merging with the
Initial Borrower pursuant to the Merger (as defined in the First Lien Credit Agreement) and as survivor of the Merger, the “Borrower”),
the lenders from time to time party thereto (the “First Lien Lenders”) and Bank of America, N.A., as administrative
agent and collateral agent for the First Lien Lenders (together with its successors and permitted assigns in such capacities, the
“First Lien Agent”), (ii) that certain First Lien Pledge and Security Agreement, dated as of August 4,
2017 (as amended, restated, amended and restated, supplemented or otherwise modified and in effect on the date hereof, the “First
Lien Security Agreement”), by and among the Initial Borrower, the Borrower, Holdings, the other Grantors from time
to time party thereto and the First Lien Agent, (iii) that certain Second Lien Credit Agreement, dated as of August 4,
2017 (as amended, restated, amended and restated, supplemented or otherwise modified in effect on the date hereof, the “Second
Lien Credit Agreement” and, together with the First Lien Credit Agreement, each, a “Credit Agreement” and, collectively,
the “Credit Agreements”), by and among Holdings, the Initial Borrower, the Borrower, the lenders from time to time
party thereto (the “Second Lien Lenders”), Bank of America, N.A., as administrative agent and collateral agent
for the Second Lien Lenders (together with its successors and permitted assigns in such capacities, the “Second Lien
Agent” and, together with the First Lien Agent, each, an “Agent” and collectively, the “Agents”)
and (iv) that certain Second Pledge and Lien Security Agreement, dated as of August 4, 2017 (as amended, restated, amended
and restated, supplemented or otherwise modified and in effect on the date hereof, the “Second Lien Security Agreement”
and, together with the First Lien Security Agreement, each, a “Security Agreement” and, collectively, the “Security
Agreements”), by and among the Initial Borrower, the Borrower, Holdings, the other Grantors from time to time party
thereto and the Second Lien Agent. Capitalized terms used but not defined herein have the meanings assigned to such terms in the
applicable Security Agreement. As used herein, the term “Company” means each of Holdings, the Borrower and the other
Loan Parties.
As of the date hereof,
the undersigned hereby represents and warrants to each Agent as follows:
1. Names.
(a) Set forth in Schedule 1(a) is a true and complete list of (i) the exact legal name of each Company, as
such name appears in its respective Organizational Documents (as defined in each Credit Agreement) filed with the Secretary of
State or other relevant office of such Company’s jurisdiction of organization or formation, (ii) the type of entity
of each Company, (iii) the organizational identification number, if any, of each Company, (iv) the Federal Taxpayer Identification
Number, if any, of each Company and (v) the jurisdiction of organization or formation of each Company.
(b) Except
as otherwise disclosed in Schedule 1(c) or Schedule 1(d), set forth in Schedule 1(b) is a true and
complete list of (i) any other legal name that any Company has had, together with the date of the relevant change and (ii) all
other names used by such Company on any filings with the Internal Revenue Service, in each case, in the past five years.
(c) Set
forth in Schedule 1(c) is a true and complete list of the information required by Section 1(a) above
for any other Person (i) to which any Company became the successor by merger, consolidation or acquisition or (ii) that
has been liquidated into, or transferred all or substantially all of its assets to, any Company, at any time within the past five
years.
(d) Except
as set forth in Schedule 1(d), or as otherwise disclosed in Schedule 1(c), no Company has changed its jurisdiction
of organization or form of entity at any time during the past four months.
2. Locations.
(a) Set forth in Schedule 2(a) is a true and complete list of the address of the chief executive offices of each
Company.
(b) Except
as disclosed in Schedule 2(a), set forth in Schedule 2(b) is a true and complete list of all other locations
where any Company currently maintains any Collateral consisting of Inventory (including property in possession of a third party
(e.g., a warehouseman or other bailee or on consignment), other than Inventory in transit or out for repair in the ordinary course
of business.
3. Stock
Ownership and Other Equity Interests. Set forth Schedule 3 is a true and complete list of all of the issued and outstanding
stock, partnership interests, limited liability company membership interests or other equity interests owned by any Company constituting
Pledged Stock, the beneficial owners of such stock, partnership interests, membership interests or other equity interests and the
percentage of the total issued and outstanding stock, partnership interests, membership interests or other equity interests of
the relevant issuer represented thereby.
4. Instruments
and Tangible Chattel Paper. Set forth in Schedule 4 is a true and complete list of all Instruments (other than checks to
be deposited in the ordinary course of business) and Tangible Chattel Paper, in each case having a face amount exceeding $15,000,000,
held by any Company as of the date hereof, including the names of the obligors, the amounts owing and the due dates.
5. Intellectual
Property. (a) Set forth in Schedule 5(a) is a true and complete list of all Patents, Designs (if applicable) and
Trademarks of each Company registered with and published by (or applied for in) the United States Patent and Trademark Office (“USPTO”)
(excluding, for the avoidance of doubt, any Patent or Trademark that has expired or been abandoned, but including Trademarks that
would constitute Collateral upon the filing of a “Statement of Use” or an “Amendment to Allege Use” with
respect thereto), as applicable, including the name of the registered owner and the registration or publication number (or, if
applicable, the applicant and the application number) of each such Patent, Design (if applicable) and Trademark.
(b) Set
forth in Schedule 5(b) is a true and complete list of all Copyrights of each Company registered with (or applied for
in) the United States Copyright Office (excluding, for the avoidance of doubt, any Copyright that has expired or been abandoned),
including the name of the registered owner and the registration number (or, if applicable, the applicant and the application number)
of each such Copyright.
6. Commercial
Tort Claims. Set forth in Schedule 6 is a true and complete list of all Commercial Tort Claims with an individual value
of at least $10,000,000 (as reasonably determined by the Borrower), held by any Company, including a brief description thereof.
[Signature Page Follows]
IN WITNESS WHEREOF,
each of the undersigned has hereunto signed this Perfection Certificate as of the date first written of above.
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HAYWARD INTERMEDIATE, INC.
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By:
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Name:
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Title:
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HAYWARD INDUSTRIES, INC.
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By:
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Name:
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Title:
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HAYWARD ACQUISITION CORP.
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By:
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Name:
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Title:
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HAYWARD INDUSTRIAL PRODUCTS, INC.
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By:
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Name:
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Title:
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GOLDLINE PROPERTIES LLC
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By:
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Name:
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Title:
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Signature
Page to First Lien and Second Lien Perfection Certificate
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HAYWARD/WRIGHT-AUSTIN, INC.
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By:
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Name:
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Title:
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WEBSTER PUMPS, INC.
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By:
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Name:
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Title:
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Signature
Page to First Lien and Second Lien Perfection Certificate
Schedule
1(a)
LEGAL
NAMES
|
Legal Name
|
Jurisdiction
|
Type
|
Organizational Identification Number
|
Federal Taxpayer Identification Number
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Hayward Intermediate, Inc.
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Delaware
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Corporation
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6429281
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82-2078678
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Hayward Acquisition Corp.
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New Jersey
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Corporation
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0101044970
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82-2163430
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Hayward Industries, Inc.
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New Jersey
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Corporation
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4465526000
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22-1715653
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Hayward Industrial Products, Inc.
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New Jersey
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Corporation
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0100127855
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22-2337329
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Goldline Properties LLC
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Rhode Island
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Limited Liability Company
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129649
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81-0614191
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Hayward/Wright-Austin, Inc.
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New Jersey
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Corporation
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0100669270
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22-3460083
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Webster Pumps, Inc.
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New Jersey
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Corporation
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0100845689
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52-2361310
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SCHEDULE
1(b)
A. PRIOR
ORGANIZATIONAL NAMES
None.
B. OTHER
NAMES USED ON IRS FILINGS:
None.
SCHEDULE
1(c)
PREDECESSOR
ENTITIES
|
Company
|
Action
|
Legal Name of Predecessor Entity
|
Jurisdiction of Organization of Predecessor Entity
|
Date of Action
|
|
Hayward Industries, Inc.
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Merger
|
Poolvergnuegen
|
California
|
03/31/2015
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SCHEDULE
1(d)
CHANGES
IN JURISDICTION OR FORM
None.
SCHEDULE
2(a)
CHIEF
EXECUTIVE OFFICE ADDRESSES
|
Company
|
Address
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Hayward Intermediate, Inc.
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620 Division St., Elizabeth, NJ 07201
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Hayward Acquisition Corp.
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620 Division St., Elizabeth, NJ 07201
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Hayward Industries, Inc.
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620 Division St., Elizabeth, NJ 07201
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Hayward Industrial Products, Inc.
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620 Division St., Elizabeth, NJ 07201
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Goldline Properties LLC
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61 Whitecap Dr., North Kingston, RI 02852
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Hayward/Wright-Austin, Inc.
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620 Division St., Elizabeth, NJ 07201
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Webster Pumps, Inc.
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620 Division St., Elizabeth, NJ 07201
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SCHEDULE
2(b)
LOCATIONS
OF INVENTORY
|
Company
|
Address
|
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Hayward Industries, Inc.
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One Hayward Industrial Drive,
Clemmons, North Carolina
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61 Whitecap Drive,
North Kingstown, Rhode Island
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2935 and 2939 Sidco Drive,
Nashville, Tennessee
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2869 and 2875 Pomona Boulevard,
2870, 2876, 2880 and 2884 Surveyor Street,
159 Voyager Street,
126 Explorer Street,
Pomona, California
|
6220, 6240 and 6280 Clementine Drive,
(Warehouse Nos. 9, 8 and 7, respectively),
Hampton Industrial Park,
Clemmons, North Carolina
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2953 Sidco Drive,
Nashville, Tennessee (warehouse)
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316 Babb Drive,
Lebanon, Tennessee
(warehouse)
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Hayward Industrial Products, Inc.
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One Hayward Industrial Drive,
Clemmons, North Carolina
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6220, 6240 and 6280 Clementine Drive,
(Warehouse Nos. 9, 8 and 7, respectively),
Hampton Industrial Park,
Clemmons, North Carolina
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460 Podlin Drive,
Franklin Park, Illinois
(warehouse)
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SCHEDULE
3
PLEDGED
STOCK
|
Issuer
|
Holder
|
Certificate No.
|
No. Shares/ Interest
|
% of Issued and Outstanding Shares
|
|
Hayward Industries, Inc.
|
Hayward Intermediate, Inc.
|
1
|
1,000 shares
|
100%
|
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Hayward Industrial Products, Inc.
|
Hayward Industries, Inc.
|
1 (2,500 shares)
3 (10 shares)
|
2,510 shares
|
100%
|
|
Hayward/Wright- Austin, Inc.
|
Hayward Industrial Products, Inc.
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4
|
1,000 shares
|
100%
|
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Webster Pumps, Inc.
|
Hayward Industrial Products, Inc.
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3
|
1,000 shares
|
100%
|
|
Hayward Pool Products Canada, Inc. / Produits de Piscines Hayward Canada, Inc.
|
Hayward Industries, Inc.
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6
|
65 shares
|
65%
|
|
Hayward Enterprises Europe S.A.
|
Hayward Industries, Inc.
|
N/A
|
8,000 shares
|
100%
|
|
Hayward Pool Europe S.A.
|
Hayward Industries, Inc.
|
N/A
|
15,000,006 shares
|
91%
|
|
Hayward Consolidated Pty. Ltd.
|
Hayward Industries, Inc.
|
4
|
1.3 shares
|
65%
|
|
Hayward Industries (Wuxi) Co. Ltd.
|
Hayward Industries, Inc.
|
N/A
|
N/A
|
100%
|
|
Hayward Pool Products Trading (Shanghai) Co. Ltd.
|
Hayward Industries, Inc.
|
N/A
|
N/A
|
100%
|
|
Hayward Pool Acquisition, S.L.U.
|
Hayward Industries, Inc.
|
N/A
|
100 shares
|
100%
|
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Goldline Properties LLC
|
Hayward Industries, Inc.
|
N/A
|
N/A
|
100%
|
SCHEDULE
4
INSTRUMENTS
AND TANGIBLE CHATTEL PAPER
Promissory Notes/Instruments: None.
Tangible Chattel Paper: None.
SCHEDULE
5(a)
PATENTS
AND TRADEMARKS
PATENTS
|
REGISTERED OWNER
|
JURISDICTION
|
PATENT NO.
|
ISSUE DATE
|
DESCRIPTION
|
|
Hayward Industries, Inc.
|
United States
|
8,343,339
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1/1/2013
|
Apparatus for Facilitating Maintenance of a Pool Cleaning Device
|
|
Hayward Industries, Inc.
|
United States
|
8,307,485
|
11/13/2012
|
Apparatus for Facilitating Maintenance of a Pool Cleaning Device
|
|
Hayward Industries, Inc.
|
United States
|
8,678,026
|
3/25/2014
|
Automatic Increased-Suction Relief Apparatus
|
|
Hayward Industries, Inc.
|
United States
|
6,289,918
|
9/18/2001
|
Automatic Locking Bypass Valve For Liquid Suction Systems
|
|
Hayward Industries, Inc.
|
United States
|
6,460,564
|
10/8/2002
|
Automatic Locking bypass Valve For Liquid Suction Systems
|
|
Hayward Industries, Inc.
|
United States
|
8,297,920
|
10/30/2012
|
Booster Pump System for Pool Applications
|
|
Hayward Industries, Inc.
|
United States
|
8,734,098
|
5/27/2014
|
Booster Pump System for Pool Applications
|
|
Hayward Industries, Inc.
|
United States
|
8,328,240
|
12/11/2012
|
Bulkhead Fitting
|
|
Hayward Industries, Inc.
|
United States
|
D664,627
|
7/31/2012
|
Chlorinator
|
|
Hayward Industries, Inc.
|
United States
|
8,869,319
|
10/28/2014
|
Circular Suction Outlet Assembly and Cover
|
|
Hayward Industries, Inc.
|
United States
|
D613,829
|
4/13/2010
|
Circular Suction Outlet Assembly Cover Design
|
|
Hayward Industries, Inc.
|
United States
|
D663,701
|
7/17/2012
|
Controller for a Chlorinator
|
|
Hayward Industries, Inc.
|
United States
|
8,402,585
|
3/26/2013
|
Convertible Pressure/Suction Swimming Pool Cleaner
|
|
REGISTERED OWNER
|
JURISDICTION
|
PATENT NO.
|
ISSUE DATE
|
DESCRIPTION
|
|
Hayward Industries, Inc.
|
United States
|
6,706,175
|
3/16/2004
|
Debris-Capturing Apparatus For Pressure Cleaners
|
|
Hayward Industries, Inc.
|
United States
|
7,931,447
|
4/26/2011
|
Drain Safety and Pump Control Device
|
|
Hayward Industries, Inc.
|
United States
|
9,300,101
|
3/29/2016
|
Electric Cable Swivel and Related Fabrication Methods
|
|
Hayward Industries, Inc.
|
United States
|
9,392,711
|
7/12/2016
|
Electrical Junction Box with Built-In Isolation Transformer
|
|
Hayward Industries, Inc.
|
United States
|
7,774,870
|
8/17/2010
|
Elongated Suction Outlet Assembly with Intrinsically Safe Sump
|
|
Hayward Industries, Inc.
|
United States
|
9,630,127
|
4/25/2017
|
Filter Vessel Assembly and Related Methods of Use
|
|
Hayward Industries, Inc.
|
United States
|
6,004,458
|
12/21/1999
|
Filter/Sanitizer
|
|
Hayward Industries, Inc.
|
United States
|
7,677,268
|
3/16/2010
|
Fluid Distribution System for a Swimming Pool Cleaning Apparatus
|
|
Hayward Industries, Inc.
|
United States
|
6,171,073
|
1/9/2001
|
Fluid Vacuum Safety Device for Fluid Transfer and Circulation Systems
|
|
Hayward Industries, Inc.
|
United States
|
5,947,700
|
9/7/1999
|
Fluid Vacuum Safety Device For Fluid Transfer Systems in Swimming Pools
|
|
Hayward Industries, Inc.
|
United States
|
6,854,148
|
2/15/2005
|
Four-Wheel-Drive Automatic Pool Cleaner
|
|
Hayward Industries, Inc.
|
United States
|
9,695947
|
7/4/2017
|
Handle Insert For Valve
|
|
Hayward Industries, Inc.
|
United States
|
7,971,603
|
7/5/2011
|
Header for a Heat Exchanger
|
|
Hayward Industries, Inc.
|
United States
|
9,353,998
|
5/31/2016
|
Header for a Heat Exchanger
|
|
Hayward Industries, Inc.
|
United States
|
D574,938
|
8/12/2008
|
Heat Exchanger
|
|
REGISTERED OWNER
|
JURISDICTION
|
PATENT NO.
|
ISSUE DATE
|
DESCRIPTION
|
|
Hayward Industries, Inc.
|
United States
|
D539,882
|
4/3/2007
|
Heat Pump
|
|
Hayward Industries, Inc.
|
United States
|
6,733,046
|
5/11/2004
|
Hose Swivel Connection Apparatus
|
|
Hayward Industries, Inc.
|
United States
|
9,046,247
|
6/2/2015
|
Low-Profile Niche for Underwater Pool/Spa Lights
|
|
Hayward Industries, Inc.
|
United States
|
9,031,702
|
5/12/2015
|
Modular Pool/Spa Control System
|
|
Hayward Industries, Inc.
|
United States
|
9,285,790
|
3/15/2016
|
Modular Pool/Spa Control System
|
|
Hayward Industries, Inc.
|
United States
|
9,506,569
|
11/29/2016
|
Needle Valve
|
|
Hayward Industries, Inc.
|
United States
|
D630,808
|
1/11/2011
|
Pool Cleaner
|
|
Hayward Industries, Inc.
|
United States
|
D630,809
|
1/11/2011
|
Pool Cleaner
|
|
Hayward Industries, Inc.
|
United States
|
D598,168
|
8/11/2009
|
Pool Cleaner
|
|
Hayward Industries, Inc.
|
United States
|
D728,873
|
5/5/2015
|
Pool Cleaner
|
|
Hayward Industries, Inc.
|
United States
|
D787,760
|
5/23/2017
|
Pool Cleaner
|
|
Hayward Industries, Inc.
|
United States
|
D787,761
|
5/23/2017
|
Pool Cleaner
|
|
Hayward Industries, Inc.
|
United States
|
D789,003
|
6/6/2017
|
Pool Cleaner
|
|
Hayward Industries, Inc.
|
United States
|
D789,624
|
6/13/2017
|
Pool Cleaner
|
|
Hayward Industries, Inc.
|
United States
|
D537,576
|
2/27/2007
|
Pool Cleaner Housing
|
|
Hayward Industries, Inc.
|
United States
|
D550,906
|
9/11/2007
|
Pool Cleaner Housing
|
|
Hayward Industries, Inc.
|
United States
|
6,298,513
|
10/9/2001
|
Pool Cleaner with Open-Ended Pin Supported Flapper Valve
|
|
Hayward Industries, Inc.
|
United States
|
8,869,337
|
10/28/2014
|
Pool Cleaning Device With Adjustable Buoyant Element
|
|
Hayward Industries, Inc.
|
United States
|
9,677,294
|
6/13/2017
|
Pool Cleaning Device with Wheel Drive Assemblies
|
|
Hayward Industries, Inc.
|
United States
|
7,118,632
|
10/10/2006
|
Pool Cleaning Method and Device
|
|
Hayward Industries, Inc.
|
United States
|
D593,508
|
6/2/2009
|
Portable Controller for Swimming Pool or Spa Equipment
|
|
REGISTERED OWNER
|
JURISDICTION
|
PATENT NO.
|
ISSUE DATE
|
DESCRIPTION
|
|
Hayward Industries, Inc.
|
United States
|
9,502,907
|
11/22/2016
|
Power Supplies for Pool and Spa Equipment
|
|
Hayward Industries, Inc.
|
United States
|
9,501,072
|
11/22/2016
|
Programmable Temperature Control System for Pools & Spas
|
|
Hayward Industries, Inc.
|
United States
|
9,084,314
|
7/14/2015
|
Programmable Underwater Lighting System
|
|
Hayward Industries, Inc.
|
United States
|
D590,842
|
4/21/2009
|
Pump
|
|
Hayward Industries, Inc.
|
United States
|
D536,705S
|
2/13/2007
|
Pump Housing
|
|
Hayward Industries, Inc.
|
United States
|
D551,256
|
9/18/2007
|
A Combined Pump Housing and Pump Cap
|
|
Hayward Industries, Inc.
|
United States
|
D588,159
|
3/10/2009
|
Pump Housing
|
|
Hayward Industries, Inc.
|
United States
|
8,182,212
|
5/22/2012
|
Pump Housing Coupling
|
|
Hayward Industries, Inc.
|
United States
|
5,115,974
|
5/26/1992
|
Apparatus for providing a waterfall or a fountain
|
|
Hayward Industries, Inc.
|
United States
|
5,271,561
|
12/21/1993
|
Rotary jet hydrotherapy device and method
|
|
Hayward Industries, Inc.
|
United States
|
7,531,092
|
5/12/2009
|
Pump
|
|
Hayward Industries, Inc.
|
United States
|
9,593,502
|
3/14/2017
|
Swimming pool cleaner
|
|
Hayward Industries, Inc.
|
United States
|
D299,143
|
12/2711988
|
Pump
|
|
Hayward Industries, Inc.
|
United States
|
D333,341
|
2/16/1993
|
Multi-port valve handle
|
|
Hayward Industries, Inc.
|
United States
|
RE43,492
|
6/26/2012
|
Underwater Led Light
|
|
Hayward Industries, Inc.
|
United States
|
3,640,310
|
2/8/1972
|
Multiport Valve
|
|
Hayward Industries, Inc.
|
United States
|
4,823,837
|
4/25/1989
|
Skimmer Cover Plate
|
|
Hayward Industries, Inc.
|
United States
|
4,988,437
|
1/29/1991
|
In-line Leaf Trap
|
|
Hayward Industries, Inc.
|
United States
|
5,105,496
|
4/21/1992
|
Suction Cleaning Device
|
|
Hayward Industries, Inc.
|
United States
|
5,432,688
|
7/11/1995
|
Plastic Niche and Grounding Assembly therefor
|
|
REGISTERED OWNER
|
JURISDICTION
|
PATENT NO.
|
ISSUE DATE
|
DESCRIPTION
|
|
Hayward Industries, Inc.
|
United States
|
5,607,224
|
3/4/1997
|
Plastic Niche and Grounding Assembly Therefor
|
|
Hayward Industries, Inc.
|
United States
|
5,671,769
|
9/30/1997
|
Swing Check Valve and Method for Repairing Same
|
|
Hayward Industries, Inc.
|
United States
|
6,026,804
|
2/22/2000
|
Heater for Fluids
|
|
Hayward Industries, Inc.
|
United States
|
5,809,587
|
9/22/1998
|
Safety Device for a Suction Outlet
|
|
Hayward Industries, Inc.
|
United States
|
5,947,700
|
9/7/1999
|
Fluid Vacuum Safety Device for Fluid Transfer Systems in Swimming Pools
|
|
Hayward Industries, Inc.
|
United States
|
6,076,554
|
6/20/2000
|
Multiport Plug Valve with Selectable Port Exclusion
|
|
Hayward Industries, Inc.
|
United States
|
6,082,993
|
7/4/2000
|
Induced Draft Heater with Premixing Burners
|
|
Hayward Industries, Inc.
|
United States
|
7,168,120
|
1/30/2007
|
Pressure-fed Vacuum Swimming Pool Cleaning Robot
|
|
Hayward Industries, Inc.
|
United States
|
8,281,425
|
10/9/2012
|
Load Sensor Safety Vacuum Release System
|
|
Hayward Industries, Inc.
|
United States
|
D373,176
|
8/24/1996
|
A Combined Valve Indicator and Handle
|
|
Hayward Industries, Inc.
|
United States
|
D384,782
|
10/7/1997
|
Swimming Pool Cleaner Housing
|
|
Hayward Industries, Inc.
|
United States
|
D400,319
|
10/27/1998
|
Swimming Pool Cleaner Housing
|
|
Hayward Industries, Inc.
|
United States
|
D417,322
|
11/30/1999
|
Swimming Pool Cleaner Housing
|
|
Hayward Industries, Inc.
|
United States
|
D425,911
|
5/30/2000
|
Pump
|
|
Hayward Industries, Inc.
|
United States
|
D429,393
|
8/8/2000
|
Pool Cleaner Wheel
|
|
Hayward Industries, Inc.
|
United States
|
D433,545
|
11/7/2000
|
Swimming Pool Cleaner Housing
|
|
Hayward Industries, Inc.
|
United States
|
D443,737
|
6/12/2001
|
Four Wheel Pool Cleaner
|
|
Hayward Industries, Inc.
|
United States
|
D444,280
|
6/26/2001
|
Two Wheel Pool Cleaner
|
|
Hayward Industries, Inc.
|
United States
|
D443,959
|
6/19/2001
|
Pool Cleaner
|
|
Hayward Industries, Inc.
|
United States
|
D445,225
|
7/17/2001
|
Pool Cleaner
|
PATENT APPLICATIONS
|
REGISTERED OWNER
|
JURISDICTION
|
APPLICATION NO.
|
FILING DATE
|
DESCRIPTION
|
|
Hayward Industries, Inc.
|
United States
|
62/369,526
|
8/1/2016
|
Accent Lights with Junction Box Controller
|
|
Hayward Industries, Inc.
|
United States
|
14/212,516
|
3/14/2014
|
Automatic Electric Top Bottom Swimming Pool Cleaner with Internal Pumps
|
|
Hayward Industries, Inc.
|
United States
|
15/587,672
|
05/05/2017
|
Automatic Pool Cleaner Traction Correction
|
|
Hayward Industries, Inc.
|
United States
|
15/349,183
|
11/11/2016
|
Ball Valve
|
|
Hayward Industries, Inc.
|
United States
|
13/954,130
|
7/30/2013
|
Butterfly Valve
|
|
Hayward Industries, Inc.
|
United States
|
15/372,705
|
12/8/2016
|
Butterfly Valve
|
|
Hayward Industries, Inc.
|
United States
|
15/372,747
|
12/8/2016
|
Butterfly Valve
|
|
Hayward Industries, Inc.
|
United States
|
15/372,822
|
12/8/2016
|
Butterfly Valve
|
|
Hayward Industries, Inc.
|
United States
|
13/561,836
|
7/30/2012
|
Chlorinators and Replaceable Cell Cartridges Therefor
|
|
Hayward Industries, Inc.
|
United States
|
14/839,166
|
8/28/2015
|
Combined Ultraviolet and Ozone Fluid Sterilization System
|
|
Hayward Industries, Inc.
|
United States
|
15/208,011
|
7/12/2016
|
Electrical Junction Box with Built-In Isolation Transformer
|
|
Hayward Industries, Inc.
|
United States
|
14/210,804
|
3/14/2014
|
Filtration Media and Filtration Therefor
|
|
Hayward Industries, Inc.
|
United States
|
14/210,835
|
3/14/2014
|
Filtration Media and Filtration Therefor
|
|
REGISTERED OWNER
|
JURISDICTION
|
APPLICATION NO.
|
FILING DATE
|
DESCRIPTION
|
|
Hayward Industries, Inc.
|
United States
|
14/212,044
|
3/14/2014
|
Fluid Sanitization Assembly and Related Methods of Use
|
|
Hayward Industries, Inc.
|
United States
|
62/370,857
|
8/4/2016
|
Gas Switching Device And Associated Methods
|
|
Hayward Industries, Inc.
|
United States
|
14/805,913
|
7/22/2015
|
Gas-Evacuating Filter
|
|
Hayward Industries, Inc.
|
United States
|
15/592,364
|
05/11/2017
|
Hydrocyclonic Pool Cleaner
|
|
Hayward Industries, Inc.
|
United States
|
14/500,307
|
9/29/2014
|
Light With Expanding Compression Member
|
|
Hayward Industries, Inc.
|
United States
|
15/050,207
|
2/22/2016
|
Lighting System For An Environment And A Control Module For Use Therein
|
|
Hayward Industries, Inc.
|
United States
|
14/204,352
|
3/11/2014
|
Local Feature Controller for Pool and Spa Equipment
|
|
Hayward Industries, Inc.
|
United States
|
14/727,030
|
6/1/2015
|
Low-Profile Niche for Underwater Pool/Spa Lights
|
|
Hayward Industries, Inc.
|
United States
|
14/211,461
|
3/14/2014
|
Modular Pool/Spa Control System
|
|
Hayward Industries, Inc.
|
United States
|
15/634,462
|
6/27/2017
|
Multi-Position Valve
|
|
Hayward Industries, Inc.
|
United States
|
15/592,371
|
05/11/2017
|
Pool Cleaner Caddy with Removable Wheel Assemblies
|
|
Hayward Industries, Inc.
|
United States
|
15/592,285
|
05/11/2017
|
Pool Cleaner Caddy with Retention Mechanism
|
|
Hayward Industries, Inc.
|
United States
|
15/592,244
|
05/11/2017
|
Pool Cleaner Canister Handle
|
|
Hayward Industries, Inc.
|
United States
|
15/592,254
|
05/11/2017
|
Pool Cleaner Check Valve
|
|
Hayward Industries, Inc.
|
United States
|
15/592,266
|
05/11/2017
|
Pool Cleaner Filter Medium
|
|
Hayward Industries, Inc.
|
United States
|
15/592,377
|
05/11/2017
|
Pool Cleaner Impeller Subassembly
|
|
REGISTERED OWNER
|
JURISDICTION
|
APPLICATION NO.
|
FILING DATE
|
DESCRIPTION
|
|
Hayward Industries, Inc.
|
United States
|
15/592,307
|
05/11/2017
|
Pool Cleaner Power Coupling
|
|
Hayward Industries, Inc.
|
United States
|
15/592,398
|
05/11/2017
|
Pool Cleaner Power Coupling
|
|
Hayward Industries, Inc.
|
United States
|
15/592,352
|
05/11/2017
|
Pool Cleaner Power Supply
|
|
Hayward Industries, Inc.
|
United States
|
15/592,277
|
05/11/2017
|
Pool Cleaner Power Supply with Kickstand
|
|
Hayward Industries, Inc.
|
United States
|
15/592,392
|
05/11/2017
|
Pool Cleaner Roller Assembly
|
|
Hayward Industries, Inc.
|
United States
|
15/592,335
|
05/11/2017
|
Pool Cleaner Roller Latch
|
|
Hayward Industries, Inc.
|
United States
|
14/209,461
|
3/13/2014
|
Pool Cleaner with Articulated Cleaning Members
|
|
Hayward Industries, Inc.
|
United States
|
14/994,653
|
1/13/2016
|
Pool Cleaner With Capacitive Water Sensor
|
|
Hayward Industries, Inc.
|
United States
|
15/592,384
|
05/11/2017
|
Pool Cleaner Modular Drivetrain
|
|
Hayward Industries, Inc.
|
United States
|
15/049,888
|
2/22/2016
|
Pool Cleaner With Optical Out-Of- Water And Debris Detection
|
|
Hayward Industries, Inc.
|
United States
|
15/359,016
|
11/22/2016
|
Power Supplies for Pool and Spa Equipment
|
|
Hayward Industries, Inc.
|
United States
|
15/359,046
|
11/22/2016
|
Power Supplies for Pool and Spa Equipment
|
|
Hayward Industries, Inc.
|
United States
|
15/359,112
|
11/22/2016
|
Programmable Temperature Control System for Pools & Spas
|
|
Hayward Industries, Inc.
|
United States
|
13/159,161
|
6/13/2011
|
Sealing Device for an Immersible Pump
|
|
Hayward Industries, Inc.
|
United States
|
62/398,228
|
9/22/2016
|
Self-Priming Dedicated Water Feature Pump
|
|
Hayward Industries, Inc.
|
United States
|
15/646,678
|
7/11/2017
|
Self-Priming Dedicated Water Feature Pump
|
|
REGISTERED OWNER
|
JURISDICTION
|
APPLICATION NO.
|
FILING DATE
|
DESCRIPTION
|
|
Hayward Industries, Inc.
|
United States
|
15/200,040
|
7/1/2016
|
Spade Connector And Associated Systems And Methods
|
|
Hayward Industries, Inc.
|
United States
|
14/464,947
|
8/21/2014
|
Swimming Pool Cleaner
|
|
Hayward Industries, Inc.
|
United States
|
14/489,240
|
9/17/2014
|
Swimming Pool Cleaner
|
|
Hayward Industries, Inc.
|
United States
|
14/489,259
|
9/17/2014
|
Swimming Pool Cleaner
|
|
Hayward Industries, Inc.
|
United States
|
15/006,869
|
1/26/2016
|
Swimming Pool Cleaner With Hydrocyclonic Particle Separator And/Or Six-Roller Drive System
|
|
Hayward Industries, Inc.
|
United States
|
15/345,617
|
11/8/2016
|
Swimming Pool Deck Jet System And Associated Methods
|
|
Hayward Industries, Inc.
|
United States
|
62/348,186
|
6/10/2016
|
Swimming Pool Heat Exchangers And Associated Systems And Methods
|
|
Hayward Industries, Inc.
|
United States
|
15/617,760
|
6/8/2017
|
Swimming Pool Heat Exchangers And Associated Systems And Methods
|
|
Hayward Industries, Inc.
|
United States
|
14/207,110
|
3/12/2014
|
Swimming Pool Pressure Cleaner Including Automatic Timing Mechanism
|
|
Hayward Industries, Inc.
|
United States
|
14/487,846
|
9/16/2014
|
Swimming Pool Pressure Cleaner Including Automatic Timing Mechanism
|
|
Hayward Industries, Inc.
|
United States
|
14/213,172
|
3/14/2014
|
System and Method for Dynamic Device Discovery and Address Assignment
|
|
Hayward Industries, Inc.
|
United States
|
14/228,689
|
3/28/2014
|
System and Method for Presenting a Sales Demonstration Using a Pool/Spa Controller User Interface
|
|
REGISTERED OWNER
|
JURISDICTION
|
APPLICATION NO.
|
FILING DATE
|
DESCRIPTION
|
|
Hayward Industries, Inc.
|
United States
|
13/562,128
|
7/30/2012
|
Systems and Methods for Controlling Chlorinators
|
|
Hayward Industries, Inc.
|
United States
|
15/115,125
|
7/28/2016
|
Systems and Methods for Interrelated Control of Chlorinators and Pumps
|
|
Hayward Industries, Inc.
|
United States
|
62/381,903
|
8/31/2016
|
Systems and Methods for Providing Network Connectivity and Remote Monitoring, Optimization, and Control of Pool/Spa Equipment
|
|
Hayward Industries, Inc.
|
United States
|
62/412,504
|
10/25/2016
|
Systems and Methods for Providing Network Connectivity and Remote Monitoring, Optimization, and Control of Pool/Spa Equipment
|
|
Hayward Industries, Inc.
|
United States
|
62/414,545
|
10/28/2016
|
Systems and Methods for Providing Network Connectivity and Remote Monitoring, Optimization, and Control of Pool/Spa Equipment
|
|
Hayward Industries, Inc.
|
United States
|
15/413,095
|
1/23/2017
|
Systems and Methods for Providing Network Connectivity and Remote Monitoring, Optimization, and Control of Pool/Spa Equipment
|
|
Hayward Industries, Inc.
|
United States
|
15/413,117
|
1/23/2017
|
Systems and Methods for Providing Network Connectivity and Remote Monitoring, Optimization, and Control of Pool/Spa Equipment
|
|
Hayward Industries, Inc.
|
United States
|
15/413,128
|
1/23/2017
|
Systems and Methods for Providing Network Connectivity and Remote Monitoring, Optimization, and Control of Pool/Spa Equipment
|
|
REGISTERED OWNER
|
JURISDICTION
|
APPLICATION NO.
|
FILING DATE
|
DESCRIPTION
|
|
Hayward Industries, Inc.
|
United States
|
15/413,141
|
1/23/2017
|
Systems and Methods for Providing Network Connectivity and Remote Monitoring, Optimization, and Control of Pool/Spa Equipment
|
|
Hayward Industries, Inc.
|
United States
|
15/413,111
|
1/23/2017
|
Systems and Methods for Providing Network Connectivity and Remote Monitoring, Optimization, and Control of Pool/Spa Equipment (Chem-Auto)
|
|
Hayward Industries, Inc.
|
United States
|
15/413,217
|
1/23/2017
|
Systems and Methods for Providing Network Connectivity and Remote Monitoring, Optimization, and Control of Pool/Spa Equipment (Cleaners)
|
|
Hayward Industries, Inc.
|
United States
|
15/413,020
|
1/23/2017
|
Systems and Methods for Providing Network Connectivity and Remote Monitoring, Optimization, and Control of Pool/Spa Equipment (Heaters)
|
|
Hayward Industries, Inc.
|
United States
|
15/413,224
|
1/23/2017
|
Systems and Methods for Providing Network Connectivity and Remote Monitoring, Optimization, and Control of Pool/Spa Equipment (Lighting)
|
|
Hayward Industries, Inc.
|
United States
|
15/413,074
|
1/23/2017
|
Systems and Methods for Providing Network Connectivity and Remote Monitoring, Optimization, and Control of Pool/Spa Equipment (Pumps)
|
|
REGISTERED OWNER
|
JURISDICTION
|
APPLICATION NO.
|
FILING DATE
|
DESCRIPTION
|
|
Hayward Industries, Inc.
|
United States
|
15/413,145
|
1/23/2017
|
Systems and Methods for Providing Network Connectivity and Remote Monitoring, Optimization, and Control of Pool/Spa Equipment (Valve Actuator)
|
|
Hayward Industries, Inc.
|
United States
|
15/413,174
|
1/23/2017
|
Systems and Methods for Providing Network Connectivity and Remote Monitoring, Optimization, and Control of Pool/Spa Equipment (Water Features)
|
|
Hayward Industries, Inc.
|
United States
|
15/413,199
|
1/23/2017
|
Systems and Methods for Providing Network Connectivity and Remote Monitoring, Optimization, and Control of Pool/Spa Equipment (Wiring Hub)
|
|
Hayward Industries, Inc.
|
United States
|
62/474,333
|
3/21/2017
|
Systems and Methods for Sanitizing Pool and Spa Water
|
|
Hayward Industries, Inc.
|
United States
|
13/562,043
|
7/30/2012
|
Systems and Methods for User- Installable Chlorinators
|
|
Hayward Industries, Inc.
|
United States
|
14/600,515
|
1/20/2015
|
Thermally-Dissipative Flow Sensor System
|
|
Hayward Industries, Inc.
|
United States
|
15/183,961
|
6/16/2016
|
Top-Bottom Pool Cleaner Including A Nose
|
|
Hayward Industries, Inc.
|
United States
|
14/208,855
|
3/13/2014
|
Underwater LED Light with Replacement Indicator
|
|
Hayward Industries, Inc.
|
United States
|
12/769,038
|
4/28/2010
|
Underwater Light Having a Sealed Polymer Housing and Method of Manufacture Therefor
|
|
REGISTERED OWNER
|
JURISDICTION
|
APPLICATION NO.
|
FILING DATE
|
DESCRIPTION
|
|
Hayward Industries, Inc.
|
United States
|
13/786,739
|
3/6/2013
|
Underwater Light Having a Sealed Polymer Housing and Method of Manufacture Therefor
|
|
Hayward Industries, Inc.
|
United States
|
13/840,751
|
3/15/2013
|
Underwater Lighting System With Bather Detection Circuitry
|
|
Hayward Industries, Inc.
|
United States
|
14/205,936
|
3/12/2014
|
Underwater Lighting System With Bather Detection Circuitry
|
|
Hayward Industries, Inc.
|
United States
|
13/034,389
|
2/24/2011
|
Universal Mount for a Variable Speed Pump Drive User Interface
|
|
Hayward Industries, Inc.
|
United States
|
14/526,299
|
10/28/2014
|
Velocity Reducing Port for a Pool Filter
|
|
Hayward Industries, Inc.
|
United States
|
14/337,873
|
7/22/2014
|
Venturi By-Pass System And Associated Methods
|
|
Hayward Industries, Inc.
|
United States
|
14/734,577
|
6/9/2015
|
Water-Cooled Electronic Inverter
|
|
Hayward Industries, Inc.
|
United States
|
11/946,267
|
11/28/2007
|
Buoyant Remote Control Unit for Swimming Pools and Spas
|
|
Hayward Industries, Inc.
|
United States
|
12/017,659
|
1/22/2008
|
Heat Exchangers and Headers Therefor
|
|
Hayward Industries, Inc.
|
United States
|
12/343,729
|
12/24/2008
|
Method and Apparatus for Forming a Thermal Interface for an Electronic Assembly
|
|
Hayward Industries, Inc.
|
United States
|
12/769,038
|
4/28/2010
|
Underwater Light Having A Sealed Hayward Industries, Inc. Polymer Housing and Method of Manufacture Therefor
|
|
REGISTERED OWNER
|
JURISDICTION
|
APPLICATION NO.
|
FILING DATE
|
DESCRIPTION
|
|
Hayward Industries, Inc.
|
United States
|
13/601,436
|
8/31/2012
|
Pool Cleaning Device With Adjustable Buoyant Element
|
|
Hayward Industries, Inc.
|
United States
|
13/786,739
|
3/6/2013
|
Underwater Light Having a Sealed Polymer Housing and Method of Manufacture Therefor
|
|
Hayward Industries, Inc.
|
United States
|
13/897,623
|
5/20/2013
|
Dynamic Ultraviolet Lamp Ballast System
|
|
Hayward Industries, Inc.
|
United States
|
14/207,110
|
3/12/2014
|
Swimming Pool Pressure Cleaner Including Automatic Timing Mechanism
|
|
Hayward Industries, Inc.
|
United States
|
14/209,461
|
3/13/2014
|
Pool Cleaner with Articulated Cleaning Members
|
|
Hayward Industries, Inc.
|
United States
|
14/213,676
|
3/14/2014
|
Pool Cleaner Drive Mechanism And Associated Systems and Methods
|
|
Hayward Industries, Inc.
|
United States
|
14/212,516
|
3/14/2014
|
Automatic Electric Top Bottom Swimming Pool Cleaner with Internal Pumps
|
|
Hayward Industries, Inc.
|
United States
|
14/206,374
|
3/12/2014
|
Vertical Slide Backwash Valve
|
|
Hayward Industries, Inc.
|
United States
|
14/210,804
|
3/14/2014
|
Filtration Media and Filter Therefor
|
|
Hayward Industries, Inc.
|
United States
|
14/210,835
|
3/14/2014
|
Filtration Media and Filter Therefor
|
|
Hayward Industries, Inc.
|
United States
|
14/207,893
|
3/13/2014
|
Swimming Pool Cleaner With Docking System And/Or Other Related Systems And Methods
|
|
Hayward Industries, Inc.
|
United States
|
14/212,044
|
3/14/2014
|
Fluid Sanitization Assembly And Related Methods of Use
|
|
REGISTERED OWNER
|
JURISDICTION
|
APPLICATION NO.
|
FILING DATE
|
DESCRIPTION
|
|
Hayward Industries, Inc.
|
United States
|
14/205,936
|
3/12/2014
|
Underwater Lighting System With Bather Detection Circuitry
|
|
Hayward Industries, Inc.
|
United States
|
13/840,751
|
3/15/2013
|
Underwater Lighting System With Bather Detection Circuitry
|
|
Hayward Industries, Inc.
|
United States
|
14/208,247
|
3/13/2014
|
Electric Hose Swivel For Skimmer Attachment
|
|
Hayward Industries, Inc.
|
United States
|
14/204,352
|
3/11/2014
|
Local Feature Controller For Pool and Spa Equipment
|
|
Hayward Industries, Inc.
|
United States
|
14/211,461
|
3/14/2014
|
Modular Pool / Spa Control System
|
|
Hayward Industries, Inc.
|
United States
|
14/213,172
|
3/14/2014
|
System And Method For Dynamic Device Discovery and Address Assignment
|
|
Hayward Industries, Inc.
|
United States
|
13/954,130
|
7/30/2013
|
Butterfly Valve
|
|
Hayward Industries, Inc.
|
United States
|
14/020,632
|
9/06/2013
|
Treaded Insert
|
|
Hayward Industries, Inc.
|
United States
|
14/526,299
|
10/28/2014
|
Velocity Reducing Pool Filter Port
|
|
Hayward Industries, Inc.
|
United States
|
14/727,030
|
6/1/2015
|
Low-Profile Niche for Underwater Pool/Spa Lights
|
|
Hayward Industries, Inc.
|
United States
|
14/228,689
|
3/28/2014
|
System and Method for Presenting a Sales Demonstration Using a Pool/Spa Controller User Interface
|
|
Hayward Industries, Inc.
|
United States
|
14/691,148
|
4/20/2015
|
Valve Switchbox
|
|
Hayward Industries, Inc.
|
United States
|
14/706,502
|
5/7/2017
|
Pool Cleaning Device Having Relief Formed in a Base Portion Thereof
|
|
Hayward Industries, Inc.
|
United States
|
14/734,577
|
6/9/2015
|
Water-Cooled Electronic Inverter
|
|
Hayward Industries, Inc.
|
United States
|
14/600,515
|
1/20/2015
|
Thermally-Dissipative Flow Sensor System
|
|
REGISTERED OWNER
|
JURISDICTION
|
APPLICATION NO.
|
FILING DATE
|
DESCRIPTION
|
|
Hayward Industries, Inc.
|
United States
|
14/801,439
|
7/16/2015
|
Unitary Filter Tank And An Underdrain For Filtering A Body Of Water
|
|
Hayward Industries, Inc.
|
United States
|
14/805,913
|
7/22/2015
|
Gas-Evacuating Filter
|
|
Hayward Industries, Inc.
|
United States
|
14/337,873
|
7/22/2014
|
Venturi By-Pass System And Associated Methods
|
|
Hayward Industries, Inc.
|
United States
|
14/932,363
|
11/4/2015
|
Pool Filter with Integrated Pump
|
|
Hayward Industries, Inc.
|
United States
|
14/994,653
|
1/13/2016
|
Pool Cleaner With Capacitive Water Sensor
|
|
Hayward Industries, Inc.
|
United States
|
15/006,869
|
1/26/2016
|
Swimming Pool Cleaner With Hydrocyclonic Particle Separator And/Or Six-Roller Dnve System
|
|
Hayward Industries, Inc.
|
United States
|
15/04,988
|
2/22/2016
|
Pool Cleaner With Optical Out-Of- Water and Debris Detection
|
|
Hayward Industries, Inc.
|
United States
|
15/208,011
|
7/12/2016
|
Electrical Junction Box With Built- in Isolation Transformer
|
|
Hayward Industries, Inc.
|
United States
|
15/115,125
|
1/28/2014
|
Systems and Methods for Interrelated Control of Chlorinators and Pumps
|
|
Hayward Industries, Inc.
|
United States
|
15/200,040
|
7/1/2016
|
Spade Connector And Associated Systems And Methods
|
|
Hayward Industries, Inc.
|
United States
|
15/359,016
|
11/22/2016
|
Power Supplies for Pool and Spa Equipment
|
|
Hayward Industries, Inc.
|
United States
|
15/359,046
|
11/22/2016
|
Power Supplies for Pool and Spa Equipment
|
|
Hayward Industries, Inc.
|
United States
|
15/372,705
|
12/8/2016
|
Butterfly Valve
|
|
Hayward Industries, Inc.
|
United States
|
15/372,747
|
12/8/2016
|
Butterfly Valve
|
|
Hayward Industries, Inc.
|
United States
|
15/372,822
|
12/8/2016
|
Butterfly Valve
|
|
REGISTERED OWNER
|
JURISDICTION
|
APPLICATION NO.
|
FILING DATE
|
DESCRIPTION
|
|
Hayward Industries, Inc.
|
United States
|
15/345,617
|
11/8/2016
|
Swimming Pool Deck Jet System and Associated Methods
|
|
Hayward Industries, Inc.
|
United States
|
15/349,183
|
11/11/2016
|
Ball Valve
|
|
Hayward Industries, Inc.
|
United States
|
13/722,112
|
12/20/2012
|
Apparatus for Facilitating Maintenance of a Pool Cleaning Device
|
|
Hayward Industries, Inc.
|
United States
|
14/208,855
|
3/13/2014
|
Underwater Led Light with Replacement Indicator
|
|
Hayward Industries, Inc.
|
United States
|
14/500,307
|
9/29/2014
|
Light with Expanding Compression Member
|
|
Hayward Industries, Inc.
|
United States
|
14/487,846
|
9/16/2014
|
Swimming Pool Pressure Cleaner Including Automatic Timing Mechanism
|
|
Hayward Industries, Inc.
|
United States
|
14/839,166
|
8/28/2015
|
Combined Ultraviolet and Ozone Fluid Sterilization System
|
|
Hayward Industries, Inc.
|
United States
|
15/050,207
|
2/22/2016
|
Lighting System for an Environment and a Control Module for Use Therein
|
|
Hayward Industries, Inc.
|
United States
|
11/127,749
|
5/12/2005
|
Debris Bag for a Swimming Pool Cleaning Apparatus
|
|
Hayward Industries, Inc.
|
United States
|
11/528,493
|
9/27/2006
|
Heat Pump System Having a Defrost mechanism for Low Ambient Air Temperature Operation
|
|
Hayward Industries, Inc.
|
United States
|
11/585,650
|
10/24/2006
|
Filter Housing and Parts Therefor
|
|
Hayward Industries, Inc.
|
United States
|
11/704,717
|
2/9/2007
|
Programmable Aerator Cooling System
|
|
Hayward Industries, Inc.
|
United States
|
11/770,831
|
6/29/2007
|
Pool Cleaner Storage Device
|
|
Hayward Industries, Inc.
|
United States
|
11/789,870
|
4/26/2007
|
Heat Exchanger
|
|
Hayward Industries, Inc.
|
United States
|
11/975,254
|
10/18/2007
|
Pump
|
|
REGISTERED OWNER
|
JURISDICTION
|
APPLICATION NO.
|
FILING DATE
|
DESCRIPTION
|
|
Hayward Industries, Inc.
|
United States
|
11/975,287
|
10/18/2007
|
Debris Bag for a Swimming Pool Cleaning Apparatus
|
|
Hayward Industries, Inc.
|
United States
|
12/163,126
|
6/27/2008
|
Drain Safety and Pump Control Device with Verification
|
|
Hayward Industries, Inc.
|
United States
|
12/394,157
|
2/27/2009
|
Sealing System for Pressure Vessels
|
|
Hayward Industries, Inc.
|
United States
|
12/435,659
|
5/5/2009
|
Combination Venturi Check Valve
|
|
Hayward Industries, Inc.
|
United States
|
12/693,832
|
1/26/2010
|
True Union Quick-disconnect Cam- lock End Connector
|
|
Hayward Industries, Inc.
|
United States
|
13/034,542
|
2/24/2011
|
Pump Controller with External Device Control Capability
|
|
Hayward Industries, Inc.
|
United States
|
13/568,838
|
8/7/2012
|
Debris-capturing Apparatus for Cleaner
|
|
Hayward Industries, Inc.
|
United States
|
14/222,892
|
3/24/2014
|
Automatic Increased-suction Relief Apparatus
|
|
Hayward Industries, Inc.
|
United States
|
14/337,396
|
7/22/2014
|
Swimming Pool Cleaner with a Rigid Debris Canister
|
TRADEMARKS
|
REGISTERED OWNER
|
JURISDICTION
|
REG. NO.
|
REG. DATE
|
TRADEMARK
|
|
Hayward Industries, Inc.
|
United States
|
3,693,133
|
10/06/2009
|
AQUA CONNECT
|
|
Hayward Industries, Inc.
|
United States
|
3,963,248
|
05/17/2011
|
AQUA CONNECT
|
|
Hayward Industries, Inc.
|
United States
|
3,464,568
|
07/08/2008
|
AQUA PLUS
|
|
Hayward Industries, Inc.
|
United States
|
3,871,629
|
11/02/2010
|
AQUA POD
|
|
Hayward Industries, Inc.
|
United States
|
3,704,835
|
11/03/2009
|
AQUA RITE
|
|
Hayward Industries, Inc.
|
United States
|
2,199,560
|
10/27/1998
|
AQUA RITE (Stylized)
|
|
Hayward Industries, Inc.
|
United States
|
2,770,932
|
10/07/2003
|
AQUA SOLAR
|
|
Hayward Industries, Inc.
|
United States
|
2,454,049
|
05/22/2001
|
AQUA TROL
|
|
REGISTERED OWNER
|
JURISDICTION
|
REG. NO.
|
REG. DATE
|
TRADEMARK
|
|
Hayward Industries, Inc.
|
United States
|
2,184,852
|
08/25/1998
|
AQUABUG
|
|
Hayward Industries, Inc.
|
United States
|
2,234,984
|
03/23/1999
|
AQUACRITTER
|
|
Hayward Industries, Inc.
|
United States
|
2,920,213
|
01/18/2005
|
AQUADRIVE
|
|
Hayward Industries, Inc.
|
United States
|
1,383,031
|
02/18/1986
|
AQUADROID
|
|
Hayward Industries, Inc.
|
United States
|
4,993,931
|
07/05/2016
|
AQUANAUT
|
|
Hayward Industries, Inc.
|
United States
|
1,620,986
|
11/06/1990
|
AQUAPILOT (Stylized)
|
|
Hayward Industries, Inc.
|
United States
|
4,125,679
|
04/10/2012
|
AQUARAY
|
|
Hayward Industries, Inc.
|
United States
|
1,107,778
|
12/05/1978
|
AQUA-VAC
|
|
Hayward Industries, Inc.
|
United States
|
3,612,167
|
04/28/2009
|
CAT 1000
|
|
Hayward Industries, Inc.
|
United States
|
3,612,168
|
04/28/2009
|
CAT 2000
|
|
Hayward Industries, Inc.
|
United States
|
5,022,967
|
08/16/2016
|
CAT 3500
|
|
Hayward Industries, Inc.
|
United States
|
3,612,169
|
04/28/2009
|
CAT 4000
|
|
Hayward Industries, Inc.
|
United States
|
3,612,170
|
04/28/2009
|
CAT 5000
|
|
Hayward Industries, Inc.
|
United States
|
4,893,384
|
01/26/2016
|
CAT 5500
|
|
Hayward Industries, Inc.
|
United States
|
3,626,278
|
05/26/2009
|
CAT CONTROLLERS
|
|
Hayward Industries, Inc.
|
United States
|
2,865,720
|
07/20/2004
|
COLORLOGIC
|
|
Hayward Industries, Inc.
|
United States
|
4,255,001
|
12/04/2012
|
CRYSTALOGIC
|
|
Hayward Industries, Inc.
|
United States
|
3,077,736
|
04/04/2006
|
DIVER DAVE
|
|
Hayward Industries, Inc.
|
United States
|
3,788,135
|
05/11/2010
|
EASY TEMP
|
|
Hayward Industries, Inc.
|
United States
|
3,623,810
|
05/19/2009
|
ECOMMAND
|
|
Hayward Industries, Inc.
|
United States
|
3,935,362
|
03/22/2011
|
ECOSTAR
|
|
Hayward Industries, Inc.
|
United States
|
3,829,566
|
08/03/2010
|
ES HAYWARD ENERGY SOLUTIONS and Design
|
|
Hayward Industries, Inc.
|
United States
|
1,502,090
|
08/30/1988
|
FIRETILE (Stylized)
|
|
Hayward Industries, Inc.
|
United States
|
1,600,619
|
06/12/1990
|
GOLDLINE
|
|
Hayward Industries, Inc.
|
United States
|
3,455,440
|
06/24/2008
|
GOLDLINE CONTROLS
|
|
Hayward Industries, Inc.
|
United States
|
1,132,980
|
04/15/1980
|
H & Design
|
|
Hayward Industries, Inc.
|
United States
|
4,016,737
|
08/23/2011
|
H & Design
|
|
Hayward Industries, Inc.
|
United States
|
4,118,702
|
03/27/2012
|
H HAYWARD & Design
|
|
REGISTERED OWNER
|
JURISDICTION
|
REG. NO.
|
REG. DATE
|
TRADEMARK
|
|
Hayward Industries, Inc.
|
United States
|
3,969,301
|
05/31/2011
|
HAYWARD
|
|
Hayward Industries, Inc.
|
United States
|
1,058,211
|
02/08/1977
|
HAYWARD
|
|
Hayward Industries, Inc.
|
United States
|
2,921,665
|
01/25/2005
|
HAYWARD ELITE
|
|
Hayward Industries, Inc.
|
United States
|
3,667,638
|
08/11/2009
|
HAYWARD ENERGY SOLUTIONS
|
|
Hayward Industries, Inc.
|
United States
|
3,489,930
|
08/19/2008
|
HAYWARD VIIO TURBO
|
|
Hayward Industries, Inc.
|
United States
|
3,588,085
|
03/10/2009
|
HAYWARD VIIO TURBO (Stylized)
|
|
Hayward Industries, Inc.
|
United States
|
2,961,464
|
06/07/2005
|
HEATPRO
|
|
Hayward Industries, Inc.
|
United States
|
4,257,942
|
12/11/2012
|
JIFFY NICHE
|
|
Hayward Industries, Inc.
|
United States
|
4,585,468
|
08/12/2014
|
LIFESTAR
|
|
Hayward Industries, Inc.
|
United States
|
2,124,181
|
12/23/1997
|
NAVIGATOR
|
|
Hayward Industries, Inc.
|
United States
|
4,672,840
|
01/13/2015
|
OMNILOGIC
|
|
Hayward Industries, Inc.
|
United States
|
3,839,066
|
08/24/2010
|
ONCOMMAND
|
|
Hayward Industries, Inc.
|
United States
|
2,055,038
|
04/22/1997
|
PERFLEX
|
|
Hayward Industries, Inc.
|
United States
|
3,489,931
|
08/19/2008
|
PHANTOM TURBO
|
|
Hayward Industries, Inc.
|
United States
|
3,499,911
|
09/09/2008
|
PHANTOM TURBO (Stylized)
|
|
Hayward Industries, Inc.
|
United States
|
5,055,736
|
10/04/2016
|
PHOENIX
|
|
Hayward Industries, Inc.
|
United States
|
2,422,021
|
01/16/2001
|
POOL VAC ULTRA
|
|
Hayward Industries, Inc.
|
United States
|
3,612,163
|
04/28/2009
|
POOLCOMM
|
|
Hayward Industries, Inc.
|
United States
|
2,075,752
|
07/01/1997
|
POWER-FLO
|
|
Hayward Industries, Inc.
|
United States
|
3,101,841
|
06/06/2006
|
POWERFLO MATRIX
|
|
Hayward Industries, Inc.
|
United States
|
3,538,131
|
11/25/2008
|
PRO LOGIC
|
|
Hayward Industries, Inc.
|
United States
|
4,667,908
|
01/06/2015
|
PURE-BLU
|
|
Hayward Industries, Inc.
|
United States
|
4,573,094
|
07/22/2014
|
SALINE C
|
|
Hayward Industries, Inc.
|
United States
|
4,255,050
|
12/04/2012
|
SALT & SWIM
|
|
Hayward Industries, Inc.
|
United States
|
3,640,451
|
06/16/2009
|
SENSE AND DISPENSE
|
|
Hayward Industries, Inc.
|
United States
|
4,023,757
|
09/06/2011
|
SHARKVAC BY HAYWARD
|
|
Hayward Industries, Inc.
|
United States
|
2,114,157
|
11/18/1997
|
SKIM-MASTER
|
|
REGISTERED OWNER
|
JURISDICTION
|
REG. NO.
|
REG. DATE
|
TRADEMARK
|
|
Hayward Industries, Inc.
|
United States
|
2,191,368
|
09/22/1998
|
SMARTDRIVE
|
|
Hayward Industries, Inc.
|
United States
|
3,652,589
|
07/07/2009
|
STRATUM
|
|
Hayward Industries, Inc.
|
United States
|
1,518,655
|
01/03/1989
|
SUPER PUMP
|
|
Hayward Industries, Inc.
|
United States
|
4,335,834
|
05/14/2013
|
SURE-TUFF
|
|
Hayward Industries, Inc.
|
United States
|
2,063,080
|
05/20/1997
|
SWIM PRO
|
|
Hayward Industries, Inc.
|
United States
|
3,280,886
|
08/14/2007
|
SWIM PURE PLUS
|
|
Hayward Industries, Inc.
|
United States
|
3,280,894
|
08/14/2007
|
SWIM PURE PLUS & Design
|
|
Hayward Industries, Inc.
|
United States
|
4,117,446
|
03/27/2012
|
TANK-TITE
|
|
Hayward Industries, Inc.
|
United States
|
2,346,109
|
04/25/2000
|
TIGERSHARK & Design
|
|
Hayward Industries, Inc.
|
United States
|
3,687,673
|
09/22/2009
|
TOTAL POOL MANAGEMENT
|
|
Hayward Industries, Inc.
|
United States
|
3,190,201
|
12/26/2006
|
TRISTAR
|
|
Hayward Industries, Inc.
|
United States
|
4,993,932
|
07/05/2016
|
TRIVAC
|
|
Hayward Industries, Inc.
|
United States
|
3,156,434
|
10/17/2006
|
TURBO CELL
|
|
Hayward Industries, Inc.
|
United States
|
3,976,710
|
06/14/2011
|
VARI-FLO
|
|
Hayward Industries, Inc.
|
United States
|
4,974,303
|
06/07/2016
|
V-FLEX
|
|
Hayward Industries, Inc.
|
United States
|
3,489,929
|
08/19/2008
|
VIIO TURBO
|
|
Hayward Industries, Inc.
|
United States
|
3,099,241
|
05/30/2006
|
WANDA THE WHALE
|
|
Hayward Industries, Inc.
|
United States
|
3,047,028
|
01/17/2006
|
XSTREAM
|
|
Hayward Industries, Inc.
|
United States
|
3,198,500
|
01/16/2007
|
XSTREAM & Design
|
TRADEMARK APPLICATIONS
|
APPLICANT
|
JURISDICTION
|
SERIAL NO.
|
FILING DATE
|
TRADEMARK
|
|
Hayward Industrial Properties, Inc.
|
United States
|
87/369,104
|
03/13/2017
|
HAYWARD FILTRATION
|
|
Hayward Industries, Inc.
|
United States
|
87/290,262
|
01/05/2017
|
HEXADRIVE
|
|
Hayward Industries, Inc.
|
United States
|
87/290,350
|
01/05/2017
|
HYDRORITE UVO3
|
|
Hayward Industries, Inc.
|
United States
|
87/290,252
|
01/05/2017
|
OPTISENSE
|
|
Hayward Industries, Inc.
|
United States
|
87/368,985
|
03/13/2017
|
PROFILE2
|
|
Hayward Industries, Inc.
|
United States
|
87/290,239
|
01/05/2017
|
SPINTECH
|
|
Hayward Industries, Inc.
|
United States
|
87/449,312
|
05/15/2017
|
SWIMPURE
|
|
Hayward Industries, Inc.
|
United States
|
87/325,729
|
02/06/2017
|
SYSTEM2
|
|
Hayward Industries, Inc.
|
United States
|
87/325,767
|
02/06/2017
|
SYSTEM2 SEALING TECHNOLOGY
|
|
Hayward Industries, Inc.
|
United States
|
87/290,228
|
01/05/2017
|
TOUCHFREE
|
SCHEDULE
5(b)
COPYRIGHTS
COPYRIGHTS
REGISTERED
OWNER
|
TITLE
|
COUNTRY
|
REG. NO.
|
REG. DATE
|
|
Hayward Industries, Inc.
|
AQUA RITE OPERATION & INSTALLATION MANUAL
|
United States
|
TX0007840642
|
5/27/2014
|
|
Hayward Industries, Inc.
|
AQUA RITE OPERATION & INSTALLATION MANUAL
|
United States
|
TX0007840644
|
5/27/2014
|
|
Hayward Industries, Inc.
|
AQUA RITE OPERATION & INSTALLATION MANUAL
|
United States
|
TX0007841245
|
5/28/2014
|
COPYRIGHT APPLICATIONS
None.
SCHEDULE
6
COMMERCIAL
TORT CLAIMS
None.
EXHIBIT F
[FORM OF]
PERFECTION CERTIFICATE SUPPLEMENT
[Insert date]
Reference is hereby
made to (i) that certain First Lien Credit Agreement, dated as of August 4, 2017 (as amended, restated, amended and restated,
supplemented or otherwise modified and in effect on the date hereof, the “First Lien Credit Agreement”), by
and among Hayward Intermediate, Inc., a Delaware corporation (“Holdings”), Hayward Industries, Inc.,
a New Jersey corporation (the “Borrower”), the lenders from time to time party thereto (the “First
Lien Lenders”) and Bank of America, N.A., as administrative agent and collateral agent for the First Lien Lenders (in
such capacities, the “First Lien Agent”), (ii) that certain First Lien Pledge and Security Agreement, dated
as of August 4, 2017 (as amended, restated, amended and restated, supplemented or otherwise modified and in effect on the
date hereof, the “First Lien Security Agreement”), by and among the Loan Parties (as defined in the First Lien
Credit Agreement) from time to time party thereto and the First Lien Agent, (iii) that certain Second Lien Credit Agreement,
dated as of August 4, 2017 (as amended, restated, amended and restated, supplemented or otherwise modified in effect on the
date hereof, the “Second Lien Credit Agreement” and, together with the First Lien Credit Agreement, each, a “Credit
Agreement” and, collectively, the “Credit Agreements”), by and among Holdings, the Borrower, the lenders
from time to time party thereto (the “Second Lien Lenders”), Bank of America, N.A., as administrative agent
and collateral agent for the Second Lien Lenders (in such capacities, the “Second Lien Agent” and, together
with the First Lien Agent, each, an “Agent” and collectively, the “Agents”), (iv) that
certain Second Pledge and Lien Security Agreement, dated as of August 4, 2017 (as amended, restated, amended and restated,
supplemented or otherwise modified and in effect on the date hereof, the “Second Lien Security Agreement” and,
together with the First Lien Security Agreement, each, a “Security Agreement” and, collectively, the “Security
Agreements”), by and among the Loan Parties (as defined in the Second Lien Credit Agreement) from time to time party
thereto and the Second Lien Agent and (v) the Perfection Certificate, dated as of August 4, 2017 (as supplemented by
any perfection certificate and/or perfection certificate supplement delivered prior to the date hereof, the “Prior Perfection
Certificate”), executed by the Loan Parties (as defined in the applicable Credit Agreement) signatory thereto. Capitalized
terms used but not defined herein have the meanings assigned to such terms in the applicable Security Agreement.
As used herein, the
term “Company” means each of Holdings, the Borrower and the other Loan Parties (as defined in the applicable
Credit Agreement).
As of [[●], 20[●]]
(the “Supplement Date”)1,
the undersigned hereby represents and warrants to each Administrative Agent as follows:
1. Names.
(a) Except as set forth in Schedule 1(a) hereto, the true and complete list of (i) the exact legal name
of each Company, as such name appears in its respective Organizational Documents (as defined in each Credit Agreement) filed with
the Secretary of State or other relevant office of such Company’s jurisdiction of organization or formation, (ii) the
type of entity of each Company, (iii) the organizational identification number, if any, of each Company, (iv) the Federal
Taxpayer Identification Number, if any, of each Company and (v) the jurisdiction of organization or formation of each Company
is set forth in Schedule 1(a) to the Prior Perfection Certificate.
1 To
refer to end of fiscal year or fiscal quarter as to which the Perfection Certificate Supplement relates.
(b) Except
as otherwise disclosed in Schedule 1(b), 1(c) or 1(d), the true and complete list of all other names
used by such Company on any filings with the Internal Revenue Service, in each case, in the past five years is set forth on Schedule
1(b) of the Prior Perfection Certificate.
(c) Except
as set forth in Schedule 1(c) hereto, the true and complete list of the information required by Section 1(a) above
for any other Person (i) to which any Company became the successor by merger, consolidation or acquisition or (ii) that
has been liquidated into, or transferred all or substantially all of its assets to, any Company, at any time within the past five
years, is set forth in Schedule 1(c) to the Prior Perfection Certificate.
(d) Except
as set forth in Schedule 1(d) hereto, or as otherwise disclosed in Schedule 1(c) or in such Schedules to the Prior
Perfection Certificate, no Company has changed its jurisdiction of organization or form of entity since the earlier of (i) the
Supplement Date or (ii) at any time during the past four months.
2. Locations.
Except as set forth in Schedule 2(a) hereto, the true and complete list of the address of the chief executive offices
of each Company is set forth in Schedule 2(a) to the Prior Perfection Certificate.
(b) Except
as set forth in Schedule 2(a) or Schedule 2(b) hereto, the true and complete list of all other locations
where any Company currently maintains any Collateral consisting of Inventory (including property in possession of a third party
(e.g., a warehouseman or other bailee or on consignment), other than Inventory in transit or out for repair in the ordinary course
of business is set forth in Schedule 2(a) or Schedule 2(b) to the Prior Perfection Certificate.
3. Stock
Ownership and Other Equity Interests. Except as set forth in Schedule 3 hereto, the true and complete list of all of
the issued and outstanding stock, partnership interests, limited liability company membership interests or other equity interests
owned by any Company constituting Pledged Stock, the beneficial owners of such stock, partnership interests, membership interests
or other equity interests and the percentage of the total issued and outstanding stock, partnership interests, membership interests
or other equity interests of the relevant issuer represented thereby is set forth in Schedule 3 to the Prior Perfection Certificate.
4. Instruments
and Tangible Chattel Paper. Except as set forth on Schedule 4 hereto, the true and complete list of all Instruments
(other than checks to be deposited in the ordinary course of business) and Tangible Chattel Paper, in each case having a face amount
exceeding $15,000,000, held by any Company as of the Supplement Date, including the names of the obligors, the amounts owing and
the due dates, is set forth in Schedule 4 to the Prior Perfection Certificate.
5. Intellectual
Property.
(a) Except
as set forth on Schedule 5(a) hereto, the true and complete list of all Patents, Designs (if applicable) and Trademarks of
each Company registered with and published by (or applied for in) the United States Patent and Trademark Office (“USPTO”)
(excluding, for the avoidance of doubt, any Patent or Trademark that has expired or been abandoned, but including Trademarks that
would constitute Collateral upon the filing of a “Statement of Use” or an “Amendment to Allege Use” with
respect thereto), as applicable, including the name of the registered owner and the registration or publication number (or, if
applicable, the applicant and the application number) of each such Patent, Design (if applicable) and Trademark, is set forth in
Schedule 5(a) to the Prior Perfection Certificate.
(b) Except
as set forth on Schedule 5(b) hereto, the true and complete list of all Copyrights of each Company registered with
(or applied for in) the United States Copyright Office (excluding, for the avoidance of doubt, any Copyright that has expired or
been abandoned), including the name of the registered owner and the registration number (or, if applicable, the applicant and the
application number) of each such Copyright, is set forth in Schedule 5(b) to the Prior Perfection Certificate.
6. Commercial
Tort Claims. Except as set forth on Schedule 6 hereto, the true and complete list of all Commercial Tort Claims with
an individual value of at least $10,000,000 (as reasonably determined by the Borrower), held by any Company, including a brief
description thereof, is set forth in Schedule 6 to the Prior Perfection Certificate.
[Signature Page Follows]
IN WITNESS WHEREOF,
the undersigned have signed this Perfection Certificate Supplement as of the date first written of above.
[Signature Page to Perfection Certificate
Supplement]
SCHEDULE
1(a)
LEGAL
NAMES
|
Legal Name
|
Jurisdiction
|
Type of Entity
|
Organizational
Identification
Number
|
Federal
Taxpayer
Identification
Number
|
|
|
|
|
|
|
|
|
|
|
|
|
SCHEDULE
1(b)
OTHER
NAMES USED ON IRS FILINGS
SCHEDULE
1(c)
PREDECESSOR
ENTITIES
|
Company
|
Action
|
Legal Name of
Predecessor
Entity
|
Jurisdiction of
Organization of
Predecessor Entity
|
Date of Action
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SCHEDULE
1(d)
CHANGES
IN JURISDICTION OR FORM
|
Company
|
Current Jurisdiction of
Organization/Form
|
Prior Jurisdiction of
Organization/Form
|
Date of Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SCHEDULE
2(a)
CHIEF
EXECUTIVE OFFICE ADDRESSES
|
Company
|
Chief Executive Office Address
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SCHEDULE
2(b)
LOCATIONS
OF INVENTORY
SCHEDULE
3
PLEDGED
STOCK
|
Issuer
|
Holder
|
Certificate No.
|
% of Issued and
Outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SCHEDULE
4
INSTRUMENTS
AND TANGIBLE CHATTEL PAPER
1. Promissory
Notes/Instruments:
|
Obligee
|
Obligor
|
Principal Amount
|
Maturity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2. Tangible
Chattel Paper:
SCHEDULE
5(a)
PATENTS
AND TRADEMARKS
PATENTS
|
REGISTERED OWNER
|
SERIAL NUMBER
|
DESCRIPTION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PATENT APPLICATIONS
|
APPLICANT
|
APPLICATION NO.
|
DESCRIPTION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TRADEMARKS
|
REGISTERED OWNER
|
REGISTRATION NUMBER
|
TRADEMARK
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TRADEMARK APPLICATIONS
|
APPLICANT
|
APPLICATION NO.
|
TRADEMARK
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SCHEDULE
5(b)
COPYRIGHTS
COPYRIGHTS
|
REGISTERED OWNER
|
REGISTRATION NUMBER
|
TITLE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COPYRIGHT APPLICATIONS
|
APPLICANT
|
APPLICATION
|
NUMBER TITLE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SCHEDULE
6
COMMERCIAL
TORT CLAIMS
EXHIBIT G
[FORM OF]
PROMISSORY NOTE
[●] [●], 20[●]
FOR VALUE RECEIVED,
the undersigned Hayward Industries, Inc., a New Jersey corporation (“Borrower”), hereby promises to pay
on demand to [●] (the “Lender”) or its registered permitted assign, at the office of Bank of America,
N.A. (“Bank of America”) at One Bryant Park, New York, New York 10036, Loans in the principal amount of $[●]
or such lesser amount as is outstanding from time to time, on the dates and in the amounts set forth in the Second Lien Credit
Agreement dated as of August 4, 2017 (as amended, restated, amended and restated, supplemented or otherwise modified and in
effect on the date hereof, the “Second Lien Credit Agreement”), by and among Hayward Industries, Inc.,
a New Jersey corporation (as survivor of the Merger (as defined in the Second Lien Credit Agreement) with Hayward Acquisition Corp.,
a New Jersey corporation) (the “Borrower”), Hayward Intermediate, Inc., a Delaware corporation (“Holdings”),
the Lenders from time to time party thereto and Bank of America, N.A. in its capacities as administrative agent and collateral
agent (the “Administrative Agent”). The Borrower also promises to pay interest from the date of such Loans on
the principal amount thereof from time to time outstanding, in like Dollars, at such office, in each case, in the manner and at
the rate or rates per annum and payable on the dates provided in the Second Lien Credit Agreement. Terms used but not defined herein
shall have the meanings assigned to such terms in the Second Lien Credit Agreement.
The Borrower promises
to pay interest on any overdue principal and, to the extent permitted by Requirements of Law, overdue interest from the relevant
due dates, in each case, in the manner, at the rate or rates and under the circumstances provided in the Second Lien Credit Agreement.
The Borrower hereby
waives diligence, presentment, demand, protest and notice of any kind to the extent possible under any applicable Requirements
of Law. The non-exercise by the holder hereof of any of its rights hereunder in any particular instance shall not constitute a
waiver thereof in that or any subsequent instance.
All Borrowings evidenced
by this Promissory Note and all payments and prepayments of the principal hereof and interest hereon and the respective dates thereof
shall be endorsed by the holder hereof on the schedules attached hereto and made a part hereof or on a continuation thereof which
shall be attached hereto and made a part hereof, or otherwise recorded by such holder in its internal records; provided,
however, that the failure of the holder hereof to make such a notation or any error in such notation shall not affect the
obligations of the Borrower under this Promissory Note.
This Promissory Note
is one of the promissory notes referred to in the Second Lien Credit Agreement that, among other things, contains provisions for
the acceleration of the maturity hereof upon the happening of certain events, for optional and mandatory prepayment of the principal
hereof prior to the maturity hereof and for the amendment or waiver of certain provisions of the Second Lien Credit Agreement,
all upon the terms and conditions therein specified. This Promissory Note is entitled to the benefit of the Second Lien Credit
Agreement, and the obligations hereunder are guaranteed and secured as provided therein and in the other Loan Documents referred
to in the Second Lien Credit Agreement.
If any assignment by
the Lender holding this Promissory Note occurs after the date of the issuance hereof, the Lender agrees that it shall, upon the
effectiveness of such assignment or as promptly thereafter as practicable, surrender this Promissory Note to the Administrative
Agent for cancellation.
THE ASSIGNMENT OF THIS PROMISSORY NOTE
AND ANY RIGHTS WITH RESPECT THERETO ARE SUBJECT TO THE PROVISIONS OF THE SECOND LIEN CREDIT AGREEMENT, INCLUDING THE PROVISIONS
GOVERNING THE REGISTER AND THE PARTICIPANT REGISTER.
THIS PROMISSORY NOTE SHALL BE CONSTRUED
IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
|
|
HAYWARD INDUSTRIES, INC.
|
|
|
|
|
|
By:
|
|
|
|
|
Name:
|
|
|
|
Title:
|
[Signature Page to Promissory Note]
SCHEDULE A
LOANS,
CONVERSIONS AND REPAYMENTS OF ABR LOANS
|
Date
|
Amount of ABR
Loans
|
Amount
Converted to ABR
Loans
|
Amount of
Principal of ABR
Loans Repaid
|
Amount of ABR
Loans Converted
to LIBO Rate
Loans
|
Unpaid Principal
Balance of ABR
Loans
|
Notation
Made By
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Schedule A to Note
SCHEDULE B
LOANS,
CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF LIBO RATE LOANS
|
Date
|
Amount of LIBO Rate Loans
|
Amount Converted to LIBO Rate Loans
|
Amount of Principal of LIBO Rate Loans Repaid
|
Amount of LIBO Rate Loans Converted to LIBO Rate Loans
|
Unpaid Principal Balance of LIBO Rate Loans
|
Notation Made By
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Schedule B to Note
EXHIBIT H
[FORM OF]
GUARANTY AGREEMENT
[ATTACHED]
Execution Version
SECOND
LIEN LOAN GUARANTY
THIS SECOND LIEN LOAN
GUARANTY dated as of August 4, 2017 (as it may be amended, restated, amended and restated, supplemented or otherwise modified
from time to time, this “Second Lien Loan Guaranty”), is entered into by and among Hayward Intermediate, Inc.,
a Delaware corporation (“Holdings”), the Subsidiary Guarantors from time to time party hereto (Holdings and
the Subsidiary Guarantors, collectively, the “Loan Guarantors”) and Bank of America, N.A. in its capacities
as administrative agent and collateral agent (the “Administrative Agent”).
PRELIMINARY
STATEMENT
Reference is hereby
made to that certain Second Lien Credit Agreement, dated as of the date hereof (as amended, restated, amended and restated, supplemented
or otherwise modified from time to time, the “Second Lien Credit Agreement”), by and among, inter alios, Holdings,
Hayward Acquisition Corp., a New Jersey corporation (the “Initial Borrower”), Hayward Industries, Inc.,
a New Jersey corporation (the “Company”) (upon merging with the Initial Borrower pursuant to the Merger (as
defined in the Second Lien Credit Agreement), with the Company as survivor of the Merger, the “Borrower”), the
Lenders from time to time party thereto and the Administrative Agent. The Loan Guarantors are entering into this Second Lien Loan
Guaranty in order to induce the Lenders to enter into and extend credit to the Borrower under the Second Lien Credit Agreement
and to guarantee the Secured Obligations.
Each Loan Guarantor
will obtain benefits from the incurrence of Loans by the Borrower for the account of the Borrower and its Restricted Subsidiaries.
ACCORDINGLY, the parties
hereto agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.01. Definitions
of Certain Terms Used Herein. As used in this Second Lien Loan Guaranty, in addition to the terms defined in the preamble and
Preliminary Statement above, the following terms shall have the following meanings:
“Accommodation
Payments” has the meaning assigned to such term in Section 2.09.
“Administrative
Agent” has the meaning assigned to such term in the preamble.
“Article”
means a numbered article of this Second Lien Loan Guaranty, unless another document is specifically referenced.
“Exhibit”
refers to a specific exhibit to this Second Lien Loan Guaranty, unless another document is specifically referenced.
“Guaranteed
Obligations” has the meaning assigned to such term in Section 2.01.
“Guarantor
Percentage” has the meaning assigned to such term in Section 2.09(a).
“Guaranty
Supplement” has the meaning assigned to such term in Section 3.04.
“Holdings”
has the meaning assigned to such term in the preamble.
“Loan Guarantors”
has the meaning assigned to such term in the preamble.
“Maximum Liability”
has the meaning assigned to such term in Section 2.09(a).
“Non-Paying
Guarantor” has the meaning assigned to such term in Section 2.09(a).
“Obligated
Party” has the meaning assigned to such term in Section 2.02.
“Paying Guarantor”
has the meaning assigned to such term in Section 2.09(a).
“Second Lien
Credit Agreement” has the meaning assigned to such term in the Preliminary Statement.
“Second Lien
Loan Guaranty” has the meaning assigned to such term in the preamble.
“Section”
means a numbered section of this Second Lien Loan Guaranty, unless another document is specifically referenced.
“UFCA”
has the meaning assigned to such term in Section 2.09(a).
“UFTA”
has the meaning assigned to such term in Section 2.09(a).
The foregoing definitions
shall be equally applicable to both the singular and plural forms of the defined terms. Capitalized terms used in this Second Lien
Loan Guaranty and not otherwise defined herein shall have the meanings set forth in the Second Lien Credit Agreement.
The rules of construction
specified in Sections 1.03 and 1.04 of the Second Lien Credit Agreement also apply to this Second Lien Loan Guaranty, mutatis
mutandis.
ARTICLE 2
LOAN GUARANTY
Section 2.01. Guaranty.
Except as otherwise provided for herein (including under Section 3.14), each Loan Guarantor hereby agrees that it is
jointly and severally liable for, and, as primary obligor and not merely as surety, and absolutely and unconditionally and irrevocably
guarantees to the Administrative Agent (acting as agent for the Secured Parties, pursuant to Article 8 of the Second
Lien Credit Agreement) for the ratable benefit of the Secured Parties, the full and prompt payment, when and as the same shall
become due, whether at stated maturity, upon acceleration or otherwise (including whether or not any bankruptcy or similar proceeding
shall have stayed the accrual or collection of any of the Secured Obligations or operated as a discharge thereof), and at all times
thereafter, and performance of the Secured Obligations, together with any and all expenses which may be incurred by the Administrative
Agent and the other Secured Parties in collecting any of the Guaranteed Obligations that are reimbursable in accordance with Section 9.03
of the Second Lien Credit Agreement (collectively the “Guaranteed Obligations”). Each Loan Guarantor further
agrees that the Guaranteed Obligations may be increased, extended or renewed in whole or in part without notice to or further assent
from it, and that it remains bound upon its guarantee notwithstanding any such extension or renewal. If any or all of the Guaranteed
Obligations become due and payable hereunder, each Loan Guarantor, unconditionally and irrevocably, promises to pay such Guaranteed
Obligations to the Administrative Agent for the benefit of the Secured Parties, on demand. This Second Lien Loan Guaranty is continuing
and shall remain in full force and effect until the Termination Date, and all liabilities to which it applies or may apply under
the terms hereof shall be conclusively presumed to have been created in reliance hereon.
Section 2.02. Guaranty
of Payment. This Second Lien Loan Guaranty is a guaranty of payment and not of collection. Each Loan Guarantor waives any right
to require the Administrative Agent or any Lender to sue the Borrower, any Loan Guarantor, any other guarantor, or any other Person
obligated for all or any part of the Guaranteed Obligations (the Borrower, each Loan Guarantor, each other guarantor or such other
Person, an “Obligated Party”), or otherwise to enforce its rights in respect of any Collateral securing all
or any part of the Guaranteed Obligations. The Administrative Agent may enforce this Second Lien Loan Guaranty at any time when
an Event of Default has occurred and is continuing.
Section 2.03. No
Discharge or Diminishment of Second Lien Loan Guaranty.
(a) Except
as otherwise provided for herein (including under Section 3.14), the obligations of each Loan Guarantor hereunder are unconditional,
irrevocable and absolute and not subject to any reduction, limitation, impairment or termination for any reason, including: (i) any
claim of waiver, release, extension, renewal, settlement, surrender, alteration, or compromise of any of the Guaranteed Obligations,
by operation of law or otherwise; (ii) any change in the corporate existence, structure or ownership of any Obligated Party;
(iii) any insolvency, bankruptcy, reorganization or other similar proceeding affecting any other Obligated Party, or their
assets or any resulting release or discharge of any obligation of any Obligated Party; (iv) the existence of any claim, setoff
or other rights which any Loan Guarantor may have at any time against any Obligated Party, the Administrative Agent, any Lender
or any other Person, whether in connection herewith or in any unrelated transactions; (v) any direction as to application
of payments by the Borrower or by any other party; (vi) any other continuing or other guaranty, undertaking or maximum liability
of a guarantor or of any other party as to the Guaranteed Obligations; (vii) any payment on or in reduction of any such other
guaranty or undertaking; (viii) any dissolution, termination or increase, decrease or change in personnel by the Borrower;
or (ix) any payment made to any Secured Party on the Guaranteed Obligations which any such Secured Party repays to the Borrower
pursuant to court order in any bankruptcy, reorganization, arrangement, moratorium or other debtor relief proceeding, and each
Loan Guarantor waives any right to the deferral or modification of its obligations hereunder by reason of any such proceeding.
(b) Except
for termination of a Loan Guarantor’s obligations hereunder or as expressly permitted by Section 3.14, the obligations
of each Loan Guarantor hereunder are not subject to any defense or setoff, counterclaim, recoupment or termination whatsoever by
reason of the invalidity, illegality or unenforceability of any of the Guaranteed Obligations or otherwise, or any Requirements
of Law purporting to prohibit payment by any Obligated Party, of the Guaranteed Obligations or any part thereof.
(c) Further,
the obligations of any Loan Guarantor hereunder are not discharged or impaired or otherwise affected by: (i) the failure of
the Administrative Agent to assert any claim or demand or to enforce any remedy with respect to all or any part of the Guaranteed
Obligations; (ii) any waiver or modification of or supplement to any provision of any agreement relating to the Guaranteed
Obligations; (iii) any release, non-perfection, or invalidity of any indirect or direct security for the obligations of the
Borrower for all or any part of the Guaranteed Obligations or any obligations of any other guarantor of or other Person liable
for any of the Guaranteed Obligations; (iv) any action or failure to act by the Administrative Agent with respect to any Collateral
securing any part of the Guaranteed Obligations; or (v) any default, failure or delay, willful or otherwise, in the payment
or performance of any of the Guaranteed Obligations, or any other circumstance, act, omission or delay that might in any manner
or to any extent vary the risk of such Loan Guarantor or that would otherwise operate as a discharge of any Loan Guarantor as a
matter of law or equity (other than as set forth in Section 3.14).
Section 2.04. Defenses
Waived. To the fullest extent permitted by applicable Requirements of Law, and except for termination of a Loan Guarantor’s
obligations hereunder or as otherwise provided for herein (including under Section 3.14), each Loan Guarantor hereby
waives any defense based on or arising out of any defense of the Borrower or any other Loan Guarantor or arising out of the disability
of the Borrower or any other Loan Guarantor or any other party or the unenforceability of all or any part of the Guaranteed Obligations
or any part thereof from any cause, or the cessation from any cause of the liability of the Borrower or any other Loan Guarantor.
Without limiting the generality of the foregoing, each Loan Guarantor irrevocably waives acceptance hereof, presentment, demand,
protest and, to the fullest extent permitted by applicable Requirements of Law, any notice not provided for herein or in any other
Loan Document, including notices of nonperformance, notices of protest, notices of dishonor, notices of acceptance of this Second
Lien Loan Guaranty and notices of the existence, creation or incurring of new or additional Guaranteed Obligations, as well as
any requirement that at any time any action be taken by any Person against any Obligated Party, or any other Person, including
any right under any statute, at common law, in equity or otherwise (except as may be required by applicable Requirements of Law
but solely to the extent the relevant requirement cannot be waived under such Requirement of Law) to require the Administrative
Agent to (i) proceed against the Borrower, any other Loan Guarantor or any other party, (ii) proceed against or exhaust
any security held from the Borrower, any other Loan Guarantor or any other party or (iii) pursue any other remedy in the Administrative
Agent’s power whatsoever. The Administrative Agent may, at its election and in accordance with the terms of the applicable
Loan Documents (including the Intercreditor Agreement), foreclose on any Collateral held by it by one or more judicial or nonjudicial
sales, whether or not every aspect of any such sale is commercially reasonable (to the extent permitted by applicable Requirements
of Law), accept an assignment of any such Collateral in lieu of foreclosure or otherwise act or fail to act with respect to any
Collateral securing all or a part of the Guaranteed Obligations, and the Administrative Agent may, at its election, compromise
or adjust any part of the Guaranteed Obligations, make any other accommodation with any Obligated Party or exercise any other right
or remedy available to it against any Obligated Party or with respect to any security, without affecting or impairing in any way
the liability of such Loan Guarantor under this Second Lien Loan Guaranty, except as otherwise provided in Section 3.14.
To the fullest extent permitted by applicable Requirements of Law, each Loan Guarantor waives any defense arising out of any such
election even though such election may operate, pursuant to applicable Requirements of Law, to impair or extinguish any right of
reimbursement or subrogation or other right or remedy of any Loan Guarantor against any Obligated Party or any security.
Section 2.05. Authorization.
Each Loan Guarantor authorizes the Administrative Agent without notice or demand (except as may be required by applicable Requirements
of Law and to the extent the relevant requirement cannot be waived), and without affecting or impairing its liability hereunder
(except as set forth in Section 3.14), from time to time, subject to the terms of the referenced Loan Documents (including
the Intercreditor Agreements), to:
(a) change
the manner, place or terms of payment of, and/or change or extend the time of payment of, renew, increase, accelerate or alter,
any of the Guaranteed Obligations (including any increase or decrease in the principal amount thereof or the rate of interest or
fees thereon), any security therefor, or any liability incurred directly or indirectly in respect thereof, and this Second Lien
Loan Guaranty shall apply to the Guaranteed Obligations as so changed, extended, renewed or altered;
(b) take
and hold security for the payment of the Guaranteed Obligations and sell, exchange, release, impair, surrender, realize upon or
otherwise deal with in any manner and in any order any property by whomsoever at any time pledged or mortgaged to secure, or howsoever
securing, the Guaranteed Obligations or any liabilities (including any of those hereunder) incurred directly or indirectly in respect
thereof or hereof, and/or any offset there against;
(c) exercise
or refrain from exercising any rights against the Borrower, any other Loan Party or others or otherwise act or refrain from acting;
(d) release
or substitute any endorser, any guarantor, the Borrower, any other Loan Party and/or any other obligor;
(e) settle
or compromise any of the Guaranteed Obligations, any security therefor or any liability (including any of those hereunder) incurred
directly or indirectly in respect thereof or hereof, and/or subordinate the payment of all or any part thereof to the payment of
any liability (whether due or not) of the Borrower to its creditors other than the Secured Parties;
(f) apply
any sums by whomsoever paid or howsoever realized to any liability or liabilities of the Borrower to the Secured Parties regardless
of what liability or liabilities of the Borrower remain unpaid;
(g) consent
to or waive any breach of, or any act, omission or default under, this Second Lien Loan Guaranty, the Second Lien Credit Agreement,
any other Loan Document or any of the instruments or agreements referred to herein or therein, or otherwise amend, modify or supplement
this Second Lien Loan Guaranty, the Second Lien Credit Agreement, any other Loan Document or any of such other instruments or agreements;
and/or
(h) take
any other action which would, under otherwise applicable principles of common law, give rise to a legal or equitable discharge
of the Loan Guarantors from their respective liabilities under this Second Lien Loan Guaranty.
Section 2.06. Rights
of Subrogation. No Loan Guarantor will assert any right, claim or cause of action, including a claim of subrogation, contribution
or indemnification that it has against any Loan Party in respect of this Second Lien Loan Guaranty until the occurrence of the
Termination Date; provided that if any amount shall be paid to such Loan Guarantor on account of such subrogation rights
at any time prior to the Termination Date, then unless such Loan Guarantor has already discharged its liabilities under this Second
Lien Loan Guaranty in an amount equal to such Loan Guarantor’s Maximum Liability as of such date, such amount shall be held
in trust for the benefit of the Secured Parties and shall forthwith be paid to the Administrative Agent (for the benefit of the
Secured Parties) to be credited and applied to the Guaranteed Obligations, whether matured or unmatured, in accordance with Section 2.18(b) of
the Second Lien Credit Agreement.
Section 2.07. Reinstatement;
Stay of Acceleration. If at any time any payment of any portion of the Guaranteed Obligations is rescinded or must otherwise
be restored or returned upon the insolvency, bankruptcy or reorganization of the Borrower or otherwise, each Loan Guarantor’s
obligations under this Second Lien Loan Guaranty with respect to that payment shall be reinstated at such time as though the payment
had not been made. If acceleration of the time for payment of any of the Guaranteed Obligations is stayed upon the insolvency,
bankruptcy or reorganization of the Borrower, all such amounts otherwise subject to acceleration under the terms of any agreement
relating to the Guaranteed Obligations shall nonetheless be payable by the other Loan Guarantors forthwith on demand by the Administrative
Agent.
Section 2.08. Information.
Each Loan Guarantor assumes all responsibility for being and keeping itself informed of the Borrower’s financial condition
and assets, and of all other circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations and the nature, scope
and extent of the risks that each Loan Guarantor assumes and incurs under this Second Lien Loan Guaranty, and agrees that none
of the Administrative Agent, any Lender or any other Secured Party shall have any duty to advise any Loan Guarantor of information
known to it regarding those circumstances or risks.
Section 2.09. Contribution;
Subordination; Maximum Liability.
(a) In
the event any Loan Guarantor (a “Paying Guarantor”) makes any payment or payments under this Second Lien Loan
Guaranty or suffers any loss as a result of any realization upon any Collateral granted by it to secure its obligations under this
Second Lien Loan Guaranty (each such payment or loss, an “Accommodation Payment”), each other Loan Guarantor
(each a “Non-Paying Guarantor”) shall contribute to such Paying Guarantor an amount equal to such Non-Paying
Guarantor’s Guarantor Percentage of such Accommodation Payments by such Paying Guarantor. For purposes of this Section 2.09,
each Non-Paying Guarantor’s “Guarantor Percentage” with respect to any such Accommodation Payments by
a Paying Guarantor shall be determined as of the date on which such Accommodation Payment was made by reference to the ratio of
(i) such Non-Paying Guarantor’s Maximum Liability as of such date to (ii) the aggregate Maximum Liability of all
Loan Guarantors hereunder (including such Paying Guarantor) as of such date. As of any date of determination, the “Maximum
Liability” of each Loan Guarantor shall be equal to the maximum amount of liability which could be asserted against such
Loan Guarantor hereunder and under the Second Lien Credit Agreement without (x) rendering such Loan Guarantor “insolvent”
within the meaning of Section 101(32) of the Bankruptcy Code, Section 2 of the Uniform Fraudulent Transfer Act (“UFTA”)
or Section 2 of the Uniform Fraud Conveyance Act (“UFCA”), (y) leaving such Loan Guarantor with unreasonably
small capital or assets, within the meaning of Section 548 of the Bankruptcy Code, Section 4 of the UFTA or Section 5
of the UFCA, or (z) leaving such Loan Guarantor unable to pay its debts as they become due within the meaning of Section 548
of the Bankruptcy Code, Section 4 of the UFTA or Section 5 of the UFCA. Nothing in this provision shall affect any Loan
Guarantor’s several liability for the entire amount of the Guaranteed Obligations (up to such Loan Guarantor’s Maximum
Liability). Each of the Loan Guarantors covenants and agrees that its right to receive any contribution under this Second Lien
Loan Guaranty from a Non-Paying Guarantor shall be subordinate and junior in right of payment to the Secured Obligations until
the Termination Date. If, prior to the Termination Date, any such contribution payment is received by a Paying Guarantor at any
time when an Event of Default has occurred and is continuing, such contribution payment shall be collected, enforced and received
by such Loan Guarantor as trustee for the Secured Parties and be paid over to the Administrative Agent on account of the Secured
Obligations, but without affecting or impairing in any manner the liability of such Loan Guarantor under the other provisions of
this Second Lien Loan Guaranty. No failure on the part of any Loan Guarantor to make the payments required by this Section 2.09
(or any other payments required under applicable law or otherwise) shall in any respect limit the obligations and liabilities of
any Loan Guarantor with respect to its obligations hereunder, and each Loan Guarantor shall remain liable for the full amount of
the obligations of such Loan Guarantor hereunder. Each Loan Guarantor hereby agrees that upon the occurrence and during the continuance
of an Event of Default and after notice from the Administrative Agent to Holdings (provided that no such notice shall be required
to be given in the case of any Event of Default arising under Section 7.01(f) or 7.01(g) of the Credit Agreement),
all Indebtedness and other monetary obligations owed by it to, or to it by, any other Loan Guarantor or any other Subsidiary shall
be fully subordinated to the payment in full in cash of all the Secured Obligations. This provision is for the benefit of the Administrative
Agent, the Lenders and the other Secured Parties.
(b) It
is the desire and intent of the Loan Guarantors and the Secured Parties that this Second Lien Loan Guaranty shall be enforced against
the Loan Guarantors to the fullest extent permissible under the Requirements of Law and public policies applied in each jurisdiction
in which enforcement is sought. The provisions of this Second Lien Loan Guaranty are severable, and in any action or proceeding
involving any state corporate law, or any state, Federal or foreign bankruptcy, insolvency, reorganization or other Requirements
of Law affecting the rights of creditors generally, if the obligations of any Loan Guarantor under this Second Lien Loan Guaranty
would otherwise be held or determined to be avoidable, invalid or unenforceable on account of the amount of such Loan Guarantor’s
liability under this Second Lien Loan Guaranty, then, notwithstanding any other provision of this Second Lien Loan Guaranty to
the contrary, the amount of such liability shall, without any further action by the Loan Guarantors or the Secured Parties, be
automatically limited and reduced to such Loan Guarantor’s Maximum Liability. Each Loan Guarantor agrees that the Guaranteed
Obligations may at any time and from time to time exceed the Maximum Liability of each Loan Guarantor without impairing this Second
Lien Loan Guaranty or affecting the rights and remedies of the Administrative Agent hereunder; provided that nothing in
this sentence shall be construed to increase any Loan Guarantor’s obligations hereunder beyond its Maximum Liability.
Section 2.10. Representations
and Warranties. As and when required in accordance with the terms of the Second Lien Credit Agreement, each Loan Guarantor
hereby makes each representation and warranty made in the Loan Documents by Holdings and the Borrower with respect to such Loan
Guarantor, as applicable, and each Loan Guarantor hereby further acknowledges and agrees with respect to itself that such Loan
Guarantor has, independently and without reliance upon any Secured Party and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this Second Lien Loan Guaranty and each other Loan
Document to which it is or is to be a party, and such Loan Guarantor has established adequate means of obtaining from each other
Loan Guarantor on a continuing basis information pertaining to the business, condition (financial or otherwise), operations, performance,
properties and prospects of each other Loan Guarantor.
Section 2.11. Covenants.
Each Loan Guarantor covenants and agrees that until the Termination Date, such Loan Guarantor will perform and observe, and cause
each of its Restricted Subsidiaries to perform and observe, all of the terms, covenants and agreements set forth in the Loan Documents
that the Borrower has agreed to cause such Loan Guarantor or such Restricted Subsidiary to perform or observe. Until the Termination
Date, no Loan Guarantor shall, without the prior written consent of the Administrative Agent, commence or join with any other Person
in commencing any bankruptcy, reorganization or insolvency case or proceeding against the Borrower or any Loan Guarantor (it being
understood and agreed, for the avoidance of doubt, that nothing in this Section 2.11 shall prohibit any Loan Guarantor
from commencing or joining with the Borrower or Loan Guarantor as a co-debtor in any bankruptcy, reorganization or insolvency case
or proceeding).
ARTICLE 3
GENERAL PROVISIONS
Section 3.01. Liability
Cumulative. The liability of each Loan Guarantor under this Second Lien Loan Guaranty is in addition to and shall be cumulative
with all liabilities of such Loan Guarantor to the Administrative Agent and the Lenders under the Second Lien Credit Agreement
and the other Loan Documents to which such Loan Guarantor is a party or in respect of any obligations or liabilities of the other
Loan Guarantors, without any limitation as to amount, unless the instrument or agreement evidencing or creating such other liability
specifically provides to the contrary.
Section 3.02. No
Waiver; Amendments. No delay or omission of the Administrative Agent in exercising any right or remedy granted under this Second
Lien Loan Guaranty shall impair such right or remedy or be construed to be a waiver of any Default or Event of Default or an acquiescence
therein, and any single or partial exercise of any such right or remedy shall not preclude any other or further exercise thereof
or the exercise of any other right or remedy. No waiver, amendment or other variation of the terms, conditions or provisions of
this Second Lien Loan Guaranty whatsoever shall be valid unless in writing signed by the Loan Guarantors and the Administrative
Agent with the concurrence or at the direction of the Lenders to the extent required under or otherwise in accordance with Section 9.02
of the Second Lien Credit Agreement and then only to the extent specifically set forth in such writing.
Section 3.03. Severability
of Provisions. To the extent permitted by applicable Requirements of Law, any provision of this Second Lien Loan Guaranty held
to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such
invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions
of this Second Lien Loan Guaranty; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate
such provision in any other jurisdiction.
Section 3.04. Additional
Subsidiaries. Certain Restricted Subsidiaries of the Borrower may be required to enter into this Second Lien Loan Guaranty
pursuant to and in accordance with Section 5.12 of the Second Lien Credit Agreement. Upon execution and delivery by
the Administrative Agent and such Restricted Subsidiary of an instrument in substantially the form of Exhibit A hereto
(each, a “Guaranty Supplement”), such Restricted Subsidiary shall become a Subsidiary Guarantor hereunder with
the same force and effect as if originally named as a Loan Guarantor herein. The execution and delivery of any such instrument
shall not require the consent of any other Loan Guarantor hereunder or any other Person. The rights and obligations of each Loan
Guarantor hereunder shall remain in full force and effect notwithstanding the addition of any new Loan Guarantor as a party to
this Second Lien Loan Guaranty.
Section 3.05. Headings.
The titles of and section headings in this Second Lien Loan Guaranty are for convenience of reference only, and shall not govern
the interpretation of any of the terms and provisions of this Second Lien Loan Guaranty.
Section 3.06. Entire
Agreement. This Second Lien Loan Guaranty and the other Loan Documents constitute the entire agreement among the parties relating
to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the
subject matter hereof.
Section 3.07. CHOICE
OF LAW. THIS SECOND LIEN LOAN GUARANTY AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS SECOND LIEN LOAN
GUARANTY, WHETHER IN TORT, CONTRACT (AT LAW OR IN EQUITY) OR OTHERWISE, SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
Section 3.08. CONSENT
TO JURISDICTION; CONSENT TO SERVICE OF PROCESS.
(a) EACH
PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION OF ANY
U.S. FEDERAL OR NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN, IN THE CITY OF NEW YORK (OR ANY APPELLATE COURT
THEREFROM) OVER ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS SECOND LIEN LOAN GUARANTY AND AGREES THAT ALL
CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING SHALL (EXCEPT AS PERMITTED BELOW) BE HEARD AND DETERMINED IN SUCH NEW YORK STATE
OR, TO THE EXTENT PERMITTED BY APPLICABLE REQUIREMENTS OF LAW, IN SUCH FEDERAL COURT. EACH PARTY HERETO AGREES THAT SERVICE
OF ANY PROCESS, SUMMONS, NOTICE OR DOCUMENTS BY REGISTERED MAIL ADDRESSED TO SUCH PERSON SHALL BE EFFECTIVE SERVICE OF PROCESS
AGAINST SUCH PERSON FOR ANY SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT. EACH PARTY HERETO AGREES THAT A FINAL JUDGMENT
IN ANY SUCH ACTION OR PROCEEDING MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED
BY APPLICABLE REQUIREMENTS OF LAW.
(b) EACH
PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO THIS SECOND LIEN LOAN GUARANTY AND BROUGHT IN ANY COURT REFERRED TO IN PARAGRAPH (a) OF THIS SECTION. EACH PARTY
HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE REQUIREMENTS OF LAW, ANY CLAIM OR DEFENSE OF AN
INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION, SUIT OR PROCEEDING IN ANY SUCH COURT.
(c) TO
THE EXTENT PERMITTED BY APPLICABLE REQUIREMENTS OF LAW, EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF ANY AND
ALL PROCESS UPON IT AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY REGISTERED MAIL (OR ANY SUBSTANTIALLY SIMILAR
FORM OF MAIL) DIRECTED TO IT AT ITS ADDRESS FOR NOTICES AS PROVIDED FOR IN SECTION 9.01 OF THE SECOND LIEN CREDIT
AGREEMENT. EACH PARTY HERETO HEREBY WAIVES ANY OBJECTION TO SUCH SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT
TO PLEAD OR CLAIM IN ANY ACTION OR PROCEEDING COMMENCED HEREUNDER THAT SERVICE OF PROCESS WAS INVALID AND INEFFECTIVE. NOTHING
IN THIS SECOND LIEN LOAN GUARANTY WILL AFFECT THE RIGHT OF ANY PARTY TO THIS SECOND LIEN LOAN GUARANTY TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW.
Section 3.09. WAIVER
OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
REQUIREMENTS OF LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY SUIT, ACTION, LEGAL PROCEEDING OR COUNTERCLAIM (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY) DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS SECOND LIEN LOAN GUARANTY,
ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE,
AGENT OR ATTORNEY OF ANY OTHER PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS SECOND LIEN LOAN GUARANTY BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
Section 3.10. Indemnity.
Each Loan Guarantor hereby agrees to indemnify the Administrative Agent and the other Indemnitees, as set forth in Section 9.03
of the Second Lien Credit Agreement.
Section 3.11. Counterparts.
This Second Lien Loan Guaranty may be executed in counterparts (and by different parties hereto on different counterparts), each
of which shall constitute an original, but all of which when taken together shall constitute a single contract. Delivery of an
executed counterpart of a signature page of this Second Lien Loan Guaranty by facsimile or by email as a “.pdf”
or “.tif” attachment shall be effective as delivery of a manually executed counterpart of this Second Lien Loan Guaranty.
Section 3.12. Successors
and Assigns. Whenever in this Second Lien Loan Guaranty any of the parties hereto is referred to, such reference shall be deemed
to include the permitted successors and assigns of such party; and all covenants, promises and agreements by or on behalf of any
Loan Guarantor or the Administrative Agent that are contained in this Second Lien Loan Guaranty shall bind and inure to the benefit
of their respective successors and permitted assigns. Except in a transaction permitted (or not prohibited) under the Second Lien
Credit Agreement, no Loan Guarantor may assign any of its rights or obligations hereunder without the written consent of the Administrative
Agent.
Section 3.13. Survival
of Agreement. Without limitation of any provision of the Second Lien Credit Agreement or Section 3.10 hereof, all
covenants, agreements, indemnities, representations and warranties made by the Loan Guarantors in the Loan Documents and in the
certificates or other instruments delivered in connection with or pursuant to this Second Lien Loan Guaranty or any other Loan
Document shall be considered to have been relied upon by the Lenders and shall survive the execution and delivery of the Loan Documents
and the making of any Loans, regardless of any investigation made by any such Lender or on its behalf and notwithstanding that
the Administrative Agent or any Lender may have had notice or knowledge of any Default or Event of Default or incorrect representation
or warranty at the time any credit is extended under the Second Lien Credit Agreement, and shall continue in full force and effect
until the Termination Date, or with respect to any individual Loan Guarantor until such Loan Guarantor is otherwise released from
its obligations under this Second Lien Loan Guaranty in accordance with Section 3.14.
Section 3.14. Release
of Loan Guarantors. A Subsidiary Guarantor shall automatically be released from its obligations hereunder and its Second Lien
Loan Guaranty shall be automatically released in the circumstances described in Article 8 and Section 9.22
of the Second Lien Credit Agreement. In connection with any such release, the Administrative Agent shall promptly execute and deliver
to any Loan Guarantor, at such Loan Guarantor’s expense, all documents that such Loan Guarantor shall reasonably request
to evidence such termination or release. Any execution and delivery of documents pursuant to the preceding sentence of this Section 3.14
shall be without recourse to or warranty by the Administrative Agent (other than as to the Administrative Agent’s authority
to execute and deliver such documents).
Section 3.15. Payments.
All payments made by any Loan Guarantor hereunder will be made without setoff, counterclaim or other defense and on the same basis
as payments are made by the Borrower under Sections 2.18 and 2.19 of the Second Lien Credit Agreement.
Section 3.16. Notice, etc.
All notices and other communications provided for hereunder shall be in writing and shall be delivered by hand or overnight
courier service, mailed by certified or registered mail or sent by facsimile or email, as follows:
(a) if
to any Loan Guarantor, addressed to it in care of the Borrower at its address specified in Section 9.01 of the Second
Lien Credit Agreement; or
(b) if
to the Administrative Agent or any Lender, at its address specified in Section 9.01 of the Second Lien Credit Agreement.
Section 3.17. Set
Off. In addition to any rights now or hereafter granted under applicable Requirements of Law and not by way of limitation of
any such rights, while an Event of Default has occurred and is continuing, the Administrative Agent, each Lender and each of their
respective Affiliates shall be entitled to rights of setoff to the extent provided in Section 9.09 of the Second Lien
Credit Agreement.
Section 3.18. Waiver
of Consequential Damages, Etc. To the extent permitted by applicable Requirements of Law, none of the Loan Guarantors nor the
Secured Parties shall assert, and each hereby waives, any claim against each other or any Related Party thereof, on any theory
of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of,
in connection with, or as a result of, this Second Lien Loan Guaranty or any agreement or instrument contemplated hereby, except,
in the case of any claim by any Indemnitee against any of the Loan Guarantors, to the extent such damages would otherwise be subject
to indemnification pursuant to the terms of Section 3.10.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF,
each Loan Guarantor and the Administrative Agent have executed this Second Lien Loan Guaranty as of the date first above written.
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HOLDINGS
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HAYWARD INTERMEDIATE, INC.
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By:
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Name: Andrew Diamond
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Title: Senior Vice President, Finance and Chief Financial Officer
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Signature
Page to Second Lien Loan Guaranty
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SUBSIDIARY GUARANTORS
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GOLDLINE PROPERTIES LLC
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By:
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Name:Andrew Diamond
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Title:Vice President
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HAYWARD INDUSTRIAL PRODUCTS,INC.
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By:
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Name: Andrew Diamond
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Title:Senior Vice President and Chief Financial Officer
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HAYWARD/WRIGHT-AUSTIN INC.
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By:
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Name:Andrew Diamond
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Title:Vice President and Chief Financial Officer
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WEBSTER PUMPS,INC.
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By:
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Name:Andrew Diamond
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Title:Vice President and Chief Financial Officer
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Signature
Page to Second Lien Loan Guaranty
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BANK OF AMERICA, N.A., as Administrative Agent
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By:
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Name:
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Title:
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Signature
Page to Second Lien Loan Guaranty
EXHIBIT A
JOINDER
AGREEMENT
THIS JOINDER AGREEMENT
(this “Agreement”) NO. [●], dated as of [●] [●], 20[●], is entered into among [●],
a [●] ([each, a] [the] “New Subsidiary”), and acknowledged and accepted by Bank of America, N.A., as administrative
agent and collateral agent (together with its successors and permitted assigns in such capacities, the “Administrative
Agent”), pursuant to that certain Second Lien Loan Guaranty, dated as of August 4, 2017 (as amended, restated, amended
and restated, supplemented or otherwise modified from time to time, the “Second Lien Loan Guaranty”), by and
among Hayward Intermediate, Inc., a Delaware corporation (“Holdings”), the Subsidiary Guarantors from time
to time party thereto (Holdings and the Subsidiary Guarantors, collectively, the “Loan Guarantors”) and the
Administrative Agent. All capitalized terms used herein and not otherwise defined herein shall have the meanings set forth in the
Second Lien Loan Guaranty.
[Each] [The] New Subsidiary
and the Administrative Agent, for the benefit of the Secured Parties, hereby agree as follows:
1. [Each]
[The] New Subsidiary hereby acknowledges, agrees and confirms that, by its execution of this Agreement, [each] [the] New Subsidiary
will be deemed to be a Loan Guarantor under the Second Lien Loan Guaranty and a Loan Guarantor for all purposes of the Second Lien
Credit Agreement and shall have all of the rights, benefits, duties and obligations of a Loan Guarantor thereunder as if it had
executed the Second Lien Loan Guaranty. [Each] [The] New Subsidiary hereby ratifies, as of the date hereof, and agrees to be bound
by, all of the terms, provisions and conditions contained in the Second Lien Loan Guaranty. Without limiting the generality of
the foregoing terms of this paragraph 1, [each] [the] New Subsidiary hereby absolutely and unconditionally guarantees, jointly
and severally with the other Loan Guarantors, to the Administrative Agent and the Secured Parties, the prompt payment and performance
of the Guaranteed Obligations in full when due (whether at stated maturity, upon acceleration or otherwise) to the extent of and
in accordance with the Second Lien Loan Guaranty.
2. [Each]
[The] New Subsidiary hereby waives acceptance by the Administrative Agent and the Secured Parties of the guaranty by [each] [the]
New Subsidiary upon the execution of this Agreement by the New Subsidiary.
3. [Each]
[The] New Subsidiary hereby (x) makes, as of the date hereof, each representation and warranty set forth in Section 2.10
of the Second Lien Loan Guaranty and (y) agrees to perform and observe, and to cause each of its Restricted Subsidiaries to
perform and observe, the covenants set forth in Section 2.11 of the Second Lien Loan Guaranty.
4. From
and after the execution and delivery hereof by the parties hereto, this Agreement shall constitute a “Loan Document”
for all purposes of the Second Lien Credit Agreement and the other Loan Documents.
5. This
Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but
all of which shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page of this
Agreement by facsimile or by email as a “.pdf” or “.tif” attachment shall be effective as delivery of a
manually executed counterpart of this Agreement.
6. THIS
AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS
OF THE STATE OF NEW YORK.
[Signature Page Follows]
IN WITNESS WHEREOF,
[each] [the] New Subsidiary has caused this Agreement to be duly executed by its authorized officer, and the Administrative Agent,
for the benefit of the Secured Parties, has caused the same to be accepted by its authorized officer, as of the day and year first
above written.
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[NEW SUBSIDIARY]
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By:
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Name:
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Title:
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Acknowledged and accepted:
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BANK OF AMERICA, N.A., as Administrative Agent
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By:
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Name:
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Title:
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EXHIBIT I
[FORM OF]
SECURITY AGREEMENT
[ATTACHED]
Execution Version
SECOND
LIEN PLEDGE AND SECURITY AGREEMENT
SECOND LIEN PLEDGE
AND SECURITY AGREEMENT dated as of August 4, 2017 (as amended, restated, amended and restated, supplemented or otherwise modified
from time to time, this “Security Agreement”), by and among Hayward Acquisition Corp., a New Jersey corporation
(the “Initial Borrower”), Hayward Industries, Inc., a New Jersey corporation (upon merging with the Initial
Borrower pursuant to the Merger (as defined in the Second Lien Credit Agreement) and as survivor of the Merger, the “Borrower”),
Hayward Intermediate, Inc., a Delaware corporation (“Holdings”), the other Grantors (as defined below)
and Bank of America, N.A., in its capacities as administrative agent and collateral agent (together with its successors and permitted
assigns in such capacities, the “Administrative Agent”) for the Secured Parties under that certain Second Lien
Credit Agreement, dated as of August , 2017 (as amended, restated, amended and restated, supplemented or otherwise
modified from time to time, the “Second Lien Credit Agreement”), by and among Holdings, the Initial Borrower,
the Borrower, the Administrative Agent and the Lenders from time to time parties thereto.
PRELIMINARY
STATEMENT
WHEREAS, the Grantors
(as defined below) are entering into this Security Agreement in order to induce the Lenders to enter into and extend credit to
the Borrower under the Second Lien Credit Agreement and to secure the Secured Obligations, including their obligations under the
Loan Guaranty;
WHEREAS, the ABL Intercreditor
Agreement governs the relative rights and priorities of the Term Secured Parties and the ABL Secured Parties in respect of the
Term Priority Collateral and the ABL Priority Collateral (as each term is defined therein); and
WHEREAS, the Term Intercreditor
Agreement governs the relative rights and priorities of the First Priority Secured Parties and the Second Priority Secured Parties
(as each term is defined therein) in respect of the Collateral;
ACCORDINGLY, the parties
hereto agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.01. Terms
Defined in Second Lien Credit Agreement. Except as set forth in Section 1.02 below, capitalized terms used herein
and not otherwise defined herein shall have the meanings assigned to such terms in the Second Lien Credit Agreement. The rules of
construction set forth in Section 1.03, Section 1.07 and Section 1.10 of the Second Lien Credit
Agreement shall apply to this Security Agreement as if specifically incorporated herein, mutatis mutandis.
Section 1.02. Terms
Defined in UCC. Terms defined in the UCC that are not otherwise defined in this Security Agreement or the Second Lien Credit
Agreement are used herein as defined in Articles 8 or 9 of the UCC, as the context may require (including without limitation, as
if such terms were capitalized in Article 8 or 9 of the UCC, as the context may require, the following terms: “Account,”
“Chattel Paper,” “Commercial Tort Claim,” “Document,” “Electronic
Chattel Paper,” “Equipment,” “Fixture,” “General Intangible,”
“Goods,” “Instruments,” “Inventory,” “Letter-of-Credit Right,”
“Supporting Obligation” and “Tangible Chattel Paper”).
Section 1.03. Definitions
of Certain Terms Used Herein. As used in this Security Agreement, in addition to the terms defined in the preamble and the
Preliminary Statement above, the following terms shall have the following meanings:
“ABL Loan
Documents” means the “Loan Documents” as defined in the ABL Credit Agreement.
“ABL US Collateral”
has the meaning specified to “ABL US Priority Collateral” in the Second Lien Credit Agreement.
“Administrative
Agent” has the meaning set forth in the preamble.
“Article”
means a numbered article of this Security Agreement, unless another document is specifically referenced.
“Borrower”
has the meaning set forth in the preamble.
“Collateral”
has the meaning set forth in Article 2.
“Contract
Rights” means all rights of any Grantor under any Contract, including, without limitation, (i) any and all rights
to receive and demand payments under such Contract, (ii) any and all rights to receive and compel performance under such Contract
and (iii) any and all other rights, interests and claims now existing or in the future arising in connection with such Contract.
“Contracts”
means all contracts between any Grantor and one or more additional parties (including, without limitation, any Hedge Agreement,
licensing agreement and any partnership agreement, joint venture agreement and/or limited liability company agreement).
“Control”
has the meaning set forth in Article 8 or, if applicable, in Section 9-104, 9-105, 9-106 or 9-107 of Article 9 of
the UCC.
“Copyrights”
means, with respect to any Grantor, all of such Grantor’s right, title and interest in and to all Copyrights (as such term
is defined in the Second Lien Credit Agreement).
“Discharge
of ABL Obligations” has the meaning given to such term in the ABL Intercreditor Agreement.
“Domain Names”
means all Internet domain names and associated URL addresses in or to which any Grantor now or hereafter has any right, title or
interest.
“Exhibit”
refers to a specific exhibit to this Security Agreement, unless another document is specifically referenced.
“First Lien
Loan Documents” means the “Loan Documents” as defined in the First Lien Credit Agreement.
“First Priority
Obligations Payment Date” has the meaning given to such term in the Term Intercreditor Agreement.
“Grantors”
means (i) Holdings, the Initial Borrower, the Borrower and the Subsidiary Guarantors party to this Security Agreement on the
Closing Date and (ii) each Subsidiary Guarantor that becomes a party to this Security Agreement as a Grantor after the Closing
Date in accordance with Section 7.10 of this Security Agreement and Section 5.12 of the Second Lien Credit
Agreement. Notwithstanding anything else provided herein, any reference to Grantors in connection with a representation or covenant
under this Security Agreement that is limited by its terms to the Closing Date shall, for such purposes, mean the Grantors on the
Closing Date.
“Holdings”
has the meaning set forth in the preamble.
“Intellectual
Property Collateral” means collectively, all (a) Copyrights, Patents, Trademarks, Trade Secrets, Domain Names, Licenses
and Software and any and all other IP Rights; (b) all income, royalties, damages, claims and payments now or hereafter due
and/or payable with respect to any of the foregoing, including, without limitation, damages, claims and payments for past, present
and future infringements, misappropriation, dilution or other violations of any of the foregoing; (c) all rights to sue for
past, present and future infringements, misappropriation, dilution or other violations of any of the foregoing; and (d) all
rights corresponding to any of the foregoing.
“Intellectual
Property Security Agreement Supplements” means (a) a Trademark Security Agreement Supplement, (b) a Patent
Security Agreement Supplement or (c) a Copyright Security Agreement Supplement, in each case, substantially in the form of
Annex A to the relevant Intellectual Property Security Agreement, as applicable.
“Licenses”
means, with respect to any Grantor, whether as licensor or licensee, all of such Grantor’s right, title, and interest in
and to (a) any and all licensing agreements or similar arrangements with respect to (1) Patents, (2) Copyrights,
(3) Trademarks, (4) Trade Secrets, (5) Software, or (6) any and all other IP Rights, (b) all income, royalties,
damages, claims and payments now or hereafter due and/or payable with respect to any of the foregoing, including, without limitation,
damages, claims and payments for past, present and future breaches thereof, (c) all rights to sue for past, present and future
breaches thereof, and (d) all rights corresponding to any of the foregoing.
“Money”
has the meaning set forth in Article 1 of the UCC.
“Patents”
means, with respect to any Grantor, all of such Grantor’s right, title and interest in and to all Patents (as such term is
defined in the Second Lien Credit Agreement).
“Perfection
Certificate” means the Perfection Certificate delivered pursuant to Section 4.01(i) of the Second Lien
Credit Agreement, as modified and supplemented from time to time as a result of the delivery of any Perfection Certificate Supplement
pursuant to Section 5.01(c) of the Second Lien Credit Agreement.
“Permits”
shall mean all licenses, permits, rights, orders, variances, franchises or authorizations of or from any Governmental Authority.
“Pledged Collateral”
means all Pledged Stock and Stock Rights, including all stock certificates, options or rights of any nature whatsoever in respect
of the Pledged Stock or other Stock Rights that may be issued or granted to, or held by, any Grantor while this Security Agreement
is in effect, all Instruments, Securities and other Investment Property owned by any Grantor, whether or not physically delivered
to the Administrative Agent pursuant to this Security Agreement, whether now owned or hereafter acquired by such Grantor and any
and all Proceeds thereof, but in any case, excluding any items constituting Excluded Assets as expressly limited or excluded by
the definition of “Collateral and Guarantee Requirement” in the Second Lien Credit Agreement.
“Pledged Stock”
means, with respect to any Grantor, the shares of Capital Stock described in Schedule 3 to the Perfection Certificate as
held by such Grantor, together with any other shares of Capital Stock as are hereafter acquired by such Grantor, excluding any
items constituting Excluded Assets.
“Proceeds”
has the meaning assigned in Article 9 of the UCC and, in any event, shall also include but not be limited to (i) any
and all proceeds of any insurance, indemnity, warranty or guaranty payable to the Administrative Agent or any Grantor from time
to time with respect to any of the Collateral, (ii) any and all payments (in any form whatsoever) made or due and payable
to any Grantor from time to time in connection with any requisition, confiscation, condemnation, seizure or forfeiture of all or
any part of the Collateral by any Governmental Authority (or any Person acting under color of Governmental Authority), (iii) any
and all Stock Rights and (iv) any and all other amounts from time to time paid or payable under or in connection with any
of the Collateral.
“Receivables”
means any Account, Chattel Paper, Document, Instrument and/or any General Intangible, in each case, that is a right or claim
to receive money or that is otherwise included as Collateral, but in any case, excluding any item constituting Excluded Assets.
“Second Lien
Credit Agreement” has the meaning set forth in the Preliminary Statement.
“Section”
means a numbered section of this Security Agreement, unless another document is specifically referenced.
“Security
Agreement” has the meaning set forth in the preamble.
“Software”
means computer programs, source code, object code and supporting documentation including “software” as such term is
defined in Article 9 of the UCC, as well as computer programs that may be construed as included in the definition of Goods.
“Stock Rights”
means all dividends, warrants, instruments or other distributions and any other right or property which any Grantor shall receive
or shall become entitled to receive for any reason whatsoever with respect to, in substitution for or in exchange for any Capital
Stock constituting Collateral, any right to receive any Capital Stock constituting Collateral and any right to receive earnings,
in which such Grantor now has or hereafter acquires any right, issued by an issuer of such Capital Stock.
“Trade Secrets”
means, with respect to any Grantor, all of such Grantor’s right, title and interest in and to the following: (a) confidential
and proprietary information, including unpatented inventions, invention disclosures, engineering or other data, information, production
procedures, know-how, financial data, customer lists, supplier lists, business and marketing plans, processes, schematics, algorithms,
techniques, analyses, proposals, source code and data collections; (b) all income, royalties, damages, claims and payments
now or hereafter due and/or payable with respect to any of the foregoing, including, without limitation, damages, claims and payments
for past, present and future misappropriation or infringements of any of the foregoing; (c) all rights to sue for past, present
and future misappropriation or infringements of any of the foregoing, including the right to settle suits involving claims and
demands for royalties owing; and (d) all rights corresponding to any of the foregoing.
“Trademarks”
means, with respect to any Grantor, all of such Grantor’s right, title and interest in and to all Trademarks (as such term
is defined in the Second Lien Credit Agreement).
ARTICLE 2
GRANT OF SECURITY INTEREST
Section 2.01. Grant
of Security Interest.
(a) As
security for the prompt and complete payment or performance, as the case may be, in full of the Secured Obligations, each Grantor
hereby pledges, collaterally assigns, mortgages, transfers and grants to the Administrative Agent, its successors and permitted
assigns, on behalf of and for the benefit of the Secured Parties, a continuing security interest in all of its right, title and
interest in, to and under all of the following personal property and other assets, whether now owned by or owing to, or hereafter
acquired by or arising in favor of such Grantor, and regardless of where located (all of which are collectively referred to as
the “Collateral”):
(i) all
Accounts;
(ii) all
Chattel Paper (including, without limitation, all Tangible Chattel Paper and all Electronic Chattel Paper);
(iii) all
Intellectual Property Collateral;
(iv) all
Documents;
(v) all
Equipment;
(vi) all
Fixtures;
(vii) all
General Intangibles;
(viii) all
Goods;
(ix) all
Instruments;
(x) all
Inventory;
(xi) all
Investment Property, Pledged Stock and other Pledged Collateral;
(xii) all
letters of credit and Letter-of-Credit Rights;
(xiii) all
Commercial Tort Claims described on Schedule 6 to the Perfection Certificate (including any supplements to such schedule);
(xiv) all
Permits;
(xv) all
Software and all recorded data of any kind or nature, regardless of the medium of recording;
(xvi) all
Contracts, together with all Contract Rights arising thereunder;
(xvii) all
other personal property not otherwise described in clauses (i) through (xvi) above;
(xviii) all
Supporting Obligations;
(xix) to
the extent constituting ABL US Collateral, Deposit Accounts, Securities Accounts, all cash, Money, Securities and other investments
therein, and all Security Entitlements in respect thereof; and
(xx) all
accessions to, substitutions and replacements for and Proceeds and products of the foregoing, together with all books and records,
customer lists, credit files, computer files, programs, printouts and other computer materials and records related thereto and
any General Intangibles at any time evidencing or relating to any of the foregoing and all collateral security and Guarantees given
by any Person with respect to any of the foregoing.
(b) Notwithstanding
the foregoing, no Lien or security interest is granted hereunder on any Excluded Asset and the term “Collateral” (and
any component definition thereof) shall not include any Excluded Asset or any other asset to the extent expressly limited or excluded
by the definition of “Collateral and Guarantee Requirement” in the Second Lien Credit Agreement. Notwithstanding anything
to the contrary contained herein, immediately upon the ineffectiveness, lapse or termination of any restriction or condition set
forth in the definition of “Excluded Assets” in the Second Lien Credit Agreement that prevented the grant of a security
interest in any right, interest or other asset that would have, but for such restriction or condition, constituted Collateral,
the Collateral shall include, and the relevant Grantor shall be deemed to have automatically granted a security interest in, all
relevant previously restricted or conditioned rights, interests or other assets, as the case may be, as if such restriction or
condition had never been in effect.
(c) Notwithstanding
anything to the contrary in this Security Agreement or any other Loan Document, no Grantor shall be required to take any action
with respect to the Collateral pledged hereunder (and no Lien on such Collateral shall be required to be perfected and/or Second
Priority, as applicable) to the extent such action is inconsistent with Section 5.12 of the Second Lien Credit Agreement
or the Perfection Requirements (and is in accordance with applicable Requirements of Law). With respect to any Collateral that
is ABL US Collateral, to the extent the ABL Agent determines that any property or assets shall not become part of, or shall be
excluded from, the ABL US Collateral because it constitutes “Excluded Assets” (as defined in the ABL Credit Agreement),
or that any delivery or notice requirement in respect of any such ABL US Collateral shall be extended or waived, the Administrative
Agent shall automatically be deemed to accept such determination and shall execute any documentation, if applicable, requested
by the Borrower in connection therewith (at the Grantor’s expense).
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
The Grantors, jointly
and severally, represent and warrant to the Administrative Agent as and when required under the Second Lien Credit Agreement, for
the benefit of the Secured Parties, that:
Section 3.01. Title,
Perfection and Priority; Filing Collateral. Subject to the Legal Reservations, this Security Agreement is effective to create
a legal, valid and enforceable Lien on and security interest in the Collateral in favor of the Administrative Agent for the benefit
of the Secured Parties and, subject to the terms of the last paragraph of Section 4.01 of the Second Lien Credit Agreement
and Section 2.01(c) of this Security Agreement, the Administrative Agent will have a fully perfected Second Priority
security interest in the Collateral securing the Secured Obligations to the extent perfection in such Collateral is required by
the Perfection Requirements upon taking all actions to perfect such Liens as in accordance with this Security Agreement and the
Collateral and Guarantee Requirement.
Section 3.02. Names,
Type and Jurisdiction of Organization, Organizational and Identification Numbers.
(a) (i) As
of the Closing Date, the exact legal name of each Grantor, as such name appears in its respective Organizational Documents filed
with the Secretary of State of such Grantor’s jurisdiction of organization, is set forth in Schedule 1(a) to
the Perfection Certificate and (ii) as of the Closing Date, each Grantor is the type of entity disclosed next to its name
in Schedule 1(a) to the Perfection Certificate. Also, as of the Closing Date, set forth in Schedule 1(a) to
the Perfection Certificate is the jurisdiction of organization of each Grantor.
(b) Except
as otherwise disclosed in Schedule 1(d) to the Perfection Certificate, as of the Closing Date, set forth in Schedule
1(b) to the Perfection Certificate is any other legal name that any Grantor has had in the past five years, together with
the date of the relevant change.
(c) As
of the Closing Date, set forth in Schedule 1(c) to the Perfection Certificate is a list of the information required
by Section 1(a) of the Perfection Certificate for any other Person (i) to which any Grantor became the successor
by merger, consolidation or acquisition or (ii) that has been liquidated into, or transferred all or substantially all of
its assets to, any Grantor, at any time within the past five years preceding the Closing Date.
(d) As
of the Closing Date, except as set forth in Schedule 1(d) to the Perfection Certificate or as otherwise disclosed in
Schedule 1(c) to the Perfection Certificate, no Grantor has changed its jurisdiction of organization or form of entity
at any time during the past four months.
Section 3.03. Locations.
The address of each Grantor’s chief executive office as of the Closing Date is accurately disclosed on Schedule 2
to the Perfection Certificate.
Section 3.04. Intellectual
Property.
(a) Upon
filing of appropriate financing statements with the Secretary of State (or equivalent office) of the state of organization of such
Grantor and the filing of the applicable Intellectual Property Security Agreement with the United States Copyright Office or the
United States Patent and Trademark Office, as applicable, the Administrative Agent shall have a fully perfected Second Priority
Lien on the Collateral constituting United States issued or registered Patents, Trademarks and Copyrights (and applications therefor).
(b) No
Grantor is aware of (i) any third-party claim (A) that any of its owned Patent, Trademark, Domain Name or Copyright registrations
or applications is invalid or unenforceable or (B) challenging such Grantor’s rights to such registrations and applications
or
(ii) any
basis for such claims with respect to such Grantor, other than, in each case, to the extent any such third-party claims would not
reasonably be expected to have a Material Adverse Effect.
Section 3.05. Pledged
Collateral; Instruments and Chattel Paper. (i) All Pledged Stock has been duly authorized and validly issued (to the extent
such concepts are relevant with respect to such Pledged Stock) by the issuer thereof and is fully paid and non-assessable, (ii) each
Grantor is the direct owner, beneficially and of record, of the Pledged Stock described in Schedule 3 to the Perfection
Certificate as held by such Grantor, (iii) each Grantor holds the Pledged Stock described in Schedule 3 to the Perfection
Certificate as held by such Grantor free and clear of all Liens (other than Permitted Liens), (iv) as
of the Closing Date, subject to the terms of the last paragraph of Section 4.01 of the Second Lien Credit Agreement,
all certificates or instruments representing or evidencing the Pledged Collateral which are required to be delivered pursuant to
Section 4.02 hereof have been delivered to the Administrative Agent in suitable form for transfer by delivery or accompanied
by duly executed instruments of transfer or assignment in blank and the Administrative Agent has a perfected Second Priority security
interest therein to the extent perfection in such Collateral is required by the Perfection Requirements.
Section 3.06. Recourse.
This Security Agreement is made with full recourse to each Grantor and pursuant to and upon all the warranties, representations,
covenants and agreements on the part of such Grantor contained herein, in the Loan Documents and otherwise in writing in connection
herewith and therewith.
ARTICLE 4
COVENANTS
From the date hereof,
and thereafter until the Termination Date (in each case, subject to Section 2.01(c) of this Security Agreement):
Section 4.01. General.
(a) Authorization
to File Financing Statements, Ratification. Each Grantor hereby (x) authorizes the Administrative Agent to (A) file
all financing statements (including amendments and continuations thereto) with respect to the Collateral naming such Grantor as
debtor and the Administrative Agent as secured party, in form appropriate for filing under the UCC of the relevant jurisdiction,
(B) make all filings with the United States Patent and Trademark Office and the United States Copyright Office (including
filing any Intellectual Property Security Agreement) for the purpose of perfecting, recording, enforcing, maintaining or protecting
the Lien of the Administrative Agent in each Grantor’s United States issued, registered or applied for Patents, Trademarks
and Copyrights (in each case, to the extent constituting Collateral) and naming such Grantor as debtor and the Administrative Agent
as secured party and (y) agrees to take such other actions as required by Section 5.14 of the Second Lien Credit
Agreement, in each case as may from time to time be necessary and reasonably requested by the Administrative Agent in order to
establish and maintain a Second Priority (subject to Permitted Liens (to the extent such Permitted Liens are not prohibited from
being senior to the Lien granted to the Administrative Agent hereunder)), valid, enforceable (subject to the Legal Reservations)
and perfected security interest in and subject, in the case of Pledged Collateral, to Section 4.02 hereof, Control
of, the Collateral. Each Grantor shall pay any applicable filing fees, recordation fees and related expenses relating to its Collateral
in accordance with Section 9.03(a) of the Second Lien Credit Agreement. The Administrative Agent may file financing
statements in any applicable UCC jurisdiction and may (i) indicate the Collateral (A) as “all assets” of
the applicable Grantor or words of similar effect, regardless of whether any particular asset comprised in the Collateral falls
within the scope of Article 9 of the UCC of such jurisdiction, or (B) by any other description which reasonably approximates
the description contained in this Security Agreement and (ii) contain any other information required by part 5 of Article 9
of the UCC for the sufficiency or filing office acceptance of any financing statement or amendment, including (A) in each
case to the extent applicable, whether the Grantor is an organization, the type of organization and any organization identification
number issued to the Grantor and (B) in the case of a financing statement filed as a fixture filing, a sufficient description
of the relevant real property to which the Collateral relates. Each Grantor agrees to furnish any such information to the Administrative
Agent promptly upon request.
(b) Further
Assurances. Each Grantor agrees, at its own expense, to take any and all actions reasonably necessary to defend title to the
Collateral against all Persons (other than Persons holding Permitted Liens on such Collateral that have priority over the Administrative
Agent’s Lien) and to defend the security interest of the Administrative Agent in the Collateral and the priority thereof
against any Lien that is not a Permitted Lien.
(c) Change
of Name, Etc. Following the occurrence of a change for which delivery of any notice is required by Section 5.01(i) of
the Second Lien Credit Agreement, the relevant Grantor shall promptly make all filings required under the UCC or other applicable
Requirements of Law and take all other actions reasonably requested by the Administrative Agent and deemed by the Administrative
Agent to be necessary or reasonable and appropriate to ensure that the Administrative Agent shall continue at all times following
such change to have a valid, legal, enforceable (subject to the Legal Reservations) and perfected Second Priority Lien (subject
to Permitted Liens (to the extent such Permitted Liens are not prohibited from being senior to the Lien granted to the Administrative
Agent hereunder)) in such Collateral for its benefit and the benefit of the other Secured Parties.
Section 4.02. Pledged
Collateral.
(a) Delivery
of Certificated Securities, Tangible Chattel Paper, Instruments and Documents. Each Grantor will, subject to the last
paragraph of Section 4.01 of the Second Lien Credit Agreement and the Perfection Requirements, (i) on the Closing
Date, deliver to the Administrative Agent for the benefit of the Secured Parties, the originals of all (x) certificated Pledged
Stock and (y) Material Debt Instruments, in each case under clauses (x) and (y), to the extent constituting
Collateral owned by such Grantor as of the Closing Date, accompanied by undated instruments of transfer or assignment duly executed
in blank and (ii) after the Closing Date, hold in trust for the Administrative Agent upon receipt and (x) if the event
giving rise to the obligation under this Section 4.02(a) occurs during the first three Fiscal Quarters of any
Fiscal Year, on or before the date on which financial statements are required to be delivered pursuant to Section 5.01(a) of
the Second Lien Credit Agreement for the Fiscal Quarter in which the relevant event occurred or (y) if the event giving rise
to the obligation under this Section 4.02(a) occurs during the fourth Fiscal Quarter of any Fiscal Year, on or
before the date that is 60 days after the end of such Fiscal Quarter (or, in each of the cases of clauses (x) and (y),
such longer period as the Administrative Agent may reasonably agree), deliver to the Administrative Agent for the benefit of the
Secured Parties any (1) certificated Capital Stock and (2) Material Debt Instruments, in each case, to the extent constituting
Collateral received after the date hereof, accompanied by undated instruments of transfer or assignment duly executed in blank.
(b) Uncertificated
Securities and Pledged Collateral. Except to the extent in connection with any Investment or Disposition permitted by the Second
Lien Credit Agreement, with respect to any Capital Stock owned by any Grantor to the extent required to be pledged to the Administrative
Agent pursuant to the terms hereof (other than Capital Stock held by a Clearing Corporation, Securities Intermediary or other financial
intermediary of any kind) which is not a certificated Security for purposes of the UCC, to the extent constituting Pledged Collateral,
such Grantor shall not permit any issuer of such Capital Stock to (i) enter into any agreement with any Person, other than
the Administrative Agent, whereby such issuer effectively delivers “control” of such partnership interests or limited
liability company interests (as applicable) under the UCC to such Person, or (ii) if such Capital Stock is not a Security
for purposes of the UCC, allow such Capital Stock to become Securities unless such Grantor certificates such securities and complies
with the procedures set forth in Section 4.02(a) within the time period prescribed therein. Each Grantor which
is an issuer of any uncertificated Pledged Collateral described in this Section 4.02(b) hereby agrees to comply
with all instructions from the Administrative Agent without such Grantor’s further consent, in each case subject to the notice
requirements set forth in Section 5.01(a)(iv) hereof.
(c) Registration
in Nominee Name; Denominations. The Administrative Agent, on behalf of the Secured Parties, shall hold certificated Pledged
Collateral required to be delivered and so delivered to the Administrative Agent under clause (a) above in the name
of the applicable Grantor, endorsed or assigned in blank or in favor of the Administrative Agent, but at any time when an Event
of Default shall have occurred and be continuing, and upon prior written notice to the Borrower, the Administrative Agent shall
have the right (in its sole and absolute discretion, but subject to the last paragraph of Section 7.01 of the Second
Lien Credit Agreement) to hold the Pledged Collateral in its own name as pledgee, or in the name of its nominee (as pledgee or
as sub-agent). At any time when an Event of Default has occurred and is continuing, but subject to the last paragraph of Section 7.01
of the Second Lien Credit Agreement, the Administrative Agent shall have the right to exchange the certificates representing Pledged
Collateral for certificates of smaller or larger denominations for any purpose consistent with this Security Agreement.
(d) Exercise
of Rights in Pledged Collateral. It is agreed that:
(i) without
in any way limiting the foregoing and subject to clause (ii) below, each Grantor shall have the right, unless an Event
of Default has occurred and is continuing after prior written notice to the Borrower by the Administrative Agent, to exercise all
voting rights or other rights relating to the Pledged Collateral for any purpose that does not violate this Security Agreement,
the Second Lien Credit Agreement or any other Loan Document;
(ii) the
Administrative Agent or its nominee at any time when an Event of Default has occurred and is continuing shall have the right to
exercise the rights and remedies provided under Section 5.01(a)(iv) (subject to the notice requirements set forth
therein) and upon the occurrence and during the continuance of an Event of Default after prior written notice to the Borrower,
all rights of the Grantors to exercise or refrain from exercising voting or other consensual rights as a holder with respect to
any Pledged collateral shall cease; and
(iii) subject
to Section 5.01(a)(iv), each Grantor shall be entitled to receive and retain any and all dividends, interest, principal
and other distributions paid on or distributed in respect of the Pledged Collateral (unless, and solely to the extent, otherwise
provided under the Second Lien Credit Agreement or the other Loan Documents); provided that any non-cash dividends or other
distributions that would constitute Pledged Collateral, whether resulting from a subdivision, combination or reclassification of
the outstanding Capital Stock of the issuer of any Pledged Collateral or received in exchange for Pledged Collateral or any part
thereof, or in redemption thereof, or as a result of any merger, consolidation, acquisition or other exchange of assets to which
such issuer may be a party or otherwise, shall, to the extent constituting Collateral, hold in trust for the Administrative Agent
and be and become part of the Pledged Collateral, and, if received by any Grantor, shall be delivered to the Administrative Agent
as and to the extent required by clause (a) above. The Administrative Agent shall promptly deliver to the applicable
Grantor (without recourse and without any representation or warranty) any Pledged Collateral in its possession if requested to
be delivered to the issuer or the holder thereof in connection with any redemption or exchange of such Pledged Collateral not prohibited
by the Second Lien Credit Agreement (unless the Second Lien Credit Agreement prohibits such redemption or exchange at such time).
Section 4.03. Intellectual
Property.
(a) At
any time when an Event of Default has occurred and is continuing, and upon the written request of the Administrative Agent, each
Grantor will (i) use its commercially reasonable efforts to obtain all consents and approvals necessary and appropriate for
the assignment to or for the benefit of the Administrative Agent of any License held by such Grantor in the U.S. to enable the
Administrative Agent to enforce the security interests granted hereunder and (ii) to the extent required pursuant to any material
License in the U.S. under which such Grantor is the licensee, deliver to the licensor thereunder any notice of the grant of security
interest hereunder or such other notices required to be delivered thereunder in order to permit the security interest created or
permitted to be created hereunder pursuant to the terms of such License.
(b) Each
Grantor shall notify the Administrative Agent promptly if it knows that any application for or registration of any Patent, Trademark,
Domain Name, or Copyright (now or hereafter existing) has become abandoned or dedicated to the public, or of any determination
or development (including the institution of, or any such determination or development in, any proceeding in the United States
Patent and Trademark Office, the United States Copyright Office or any court) abandoning such Grantor’s ownership of any
such Patent, Trademark or Copyright, its right to register the same, or to keep and maintain the same, except, in each case, for
Dispositions not prohibited by the Second Lien Credit Agreement or where such occurrences individually or in the aggregate, could
not reasonably be expected to result in a Material Adverse Effect.
(c) In
the event that any Grantor (x) files an application for the registration of any Patent, Trademark or Copyright with the United
States Patent and Trademark Office or the United States Copyright Office, (y) acquires any such Patent, Trademark or Copyright
by purchase or assignment, or (z) files a Statement of Use or an Amendment to Allege Use with respect to any “intent-to-use”
Trademark application, in each case, after the Closing Date and to the extent the same constitutes Collateral (and other than as
a result of an application that is then subject to an Intellectual Property Security Agreement or Intellectual Property Security
Agreement Supplement becoming registered), it shall, (i) if the event giving rise to the obligation under this Section 4.03(c) occurs
during the first three Fiscal Quarters of any Fiscal Year, on or before the date on which financial statements are required to
be delivered pursuant to Section 5.01(a) of the Second Lien Credit Agreement for the Fiscal Quarter in which the
relevant event occurred or (ii) if the event giving rise to the obligation under this Section 4.03(c) occurs
during the fourth Fiscal Quarter of any Fiscal Year, on or before the date that is 60 days after the end of such Fiscal Quarter
(or, in the case of each of clauses (i) and (ii), such longer period as the Administrative Agent may reasonably
agree), notify the Administrative Agent and, execute and deliver to the Administrative Agent, at such Grantor’s sole cost
and expense, any Intellectual Property Security Agreement or Intellectual Property Security Agreement Supplement, as applicable,
or any other instrument as the Administrative Agent may reasonably request to evidence the Administrative Agent’s security
interest in such registered Patent, Trademark or Copyright (or application therefor), and the General Intangibles of such Grantor
relating thereto or represented thereby.
(d) Each
Grantor shall take all actions necessary or reasonably requested by the Administrative Agent to (i) maintain and pursue each
application and to obtain and maintain the registration of each Patent, Trademark, Domain Name and, to the extent consistent with
past practices, Copyright that constitutes Collateral (now or hereafter existing), including by filing applications for renewal,
affidavits of use, affidavits of non-contestability and, if consistent with good business judgment (as determined by such Grantor),
by initiating opposition and interference and cancellation proceedings against third parties, (ii) maintain and protect the
secrecy or confidentiality of its Trade Secrets and (iii) otherwise protect and preserve such Grantor’s rights in, and
the validity or enforceability of, its Intellectual Property Collateral, in each case except where failure to do so (A) could
not reasonably be expected to result in a Material Adverse Effect, or (B) is otherwise permitted under the Second Lien Credit
Agreement.
(e) Each
Grantor shall promptly notify the Administrative Agent of any material infringement or misappropriation of such Grantor’s
Patents, Trademarks, Copyrights or Trade Secrets of which it becomes aware, and shall take such actions as are reasonable and appropriate
under the circumstances to protect such Patent, Trademark, Copyright or Trade Secret, except where such infringement, misappropriation
or dilution could not reasonably be expected to cause a Material Adverse Effect.
Section 4.04. Commercial
Tort Claims. After the Closing Date, on or before the date that is 60 days after the end of any Fiscal Quarter or Fiscal Year
(or such longer period as the Administrative Agent may reasonably agree), each relevant Grantor shall notify the Administrative
Agent of any Commercial Tort Claim with an individual value (as reasonably estimated by the Borrower) in excess of $10,000,000
acquired by it, together with an update to Schedule 6 to the Perfection Certificate containing a summary description thereof
sufficient to create a security interest therein, and such Commercial Tort Claim (and the Proceeds thereof) shall automatically
constitute Collateral, all upon the terms of this Security Agreement.
Section 4.05. Insurance.
Except to the extent otherwise permitted to be retained by any Grantor or applied by any Grantor pursuant to the terms of the Loan
Documents, the Administrative Agent shall, at the time any proceeds of any insurance in respect of the Collateral are distributed
to the Administrative Agent, apply such proceeds at any time the Administrative Agent is exercising remedies in accordance with
Section 5.01 in accordance with Section 5.04 hereof. Each Grantor assumes all liability and responsibility
in connection with the Collateral acquired by it, and the liability of such Grantor to pay the Secured Obligations shall in no
way be affected or diminished by reason of the fact that such Collateral may be lost, destroyed, stolen, damaged or for any reason
whatsoever unavailable to such Grantor.
Section 4.06. Grantors
Remain Liable Under Contracts. Each Grantor (rather than the Administrative Agent or any Secured Party) shall remain liable
(as between itself and any relevant counterparty) to observe and perform all the conditions and obligations to be observed and
performed by it under any Contract relating to the Collateral, all in accordance with the terms and conditions thereof. Neither
the Administrative Agent nor any other Secured Party shall have any obligation or liability under any Contract by reason of or
arising out of this Security Agreement or the receipt by the Administrative Agent or any other Secured Party of any payment relating
to such Contract pursuant hereto, nor shall the Administrative Agent or any other Secured Party be obligated in any manner to perform
any of the obligations of any Grantor under or pursuant to any Contract, to make any payment, to make any inquiry as to the nature
or sufficiency of any performance or to collect the payment of any amounts which may have been assigned to them or to which they
may be entitled at any time or times.
Section 4.07. Grantors
Remain Liable Under Accounts. Notwithstanding anything herein to the contrary, the Grantors shall remain liable under each
of the Accounts to observe and perform all of the conditions and obligations to be observed and performed by it thereunder, all
in accordance with the terms of any agreement giving rise to such Accounts. Neither the Administrative Agent nor any other Secured
Party shall have any obligation or liability under any Account (or any agreement giving rise thereto) by reason of or arising out
of this Security Agreement or the receipt by the Administrative Agent or any other Secured Party of any payment relating to such
Account pursuant hereto, nor shall the Administrative Agent or any other Secured Party be obligated in any manner to perform any
of the obligations of any Grantor under or pursuant to any Account (or any agreement giving rise thereto), to make any payment,
to make any inquiry as to the nature or the sufficiency of any payment received by them or as to the sufficiency of any performance
by any party under any Account (or any agreement giving rise thereto), to present or file any claim, to take any action to enforce
any performance or to collect the payment of any amounts which may have been assigned to them or to which they may be entitled
at any time or times.
ARTICLE 5
REMEDIES
Section 5.01. Remedies.
(a) Each
Grantor agrees that, at any time when an Event of Default has occurred and is continuing, but subject to the last paragraph of
Section 7.01 of the Second Lien Credit Agreement, the Administrative Agent may exercise any or all of the following rights
and remedies (in addition to the rights and remedies existing under applicable Requirements of Law):
(i) the
rights and remedies provided in this Security Agreement, the Second Lien Credit Agreement, or any other Loan Document; provided
that this Section 5.01(a) shall not limit any rights available to the Administrative Agent prior to the occurrence
and continuance of an Event of Default;
(ii) the
rights and remedies available to a secured party under the UCC of each relevant jurisdiction (whether or not the UCC applies to
the affected Collateral) or under any other applicable Requirements of Law (including, without limitation, any law governing the
exercise of a bank’s right of setoff or bankers’ Lien) or in equity when a debtor is in default under a security agreement;
(iii) without
notice (except as specifically provided in Section 7.01 or elsewhere herein), demand or advertisement of any kind to
any Grantor or any other Person, but subject to the terms of any applicable lease agreement, personally, or by agents or attorneys,
enter the premises of any Grantor where any Collateral is located (through self-help and without judicial process) to collect,
receive, assemble, process, appropriate, sell, lease, assign, grant an option or options to purchase or otherwise dispose of, deliver,
or realize upon, the Collateral or any part thereof in one or more parcels at one or more public or private sales (which sales
may be adjourned or continued from time to time with or without notice and may take place at such Grantor’s premises or elsewhere),
for cash, on credit or for future delivery without assumption of any credit risk, and upon such other terms as the Administrative
Agent may deem commercially reasonable;
(iv) upon
one Business Day’s written notice to the Borrower, (A) transfer and register in its name or in the name of its nominee
the whole or any part of the Pledged Collateral and (B) exercise the voting and all other rights as a holder with respect
thereto, to collect and receive all cash dividends, interest, principal and other distributions made thereon and to otherwise act
with respect to the Pledged Collateral as though the Administrative Agent was the outright owner thereof; and
(v) to
take possession of the Collateral or any part thereof, by directing such Grantor in writing to deliver the same to the Administrative
Agent at any reasonable place or places designated by the Administrative Agent, in which event such Grantor shall at its own expense
forthwith cause the same to be moved to the place or places so designated by the Administrative Agent and there delivered to the
Administrative Agent.
(b) Each
Grantor acknowledges and agrees that compliance by the Administrative Agent, on behalf of the Secured Parties, with any applicable
state or federal Requirements of Law in connection with a disposition of the Collateral will not be considered to adversely affect
the commercial reasonableness of any sale of the Collateral.
(c) The
Administrative Agent shall have the right in any public sale and, to the extent permitted by applicable Requirements of Law, in
any private sale, to purchase for the benefit of the Administrative Agent and the Secured Parties, all or any part of the Collateral
so sold, free of any right of equity redemption that Grantor is permitted to release and waive pursuant to applicable Requirements
of Law, and, each Grantor hereby expressly releases such right to equity redemption to the extent permitted by applicable Requirements
of Law.
(d) Until
the Administrative Agent is able to effect a sale, lease, transfer or other disposition of any particular Collateral under this
Section 5.01, the Administrative Agent shall have the right to hold or use such Collateral, or any part thereof, to
the extent that it deems appropriate for the purpose of preserving such Collateral or the value of such Collateral, or for any
other purpose deemed reasonably appropriate by the Administrative Agent. At any time when an Event of Default has occurred and
is continuing, the Administrative Agent may, if it so elects, seek the appointment of a receiver or keeper to take possession of
any Collateral and to enforce any of the Administrative Agent’s remedies (for the benefit of the Administrative Agent and
Secured Parties), with respect to such appointment without prior notice or hearing as to such appointment.
(e) Notwithstanding
the foregoing, neither the Administrative Agent nor any Secured Party shall be required to (i) make any demand upon, or pursue
or exhaust any of their rights or remedies against, the Grantors, any other obligor, guarantor, pledgor or any other Person with
respect to the payment of the Secured Obligations or to pursue or exhaust any of their rights or remedies with respect to any Collateral
therefor or any direct or indirect Guarantee thereof, (ii) marshal the Collateral or any Guarantee of the Secured Obligations
or to resort to the Collateral or any such Guarantee in any particular order, or (iii) effect a public sale of any Collateral.
(f) Each
Grantor recognizes that the Administrative Agent may be unable to effect a public sale of any or all the Pledged Collateral and
may be compelled to resort to one or more private sales thereof. Each Grantor also acknowledges that any private sale may result
in prices and other terms less favorable to the seller than if such sale were a public sale and, notwithstanding such circumstances,
agrees that no such private sale shall be deemed to have been made in a commercially unreasonable manner solely by virtue of such
sale being private. The Administrative Agent shall be under no obligation to delay a sale of any of the Pledged Collateral for
the period of time necessary to permit any Grantor or the issuer of any Pledged Collateral to register such securities for public
sale under the Securities Act of 1933, as amended, or under applicable state securities laws, even if any Grantor and the issuer
would agree to do so.
(g) The
Administrative Agent and each Secured Party (by its acceptance of the benefits of this Security Agreement) acknowledges and agrees
that notwithstanding any other provisions in this Security Agreement or any other Loan Document, the exercise of rights or remedies
with respect to certain Collateral and the enforcement of any security interests therein may be limited or restricted by, or require
any consents, authorizations approvals or licenses under, any Requirement of Law.
(h) Notwithstanding
the foregoing, any rights and remedies provided in this Section 5.01 shall be subject to the Intercreditor Agreements
(and any other applicable Acceptable Intercreditor Agreements).
Section 5.02. Grantors’
Obligations Upon Default. Upon the request of the Administrative Agent at any time when an Event of Default has occurred and
is continuing, but subject to the last paragraph of Section 7.01 of the Second Lien Credit Agreement, each Grantor
will:
(a) at
its own cost and expense (i) assemble and make available to the Administrative Agent, the Collateral and all books and records
relating thereto at any place or places reasonably specified by the Administrative Agent, whether at such Grantor’s premises
or elsewhere, (ii) deliver all tangible evidence of its Accounts and Contract Rights (including, without limitation, all documents
evidencing the Accounts and all Contracts) and such books and records to the Administrative Agent or to its representatives (copies
of which evidence and books and records may be retained by such Grantor) and (iii) if the Administrative Agent so directs
and in a form and in a manner reasonably satisfactory to the Administrative Agent, legend the Accounts and the Contracts, as well
as books, records and documents (if any) of such Grantor evidencing or pertaining to such Accounts and Contracts with an appropriate
reference to the fact that such Accounts and Contracts have been assigned to the Administrative Agent and that the Administrative
Agent has a security interest therein; and
(b) subject
to the terms of any applicable lease agreement, permit the Administrative Agent and/or its representatives and/or agents, to enter,
occupy and use any premises where all or any part of the Collateral, or the books and records relating thereto, or both, are located,
to take possession of all or any part of the Collateral or the books and records relating thereto, or both, to remove all or any
part of the Collateral or the books and records relating thereto, or both, and to conduct sales of the Collateral, without any
obligation to pay any Grantor for such use and occupancy.
Section 5.03. Intellectual
Property Remedies.
(a) For
the purpose of enabling the Administrative Agent to exercise the rights and remedies under this Article 5 at any time
when an Event of Default has occurred and is continuing, but subject to the last paragraph of Section 7.01 of the Second
Lien Credit Agreement, and at such time as the Administrative Agent shall be lawfully entitled to exercise such rights and remedies,
each Grantor hereby grants to the Administrative Agent a power of attorney to sign any document which may be required by the United
States Patent and Trademark Office, the United States Copyright Office or similar registrar or domain name registrar in order to
effect an absolute assignment of all right, title and interest in each registered Patent, Trademark, Domain Name and Copyright
and each application for any such registration, and record the same. At any time when an Event of Default has occurred and is continuing,
but subject to the last paragraph of Section 7.01 of the Second Lien Credit Agreement, the Administrative Agent may
(i) declare the entire right, title and interest of such Grantor in and to each item of Intellectual Property Collateral to
be vested in the Administrative Agent for the benefit of the Secured Parties, in which event such right, title and interest shall
immediately vest in the Administrative Agent for the benefit of the Secured Parties, and the Administrative Agent shall be entitled
to exercise the power of attorney referred to in this Section 5.03 to execute, cause to be acknowledged and notarized
and record such absolute assignment with the applicable agency or registrar; (ii) sell any Grantor’s Inventory directly
to any Person, including without limitation Persons who have previously purchased any Grantor’s Inventory from such Grantor
and in connection with any such sale or other enforcement of the Administrative Agent’s rights under this Security Agreement
and subject to any restrictions contained in applicable third party licenses entered into by such Grantor, sell Inventory which
bears any Trademark owned by or licensed to any Grantor and any Inventory that is covered by any Intellectual Property Collateral
owned by or licensed to any Grantor, and the Administrative Agent may finish any work in process and affix any relevant Trademark
owned by or licensed to such Grantor, and sell such Inventory as provided herein; (iii) direct such Grantor to refrain, in
which event such Grantor shall refrain, from using any Intellectual Property Collateral in any manner whatsoever, directly or indirectly;
and (iv) assign or sell any Intellectual Property, in each case to the extent constituting Collateral, as well as the goodwill
of such Grantor’s business connected with the use of and symbolized by any such Trademark and the right to carry on the business
and use the assets of such Grantor in connection with which any such Trademark or Domain Name has been used.
(b) Each
Grantor hereby grants to the Administrative Agent an irrevocable (until the Termination Date), nonexclusive, royalty-free, world-wide
license to its right to use, license or sublicense any IP Rights now owned or hereafter acquired by such Grantor, wherever the
same may be located, and including in such license access to all media in which any of the licensed items may be recorded or stored
and (to the extent not prohibited by any applicable license) to all computer software and programs used for compilation or printout
thereof. The use of the license granted to the Administrative Agent pursuant to the preceding sentence may be exercised, at the
option of the Administrative Agent, only when an Event of Default has occurred and is continuing, but subject to the last paragraph
of Section 7.01 of the Second Lien Credit Agreement; provided that such licenses to be granted hereunder with
respect to Trademarks shall be subject to, with respect to the goods and/or services on which such Trademarks are used, the maintenance
of quality standards that are sufficient to preserve the validity of such Trademarks and are consistent with past practices.
Section 5.04. Application
of Proceeds.
(a) Subject
to the Intercreditor Agreements (and any other applicable Acceptable Intercreditor Agreements), the Administrative Agent shall
apply the proceeds of any collection, sale, foreclosure or other realization upon any Collateral received by it pursuant to the
exercise of remedies in accordance with this Security Agreement and as set forth in Section 2.18(b) of the Second
Lien Credit Agreement.
(b) Except
as otherwise provided herein or in any other Loan Document, the Administrative Agent shall have absolute discretion as to the time
of application of any such proceeds, money or balance received by it pursuant to the exercise of remedies in accordance with this
Security Agreement. Upon any sale of Collateral by the Administrative Agent (including pursuant to a power of sale granted by statute
or under a judicial proceeding), a receipt by the Administrative Agent or of the officer making the sale of such proceeds, moneys
or balances shall be a sufficient discharge to the purchaser or purchasers of the Collateral so sold and such purchaser or purchasers
shall not be obligated to see to the application of any part of the purchase money paid over to the Administrative Agent or such
officer or be answerable in any way for the misapplication thereof. It is understood that the Grantors shall remain jointly and
severally liable to the extent of any deficiency between the amount of the proceeds of the Collateral and the aggregate amount
of the Secured Obligations.
ARTICLE 6
ACCOUNT VERIFICATION; ATTORNEY IN FACT; PROXY
Section 6.01. Account
Verification. The Administrative Agent may at any time and from time to time when an Event of Default has occurred and is continuing,
but subject to the last paragraph of Section 7.01 of the Second Lien Credit Agreement, and upon prior written notice
to the relevant Grantor, in the Administrative Agent’s own name, in the name of a nominee of the Administrative Agent, or
in the name of any Grantor, communicate (by mail, telephone, facsimile or otherwise) with the Account Debtors of such Grantor,
parties to Contracts with such Grantor and obligors in respect of Instruments of such Grantor to verify with such Persons, to the
Administrative Agent’s reasonable satisfaction, the existence, amount, terms of, and any other matter relating to, Accounts,
Contracts, Instruments, Chattel Paper, payment intangibles and/or other Receivables that constitute Collateral.
Section 6.02. Authorization
for the Administrative Agent to Take Certain Action.
(a) Each
Grantor hereby irrevocably authorizes the Administrative Agent and appoints the Administrative Agent (and all officers, employees
or agents designated by the Administrative Agent) as its true and lawful attorney in fact (i) at any time and from time to
time in its sole discretion (A) to execute (to the extent necessary under the law of the applicable jurisdiction) on behalf
of such Grantor as debtor and to file financing statements necessary or desirable in the Administrative Agent’s reasonable
discretion to perfect and to maintain the perfection and priority of the Administrative Agent’s security interest in the
Collateral, (B) to file a carbon, photographic or other reproduction of this Security Agreement as a financing statement and
to file any amendment of a financing statement with respect to the Collateral (which would not add new collateral or add a debtor,
except as otherwise provided for herein or in any other Loan Document) in such offices as the Administrative Agent in its reasonable
discretion deems necessary or desirable to perfect and to maintain the perfection and priority of the Administrative Agent’s
security interest in the Collateral and (C) during the continuation of an Event of Default after prior written notice to the
Borrower, but subject to the last paragraph of Section 7.01 of the Second Lien Credit Agreement, in the sole discretion
of the Administrative Agent (in the name of such Grantor or otherwise) to contact and enter into one or more agreements with the
issuers of uncertificated securities that constitute Pledged Collateral or with securities intermediaries holding Pledged Collateral
as may be necessary or advisable to give the Administrative Agent Control over such Pledged Collateral in accordance with the terms
hereof (including, without limitation, Section 2.01(c) of this Security Agreement) and (ii) during the continuation
of an Event of Default, in the sole discretion of the Administrative Agent (in the name of such Grantor or otherwise) after prior
written notice to the Borrower, (A) to endorse and collect any cash proceeds of the Collateral and to apply the proceeds of
any Collateral received by the Administrative Agent to the Secured Obligations as provided herein or in the Second Lien Credit
Agreement or any other Loan Document, subject to the terms of the Intercreditor Agreements (and any other applicable Acceptable
Intercreditor Agreements), (B) to demand payment or enforce payment of any Receivable in the name of the Administrative Agent
or such Grantor and to endorse any check, draft and/or any other instrument for the payment of money relating to any such Receivable,
(C) to sign such Grantor’s name on any invoice or bill of lading relating to any Receivable, any draft against any Account
Debtor of such Grantor, and/or any assignment and/or verification of any Receivable, (D) to exercise all of any Grantor’s
rights and remedies with respect to the collection of any Receivable and any other Collateral, (E) to settle, adjust, compromise,
extend or renew any Receivable, (F) to settle, adjust or compromise any legal proceedings brought
to collect any Receivable, (G) to prepare, file and sign such Grantor’s name on a proof of claim in bankruptcy or similar
document against any Account Debtor of such Grantor, (H) to prepare, file and sign such Grantor’s name on any notice
of Lien, assignment or satisfaction of Lien or similar document in connection with any Receivable, (I) to change the address
for delivery of mail addressed to such Grantor to such address as the Administrative Agent may designate and to receive, open and
dispose of all mail addressed to such Grantor (provided copies of such mail are provided to such Grantor), (J) to discharge
past due taxes, assessments, charges, fees or Liens on the Collateral (except for Permitted Liens), (K) to make, settle and
adjust claims in respect of Collateral under policies of insurance and endorse the name of such Grantor on any check, draft, instrument
or other item of payment for the proceeds of such policies of insurance, and make all determinations and decisions with respect
thereto (L) to obtain or maintain the policies of insurance of the types referred to in Section 5.05 of the Second
Lien Credit Agreement or to pay any premium in whole or in part relating thereto and (M) to do all other acts and things or
institute any proceedings which the Administrative Agent may reasonably deem to be necessary (pursuant to this Security Agreement
and the other Loan Documents and in accordance with applicable law) to carry out the terms of this Security Agreement and to protect
the interests of the Secured Parties; and, when and to the extent required pursuant to Section 9.03(a) of the
Second Lien Credit Agreement, such Grantor agrees to reimburse the Administrative Agent for any payment made in connection with
this paragraph or any expense (including reasonable and documented attorneys’ fees, court costs and out-of-pocket expenses)
and other charges related thereto incurred by the Administrative Agent in connection with any of the foregoing (it being understood
that any such sums shall constitute additional Secured Obligations); provided that, this authorization shall not relieve
such Grantor of any of its obligations under this Security Agreement or under the Second Lien Credit Agreement.
(b) All
such acts of such attorney or designee are hereby ratified and approved by each Grantor. The powers conferred on the Administrative
Agent, for the benefit of the Administrative Agent and Secured Parties, under this Section 6.02 are solely to protect
the Administrative Agent’s interests in the Collateral and shall not impose any duty upon the Administrative Agent or any
Secured Party to exercise any such powers.
Section 6.03. PROXY.
EACH GRANTOR HEREBY IRREVOCABLY (UNTIL THE TERMINATION DATE) CONSTITUTES AND APPOINTS THE ADMINISTRATIVE AGENT AS ITS PROXY AND
ATTORNEY-IN-FACT (AS SET FORTH IN SECTION 6.02 ABOVE) WITH RESPECT TO THE PLEDGED COLLATERAL, INCLUDING, DURING
THE CONTINUATION OF AN EVENT OF DEFAULT, BUT SUBJECT TO THE LAST PARAGRAPH OF SECTION 7.01 OF THE SECOND LIEN CREDIT
AGREEMENT, AND SUBJECT TO ANY NOTICE REQUIREMENTS AS SET FORTH HEREIN, THE RIGHT TO VOTE SUCH PLEDGED COLLATERAL, WITH FULL POWER
OF SUBSTITUTION TO DO SO. IN ADDITION TO THE RIGHT TO VOTE ANY SUCH PLEDGED COLLATERAL, THE APPOINTMENT OF THE ADMINISTRATIVE AGENT
AS PROXY AND ATTORNEY-IN-FACT SHALL, DURING THE CONTINUATION OF AN EVENT OF DEFAULT AND SUBJECT TO ANY NOTICE REQUIREMENTS AS SET
FORTH HEREIN, INCLUDE THE RIGHT TO EXERCISE ALL OTHER RIGHTS, POWERS, PRIVILEGES AND REMEDIES TO WHICH A HOLDER OF SUCH PLEDGED
COLLATERAL WOULD BE ENTITLED (INCLUDING GIVING OR WITHHOLDING WRITTEN CONSENTS OF SHAREHOLDERS, CALLING SPECIAL MEETINGS OF SHAREHOLDERS
AND VOTING AT SUCH MEETINGS). SUCH PROXY SHALL BE EFFECTIVE, AUTOMATICALLY AND WITHOUT THE NECESSITY OF ANY ACTION (INCLUDING ANY
TRANSFER OF ANY SUCH PLEDGED COLLATERAL ON THE RECORD BOOKS OF THE ISSUER THEREOF) BY ANY PERSON (INCLUDING THE ISSUER OF SUCH
PLEDGED COLLATERAL OR ANY OFFICER OR ADMINISTRATIVE AGENT THEREOF), IN EACH CASE ONLY WHEN AN EVENT OF DEFAULT HAS OCCURRED
AND IS CONTINUING AND UPON ONE BUSINESS DAYS’ PRIOR WRITTEN NOTICE TO THE BORROWER.
Section 6.04. NATURE
OF APPOINTMENT; LIMITATION OF DUTY. THE APPOINTMENT OF THE ADMINISTRATIVE AGENT AS PROXY AND ATTORNEY-IN-FACT IN THIS ARTICLE 6
IS COUPLED WITH AN INTEREST AND SHALL BE IRREVOCABLE UNTIL THE DATE ON WHICH THIS SECURITY AGREEMENT IS TERMINATED IN ACCORDANCE
WITH SECTION 7.12. NOTWITHSTANDING ANYTHING CONTAINED HEREIN, NEITHER THE ADMINISTRATIVE AGENT, NOR ANY SECURED PARTY,
NOR ANY OF THEIR RESPECTIVE AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR REPRESENTATIVES SHALL HAVE ANY DUTY TO EXERCISE
ANY RIGHT OR POWER GRANTED HEREUNDER OR OTHERWISE OR TO PRESERVE THE SAME AND SHALL NOT BE LIABLE FOR ANY FAILURE TO DO SO OR FOR
ANY DELAY IN DOING SO, EXCEPT TO THE EXTENT SUCH DAMAGES ARE ATTRIBUTABLE TO THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH
PERSON AS FINALLY DETERMINED BY A COURT OF COMPETENT JURISDICTION IN A FINAL AND NON-APPEALABLE DECISION SUBJECT TO SECTION 7.20
HEREOF; PROVIDED, THAT THE FOREGOING EXCEPTION SHALL NOT BE CONSTRUED TO OBLIGATE THE ADMINISTRATIVE AGENT TO TAKE OR REFRAIN
FROM TAKING ANY ACTION WITH RESPECT TO THE COLLATERAL.
ARTICLE 7
GENERAL PROVISIONS
Section 7.01. Waivers.
To the maximum extent permitted by applicable Requirements of Law, each Grantor hereby waives notice of the time and place of any
judicial hearing in connection with the Administrative Agent’s taking possession of the Collateral or of any public sale
or the time after which any private sale or other disposition of all or any part of the Collateral may be made, including without
limitation, any and all prior notice and hearing for any prejudgment remedy or remedies. To the extent such notice may not be waived
under applicable Requirements of Law, any notice made shall be deemed reasonable if sent to any Grantor, addressed as set forth
in Article 8, at least 10 days prior to (a) the date of any such public sale or (b) the time after which
any such private Disposition may be made. To the maximum extent permitted by applicable Requirements of Law, each Grantor waives
all claims, damages and demands against the Administrative Agent arising out of the repossession, retention or sale of the Collateral,
except those arising out of the bad faith, the gross negligence or willful misconduct of the Administrative Agent as determined
by a court of competent jurisdiction in a final and non-appealable judgment. To the extent it may lawfully do so, each Grantor
absolutely and irrevocably waives and relinquishes the benefit and advantage of, and covenants not to assert against the Administrative
Agent, any valuation, stay (other than an automatic stay under any applicable Debtor Relief Law), appraisal, extension, moratorium,
redemption or similar law and any and all rights or defenses it may have as a surety now or hereafter existing which, but for this
provision, might be applicable to the sale of any Collateral made under the judgment, order or decree of any court, or privately
under the power of sale conferred by this Security Agreement, or otherwise. Except as otherwise specifically provided herein, each
Grantor hereby waives presentment, demand, protest, any notice (to the maximum extent permitted by applicable Requirements of Law)
of any kind or all other requirements as to the time, place and terms of sale in connection with this Security Agreement or any
Collateral.
Section 7.02. Limitation
on the Administrative Agent’s and Secured Party’s Duty with Respect to the Collateral. The Administrative Agent
shall not have any obligation to clean or otherwise prepare the Collateral for sale. The Administrative Agent shall use reasonable
care with respect to the Collateral in its possession; provided that the Administrative Agent shall be deemed to have exercised
reasonable care in the custody and preservation of any Collateral in its possession if such Collateral is accorded treatment substantially
equal to which it accords its own property. Neither the Administrative Agent nor any Secured Party shall have any other duty as
to any Collateral in its possession or control or in the possession or control of any agent or nominee of the Administrative Agent
or of such Secured Party, or any income thereon or as to the preservation of rights against prior parties or any other rights pertaining
thereto. To the extent that applicable Requirements of Law impose duties on the Administrative Agent to exercise remedies in a
commercially reasonable manner, each Grantor acknowledges and agrees that it would be commercially reasonable for the Administrative
Agent, subject to Section 7.06, (a) to fail to incur expenses to prepare Collateral for Disposition or otherwise
to transform raw material or work in process into finished goods or other finished products for Disposition, (b) to fail to
obtain third party consents for access to Collateral to be Disposed of (unless expressly required under any applicable agreement),
or to obtain or, if not required by any other Requirement of Law, to fail to obtain governmental or third party consents for the
collection or Disposition of Collateral to be collected or Disposed of, (c) to fail to exercise collection remedies against
Account Debtors or other Persons obligated on Collateral or to remove Liens on or any adverse claims against Collateral, (d) to
exercise collection remedies against Account Debtors and other Persons obligated on Collateral directly or through the use of collection
agencies and other collection specialists, (e) to advertise Dispositions of Collateral through publications or media of general
circulation, whether or not the Collateral is of a specialized nature, (f) to contact other Persons, whether or not in the
same business as any Grantor, for expressions of interest in acquiring all or any portion of such Collateral, (g) to hire
one or more professional auctioneers to assist in the Disposition of Collateral, whether or not the Collateral is of a specialized
nature, (h) to Dispose of Collateral by utilizing internet sites that provide for the auction of assets of the types included
in the Collateral or that have the reasonable capacity of doing so, or that match buyers and sellers of assets, (i) to Dispose
of assets in wholesale rather than retail markets, (j) to disclaim Disposition warranties, such as title, possession or quiet
enjoyment, (k) to purchase insurance or credit enhancements (which, subject to Section 9.03 of the Second Lien Credit
Agreement, shall be at the cost of the Grantors) to insure the Administrative Agent against risks of loss in connection with any
collection or Disposition of Collateral or to provide to the Administrative Agent a guaranteed return from the collection or Disposition
of Collateral or (l) to the extent deemed appropriate by the Administrative Agent, to obtain the services of other brokers,
investment bankers, consultants and other professionals to assist the Administrative Agent in the collection or Disposition of
any of the Collateral. Each Grantor acknowledges that the purpose of this Section 7.02 is to provide non-exhaustive
indications of what actions or omissions by the Administrative Agent would be commercially reasonable in the Administrative Agent’s
exercise of remedies with respect to the Collateral and that other actions or omissions by the Administrative Agent shall not be
deemed commercially unreasonable solely on account of not being indicated in this Section 7.02. Without limitation
upon the foregoing, nothing contained in this Section 7.02 shall be construed to grant any rights to any Grantor or
to impose any duties on the Administrative Agent that would not have been granted or imposed by this Security Agreement or by applicable
law in the absence of this Section 7.02.
Section 7.03. Compromises
and Collection of Collateral. Each Grantor and the Administrative Agent recognize that setoffs, counterclaims, defenses and
other claims may be asserted by obligors with respect to certain of the Receivables, that certain of the Receivables may be or
become uncollectible in whole or in part and that the expense and probability of success in litigating a disputed Receivable may
exceed the amount that reasonably may be expected to be recovered with respect to any Receivable. In view of the foregoing, each
Grantor agrees that the Administrative Agent may at any time and from time to time, if an Event of Default has occurred and is
continuing and upon prior written notice to the relevant Grantor, compromise with the obligor on any Receivable, accept in full
payment of any Receivable such amount as the Administrative Agent in its sole discretion shall determine or abandon any Receivable,
and any such action by the Administrative Agent shall be commercially reasonable so long as the Administrative Agent acts in good
faith based on information known to it at the time it takes any such action.
Section 7.04. Administrative
Agent Performance of Debtor Obligations. Without having any obligation to do so, the Administrative Agent may, at any time
when an Event of Default has occurred and is continuing, but subject to the last paragraph of Section 7.01 of the Second
Lien Credit Agreement, and upon prior written notice to the Borrower, perform or pay any obligation which any Grantor has agreed
to perform or pay under this Security Agreement and which obligation is due and unpaid and not being contested by such Grantor
in good faith, and such Grantor shall reimburse the Administrative Agent for any amounts paid by the Administrative Agent pursuant
to this Section 7.04 as a Secured Obligation payable in accordance with Section 9.03(a) of the Second
Lien Credit Agreement.
Section 7.05. No
Waiver; Amendments; Cumulative Remedies. No delay or omission of the Administrative Agent (subject to the provisions of Article 8
of the Second Lien Credit Agreement) to exercise any right or remedy granted under this Security Agreement shall impair such right
or remedy or be construed to be a waiver of any Default or an acquiescence therein, and no single or partial exercise of any such
right or remedy shall preclude any other or further exercise thereof or the exercise of any other right or remedy. No waiver, amendment
or other variation of the terms, conditions or provisions of this Security Agreement whatsoever shall be valid unless in writing
signed by the Grantors and the Administrative Agent with the concurrence or at the direction of the Lenders to the extent required
under Section 9.02 of the Second Lien Credit Agreement and then only to the extent in such writing specifically set
forth. All rights and remedies contained in this Security Agreement or afforded by law shall be cumulative and all shall be available
to the Administrative Agent until the Termination Date.
Section 7.06. Limitation
by Law; Severability of Provisions. All rights, remedies and powers provided in this Security Agreement may be exercised only
to the extent that the exercise thereof does not violate any applicable Requirements of Law, and all of the provisions of this
Security Agreement are intended to be subject to all applicable Requirements of Law that may be controlling and to be limited to
the extent necessary so that such provisions do not render this Security Agreement invalid, unenforceable or not entitled to be
recorded or registered, in whole or in part. To the extent permitted by law, any provision of this Security Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity,
illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions of this
Security Agreement; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision
in any other jurisdiction. If the exercise of rights or remedies with respect to certain Collateral and the enforcement of any
security interests therein require any consents, authorizations approvals or licenses under any Requirement of Law, no such actions
shall be taken unless and until all requisite consents, authorizations approvals or licenses have been obtained.
Section 7.07. Security
Interest Absolute. All rights of the Administrative Agent hereunder, the security interests granted hereunder and all obligations
of each Grantor hereunder shall be absolute and unconditional irrespective of (a) any lack of validity or enforceability of
the Second Lien Credit Agreement, any other Loan Document, any agreement with respect to any of the Secured Obligations or any
other agreement or instrument relating to any of the foregoing, (b) any change in the time, manner or place of payment of,
or in any other term of, all or any of the Secured Obligations, or any other amendment or waiver of or any consent to any departure
from the Second Lien Credit Agreement, any other Loan Document or any other agreement or instrument relating to the foregoing,
(c) any exchange, release or non-perfection of any Lien on any Collateral, or any release or amendment or waiver of or consent
under or departure from any guaranty, securing or guaranteeing all or any of the Secured Obligations, (d) any bankruptcy,
insolvency, reorganization, arrangement, readjustment, composition, liquidation or the like of any Grantor, (e) any exercise
or non-exercise, or any waiver of, any right, remedy, power or privilege under or in respect of this Security Agreement or any
other Loan Document or (f) any other circumstance that might otherwise constitute a defense available to, or a discharge of,
any Grantor in respect of the Secured Obligations or this Security Agreement (other than a termination of any Lien contemplated
by Section 7.12 or the occurrence of the Termination Date).
Section 7.08. Benefit
of Security Agreement. The terms and provisions of this Security Agreement shall be binding upon and inure to the benefit of
each Grantor, the Administrative Agent and the Secured Parties and their respective successors and permitted assigns (including
all Persons who become bound as a debtor to this Security Agreement). No sales of participations, assignments, transfers, or other
dispositions of any agreement governing the Secured Obligations or any portion thereof or interest therein shall in any manner
impair the Lien granted to the Administrative Agent hereunder for the benefit of the Administrative Agent and the Secured Parties.
Section 7.09. [RESERVED]
Section 7.10. Additional
Subsidiaries. Each Person required to become a Loan Party pursuant to and in accordance with Section 5.12 of the
Second Lien Credit Agreement shall, within the time periods specified in Section 5.12 of the Second Lien Credit Agreement,
execute an instrument in the form of Exhibit D. Upon the execution and delivery by the Administrative Agent and any
Restricted Subsidiary of an instrument in the form of Exhibit D in accordance with Section 5.12 of the
Second Lien Credit Agreement, such Restricted Subsidiary shall become a Grantor hereunder with the same force and effect as if
such Restricted Subsidiary was originally named as a Grantor herein. The execution and delivery of any such instrument shall not
require the consent of any other Grantor hereunder. The rights and obligations of each Grantor hereunder shall remain in full force
and effect notwithstanding the addition of any new Grantor as a party to this Security Agreement.
Section 7.11. Headings.
The titles of and section headings in this Security Agreement are for convenience of reference only, and shall not govern the interpretation
of any of the terms and provisions of this Security Agreement.
Section 7.12. Termination
or Release.
(a) This
Security Agreement shall continue in effect until the Termination Date, and the Liens granted hereunder shall automatically be
released, in whole or in part, in the circumstances expressly set forth in the Second Lien Credit Agreement, including Article 8
thereof, and in all cases subject to the terms and conditions thereof.
(b) In
connection with any termination or release pursuant to paragraph (a) above, the Administrative Agent shall promptly
execute (if applicable) and deliver to any Grantor, at such Grantor’s expense, all UCC termination statements and similar
documents that such Grantor shall reasonably request to evidence and/or effectuate such termination or release and deliver all
applicable Pledged Collateral. Any execution and delivery of documents pursuant to this Section 7.12 shall be without
recourse to or representation or warranty by the Administrative Agent or any Secured Party. The Borrower shall reimburse the Administrative
Agent for all reasonable and documented costs and out-of- pocket expenses, including the fees and expenses of one outside counsel
(and, if necessary, of one local counsel in any relevant jurisdiction), incurred by it in connection with any action contemplated
by this Section 7.12 pursuant to and to the extent required by Section 9.03(a) of the Second Lien
Credit Agreement.
(c) The
Administrative Agent shall have no liability whatsoever to any other Secured Party as the result of any release of Collateral by
it in accordance with (or which the Administrative Agent in good faith believes to be in accordance with) the terms of this Section 7.12.
Section 7.13. Entire
Agreement. This Security Agreement, together with the other Loan Documents and the Intercreditor Agreements, embodies the entire
agreement and understanding between each Grantor and the Administrative Agent relating to the Collateral and supersedes all prior
agreements and understandings between any Grantor and the Administrative Agent relating to the Collateral.
Section 7.14. CHOICE
OF LAW. THIS SECURITY AGREEMENT AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS SECURITY AGREEMENT,
WHETHER IN TORT, CONTRACT (AT LAW OR IN EQUITY) OR OTHERWISE, SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.
Section 7.15. CONSENT
TO JURISDICTION; CONSENT TO SERVICE OF PROCESS.
(a) EACH
PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION (SUBJECT
TO THE LAST SENTENCE OF THIS CLAUSE (A)) OF ANY U.S. FEDERAL OR NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN, IN
THE CITY OF NEW YORK (OR ANY APPELLATE COURT THEREFROM) OVER ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
SECURITY AGREEMENT AND AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING SHALL (EXCEPT AS PERMITTED BELOW) BE
HEARD AND DETERMINED IN SUCH NEW YORK STATE OR, TO THE EXTENT PERMITTED BY APPLICABLE REQUIREMENTS OF LAW, IN SUCH FEDERAL
COURT. EACH PARTY HERETO AGREES THAT SERVICE OF ANY PROCESS, SUMMONS, NOTICE OR DOCUMENTS BY REGISTERED MAIL ADDRESSED TO SUCH
PERSON SHALL BE EFFECTIVE SERVICE OF PROCESS AGAINST SUCH PERSON FOR ANY SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT.
EACH PARTY HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING MAY BE ENFORCED IN OTHER JURISDICTIONS BY
SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY APPLICABLE REQUIREMENTS OF LAW. EACH PARTY HERETO HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS SECURITY AGREEMENT IN
ANY SUCH COURT. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE REQUIREMENTS OF LAW,
ANY CLAIM OR DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION, SUIT OR PROCEEDING IN ANY SUCH COURT. EACH PARTY
HERETO AGREES THAT THE ADMINISTRATIVE AGENT AND SECURED PARTIES RETAIN THE RIGHT TO BRING PROCEEDINGS AGAINST ANY GRANTOR IN THE
COURTS OF ANY OTHER JURISDICTION SOLELY IN CONNECTION WITH THE EXERCISE OF ANY RIGHTS IN RESPECT OF THE COLLATERAL UNDER THIS SECURITY
AGREEMENT.
(b) TO
THE EXTENT PERMITTED BY APPLICABLE REQUIREMENTS OF LAW, EACH PARTY TO THIS SECURITY AGREEMENT HEREBY IRREVOCABLY WAIVES PERSONAL
SERVICE OF ANY AND ALL PROCESS UPON IT AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY REGISTERED MAIL (OR ANY
SUBSTANTIALLY SIMILAR FORM OF MAIL) DIRECTED TO IT AT ITS ADDRESS FOR NOTICES AS PROVIDED FOR IN SECTION 9.01
OF THE SECOND LIEN CREDIT AGREEMENT. EACH PARTY TO THIS SECURITY AGREEMENT HEREBY WAIVES ANY OBJECTION TO SUCH SERVICE OF PROCESS
AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY ACTION OR PROCEEDING COMMENCED HEREUNDER THAT SERVICE OF
PROCESS WAS INVALID AND INEFFECTIVE. NOTHING IN THIS SECURITY AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY TO THIS SECURITY AGREEMENT
TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE REQUIREMENTS OF LAW.
Section 7.16. WAIVER
OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE REQUIREMENTS OF LAW,
ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY SUIT, ACTION, LEGAL PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT,
TORT OR ANY OTHER THEORY) DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS SECURITY AGREEMENT, ANY OTHER LOAN DOCUMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY
OF ANY OTHER PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION,
SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS SECURITY AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
Section 7.17. Indemnity.
Each Grantor hereby agrees to indemnify the Indemnitees, as, and to the extent, set forth in Section 9.03 of the Second
Lien Credit Agreement.
Section 7.18. Counterparts.
This Security Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which
shall constitute an original, but all of which when taken together shall constitute a single contract. Delivery of an executed
counterpart of a signature page of this Security Agreement by facsimile or by email as a “.pdf” or “.tif”
attachment or other electronic transmission shall be effective as delivery of a manually executed counterpart of this Security
Agreement.
Section 7.19. Waiver
of Consequential Damages, Etc. To the extent permitted by applicable law, none of the Grantors or Secured Parties shall assert,
and each hereby waives, any claim against each other or any Related Party thereof, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of,
this Security Agreement or any agreement or instrument contemplated hereby, except, in the case of any claim by any Indemnitee
against any of the Grantors, to the extent such damages would otherwise be subject to indemnification pursuant to the terms of
Section 7.17.
Section 7.20. Successors
and Assigns. Whenever in this Security Agreement any party hereto is referred to, such reference shall be deemed to include
the successors and permitted assigns of such party and all covenants, promises and agreements by or on behalf of any Grantor or
the Administrative Agent in this Security Agreement shall bind and inure to the benefit of their respective successors and permitted
assigns. Except in a transaction expressly permitted under the Second Lien Credit Agreement, no Grantor may assign any of its rights
or obligations hereunder without the written consent of the Administrative Agent.
Section 7.21. Survival
of Agreement. Without limiting any provision of the Second Lien Credit Agreement or Section 7.17 hereof, all covenants,
agreements, indemnities, representations and warranties made by the Grantors in the Loan Documents and in the certificates or other
instruments delivered in connection with or pursuant to this Security Agreement or any other Loan Document shall be considered
to have been relied upon by the Lenders and shall survive the execution and delivery of the Loan Documents and the making of any
Loans, regardless of any investigation made by any such Lender or on its behalf and notwithstanding that the Administrative Agent
or any Lender may have had notice or knowledge of any Default or Event of Default or incorrect representation or warranty at the
time any credit is extended under the Second Lien Credit Agreement, and shall continue in full force and effect until the Termination
Date, or with respect to any individual Grantor until such Grantor is otherwise released from its obligations under this Security
Agreement in accordance with the terms hereof and the Second Lien Credit Agreement.
ARTICLE 8
NOTICES
Section 8.01. Sending
Notices. Any notice required or permitted to be given under this Security Agreement shall be delivered in accordance with Section 9.01
of the Second Lien Credit Agreement (it being understood and agreed that references in such Section to “herein,”
“hereunder” and other similar terms shall be deemed to be references to this Security Agreement).
Section 8.02. Change
in Address for Notices. The Administrative Agent, any Grantor and any Lender may change the address or facsimile number for
service of notice upon it by a notice in writing to the other parties hereto.
ARTICLE 9
THE ADMINISTRATIVE AGENT
Bank of America, N.A.
has been appointed Administrative Agent for the Lenders hereunder pursuant to Article 8 of the Second Lien Credit Agreement.
It is expressly understood and agreed by the parties to this Security Agreement that any authority conferred upon the Administrative
Agent hereunder is subject to the terms of the delegation of authority made by the Lenders to the Administrative Agent pursuant
to the Second Lien Credit Agreement, and that the Administrative Agent has agreed to act (and any successor Administrative Agent
shall act) as such hereunder only on the express conditions contained in such Article 8. Any successor Administrative
Agent appointed pursuant to Article 8 of the Second Lien Credit Agreement shall be entitled to all the rights, interests
and benefits of the Administrative Agent hereunder.
By accepting the benefits
of this Security Agreement and each other Loan Document, each Secured Party expressly acknowledges and agrees that this Security
Agreement and each other Loan Document may be enforced only by the action of the Administrative Agent, and that such Secured Party
shall not have any right individually to seek to enforce or to enforce this Security Agreement or to realize upon the security
to be granted hereby, it being understood and agreed that such rights and remedies may be exercised by the Administrative Agent
for the benefit of the Secured Parties upon the terms of this Security Agreement and the other Loan Documents.
The Administrative
Agent may rely on advice of counsel as to whether any or all UCC financing statements of the Grantors need to be amended as a result
of any of the changes described in Section 5.01(i) of the Second Lien Credit Agreement. If any Grantor fails to
provide information to the Administrative Agent about such changes on a timely basis, the Administrative Agent shall not be liable
or responsible to any Secured Party for any failure to maintain a perfected security interest in such Grantor’s property
constituting Collateral, for which the Administrative Agent needed to have information relating to such changes. The Administrative
Agent shall have no duty to inquire about such changes if any Grantor does not inform the Administrative Agent of such changes,
the Secured Parties acknowledging and agreeing that it would not be feasible or practical for the Administrative Agent to search
for information on such changes if such information is not provided by any Grantor.
ARTICLE 10
INTERCREDITOR AGREEMENTS
Section 10.01. ABL
Intercreditor Agreement.
(a) Notwithstanding
anything herein to the contrary, the Liens granted to the Administrative Agent under this Security Agreement and the exercise of
the rights and remedies of the Administrative Agent hereunder and under any other Collateral Document are subject to the provisions
of the ABL Intercreditor Agreement. In the event of any conflict between the terms of the ABL Intercreditor Agreement and this
Security Agreement or any other Collateral Document, the terms of the ABL Intercreditor Agreement shall govern and control.
(b) In
accordance with the terms of the ABL Intercreditor Agreement, all ABL US Collateral delivered to the ABL Agent shall be held by
the ABL Agent as gratuitous bailee for the Administrative Agent and the Secured Parties solely for the purpose of perfecting the
security interest granted under this Security Agreement. Notwithstanding anything herein to the contrary, prior to the Discharge
of ABL Obligations, to the extent any Grantor is required hereunder to deliver ABL US Collateral to the Administrative Agent and
is unable to do so as a result of having previously delivered such ABL US Collateral to the ABL Agent in accordance with the terms
of the ABL Loan Documents, such Grantor’s obligations hereunder with respect to such delivery shall be deemed satisfied by
the delivery to the ABL Agent, acting as gratuitous bailee of the Administrative Agent and the Secured Parties.
(c) Furthermore,
at all times prior to the Discharge of ABL Obligations, the Administrative Agent is authorized by the parties hereto to effect
transfers of ABL US Collateral at any time in its possession (and any “control” or similar agreements with respect
to ABL US Collateral) to the ABL Agent.
(d) Notwithstanding
anything to the contrary herein but subject to the ABL Intercreditor Agreement, in the event the ABL Loan Documents provide for
the grant of a security interest or pledge over the assets (other than ABL Exclusive Collateral (as defined in the ABL Intercreditor
Agreement)) of any Grantor and such assets do not otherwise constitute Collateral under this Security Agreement or any other Loan
Document, such Grantor shall (i) promptly grant a security interest in or pledge such assets to secure the Secured Obligations,
(ii) promptly take any actions necessary to perfect such security interest or pledge to the extent set forth in the ABL Loan
Documents and (iii) take all other steps reasonably requested by the Administrative Agent in connection with the foregoing.
(e) Nothing
contained in the ABL Intercreditor Agreement shall be deemed to modify any of the provisions of this Security Agreement, which,
as among the Grantors and the Administrative Agent, shall remain in full force and effect in accordance with its terms.
Section 10.02. Term
Intercreditor Agreement
(a) Notwithstanding
anything herein to the contrary, the Liens granted to the Administrative Agent under this Security Agreement and the exercise of
the rights and remedies of the Administrative Agent hereunder and under any other Collateral Document are subject to the provisions
of the Term Intercreditor Agreement. In the event of any conflict between the terms of the Term Intercreditor Agreement and this
Security Agreement or any other Collateral Document (other than the ABL Intercreditor Agreement), the terms of the Term Intercreditor
Agreement shall govern and control.
(b) In
accordance with the terms of the Term Intercreditor Agreement, all Pledged Collateral delivered to the First Lien Agent shall be
held by the First Lien Agent as gratuitous bailee for the Administrative Agent and the Secured Parties solely for the purpose of
perfecting the security interest granted under this Security Agreement. Notwithstanding anything herein to the contrary, prior
to the occurrence of the First Priority Obligations Payment Date, to the extent any Grantor is required hereunder to deliver Pledged
Collateral to the Administrative Agent and is unable to do so as a result of having previously delivered such Pledged Collateral
to the First Lien Agent in accordance with the terms of the First Lien Loan Documents, such Grantor’s obligations hereunder
with respect to such delivery shall be deemed satisfied by the delivery to the First Lien Agent, acting as gratuitous bailee of
the Administrative Agent and the Secured Parties.
(c) Furthermore,
at all times prior to the occurrence of the First Priority Obligations Payment Date, the Administrative Agent is authorized by
the parties hereto to effect transfers of Pledged Collateral at any time in its possession (and any “control” or similar
agreements with respect to Pledged Collateral) to the First Lien Agent.
(d) Notwithstanding
anything to the contrary herein but subject to the Term Intercreditor Agreement, in the event the First Lien Loan Documents provide
for the grant of a security interest or pledge over the assets of any Grantor and such assets do not otherwise constitute Collateral
under this Security Agreement or any other Loan Document, such Grantor shall (i) promptly grant a security interest in or
pledge such assets to secure the Secured Obligations, (ii) promptly take any actions necessary to perfect such security interest
or pledge to the extent set forth in the First Lien Loan Documents and (iii) take all other steps reasonably requested by
the Administrative Agent in connection with the foregoing.
(e) Nothing
contained in the Term Intercreditor Agreement shall be deemed to modify any of the provisions of this Security Agreement, which,
as among the Grantors and the Administrative Agent, shall remain in full force and effect in accordance with its terms.
[Signature Pages Follow]
IN WITNESS WHEREOF,
each Grantor and the Administrative Agent have executed this Security Agreement as of the date first above written.
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GRANTORS
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HAYWARD
INTERMEDIATE, INC.,
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as Holdings
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By:
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Name:
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Andrew Diamond
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Title:
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Senior Vice President,
Finance
and Chief Financial Officer
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HAYWARD
ACQUISITION CORP.,
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as
the Borrower immediately prior to the Merger
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By:
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Name:
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Mark McFadden
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Title:
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President
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By:
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Name:
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Kevin Brown
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Title:
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Vice President, Assistant
Secretary
and Assistant Treasurer
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HAYWARD
INDUSTRIES, INC.,
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as the Borrower upon and
following the Merger
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By:
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Name:
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Andrew Diamond
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Title:
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Senior Vice President
and Chief Financial Officer
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Signature
Page to Second Lien Pledge and Security Agreement
IN WITNESS WHEREOF,
each Grantor and the Administrative Agent have executed this Security Agreement as of the date first above written.
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GRANTORS
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GOLDLINE PROPERTIES LLC
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By:
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Name:
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Andrew Diamond
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Title:
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Vice President
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HAYWARD INDUSTRIAL PRODUCTS, INC.
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By:
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Name:
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Andrew Diamond
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Title:
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Senior Vice President
and Chief Financial Officer
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HAYWARD/WRIGHT-AUSTIN INC.
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By:
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Name:
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Andrew Diamond
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Title:
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Vice President and Chief
Financial Officer
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WEBSTER PUMPS, INC.
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By:
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Name:
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Andrew Diamond
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Title:
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Vice President and Chief
Financial Officer
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Signature
Page to Second Lien Pledge and Security Agreement
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BANK OF AMERICA, N.A.,
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as Administrative Agent
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By:
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Name:
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Title:
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Signature
Page to Second Lien Pledge and Security Agreement
EXHIBIT A
FORM OF
SECOND LIEN COPYRIGHT SECURITY AGREEMENT
SECOND LIEN COPYRIGHT
SECURITY AGREEMENT dated as of [●], 20[●] (this “Copyright Security Agreement”), by and [between][among]
[●], a [●] ([each, a][the] “Grantor”) and Bank of America, N.A., as administrative agent and collateral
agent (together with its successors and permitted assigns in such capacities, the “Administrative Agent”) for
the Secured Parties (as defined in the Second Lien Credit Agreement).
Reference is made to
that certain Second Lien Credit Agreement, dated as of August , 2017 (as amended, restated, amended and restated,
supplemented or otherwise modified from time to time, the “Second Lien Credit Agreement”), by and among Hayward
Industries, Inc., a New Jersey corporation (as survivor of the Merger (as defined in the Second Lien Credit Agreement) with
Hayward Acquisition Corp., a New Jersey corporation) (the “Borrower”), Hayward Intermediate, Inc., a Delaware
corporation (“Holdings”), the Lenders from time to time party thereto and the Administrative Agent.
Reference is also made
[to that certain Joinder No. [●] dated as of [●], 20[●], by [and among ][●][and [●]] and acknowledged
and agreed by the Administrative Agent,]1
1to that certain Second Lien Pledge and Security Agreement dated as of August 4, 2017 (as
amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Security Agreement”),
by and among the Borrower, Holdings, the other Grantors (as defined therein) and the Administrative Agent for the Secured Parties.
The Lenders (as defined
in the Second Lien Credit Agreement) have extended credit to the Borrower subject to the terms and conditions set forth in the
Second Lien Credit Agreement. Consistent with the requirements set forth in Sections 4.01 and 5.12 of the Second
Lien Credit Agreement and Section 4.03(c) of the Security Agreement, the parties hereto agree as follows:
SECTION 1. Terms.
Capitalized terms used herein and not otherwise defined herein have the meanings specified in the Security Agreement.
SECTION 2. Grant
of Security Interest. As security for the prompt and complete payment or performance, as the case may be, in full of the Secured
Obligations, [each][the] Grantor, pursuant to the Security Agreement, did and hereby does pledge, collaterally assign, mortgage,
transfer and grant to the Administrative Agent, its successors and permitted assigns, on behalf of and for the benefit of the Secured
Parties, a continuing security interest in all of its right, title and interest in, to and under all of the following assets, whether
now owned by or owing to, or hereafter acquired by or arising in favor of [such][the] Grantor, and regardless of where located
(collectively, the “Copyright Collateral”):
(a) all
copyrights, rights and interests in copyrights, works protectable by copyright whether published or unpublished, registrations
and copyright applications (including but not limited to the registrations and applications set forth on Schedule I hereto);
(b) all renewals of any of the foregoing; (c) all income, royalties, damages, and payments now or hereafter due and/or
payable under any of the foregoing, including, without limitation, damages or payments for past, present or future infringements
for any of the foregoing; (d) the right to sue for past, present, and future infringements of any of the foregoing; and (e) all
rights corresponding to any of the foregoing.
1To be used after a Joinder by a new Restricted
Subsidiary Grantor.
SECTION 3. Security
Agreement. The security interests granted to the Administrative Agent herein are granted in furtherance, and not in limitation
of, the security interests granted to the Administrative Agent pursuant to the Security Agreement. [Each][The] Grantor hereby acknowledges
and affirms that the rights and remedies of the Administrative Agent with respect to the Copyright Collateral are more fully set
forth in the Security Agreement, the terms and provisions of which are hereby incorporated herein by reference as if fully set
forth herein. In the event of any conflict between the terms of this Copyright Security Agreement and the Security Agreement, the
terms of the Security Agreement shall govern.
SECTION 4. Governing
Law. This Copyright Security Agreement shall be governed by, and construed in accordance with, the laws of the State of New
York.
SECTION 5. Counterparts.
This Copyright Security Agreement may be executed in one or more counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but
one and the same instrument.
[Signature Pages Follow]
IN WITNESS WHEREOF,
the parties hereto have duly executed this Copyright Security Agreement as of the day and year first above written.
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[●]
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By:
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Name:
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[●]
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Title:
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[●]
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[Signature
Page to Second Lien Copyright Security Agreement]
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BANK OF AMERICA, N.A.,
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as Administrative Agent
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By:
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Name:
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Title:
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[Signature
Page to Second Lien Copyright Security Agreement]
SCHEDULE
I
COPYRIGHTS
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REGISTERD OWNER
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REGISTRATION
NUMBER
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REGISTRATION
DATE
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TITLE
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COPYRIGHT APPLICATIONS
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APPLICANT
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APPLICATION NUMBER
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FILING DATE
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TITLE
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[EXCLUSIVE COPYRIGHT LICENSES]
ANNEX
A TO SECOND LIEN COPYRIGHT SECURITY AGREEMENT
FORM OF
SECOND LIEN COPYRIGHT SECURITY AGREEMENT SUPPLEMENT
SECOND LIEN COPYRIGHT
SECURITY AGREEMENT SUPPLEMENT dated as of [●], 20[●] (this “Copyright Security Agreement Supplement”),by
and [between][among] [●], a [●] ([each, a][the] “Grantor”) and Bank of America, N.A., as administrative
agent and collateral agent (together with its successors and permitted assigns in such capacities, the “Administrative
Agent”) for the Secured Parties (as defined in the Second Lien Credit Agreement).
Reference is made to
that certain Second Lien Credit Agreement, dated as of August , 2017 (as amended, restated, amended and restated,
supplemented or otherwise modified from time to time, the “Second Lien Credit Agreement”), by and among Hayward
Industries, Inc., a New Jersey corporation (as survivor of the Merger (as defined in the Second Lien Credit Agreement) with
Hayward Acquisition Corp., a New Jersey corporation) (the “Borrower”), Hayward Intermediate, Inc., a Delaware
corporation (“Holdings”), the Lenders from time to time party thereto and the Administrative Agent.
Reference is also made
to that certain Second Lien Pledge and Security Agreement dated as of August 4, 2017 (as amended, restated, amended and restated,
supplemented or otherwise modified from time to time, the “Security Agreement”), by and among the Borrower,
Holdings, the other Grantors (as defined therein) and the Administrative Agent for the Secured Parties.
Reference is also made
to that certain Second Lien Copyright Security Agreement, dated as of [●], 20[●] (as amended, restated, amended and
restated, supplemented or otherwise modified from time to time and in effect on the date hereof, the “Copyright Security
Agreement”) by and [between][among] the Grantor[s] (as defined therein) party thereto and the Administrative Agent for
the Secured Parties.
The Lenders (as defined
in the Second Lien Credit Agreement) have extended credit to the Borrower subject to the terms and conditions set forth in the
Second Lien Credit Agreement. Under the terms of the Security Agreement, [each][the] Grantor has granted to the Administrative
Agent for the benefit of the Secured Parties a security interest in the Additional Copyright Collateral (as defined below) and
has agreed, consistent with the requirements of Section 4.03(c) of the Security Agreement, to execute this Copyright
Security Agreement Supplement. Now, therefore, the parties hereto agree as follows:
SECTION 1. Terms.
Capitalized terms used in this Copyright Security Agreement Supplement and not otherwise defined herein have the meanings specified
in the Security Agreement.
SECTION 2. Grant
of Security Interest. As security for the prompt and complete payment or performance, as the case may be, in full of the Secured
Obligations, [each][the] Grantor, pursuant to the Security Agreement, did and hereby does pledge, collaterally assign, mortgage,
transfer and grant to the Administrative Agent, its successors and permitted assigns, on behalf of and for the benefit of the Secured
Parties, a continuing security interest in all of its right, title and interest in, to and under all of the following assets, whether
now owned by or owing to, or hereafter acquired by or arising in favor of [such][the] Grantor, and regardless of where located
(collectively, the “Additional Copyright Collateral”):
(a) all
copyrights, rights and interests in copyrights, works protectable by copyright whether published or unpublished, registrations
and copyright applications (including but not limited to the registrations and applications set forth on Schedule I hereto);
(b) all renewals of any of the foregoing; (c) all income, royalties, damages, and payments now or hereafter due and/or
payable under any of the foregoing, including, without limitation, damages or payments for past, present or future infringements
for any of the foregoing; (d) the right to sue for past, present, and future infringements of any of the foregoing; and (e) all
rights corresponding to any of the foregoing.
Annex
A-1
SECTION 3. Security
Agreement. The security interests granted to the Administrative Agent herein are granted in furtherance, and not in limitation
of, the security interests granted to the Administrative Agent pursuant to the Security Agreement. [Each][The] Grantor hereby acknowledges
and affirms that the rights and remedies of the Administrative Agent with respect to the Additional Copyright Collateral are more
fully set forth in the Security Agreement, the terms and provisions of which are hereby incorporated herein by reference as if
fully set forth herein. In the event of any conflict between the terms of this Copyright Security Agreement Supplement and the
Security Agreement, the terms of the Security Agreement shall govern.
SECTION 4. Governing
Law. This Copyright Security Agreement Supplement shall be governed by, and construed in accordance with, the laws of the State
of New York.
SECTION 5. Counterparts.
This Copyright Security Agreement Supplement may be executed in one or more counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together
shall constitute but one and the same instrument.
[Signature Pages Follow]
Annex
A-2
IN WITNESS WHEREOF,
the parties hereto have duly executed this Copyright Security Agreement Supplement as of the day and year first above written.
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[●]
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By:
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Name:
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[●]
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Title:
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[●]
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[Signature
Page to Second Lien Copyright Security Agreement Supplement]
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BANK OF AMERICA, N.A.,
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as Administrative Agent
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By:
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Name:
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Title:
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[Signature
Page to Second Lien Copyright Security Agreement Supplement]
SCHEDULE
I
COPYRIGHTS
|
REGISTERD OWNER
|
REGISTRATION
NUMBER
|
REGISTRATION
DATE
|
TITLE
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COPYRIGHT APPLICATIONS
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APPLICANT
|
APPLICATION NUMBER
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FILING DATE
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TITLE
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[EXCLUSIVE COPYRIGHT LICENSES]
EXHIBIT B
FORM OF
SECOND LIEN PATENT SECURITY AGREEMENT
SECOND LIEN PATENT
SECURITY AGREEMENT dated as of [●], 20[●] (this “Patent Security Agreement”), by and [between][among]
[●], a [●] ([each, a][the] “Grantor”) and Bank of America, N.A., as administrative agent and collateral
agent (together with its successors and permitted assigns in such capacities, the “Administrative Agent”) for
the Secured Parties (as defined in the Second Lien Credit Agreement).
Reference is made to
that certain Second Lien Credit Agreement, dated as of August , 2017 (as amended, restated, amended and restated,
supplemented or otherwise modified from time to time, the “Second Lien Credit Agreement”), by and among Hayward
Industries, Inc., a New Jersey corporation (as survivor of the Merger (as defined in the Second Lien Credit Agreement) with
Hayward Acquisition Corp., a New Jersey corporation) (the “Borrower”), Hayward Intermediate, Inc., a Delaware
corporation (“Holdings”), the Lenders from time to time party thereto and the Administrative Agent.
Reference is also made[
to that certain Joinder No. [●] dated as of [●], 20[●], by [and among ][●][and [●]] and acknowledged
and agreed by the Administrative Agent,]1
to that certain Second Lien
Pledge and Security
Agreement dated as of August 4, 2017 (as amended, restated, amended and restated, supplemented or otherwise modified from
time to time, the “Security Agreement”), by and among the Borrower, Holdings, the other Grantors (as defined
therein) and the Administrative Agent for the Secured Parties.
The Lenders (as defined
in the Second Lien Credit Agreement) have extended credit to the Borrower subject to the terms and conditions set forth in the
Second Lien Credit Agreement. Consistent with the requirements set forth in Sections 4.01 and 5.12 of the Second
Lien Credit Agreement and Section 4.03(c) of the Security Agreement, the parties hereto agree as follows:
SECTION 1. Terms.
Capitalized terms used herein and not otherwise defined herein have the meanings specified in the Security Agreement.
SECTION 2. Grant
of Security Interest. As security for the prompt and complete payment or performance, as the case may be, in full of the Secured
Obligations, [each][the] Grantor, pursuant to the Security Agreement, did and hereby does pledge, collaterally assign, mortgage,
transfer and grant to the Administrative Agent, its successors and permitted assigns, on behalf of and for the benefit of the Secured
Parties, a continuing security interest in all of its right, title and interest in, to and under all of the following assets, whether
now owned by or owing to, or hereafter acquired by or arising in favor of [such][the] Grantor, and regardless of where located
(collectively, the “Patent Collateral”):
(a) any
and all patents and patent applications (including but not limited to the patents and patent applications listed on Schedule
I hereto); (b) all inventions described and claimed therein; (c) all reissues, divisions, continuations, renewals,
extensions and continuations in part thereof; (d) all income, royalties, damages, claims, and payments now or hereafter due
or payable under and with respect thereto, including, without limitation, damages and payments for past, present and future infringements
thereof; (e) all rights to sue for past, present, and future infringements thereof; and (f) all rights corresponding
to any of the foregoing, in each case, excluding any Excluded Assets.
1 To be used after a Joinder by a new Restricted
Subsidiary Grantor.
SECTION 3. Security
Agreement. The security interests granted to the Administrative Agent herein are granted in furtherance, and not in limitation
of, the security interests granted to the Administrative Agent pursuant to the Security Agreement. [Each][The] Grantor hereby acknowledges
and affirms that the rights and remedies of the Administrative Agent with respect to the Patent Collateral are more fully set forth
in the Security Agreement, the terms and provisions of which are hereby incorporated herein by reference as if fully set forth
herein. In the event of any conflict between the terms of this Patent Security Agreement and the Security Agreement, the terms
of the Security Agreement shall govern.
SECTION 4. Governing
Law. This Patent Security Agreement shall be governed by, and construed in accordance with, the laws of the State of New York.
SECTION 5. Counterparts.
This Patent Security Agreement may be executed in one or more counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but
one and the same instrument.
[Signature Pages Follow]
IN WITNESS WHEREOF,
the parties hereto have duly executed this Patent Security Agreement as of the day and year first above written.
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By:
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Name:
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[●]
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Title:
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[●]
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[Signature
Page to Second Lien Patent Security Agreement]
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BANK OF AMERICA, N.A.,
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as Administrative Agent
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By:
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Name:
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Title:
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[Signature
Page to Second Lien Patent Security Agreement]
SCHEDULE
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PATENTS
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REGISTERD OWNER
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PATENT
NO.
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ISSUE
DATE
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TITLE
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PATENT APPLICATIONS
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APPLICANT
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APPLICATION NO.
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FILING DATE
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TITLE
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ANNEX
A TO SECOND LIEN PATENT SECURITY AGREEMENT
FORM OF
SECOND LIEN PATENT SECURITY AGREEMENT SUPPLEMENT
SECOND LIEN PATENT
SECURITY AGREEMENT SUPPLEMENT dated as of [●], 20[●] (this “Patent Security Agreement Supplement”),
by and [between][among] [●], a [●] ([each, a][the] “Grantor”) and Bank of America, N.A., as administrative
agent and collateral agent (together with its successors and permitted assigns in such capacities, the “Administrative
Agent”) for the Secured Parties (as defined in the Second Lien Credit Agreement).
Reference is made to
that certain Second Lien Credit Agreement, dated as of August , 2017 (as amended, restated, amended and restated,
supplemented or otherwise modified from time to time, the “Second Lien Credit Agreement”), by and among Hayward
Industries, Inc., a New Jersey corporation (as survivor of the Merger (as defined in the Second Lien Credit Agreement) with
Hayward Acquisition Corp., a New Jersey corporation) (the “Borrower”), Hayward Intermediate, Inc., a Delaware
corporation (“Holdings”), the Lenders from time to time party thereto and the Administrative Agent.
Reference is also made
to that certain Second Lien Pledge and Security Agreement dated as of August 4, 2017 (as amended, restated, amended and restated,
supplemented or otherwise modified from time to time, the “Security Agreement”), by and [between][among] the
Borrower, Holdings, the other Grantors (as defined therein) and the Administrative Agent for the Secured Parties.
Reference is also made
to that certain Second Lien Patent Security Agreement, dated as of [●], 20[●] (as amended, restated, amended and restated,
supplemented or otherwise modified from time to time and in effect on the date hereof, the “Patent Security Agreement”)
by and among the Grantor[s] (as defined therein) party thereto and the Administrative Agent for the Secured Parties.
The Lenders (as defined
in the Second Lien Credit Agreement) have extended credit to the Borrower subject to the terms and conditions set forth in the
Second Lien Credit Agreement. Under the terms of the Security Agreement, [each][the] Grantor has granted to the Administrative
Agent for the benefit of the Secured Parties a security interest in the Additional Patent Collateral (as defined below) and has
agreed, consistent with the requirements of Section 4.03(c) of the Security Agreement, to execute this Patent
Security Agreement Supplement. Now, therefore, the parties hereto agree as follows:
SECTION 1. Terms.
Capitalized terms used in this Patent Security Agreement Supplement and not otherwise defined herein have the meanings specified
in the Security Agreement.
SECTION 2. Grant
of Security Interest. As security for the prompt and complete payment or performance, as the case may be, in full of the Secured
Obligations, [each][the] Grantor, pursuant to the Security Agreement, did and hereby does pledge, collaterally assign, mortgage,
transfer and grant to the Administrative Agent, its successors and permitted assigns, on behalf of and for the benefit of the Secured
Parties, a continuing security interest in all of its right, title and interest in, to and under all of the following assets, whether
now owned by or owing to, or hereafter acquired by or arising in favor of [such][the] Grantor, and regardless of where located
(collectively, the “Additional Patent Collateral”):
Annex
A-1
(a) any
and all patents and patent applications (including but not limited to the patents and patent applications listed on Schedule
I hereto); (b) all inventions described and claimed therein; (c) all reissues, divisions, continuations, renewals,
extensions and continuations in part thereof; (d) all income, royalties, damages, claims, and payments now or hereafter due
or payable under and with respect thereto, including, without limitation, damages and payments for past, present and future infringements
thereof; (e) all rights to sue for past, present, and future infringements thereof; and (f) all rights corresponding
to any of the foregoing, in each case, excluding any Excluded Assets.
SECTION 3. Security
Agreement. The security interests granted to the Administrative Agent herein are granted in furtherance, and not in limitation
of, the security interests granted to the Administrative Agent pursuant to the Security Agreement. [Each][The] Grantor hereby acknowledges
and affirms that the rights and remedies of the Administrative Agent with respect to the Additional Patent Collateral are more
fully set forth in the Security Agreement, the terms and provisions of which are hereby incorporated herein by reference as if
fully set forth herein. In the event of any conflict between the terms of this Patent Security Agreement Supplement and the Security
Agreement, the terms of the Security Agreement shall govern.
SECTION 4. Governing
Law. This Patent Security Agreement Supplement shall be governed by, and construed in accordance with, the laws of the State
of New York.
SECTION 5. Counterparts.
This Patent Security Agreement Supplement may be executed in one or more counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall
constitute but one and the same instrument.
[Signature Pages Follow]
Annex
A-2
IN WITNESS WHEREOF,
the parties hereto have duly executed this Patent Security Agreement Supplement as of the day and year first above written.
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By:
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Name:
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[●]
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Title:
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[●]
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[Signature
Page to Second Lien Patent Security Agreement Supplement]
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BANK OF AMERICA, N.A.,
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as Administrative Agent
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By:
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Name:
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Title:
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[Signature
Page to Second Lien Patent Security Agreement Supplement]
SCHEDULE
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PATENTS
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REGISTERD OWNER
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PATENT
NO.
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ISSUE
DATE
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TITLE
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PATENT APPLICATIONS
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APPLICANT
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APPLICATION NO.
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FILING DATE
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TITLE
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EXHIBIT C
FORM OF
SECOND LIEN TRADEMARK SECURITY AGREEMENT
SECOND LIEN TRADEMARK
SECURITY AGREEMENT dated as of [●], 20[●] (this
“Trademark
Security Agreement”), by and [between][among] [●], a [●] ([each, a][the] “Grantor”) and
Bank of America, N.A., as administrative agent and collateral agent (together with its successors and permitted assigns in such
capacities, the “Administrative Agent”) for the Secured Parties (as defined in the Second Lien Credit Agreement).
Reference is made to
that certain Second Lien Credit Agreement, dated as of August , 2017 (as amended, restated, amended and restated,
supplemented or otherwise modified from time to time, the “Second Lien Credit Agreement”), by and among Hayward
Industries, Inc., a New Jersey corporation (as survivor of the Merger (as defined in the Second Lien Credit Agreement) with
Hayward Acquisition Corp., a New Jersey corporation) (the “Borrower”), Hayward Intermediate, Inc., a Delaware
corporation (“Holdings”), the Lenders from time to time party thereto and the Administrative Agent.
Reference is also made[
to that certain Joinder No. [●] dated as of [●], 20[●], by [and among ][●][and [●]] and acknowledged
and agreed by the Administrative Agent,]1
to that certain Second Lien
Pledge and Security
Agreement dated as of August 4, 2017 (as amended, restated, amended and restated, supplemented or otherwise modified from
time to time, the “Security Agreement”), by and among the Borrower, Holdings, the other Grantors (as defined
therein) and the Administrative Agent for the Secured Parties.
The Lenders (as defined
in the Second Lien Credit Agreement) have extended credit to the Borrower subject to the terms and conditions set forth in the
Second Lien Credit Agreement. Consistent with the requirements set forth in Sections 4.01 and 5.12 of the Second
Lien Credit Agreement and Section 4.03(c) of the Security Agreement, the parties hereto agree as follows:
SECTION 1. Terms.
Capitalized terms used herein and not otherwise defined herein have the meanings specified in the Security Agreement.
SECTION 2. Grant
of Security Interest. As security for the prompt and complete payment or performance, as the case may be, in full of the Secured
Obligations, [each][the] Grantor, pursuant to the Security Agreement, did and hereby does pledge, collaterally assign, mortgage,
transfer and grant to the Administrative Agent, its successors and permitted assigns, on behalf of and for the benefit of the Secured
Parties, a continuing security interest in all of its right, title and interest in, to and under all of the following assets, whether
now owned by or owing to, or hereafter acquired by or arising in favor of [such][the] Grantor, and regardless of where located
(collectively, the “Trademark Collateral”):
(a) all
trademarks (including service marks), common law marks, trade names, trade dress, domain names and logos, slogans and other indicia
of origin under the laws of any jurisdiction in the world, and the registrations and applications for registration thereof (including
but not limited to registrations and applications listed on Schedule I hereto); and the goodwill of the business connected
with the use of and symbolized by the foregoing; (b) all renewals of the foregoing; (c) all income, royalties, damages,
and payments now or hereafter due or payable with respect thereto, including, without limitation, damages, claims and payments
for past, present and future infringements or dilutions thereof; (d) all rights to sue for past, present, and future infringements
or dilutions of any of the foregoing, including the right to settle suits involving claims and demands for royalties owing; and
(e) all rights corresponding to any of the foregoing. Notwithstanding anything herein to the contrary, in no event shall the
Trademark Collateral include (i) any foreign IP Rights and any intent-to-use Trademark application prior to the filing of
a “Statement of Use” or an “Amendment to Allege Use” with respect thereto, only to the extent, if any,
that, and solely during the period, if any, in which, the grant of a security interest therein would impair the validity or enforceability
of such intent-to-use Trademark application or any registration issuing therefrom under applicable law, or (ii) any other
Excluded Assets.
1 To be used after a Joinder by a new Restricted
Subsidiary Grantor.
SECTION 3. Security
Agreement. The security interests granted to the Administrative Agent herein are granted in furtherance, and not in limitation
of, the security interests granted to the Administrative Agent pursuant to the Security Agreement. [Each][The] Grantor hereby acknowledges
and affirms that the rights and remedies of the Administrative Agent with respect to the Trademark Collateral are more fully set
forth in the Security Agreement, the terms and provisions of which are hereby incorporated herein by reference as if fully set
forth herein. In the event of any conflict between the terms of this Trademark Security Agreement and the Security Agreement, the
terms of the Security Agreement shall govern.
SECTION 4. Governing
Law. This Trademark Security Agreement shall be governed by, and construed in accordance with, the laws of the State of New
York.
SECTION 5. Counterparts.
This Trademark Security Agreement may be executed in one or more counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but
one and the same instrument.
[Signature Pages Follow]
[Signature
Page to Second Lien Trademark Security Agreement]
IN WITNESS WHEREOF,
the parties hereto have duly executed this Trademark Security Agreement as of the day and year first above written.
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[●]
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By:
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Name:
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[●]
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Title:
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[●]
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[Signature
Page to Second Lien Trademark Security Agreement]
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BANK OF AMERICA, N.A.,
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as Administrative Agent
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By:
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Name:
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Title:
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[Signature
Page to Second Lien Trademark Security Agreement]
SCHEDULE
I
TRADEMARKS
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REGISTERD OWNER
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REGISTRATION NUMBER
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REGISTRATION DATE
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TRADEMARK
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TRADEMARK APPLICATIONS
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APPLICANT
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APPLICATION NO.
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FILING DATE
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TRADEMARK
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ANNEX
A TO SECOND LIEN TRADEMARK SECURITY AGREEMENT
FORM OF
SECOND LIEN TRADEMARK SECURITY AGREEMENT SUPPLEMENT
SECOND LIEN TRADEMARK
SECURITY AGREEMENT SUPPLEMENT dated as of [●], 20[●] (this “Trademark Security Agreement Supplement”),
by and [between][among] [●], a [●] ([each, a][the] “Grantor”) and Bank of America, N.A., as administrative
agent and collateral agent (together with its successors and permitted assigns in such capacities, the “Administrative
Agent”) for the Secured Parties (as defined in the Second Lien Credit Agreement).
Reference is made to
that certain Second Lien Credit Agreement, dated as of August , 2017 (as amended, restated, amended and restated,
supplemented or otherwise modified from time to time, the “Second Lien Credit Agreement”), by and among Hayward
Industries, Inc., a New Jersey corporation (as survivor of the Merger (as defined in the Second Lien Credit Agreement) with
Hayward Acquisition Corp., a New Jersey corporation) (the “Borrower”), Hayward Intermediate, Inc., a Delaware
corporation (“Holdings”), the Lenders from time to time party thereto and the Administrative Agent.
Reference is also made
to that certain Second Lien Pledge and Security Agreement dated as of August 4, 2017 (as amended, restated, amended and restated,
supplemented or otherwise modified from time to time, the “Security Agreement”), by and among the Borrower,
Holdings, the other Grantors (as defined therein) and the Administrative Agent for the Secured Parties.
Reference is also made
to that certain Second Lien Trademark Security Agreement, dated as of [●], 20[●] (as amended, restated, amended and
restated, supplemented or otherwise modified from time to time and in effect on the date hereof, the “Trademark Security
Agreement”) by and among the Grantor[s] (as defined therein) party thereto and the Administrative Agent for the Secured
Parties.
The Lenders (as defined
in the Second Lien Credit Agreement) have extended credit to the Borrower subject to the terms and conditions set forth in the
Second Lien Credit Agreement. Under the terms of the Security Agreement, [each][the] Grantor has granted to the Administrative
Agent for the benefit of the Secured Parties a security interest in the Additional Trademark Collateral (as defined below) and
has agreed, consistent with the requirements of Section 4.03(c) of the Security Agreement, to execute this Trademark
Security Agreement Supplement. Now, therefore, the parties hereto agree as follows
SECTION 1. Terms.
Capitalized terms used in this Trademark Security Agreement Supplement and not otherwise defined herein have the meanings specified
in the Security Agreement.
SECTION 2. Grant
of Security Interest. As security for the prompt and complete payment or performance, as the case may be, in full of the Secured
Obligations, [each][the] Grantor, pursuant to the Security Agreement, did and hereby does pledge, collaterally assign, mortgage,
transfer and grant to the Administrative Agent, its successors and permitted assigns, on behalf of and for the ratable benefit
of the Secured Parties, a continuing security interest in all of its right, title or interest in, to or under all of the following
assets, whether now owned or at any time hereafter acquired by or arising in favor of the [such][the] Grantor and regardless of
where located (collectively, the “Additional Trademark Collateral”):
Annex
A-1
(a) all
trademarks (including service marks), common law marks, trade names, trade dress, domain names and logos, slogans and other indicia
of origin under the laws of any jurisdiction in the world, and the registrations and applications for registration thereof (including
but not limited to registrations and applications listed on Schedule I hereto); and the goodwill of the business connected
with the use of and symbolized by the foregoing; (b) all renewals of the foregoing; (c) all income, royalties, damages,
and payments now or hereafter due or payable with respect thereto, including, without limitation, damages, claims and payments
for past, present and future infringements or dilutions thereof; (d) all rights to sue for past, present, and future infringements
or dilutions of any of the foregoing, including the right to settle suits involving claims and demands for royalties owing; and
(e) all rights corresponding to any of the foregoing. Notwithstanding anything herein to the contrary, in no event shall the
Additional Trademark Collateral include (i) any foreign IP Rights and any intent-to-use Trademark application prior to the
filing of a “Statement of Use” or an “Amendment to Allege Use” with respect thereto, only to the extent,
if any, that, and solely during the period, if any, in which, the grant of a security interest therein would impair the validity
or enforceability of such intent-to-use Trademark application or any registration issuing therefrom under applicable law, or (ii) any
other Excluded Assets.
SECTION 3. Security
Agreement. The security interests granted to the Administrative Agent herein are granted in furtherance, and not in limitation
of, the security interests granted to the Administrative Agent pursuant to the Security Agreement. [Each][The] Grantor hereby acknowledges
and affirms that the rights and remedies of the Administrative Agent with respect to the Additional Trademark Collateral are more
fully set forth in the Security Agreement, the terms and provisions of which are hereby incorporated herein by reference as if
fully set forth herein. In the event of any conflict between the terms of this Trademark Security Agreement Supplement and the
Security Agreement, the terms of the Security Agreement shall govern.
SECTION 4. Governing
Law. This Trademark Security Agreement Supplement shall be governed by, and construed in accordance with, the laws of the State
of New York.
SECTION 5. Counterparts.
This Trademark Security Agreement Supplement may be executed in one or more counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together
shall constitute but one and the same instrument.
[Signature Pages Follow]
Annex
A-2
IN WITNESS WHEREOF,
the parties hereto have duly executed this Trademark Security Agreement Supplement as of the day and year first above written.
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[●]
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By:
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Name:
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[●]
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Title:
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[●]
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[Signature
Page to Second Lien Trademark Security Agreement Supplement]
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BANK OF AMERICA, N.A.,
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as Administrative Agent
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By:
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Name:
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Title:
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[Signature
Page to Second Lien Trademark Security Agreement Supplement]
SCHEDULE
I
TRADEMARKS
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REGISTERD OWNER
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REGISTRATION NUMBER
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REGISTRATION DATE
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TRADEMARK
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TRADEMARK APPLICATIONS
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APPLICANT
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APPLICATION NO.
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FILING DATE
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TRADEMARK
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EXHIBIT D
FORM OF
SECOND LIEN SECURITY AGREEMENT JOINDER
A. JOINDER NO. [●]
dated as of [●] (this “Joinder”), to the Second Lien Pledge and Security Agreement, dated as of August 4,
2017 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Security
Agreement”), by and among Hayward Industries, Inc., a New Jersey corporation (as survivor of the Merger (as defined
in the Second Lien Credit Agreement) with Hayward Acquisition Corp., a New Jersey corporation) (the “Borrower”),
Hayward Intermediate, Inc., a Delaware corporation (“Holdings”), the other Grantors (as defined in the
Security Agreement) and Bank of America, N.A., in its capacities as administrative agent and collateral agent (together with its
successors and permitted assigns in such capacities, the “Administrative Agent”) for the Secured Parties.
A. Reference
is made to that certain Second Lien Credit Agreement, dated as of August [4], 2017 (as amended, restated, amended and restated,
supplemented or otherwise modified from time to time, the “Second Lien Credit Agreement”), by and among, inter
alios, the Borrower, Holdings, the Lenders from time to time party thereto and the Administrative Agent.
B. Capitalized
terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Second Lien Credit Agreement
or the Security Agreement, as applicable.
D. [The][Each]
undersigned Restricted Subsidiary ([each a][the] “New Subsidiary”) is executing this Joinder in accordance with
Section 7.10 of the Security Agreement and Section 5.12 of the Second Lien Credit Agreement to become a
Grantor under the Security Agreement in order to induce the Lenders to make additional Loans and as consideration for Loans previously
made.
Accordingly, the Administrative
Agent and [each][the] New Subsidiary agree as follows:
SECTION 1. In
accordance with Section 7.10 of the Security Agreement, [the][each] New Subsidiary by its signature below becomes a
Grantor under the Security Agreement with the same force and effect as if originally named therein as a Grantor, and [the][each]
New Subsidiary hereby (a) agrees to all the terms and provisions of the Security Agreement applicable to it as a Grantor thereunder
and (b) represents and warrants as of the date hereof that the applicable representations and warranties made by it as a Grantor
thereunder on the date hereof that are qualified as to materiality are true and correct in all respects on and as of the date hereof
and those that are not so qualified are true and correct in all material respects on and as of the date hereof; it being understood
and agreed that any representation or warranty that expressly relates to an earlier date shall be deemed to refer to the date hereof.
In furtherance of the foregoing, [the][each] New Subsidiary, as security for the payment and performance in full of the Secured
Obligations, hereby pledges, collaterally assigns, mortgages, transfers and grants to the Administrative Agent, its successors
and permitted assigns, for the benefit of the Secured Parties, their successors and permitted assigns, a security interest in and
Lien on all of [the][each] New Subsidiary’s right, title and interest in and to the Collateral of [the][each] New Subsidiary
to the extent provided in Section 2.01 of the Security Agreement. Upon the effectiveness of this Joinder, each reference
to a “Grantor” and “Subsidiary Guarantor” in the Security Agreement shall be deemed to include [the][each]
New Subsidiary. The Security Agreement is hereby incorporated herein by reference.
SECTION 2. [The][Each]
New Subsidiary represents and warrants to the Administrative Agent and the other Secured Parties that this Joinder has been duly
authorized, executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance
with its terms, subject to the Legal Reservations.
SECTION 3. This
Joinder may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute
an original, but all of which when taken together shall constitute a single contract. This Joinder shall become effective when
the Administrative Agent shall have received a counterpart of this Joinder that bears the signature of [the][each] New Subsidiary
and the Administrative Agent has executed a counterpart hereof. Delivery of an executed signature page to this Joinder by
facsimile transmission or by email as a “.pdf” or “.tiff” attachment shall be as effective as delivery
of a manually signed counterpart of this Joinder.
SECTION 4. Attached
hereto is a duly prepared, completed and executed Perfection Certificate with respect to [the][each] New Subsidiary, and [the][each]
New Subsidiary hereby represents and warrants that the information set forth therein is correct and complete in all material respects
as of the date hereof.
SECTION 5. Except
as expressly supplemented hereby, the Security Agreement shall remain in full force and effect.
SECTION 6. THIS
JOINDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 7. In
case any one or more of the provisions contained in this Joinder is invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein and in the Security Agreement shall not in any way be
affected or impaired thereby (it being understood that the invalidity of a particular provision in a particular jurisdiction shall
not in and of itself affect the validity of such provision in any other jurisdiction). The parties hereto shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes
as close as possible to that of the invalid, illegal or unenforceable provisions.
SECTION 8. All
communications and notices hereunder shall be in writing and given as provided in Section 8.01 of the Security Agreement.
SECTION 9. [The][Each]
New Subsidiary agrees to reimburse the Administrative Agent for its expenses in connection with this Joinder, including the fees,
other charges and disbursements of counsel in accordance with Section 9.03(a) of the Second Lien Credit Agreement.
SECTION 10. This
Joinder shall constitute a Loan Document, under and as defined in, the Second Lien Credit Agreement.
[Signature pages follow]
IN WITNESS WHEREOF,
[the][each] New Subsidiary has duly executed this Joinder, and the Administrative Agent, for the benefit of the Secured Parties,
has caused the same to be accepted, as of the day and year first above written.
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[NAME OF
NEW SUBSIDIARY]
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By:
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Name:
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Title:
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[Signature Page to Second Lien Security
Agreement Joinder]
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BANK OF AMERICA, N.A.,
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as Administrative Agent
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By:
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Name:
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Title:
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[Signature Page to Second Lien Security
Agreement Joinder]
EXHIBIT J-1
[FORM OF]
U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Lenders
That Are Not Partnerships For U.S. Federal Income Tax Purposes)
Reference is hereby
made to that certain Second Lien Credit Agreement dated as of August 4, 2017 (as amended, restated, amended and restated,
supplemented or otherwise modified and in effect on the date hereof, the “Second Lien Credit Agreement”), by
and among Hayward Industries, Inc., a New Jersey corporation (as survivor of the Merger (as defined in the Second Lien Credit
Agreement) with Hayward Acquisition Corp., a New Jersey corporation) (the “Borrower”), Hayward Intermediate, Inc.,
a Delaware corporation (“Holdings”), the Lenders from time to time party thereto and Bank of America, N.A.
in its capacities as administrative agent and collateral agent (the “Administrative Agent”).
Pursuant to the provisions
of Section 2.17(f)(ii)(B)(3) of the Second Lien Credit Agreement, the undersigned hereby certifies that (i) it
is the sole record and beneficial owner of the Loan(s) (as well as any Promissory Notes evidencing such Loan(s)) in respect
of which it is providing this certificate, (ii) it is not a “bank” within the meaning of Section 881(c)(3)(A) of
the Code, (iii) it is not a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of
the Code, (iv) it is not a “controlled foreign corporation” described in Section 881(c)(3)(C) of the
Code and (v) the interest payments in question are not effectively connected with the undersigned’s conduct of a United
States trade or business.
The undersigned has
furnished the Borrower and the Administrative Agent with a duly executed certificate of its non-U.S. person status on IRS Form W-8BEN
or IRS Form W-8BEN-E, as applicable.
By executing this
certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall
promptly so inform each of the Borrower and the Administrative Agent, and (2) the undersigned shall have at all times furnished
each of the Borrower and the Administrative Agent with a properly completed and currently effective certificate in either the
calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.
Unless otherwise defined
herein, terms defined in the Second Lien Credit Agreement and used herein shall have the meanings given to them in the Second
Lien Credit Agreement.
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[NAME OF LENDER]
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By:
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Name:
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Title:
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Date: [●] [●], 20[●]
EXHIBIT J-2
[FORM OF]
U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Participants
That Are Not Partnerships For U.S. Federal Income Tax Purposes)
Reference is hereby
made to that certain Second Lien Credit Agreement dated as of August 4, 2017 (as amended, restated, amended and restated,
supplemented or otherwise modified and in effect on the date hereof, the “Second Lien Credit Agreement”), by
and among Hayward Industries, Inc., a New Jersey corporation (as survivor of the Merger (as defined in the Second Lien Credit
Agreement) with Hayward Acquisition Corp., a New Jersey corporation) (the “Borrower”), Hayward Intermediate, Inc.,
a Delaware corporation (“Holdings”), the Lenders from time to time party thereto and Bank of America, N.A.
in its capacities as administrative agent and collateral agent (the “Administrative Agent”).
Pursuant to the provisions
of Section 2.17(f)(ii)(B)(4) of the Second Lien Credit Agreement, the undersigned hereby certifies that (i) it
is the sole record and beneficial owner of the participation in respect of which it is providing this certificate, (ii) it
is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a “10
percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Code, (iv) it is not
a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code and (v) the interest
payments in question are not effectively connected with the undersigned’s conduct of a United States trade or business.
The undersigned has
furnished its participating Lender with a duly executed certificate of its non-U.S. person status on IRS Form W-8BEN or IRS
Form W-8BEN-E, as applicable. By executing this certificate, the undersigned agrees that (1) if the information provided
on this certificate changes, the undersigned shall promptly so inform such Lender in writing, and (2) the undersigned shall
have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year
in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.
Unless otherwise defined
herein, terms defined in the Second Lien Credit Agreement and used herein shall have the meanings given to them in the Second
Lien Credit Agreement.
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[NAME OF PARTICIPANT]
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By:
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Name:
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Title:
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Date: [●] [●], 20[●]
EXHIBIT J-3
[FORM Of]
U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Participants
That Are Partnerships For U.S. Federal Income Tax Purposes)
Reference is hereby
made to that certain Second Lien Credit Agreement dated as of August 4, 2017 (as amended, restated, amended and restated,
supplemented or otherwise modified and in effect on the date hereof, the “Second Lien Credit Agreement”), by
and among Hayward Industries, Inc., a New Jersey corporation (as survivor of the Merger (as defined in the Second Lien Credit
Agreement) with Hayward Acquisition Corp., a New Jersey corporation) (the “Borrower”), Hayward Intermediate, Inc.,
a Delaware corporation (“Holdings”), the Lenders from time to time party thereto and Bank of America, N.A.
in its capacities as administrative agent and collateral agent (the “Administrative Agent”).
Pursuant to the provisions
of Section 2.17(f)(ii)(B)(4) of the Second Lien Credit Agreement, the undersigned hereby certifies (with respect
to its direct or indirect partners/members that are claiming the portfolio interest exemption) that (i) it is the sole record
owner of the participation in respect of which it is providing this certificate, (ii) its direct or indirect partners/members
are the sole beneficial owners of such participation, (iii) with respect to such participation, neither the undersigned nor
any of its direct or indirect partners/members is a “bank” extending credit pursuant to a loan agreement entered into
in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none
of its direct or indirect partners/members is a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of
the Code, (v) none of its direct or indirect partners/members is a “controlled foreign corporation” described
in Section 881(c)(3)(C) of the Code and (vi) the interest payments in question are not effectively connected with
the undersigned’s or its direct or indirect partners’/members’ conduct of a United States trade or business.
The undersigned has
furnished its participating Lender with a duly executed IRS Form W-8IMY accompanied by one of the following forms from each
of its partners/members that is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or IRS Form W-8BEN-E,
as applicable, or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable,
from each of such partner’s/member’s beneficial owners that is claiming the portfolio interest exemption.
By executing this
certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall
promptly so inform such Lender and (2) the undersigned shall have at all times furnished such Lender with a properly completed
and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in
either of the two calendar years preceding such payments.
Unless otherwise defined
herein, terms defined in the Second Lien Credit Agreement and used herein shall have the meanings given to them in the Second
Lien Credit Agreement.
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[NAME OF PARTICIPANT]
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By:
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Name:
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Title:
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Date: [●] [●], 20[●]
EXHIBIT J-4
[FORM OF]
U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Lenders
That Are Partnerships For U.S. Federal Income Tax Purposes)
Reference is hereby
made to that certain Second Lien Credit Agreement dated as of August 4, 2017 (as amended, restated, amended and restated,
supplemented or otherwise modified and in effect on the date hereof, the “Second Lien Credit Agreement”), by
and among Hayward Industries, Inc., a New Jersey corporation (as survivor of the Merger (as defined in the Second Lien Credit
Agreement) with Hayward Acquisition Corp., a New Jersey corporation) (the “Borrower”), Hayward Intermediate, Inc.,
a Delaware corporation (“Holdings”), the Lenders from time to time party thereto and Bank of America, N.A.
in its capacities as administrative agent and collateral agent (the “Administrative Agent”).
Pursuant to the provisions
of Section 2.17(f)(ii)(B)(4) of the Second Lien Credit Agreement, the undersigned hereby certifies that (i) it
is the sole record owner of the Loan(s) (as well as any Promissory Note(s) evidencing such Loan(s)) in respect of which
it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such Loan(s) (as
well as any Promissory Note(s) evidencing such Loan(s)), (iii) with respect to the extension of credit pursuant to this
Second Lien Credit Agreement or any other Loan Document, neither the undersigned nor any of its direct or indirect partners/members
is a “bank” extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business
within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members is
a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Code and (v) none
of its direct or indirect partners/members is a “controlled foreign corporation” described in Section 881(c)(3)(C) of
the Code.
The undersigned has
furnished the Borrower and the Administrative Agent with a duly executed IRS Form W-8IMY accompanied by one of the following
forms from each of its partners/members that is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or
IRS Form W-8BEN-E, as applicable, or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN or IRS Form W-
8BENE, as applicable, from each of such partner’s/member’s beneficial owners that is claiming the portfolio interest
exemption. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate
changes, the undersigned shall promptly so inform the Borrower and the Administrative Agent, and (2) the undersigned shall
have at all times furnished the Borrower and the Administrative Agent with a properly completed and currently effective certificate
in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding
such payments.
Unless otherwise defined
herein, terms defined in the Second Lien Credit Agreement and used herein shall have the meanings given to them in the Second
Lien Credit Agreement.
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[NAME OF LENDER]
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By:
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Name:
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Date: [●] [●], 20[●]
EXHIBIT K
[FORM OF]
SOLVENCY CERTIFICATE
[●]
[●], 20[●]
This Solvency Certificate
is being executed and delivered pursuant to Section 4.01(h) of that certain Second Lien Credit Agreement, dated
as of the date hereof (the “Second Lien Credit Agreement”; the terms defined therein being used herein as therein
defined), by and among HAYWARD INDUSTRIES, INC., a New Jersey corporation (as survivor of the Merger (as defined in the Second
Lien Credit Agreement) with HAYWARD ACQUISITION CORP., a New Jersey corporation) (the “Borrower”), HAYWARD
INTERMEDIATE, INC., a Delaware corporation (“Holdings”), the Lenders from time to time party thereto and
BANK OF AMERICA, N.A. in its capacities as administrative agent and collateral agent (the “Administrative Agent”).
I, [●], the
[Chief Financial Officer/equivalent officer] of the Borrower, in such capacity and not in an individual capacity, hereby certify
as follows:
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1.
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I am generally familiar with the businesses
and assets of the Borrower and its Restricted Subsidiaries, taken as a whole, and am
duly authorized to execute this Solvency Certificate on behalf of the Borrower pursuant
to the Second Lien Credit Agreement; and
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2.
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As of the date hereof and after giving
effect to the Transactions and the incurrence of the indebtedness and obligations being
incurred in connection with the Second Lien Credit Agreement and the Transactions, (i) the
sum of the debt (including contingent liabilities) of the Borrower and its Restricted
Subsidiaries, taken as a whole, does not exceed the fair value of the assets of the Borrower
and its Restricted Subsidiaries, taken as a whole; (ii) the present fair saleable
value of the assets of the Borrower and its Restricted Subsidiaries, taken as a whole,
is not less than the amount that will be required to pay the probable liabilities of
the Borrower and its Restricted Subsidiaries, taken as a whole, on their debts as they
become absolute and matured; (iii) the capital of the Borrower and its Restricted
Subsidiaries, taken as a whole, is not unreasonably small in relation to the business
of the Borrower or its Restricted Subsidiaries, taken as a whole, contemplated as of
the date hereof; and (iv) the Borrower and its Restricted Subsidiaries, taken as
a whole, do not intend to incur, or believe that they will incur, debts (including current
obligations and contingent liabilities) beyond their ability to pay such debts as they
mature in the ordinary course of business. For the purposes hereof, 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 Standards No. 5).
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[Signature Page Follows]
IN WITNESS WHEREOF, I
have executed this Solvency Certificate on the date first above written.
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HAYWARD INDUSTRIES, INC.
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By:
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Name:
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Title:
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[Signature Page to
Solvency Certificate]
EXHIBIT L
[FORM OF]
ABL INTERCREDITOR AGREEMENT
[ATTACHED]
Execution Version
ABL
INTERCREDITOR AGREEMENT
THIS ABL INTERCREDITOR
AGREEMENT (as amended, restated, amended and restated, extended, supplemented or otherwise modified from time to time pursuant
to the terms hereof, this “Agreement”) is entered into as of August 4, 2017 between (x) BANK
OF AMERICA, N.A. (“Bank of America”), in its capacities as administrative agent and collateral agent
(Bank of America, together with its successors and assigns in such capacities, the “ABL Agent”) for
(i) the financial institutions, lenders and investors party from time to time to any ABL Credit Agreement (as defined below)
(including any swingline lenders or letter of credit issuers under the ABL Credit Agreement) (such financial institutions, lenders
and investors, together with their respective successors, assigns and transferees, the “ABL Lenders”),
(ii) any ABL Cash Management Affiliates (as defined below) and (iii) any ABL Hedging Banks (as defined below) (such
ABL Cash Management Affiliates and ABL Hedging Banks, together with the ABL Agent, the ABL Lenders and any other Secured Parties
under, and as defined in, any ABL Credit Agreement, the “ABL Secured Parties”), (y) Bank of America,
in its capacities as administrative agent and collateral agent (Bank of America, together with its successors and assigns in such
capacities, the “First Lien Term Agent”) for (i) the financial institutions, lenders and investors
party from time to time to any First Lien Term Credit Agreement (as defined below) (including, if applicable, any letter of credit
issuers under the First Lien Term Credit Agreement) (such financial institutions, lenders and investors, together with their respective
successors, assigns and transferees, the “First Lien Term Lenders”), (ii) any Term Cash Management
Affiliates (as defined below) and (iii) any Term Hedging Affiliates (as defined below) (such Term Cash Management Affiliates
and Term Hedging Affiliates, together with the First Lien Term Agent and the First Lien Term Lenders and any other Secured Parties
under, and as defined in, any First Lien Term Credit Agreement, the “First Lien Term Secured Parties”)
and (z) Bank of America, in its capacities as administrative agent and collateral agent (Bank of America, together with its
successors and assigns in such capacities, the “Second Lien Term Agent” and, together with the First
Lien Term Agent, collectively, the “Term Agents”) for the financial institutions, lenders and investors
party from time to time to the Second Lien Term Credit Agreement (as defined below) (such financial institutions, lenders and
investors, together with their respective successors, assigns and transferees, the “Second Lien Term Lenders”
and, together with the First Lien Term Lenders, collectively, the “Term Lenders”) (the Second Lien Term
Agent, the Second Lien Term Lenders and any other Secured Parties under, and as defined in, any Second Lien Term Credit Agreement,
the “Second Lien Term Secured Parties” and, together with the First Lien Term Secured Parties, collectively,
the “Term Secured Parties”), and acknowledged and agreed to by the Initial Borrower, the Borrower, Holdings
and the other ABL Guarantors (as such terms are defined below).
RECITALS
A. Pursuant
to that certain ABL Credit Agreement dated as of the date hereof by and among, inter alia, HAYWARD INTERMEDIATE, INC., a
Delaware corporation (“Holdings”), HAYWARD ACQUISITION CORP., a New Jersey corporation (the “Initial
Borrower”, to be merged on the Closing Date with and into HAYWARD INDUSTRIES, INC., a New Jersey corporation
(the “Borrower”), with the Borrower as survivor of such merger), HAYWARD POOL PRODUCTS CANADA, INC.
/ Produits De Piscines Hayward Canada, Inc., a Canadianfederal corporation (the “Canadian Borrower”),
the ABL Lenders and the ABL Agent (the “ABL Credit Agreement”), the ABL Lenders have agreed to make
certain loans and other financial accommodations to or for the benefit of the Borrower and the Canadian Borrower.
B. Pursuant
to that certain US Loan Guaranty dated as of the date hereof (as the same may be amended, restated, amended and restated, extended,
supplemented and/or otherwise modified from time to time, the “ABL Guaranty”) by each of the ABL Guarantors
(as hereinafter defined) in favor of the ABL Agent, for the benefit of the ABL Secured Parties, the ABL Guarantors have agreed
to guarantee, inter alia, the payment and performance of the obligations under the ABL Documents (as hereinafter defined).
C. As
a condition to the effectiveness of the ABL Credit Agreement and to secure the obligations of the Borrower and the ABL Guarantors
(the Borrower and the ABL Guarantors, collectively, the “ABL Credit Parties”) under and in connection
with the ABL Documents, the ABL Credit Parties on the Closing Date have granted to the ABL Agent (for the benefit of the ABL Secured
Parties) Liens on the Collateral.
D. Pursuant
to that certain First Lien Credit Agreement dated as of the date hereof by and among Holdings, the Borrower, the First Lien Term
Lenders and the First Lien Term Agent (the “First Lien Term Credit Agreement”), the First Lien Term
Lenders have agreed to make certain loans to the Borrower.
E. Pursuant
to that certain Second Lien Credit Agreement dated as of the date hereof by and among Holdings, the Borrower, the Second Lien
Term Lenders and the Second Lien Term Agent (the “Second Lien Term Credit Agreement”), the Second Lien
Term Lenders have agreed to make certain loans to the Borrower.
F. Pursuant
to that certain first lien Guaranty Agreement and that certain second lien Guaranty Agreement, each dated as of the date hereof
(as the same may be amended, restated, amended and restated, extended, supplemented and/or otherwise modified from time to time,
each a “Term Guaranty”) by each of the Term Guarantors (as hereinafter defined) in favor of the relevant
Term Agent, for the benefit of the relevant Term Secured Parties represented by such Term Agent, the Term Guarantors have agreed
to guarantee, inter alia, the payment and performance of the obligations under each applicable Term Document (as hereinafter defined).
G. As
a condition to the effectiveness of the Term Credit Agreements and to secure the obligations of the Borrower and the Term Guarantors
(the Borrower and the Term Guarantors, collectively, the “Term Credit Parties”) under and in connection
with the Term Documents, the Term Credit Parties on the Closing Date have granted to the relevant Term Agent (in each case, for
the benefit of the relevant Term Secured Parties represented by such Term Agent) Liens on the Collateral.
H. Each
of the ABL Agent (on behalf of the ABL Secured Parties) and each of the Term Agents (in each case, on behalf of the relevant Term
Secured Parties represented by such Term Agent) and, by their acknowledgment hereof, the ABL Credit Parties and the Term Credit
Parties, desire to agree to the relative priority of Liens on the Collateral and certain other rights, priorities and interests
as provided herein.
NOW THEREFORE,
in consideration of the foregoing and for other good and valuable consideration, receipt of which is hereby acknowledged, the
parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.1
UCC Definitions. Unless otherwise defined herein (or defined in reference to a Credit Document), all terms which are
defined in the Uniform Commercial Code are used herein as so defined, including the following: Account, Chattel Paper, Commercial
Tort Claim, Commodity Account, Commodity Contract, Deposit Account, Document, Electronic Chattel Paper, Financial Asset, Fixtures,
General Intangible, Instrument, Inventory, Investment Property, Letter-of-Credit Right, Money, Payment Intangible,
Promissory Note, Records, Securities Account, Security Entitlement, Supporting Obligation and Tangible Chattel Paper.
Section 1.2
Other Definitions. Subject to Section 1.1 hereof, as used in this Agreement, the following terms shall
have the meanings set forth below:
“ABL Agent”
shall have the meaning assigned to that term in the introduction to this Agreement and shall include any successor thereto as
well as any Person designated as the “Agent”, “Administrative Agent”, “Collateral Agent”,
“Trustee” or “Collateral Trustee” or similar term under any ABL Credit Agreement.
“ABL Bankruptcy
Sale” shall have the meaning set forth in Section 6.4 hereof.
“ABL Cash
Management Affiliate” shall mean any ABL Cash Management Bank (together with its respective successors, assigns
and transferees) that is owed ABL Cash Management Obligations by any ABL Credit Party or any Restricted Subsidiary, as applicable,
which ABL Cash Management Obligations are secured by Liens granted under one or more ABL Collateral Documents.
“ABL Cash
Management Agreement” shall mean any agreement to provide Cash Management Services between any ABL Cash Management
Bank and any ABL Credit Party (or any Restricted Subsidiary of any ABL Credit Party).
“ABL Cash
Management Bank” shall have the meaning assigned to the term “Secured Banking Services Provider” in
any ABL Credit Agreement.
“ABL Cash
Management Obligations” shall mean obligations owed by any ABL Credit Party or any Restricted Subsidiary, as applicable,
to any ABL Cash Management Bank in respect of or in connection with any Cash Management Services and pursuant to an ABL Cash Management
Agreement.
“ABL Collateral
Documents” shall mean all “Collateral Documents” (as defined in any ABL Credit Agreement) or similar
term, executed and delivered by one or more of the ABL Credit Parties, and all other security agreements, mortgages, deeds of
trust and other collateral documents executed and delivered by any ABL Credit Party in connection with any ABL Credit Agreement
(in each case, other than any such “Collateral Document” or similar term, other security agreement, mortgage, deed
of trust or other collateral document to the extent relating to any ABL Exclusive Credit Party or any ABL Exclusive Collateral),
in each case as the same may be amended, restated, amended and restated, extended, supplemented or otherwise modified from time
to time.
“ABL Credit
Agreement” shall mean the ABL Credit Agreement dated as of the date hereof (as such agreement may be amended, restated,
amended and restated, supplemented or otherwise modified from time to time or refunded, refinanced, restructured, replaced, renewed,
repaid, increased or extended from time to time (whether in whole or in part, whether with the original administrative agent and
lenders or other agents and lenders or otherwise, and whether provided under the original credit agreement or one or more other
credit agreements, indentures, financing agreements or otherwise, including any agreement extending the maturity thereof, otherwise
restructuring all or any portion of the Indebtedness thereunder, increasing the amount loaned or issued thereunder, altering the
maturity thereof or providing for other Indebtedness), in each case as and to the extent permitted by this Agreement, unless such
agreement, instrument or document expressly provides that it is not intended to be and is not an ABL Credit Agreement).
“ABL Credit
Parties” shall have the meaning assigned to that term in the recitals to this Agreement.
“ABL Deposit
and Securities Accounts” shall mean all Deposit Accounts, Securities Accounts, collection accounts and lockbox accounts
(and all related lockboxes) of the ABL Credit Parties (other than the Term Loan Priority Accounts).
“ABL DIP
Financing” shall have the meaning set forth in Section 6.1(a) hereof.
“ABL Documents”
shall mean any ABL Credit Agreement, any ABL Guaranty, any ABL Collateral Document, any ABL Cash Management Agreement between
any ABL Credit Party and any ABL Cash Management Affiliate, any ABL Hedging Agreement between any ABL Credit Party and any ABL
Hedging Bank, any other ancillary agreement executed and delivered by an ABL Credit Party as to which any ABL Secured Party is
a party or a beneficiary and all other agreements, instruments, documents and certificates, now or hereafter executed by or on
behalf of any ABL Credit Party, and delivered to the ABL Agent or any other ABL Secured Party in connection with any of the foregoing
or any ABL Credit Agreement, in each case as the same may be amended, restated, amended and restated, extended, supplemented or
otherwise modified from time to time.
“ABL Exclusive
Collateral” shall have the meaning assigned to that term in the definition of “ABL Priority Collateral”.
“ABL Exclusive
Credit Parties” shall mean the collective reference to (x) each “Guarantor” (as defined in the
ABL Credit Agreement) and (y) each borrower under any ABL Credit Agreement that, in the case of each of the foregoing clauses
(x) and (y), does not also guarantee any Term Obligations or become a borrower under any Term Credit Agreement. For the avoidance
of doubt, any Canadian Loan Party is an ABL Exclusive Credit Party.
“ABL Guarantors”
shall mean the collective reference to Holdings and all “Subsidiary Guarantors” under and as defined in any ABL Credit
Agreement other than any ABL Exclusive Credit Party.
“ABL Guaranty”
shall have the meaning assigned to that term in the recitals to this Agreement and shall also include any other guaranty made
by any ABL Guarantor guaranteeing, inter alia, the payment and performance of any ABL Obligations.
“ABL Hedging
Agreement” means any “Hedge Agreement” as defined in the ABL Credit Agreement.
“ABL Hedging
Bank” shall mean any counterparty (together with its respective successors, assigns and transferees) that has entered
into an ABL Hedging Agreement with an ABL Credit Party with the obligations of such ABL Credit Party thereunder being secured
by Liens granted under one or more ABL Collateral Documents.
“ABL Joint
Collateral” shall have the meaning set forth in Section 3.6(a) hereof.
“ABL Lenders”
shall have the meaning assigned to that term in the introduction to this Agreement, and shall include any Person designated as
a “Lender” or similar term under any ABL Credit Agreement.
“ABL Obligations”
shall mean any and all obligations of every nature of each ABL Credit Party from time to time owed to the ABL Secured Parties,
or any of them, under, in connection with, or evidenced or secured by any ABL Document, including, without limitation, all “Obligations”
(as defined in any ABL Credit Agreement) or similar term, and whether for principal, interest, fees, expenses (including interest,
fees, or expenses which, but for the filing of a petition in bankruptcy with respect to such ABL Credit Party, would have accrued
on any ABL Obligation, whether or not a claim is allowed against such ABL Credit Party for such interest, fees, or expenses in
the related bankruptcy proceeding), reimbursement of amounts drawn under letters of credit, payments for early termination of
ABL Secured Hedging Obligations, indemnification or otherwise, and all other amounts owing or due from any ABL Credit Party under
the terms of any ABL Document.
“ABL Priority
Collateral” shall mean all Collateral (including, for the avoidance of doubt, any such assets that, but for the
application of Section 552 of the Bankruptcy Code or similar provision in any foreign Debtor Relief Laws, would constitute
Collateral) consisting of the following:
(1) all
Accounts and other Receivables, other than Accounts and other Receivables which constitute identifiable proceeds of Term Priority
Collateral;
(2) cash,
Money, cash equivalents and tax refunds (other than, in each case, to the extent constituting proceeds of Term Priority Collateral);
(3) all
(x) Deposit Accounts (other than Term Loan Priority Accounts) and Money and all cash, checks, other negotiable instruments,
funds and other evidences of payments properly held therein, including intercompany indebtedness between or among the ABL Credit
Parties or their Affiliates, to the extent owing in respect of ABL Priority Collateral, (y) Securities Accounts (other than
Term Loan Priority Accounts), Security Entitlements and Securities credited to such a Securities Account (in each case, other
than Equity Interests or Instruments evidencing indebtedness to the extent such indebtedness is not relating to, evidencing or
owing in respect of, ABL Priority Collateral (provided that to the extent such Instruments also relate to Term Priority
Collateral then only the portion thereof relating to ABL Priority Collateral shall be included in ABL Priority Collateral)) and
(z) Commodity Accounts (other than Term Loan Priority Accounts) and Commodity Contracts credited thereto, and, in each case,
all cash, Money, cash equivalents, checks and other property properly held therein or credited thereto (other than Equity Interests
or Instruments evidencing indebtedness to the extent such indebtedness is not relating to, evidencing or owing in respect of,
ABL Priority Collateral (provided that to the extent such Instruments also relate to Term Priority Collateral then only
the portion thereof relating to ABL Priority Collateral shall be included in ABL Priority Collateral)); provided, however,
that, subject to the last sentence of Section 4.1(a), to the extent that identifiable proceeds of Term Priority Collateral
are deposited in any such Deposit Accounts, Securities Accounts or Commodities Accounts, such identifiable proceeds shall be treated
as Term Priority Collateral;
(4) all
Inventory;
(5) to
the extent relating to, evidencing or governing (x) any of the items referred to in the preceding clauses (1) through
(4) constituting ABL Priority Collateral, all Documents, Instruments (including Promissory Notes), Chattel Paper (including
Tangible Chattel Paper and Electronic Chattel Paper), Investment Property and Commercial Tort Claims or (y) any other
ABL Priority Collateral, General Intangibles (including all rights under contracts but excluding any Intellectual Property and
Equity Interests); provided that, to the extent any of the foregoing also relates to Term Priority Collateral, only that
portion related to the items referred to in the preceding clauses (1) through (4) shall be included in the ABL Priority
Collateral;
(6) to
the extent relating to any of the items referred to in the preceding clauses (1) through (5) constituting ABL Priority
Collateral, all Supporting Obligations, letters of credit and Letter-of-Credit Rights; provided that, to the extent any
of the foregoing also relates to Term Priority Collateral only that portion related to the items referred to in the preceding
clauses (1) through (5) shall be included in the ABL Priority Collateral;
(7) all
books and Records relating to any of the items referred to in the preceding clauses (1) through (6) constituting ABL
Priority Collateral (including all books, databases, customer lists, engineer drawings, and Records, whether tangible or electronic,
which contain any information relating to any of the items referred to in the preceding clauses (1) through (6) constituting
ABL Priority Collateral but, in each case, excluding any Intellectual Property); and
(8) all
collateral security and guarantees with respect to any of the items referred to in the preceding clauses (1) through (7) constituting
ABL Priority Collateral and all cash, Money, cash equivalents, insurance proceeds, Instruments, Securities and Financial
Assets (other than Equity Interests) received as Proceeds of, and any other Proceeds of, any of the items referred to in the preceding
clauses (1) through (7) and this clause (8) constituting ABL Priority Collateral (“ABL Priority Proceeds”);
provided, that in no case shall ABL Priority Collateral include Equipment, Intellectual Property or Real Property
owned or leased by any Term Credit Party.
For the avoidance
of doubt, it is understood and agreed that “ABL Priority Collateral” shall include any Collateral consisting of assets
or property of any ABL Exclusive Credit Party and any Proceeds thereof which would not otherwise constitute ABL Priority Collateral
or Term Priority Collateral (such assets and property, the “ABL Exclusive Collateral”).
“ABL Priority
Proceeds” shall have the meaning assigned to that term in the definition of “ABL Priority Collateral”.
“ABL Recovery”
shall have the meaning set forth in Section 5.3(a) hereof.
“ABL Secured
Hedging Obligations” shall mean obligations owed by any ABL Credit Party to any ABL Hedging Bank in respect of or
in connection with any ABL Hedging Agreement.
“ABL Secured
Parties” shall have the meaning assigned to that term in the introduction to this Agreement.
“Affiliate”
shall mean, as applied to any Person, any other Person directly or indirectly Controlling, Controlled by, or under common Control
with, that Person.
“Agent”
shall mean the ABL Agent or a Term Agent (and collectively, the “Agents”). “Agreement”
shall have the meaning assigned to that term in the introduction to this Agreement.
“Asset
Sale Proceeds Pledged Account” shall mean any account held at, and subject to the sole dominion and control of any
Term Agent in which the proceeds from any disposition of Term Priority Collateral is held pending reinvestment pursuant to any
Term Credit Agreement.
“Bankruptcy
Code” shall mean Title 11 of the United States Code, as now or hereafter in effect or any successor thereto.
“Borrower”
shall have the meaning assigned to that term in the Recitals of this Agreement.
“Business
Day” shall mean any day that is not a Saturday, Sunday or other day on which commercial banks in New York, New York
are authorized or required by law to remain closed (or are in fact closed).
“Canadian
Loan Party” shall have the meaning provided in the ABL Credit Agreement. “Cash Management Services”
means any one or more of the following types of services or facilities: commercial credit cards, stored value cards, purchasing
cards, treasury management services, netting services, overdraft protections, check drawing services, automated payment services
(including depository, overdraft, controlled disbursement, ACH transactions, return items and interstate depository network services),
employee credit card programs, cash pooling services and any arrangements or services similar to any of the foregoing and/or otherwise
in connection with Cash (as defined in the First Lien Term Credit Agreement) management and Deposit Accounts (as defined in the
First Lien Term Credit Agreement).
“Closing
Date” shall mean August 4, 2017.
“Collateral”
shall mean all Property now owned or hereafter acquired by the Borrower or any Guarantor in or upon which a Lien is granted or
purported to be granted to any ABL Agent or any Term Agent under any of the ABL Collateral Documents or the Term Collateral Documents,
together with all rents, issues, profits, products and Proceeds thereof.
“Control”
means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled”
have meanings correlative thereto.
“Control
Collateral” shall mean any Collateral consisting of any Certificated Security (as defined in Section 8−102
of the Uniform Commercial Code), Investment Property, Deposit Account, Securities Account, Instruments and any other
Collateral as to which a Lien may be perfected through possession or control by the secured party or any agent therefor.
“Controlling
Term Agent” shall mean (i) at any time prior to the Discharge of First Lien Term Obligations, the “Designated
First Priority Representative” (as such term is defined in the Term Loan Intercreditor Agreement) and (ii) after the
Discharge of First Lien Term Obligations has occurred and the ABL Agent has received written notice thereof from the Borrower
and the “Designated Second Priority Representative” (as such term is defined in the Term Loan Intercreditor Agreement),
such Designated Second Priority Representative.
“Copyright
Licenses” shall mean any written agreement, now or hereafter in effect, naming any Credit Party as licensor and
granting any right to any third party under any Copyright now or hereafter owned by such Credit Party or that such Credit Party
otherwise has the right to license, or naming any Credit Party as a licensee and granting any right to such Credit Party under
any Copyright now or hereafter owned by any third party, and all rights of such Credit Party under any such agreement.
“Copyrights”
shall mean the following: (a) all copyrights, rights and interests in copyrights, works protectable by copyright whether
published or unpublished, copyright registrations and copyright applications; (b) all renewals of any of the foregoing; (c) all
income, royalties, damages, and payments now or hereafter due and/or payable under any of the foregoing, including, without limitation,
damages or payments for past, present or future infringements for any of the foregoing; (d) the right to sue for past, present,
and future infringements of any of the foregoing; and (e) all rights corresponding to any of the foregoing.
“Credit
Documents” shall mean the ABL Documents and the Term Documents. “Credit Parties” shall
mean the ABL Credit Parties and the Term Credit Parties.
“Debtor
Relief Laws” shall mean the Bankruptcy Code of the United States, the Companies’ Creditor Arrangement Act
(Canada), the Bankruptcy and Insolvency Act (Canada), the Winding-up and Restructuring Act (Canada) and all other liquidation,
conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization,
or similar debtor relief Laws of the United States, Canada or other applicable jurisdictions from time to time in effect and affecting
the rights of creditors generally.
“Discharge
of ABL Obligations” shall mean the time at which all the ABL Obligations (other than contingent indemnification
and reimbursement obligations as to which no claim has been asserted by the Person entitled thereto) have been paid in full in
cash, all Letters of Credit (as defined in any ABL Credit Agreement) have expired or been terminated (other than Letters of Credit
for which other arrangements reasonably satisfactory to the ABL Agent and each applicable Issuing Bank (or similar term) (as defined
in any ABL Credit Agreement) have been made), all Commitments (as defined in the ABL Credit Agreement) have been terminated and,
with respect to any Hedging Obligations (as defined in the ABL Credit Agreement) and Banking Services Obligations (as defined
in any ABL Credit Agreement), such Hedging Obligations and Banking Services Obligations have either been paid in full, cash collateralized
on terms reasonably satisfactory to each applicable counterparty (or other arrangements reasonably satisfactory to the applicable
counterparty shall have been made) or are no longer secured by the Collateral pursuant to the terms of any ABL Credit Agreement.
“Discharge
of First Lien Term Obligations” shall mean the time at which all the First Lien Term Obligations (other than contingent
indemnification and reimbursement obligations as to which no claim has been asserted by the Person entitled thereto) have been
paid in full in cash and all Commitments (as defined in any First Lien Term Credit Agreement) have been terminated, and, with
respect to any First Lien Term Obligations in respect of Hedge Agreements (as defined in any First Lien Term Credit Agreement)
and in respect of Banking Services (as defined in any First Lien Term Credit Agreement), such First Lien Term Obligations have
either been paid in full, cash collateralized on terms reasonably satisfactory to each applicable counterparty (or other arrangements
reasonably satisfactory to the applicable counterparty shall have been made) or are no longer secured by the Collateral pursuant
to the terms of any First Lien Term Credit Agreement.
“Discharge
of Second Lien Term Obligations” shall mean the time at which all the Second Lien Term Obligations (other than contingent
indemnification and reimbursement obligations as to which no claim has been asserted by the Person entitled thereto) have been
paid in full in cash and all Commitments (as defined in each Second Lien Term Credit Agreement) have been terminated.
“Discharge
of Term Obligations” shall mean the time at which both the Discharge of First Lien Term Obligations and Discharge
of Second Lien Term Obligations shall have occurred.
“Domain
Names” shall mean all Internet domain names and associated URL addresses in or to which any Credit Party now or
hereafter has any right, title or interest.
“Enforcement
Notice” shall mean a written notice delivered by either the ABL Agent to the Controlling Term Agent, or by the Controlling
Term Agent to the ABL Agent, announcing that it intends to commence an Exercise of Any Secured Creditor Remedies.
“Equipment”
shall mean (x) any “equipment” as such term is defined in Article 9 of the Uniform Commercial Code, and
in any event, shall include, but shall not be limited to, all machinery, equipment, furnishings, appliances, furniture, fixtures,
tools, and vehicles now or hereafter owned by any Credit Party in each case, regardless of whether characterized as equipment
under the Uniform Commercial Code (but excluding any such items which constitute Inventory), and (y) any and all additions,
substitutions and replacements of any of the foregoing and all accessions thereto, wherever located, whether or not at any time
of determination incorporated or installed therein or attached thereto, and all replacements therefor, together with all attachments,
components, parts, equipment and accessories installed thereon or affixed thereto.
“Equity
Interest” shall mean any and all shares, interests, participations or other equivalents (however designated) of
capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation), including partnership
interests and membership interests, and any and all warrants, rights or options to purchase or other arrangements or rights to
acquire any of the foregoing, but excluding for the avoidance of doubt any Indebtedness convertible into or exchangeable for any
of the foregoing.
“Event
of Default” shall mean an “Event of Default” or similar term under and as defined in any ABL Credit
Agreement or any Term Credit Agreement, as applicable.
“Exercise
of Any Secured Creditor Remedies” or “Exercise Any Secured Creditor Remedies” or “Exercise
of Secured Creditor Remedies” or similar phrase shall mean, except as otherwise provided in the final sentence of
this definition:
(a) the
taking by any Secured Party of any action to enforce or realize upon any Lien (including any judgment lien), including the institution
of any foreclosure proceedings, action, exercise of a power of sale or the noticing of any public or private sale pursuant to
Article 9 of the Uniform Commercial Code or other applicable law;
(b) the
exercise by any Secured Party of any right or remedy provided to a secured creditor on account of a Lien under any of the Credit
Documents, under applicable law, in an Insolvency Proceeding or otherwise, including the election to retain any of the Collateral
in satisfaction of a Lien;
(c) the
taking of any action by any Secured Party or the exercise of any right or remedy by any Secured Party in respect of the collection
on, set off against, marshaling of, injunction respecting or foreclosure or power of sale on the Collateral or the Proceeds thereof;
(d) the
appointment on the application of a Secured Party, of a liquidator, trustee in bankruptcy, receiver, receiver and manager or interim
receiver of all or part of the Collateral;
(e) the
sale, lease, license or other disposition of all or any portion of the Collateral by private or public sale conducted by any Secured
Party or any other means at the direction of any Secured Party permissible under applicable law;
(f) the
exercise of any other right of a secured creditor under Part 6 of Article 9 of the Uniform Commercial Code or under
provisions of similar effect under other applicable law; and
(g) the
exercise by any Secured Party of any voting rights relating to any Equity Interest included in the Collateral.
For the avoidance of doubt, none of the
following shall be deemed to constitute an Exercise of Any Secured Creditor Remedies or an Exercise of Secured Creditor Remedies:
(i) the filing of a proof of claim or voting with respect to such claim in any Insolvency Proceeding or the seeking of adequate
protection (subject to Section 6.3), in each instance in a manner otherwise consistent with the terms and conditions
of this Agreement, (ii) the exercise of rights with respect to the ABL Priority Collateral by the ABL Agent upon the occurrence
of a Cash Dominion Period (as defined in any ABL Credit Agreement) of the type provided in the ABL Credit Agreement as in effect
on the Closing Date, including, without limitation, the notification of account debtors, depository institutions or any other
Person to deliver proceeds of ABL Priority Collateral to the ABL Agent, (iii) the consent by the ABL Agent to a going out
of business sale or other disposition by any Credit Party of any of the ABL Priority Collateral (other than after the occurrence
of an Event of Default), (iv) the consent of the Controlling Term Agent to disposition by any Credit Party of any of the
Term Priority Collateral (other than after the occurrence of an Event of Default), (v) the reduction of advance rates or
sub-limits by the ABL Agent and the ABL Lenders, (vi) the change in eligibility criteria for components of the borrowing
base under the ABL Credit Agreement by the ABL Agent and the ABL Lenders or (vii) the imposition of Availability Reserves
(as defined in the ABL Credit Agreement) by the ABL Agent.
“First
Lien Term Agent” shall have the meaning assigned to that term in the introduction to this Agreement.
“First
Lien Term Credit Agreement” (i) shall mean the First Lien Term Credit Agreement referred to in the recitals
to this Agreement (as such agreement may be amended, restated, amended and restated, supplemented or otherwise modified from time
to time or refunded, refinanced, restructured, replaced, renewed, repaid, increased or extended from time to time (whether in
whole or in part, whether with the original administrative agent and lenders or other agents and lenders or otherwise, and whether
provided under the original credit agreement or one or more other credit agreements, indentures, financing agreements or otherwise,
including any agreement extending the maturity thereof, otherwise restructuring all or any portion of the Indebtedness thereunder,
increasing the amount loaned or issued thereunder, altering the maturity thereof or providing for other Indebtedness), in each
case as and to the extent permitted by this Agreement, unless such agreement, instrument or document expressly provides that it
is not intended to be and is not a First Lien Term Credit Agreement) and (ii) shall include any one or more other agreements,
indentures or facilities relating to additional First Lien Term Obligations joined to this Agreement pursuant to Section 7.20
hereof.
“First
Lien Term Credit Agreement Obligations” shall have the meaning assigned to that term in the definition of “First
Lien Term Obligations”.
“First
Lien Term Documents” shall mean any First Lien Term Credit Agreement, any Term Guaranty relating to the First Lien
Term Obligations, any Term Collateral Document relating to the First Lien Term Obligations, any Cash Management Services between
any Term Credit Party and any Term Cash Management Affiliate, any Term Hedging Agreement between any Term Credit Party and any
Term Hedging Affiliate, any other ancillary agreement executed and delivered by a Term Credit Party as to which any First Lien
Term Secured Party is a party or a beneficiary relating to the First Lien Term Obligations and all other agreements, instruments,
documents and certificates, now or hereafter executed by or on behalf of any Term Credit Party, and delivered to the First Lien
Term Agent or any other First Lien Term Secured Party, in connection with any of the foregoing or any First Lien Term Credit Agreement,
in each case as the same may be amended, restated, amended and restated, extended, supplemented or otherwise modified from time
to time.
“First
Lien Term Lender” shall have the meaning assigned to that term in the introduction to this Agreement, and shall
include any Person that is a “Lender” or similar term under any First Lien Term Credit Agreement.
“First
Lien Term Obligations” shall mean (i) any and all obligations of every nature of each Term Credit Party from
time to time owed to the First Lien Term Secured Parties, or any of them, under, in connection with, or evidenced or secured by
any First Lien Term Document, including, without limitation, all “Obligations” (as defined in the First Lien Term
Credit Agreement) or similar term, and whether for principal, interest, fees, expenses (including interest, fees, or expenses
which, but for the filing of a petition in bankruptcy with respect to such Term Credit Party, would have accrued on any First
Lien Term Obligation, whether or not a claim is allowed against such Term Credit Party for such interest, fees, or expenses in
the related bankruptcy proceeding), payments for early termination of Term Secured Hedging Obligations, indemnification or otherwise,
and all other amounts owing or due from any Term Credit Party under the terms of any First Lien Term Document, as amended, restated,
modified, renewed, refunded, replaced or refinanced in whole or in part from time to time (the “First Lien Term Credit
Agreement Obligations”) and (ii) all Other First Lien Term Obligations.
“First
Lien Term Secured Parties” shall have the meaning assigned to that term in the introduction to this Agreement and
shall include all other Persons holdings First Lien Term Obligations.
Governmental
Authority” means any federal, state, provincial, municipal, national or other government, governmental department,
commission, board, bureau, court, agency or instrumentality or political subdivision thereof or any entity or officer exercising
executive, legislative, judicial, regulatory or administrative functions of or pertaining to any government or any court, in each
case whether associated with a state or locality of the U.S., the U.S., or a foreign government or any other political subdivision
thereof, including central banks and supra national bodies.
“Guarantor”
shall mean any of the ABL Guarantors or Term Guarantors.
“Holdings”
shall have the meaning assigned to that term in the recitals to this Agreement.
“Indebtedness”
shall have the meaning provided in the ABL Credit Agreement and the Term Credit Agreements as in effect on the date hereof.
“Insolvency
Proceeding” shall mean (a) any case, action or proceeding before any court or other Governmental Authority relating
to bankruptcy, reorganization, insolvency, liquidation, receivership, dissolution, arrangement (pursuant to any corporate statutes)
winding-up or relief of debtors, or (b) any general assignment for the benefit of creditors, composition, marshalling of assets
for creditors or other similar arrangement in respect of a Person’s creditors generally or any substantial portion of a Person’s
creditors; in each case covered by clauses (a) and (b) undertaken under any Debtor Relief
Laws.
“Intellectual
Property” shall mean all intellectual and similar property of every kind and nature now owned, licensed or hereafter
acquired by any Credit Party that is subject to a security interest under any ABL Documents and any Term Documents, including inventions,
designs, Patents, Copyrights, Licenses, Trademarks, Domain Names, trade secrets, confidential or proprietary technical and business
information, know how, show how or other data or information, software, databases, all other proprietary information and all embodiments
or fixations thereof and related documentation and registrations and all additions, improvements and accessions to, and books and
records describing or used in connection with, any of the foregoing.
“Lenders”
means, collectively, all of the ABL Lenders and the Term Lenders.
“License”
shall mean any Patent License, Trademark License, Copyright License, or other license or sublicense agreement granting rights under
Intellectual Property to which any Credit Party is a party.
“Lien”
shall mean any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge,
or preference, priority or other security interest or preferential arrangement of any kind or nature whatsoever (including any
conditional sale or other title retention agreement, any easement, right of way or other encumbrance on title to real property,
and any Capital Lease having substantially the same economic effect as any of the foregoing), in each case, in the nature of security;
provided that in no event shall an operating lease in and of itself be deemed to constitute a Lien on any asset.
“Lien Priority”
shall mean with respect to any Lien of the ABL Secured Parties or the Term Secured Parties in the Collateral, the order of priority
of such Lien as specified in Section 2.1 hereof.
“Other
First Lien Term Obligations” means (a) if the Pari Passu Intercreditor Agreement (as defined in the First Lien
Term Credit Agreement) has been entered into, all “Additional Pari Obligations” (as defined in such Pari Passu Intercreditor
Agreement), (b) if the Term Loan Intercreditor Agreement has been entered into, all other obligations in connection with,
or evidenced or secured by, “Additional First Priority Debt” (as defined in the Term Loan Intercreditor Agreement)
and (c) in any event, any indebtedness or obligations (other than First Lien Term Credit Agreement Obligations) of the Loan
Parties (as defined in the Term Loan Intercreditor Agreement) that are to be secured with a Lien pari passu with the Liens on the
Collateral securing the First Lien Term Credit Agreement Obligations and are designated by the Borrower as First Lien Term Obligations
hereunder; provided, however, that with respect to this clause (c), the requirements set forth in Section 7.20
shall have been satisfied.
“Other
Liabilities” means ABL Cash Management Obligations and ABL Secured Hedging Obligations.
“Other
Second Lien Term Obligations” means (a) if the Pari Passu Intercreditor Agreement (as defined in the Second
Lien Term Credit Agreement) has been entered into, all “Additional Pari Obligations” as defined in such Pari Passu
Intercreditor Agreement, (b) if the Term Loan Intercreditor Agreement has been entered into, all other obligations in connection
with, or evidenced or secured by, “Additional Second Priority Debt” as defined in the Term Loan Intercreditor Agreement
and (c) in any event, any indebtedness or obligations (other than Second Lien Term Credit Agreement Obligations) of the Loan
Parties (as defined in the Term Loan Intercreditor Agreement) that are to be secured with a Lien pari passu with the Liens on the
Collateral securing the Second Lien Term Credit Agreement Obligations and are designated by the Borrower as Second Lien Term Obligations
hereunder; provided, however, that with respect to this clause (c), the requirements set forth in Section 7.20
shall have been satisfied.
“Party”
shall mean the ABL Agent, the First Lien Term Agent or the Second Lien Term Agent (and collectively, the “Parties”).
“Patent
License” shall mean any written agreement, now or hereafter in effect, naming any Credit Party as licensor and granting
to any third party any right to develop, commercialize, import, make, have made, offer for sale, use or sell any invention on which
a Patent, now or hereafter owned by such Credit Party or that such Credit Party otherwise has the right to license, is in existence,
or naming any Credit Party as licensee and granting to such Credit Party any such right with respect to any invention on which
a Patent, now or hereafter owned by any third party, is in existence, and all rights of such Credit Party under any such agreement.
“Patents”
shall mean the following: (a) any and all patents and patent applications; (b) all inventions described and claimed therein;
(c) all reissues, divisions, continuations, renewals, extensions and continuations in part thereof; (d) all income, royalties,
damages, claims, and payments now or hereafter due or payable under and with respect thereto, including, without limitation, damages
and payments for past, present and future infringements thereof; (e) all rights to sue for past, present, and future infringements
thereof; and (f) all rights corresponding to any of the foregoing.
“Person”
shall mean any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership,
Governmental Authority or any other entity.
“Priority
Collateral” shall mean the ABL Priority Collateral or the Term Priority Collateral, as applicable.
“Proceeds”
shall mean (a) all “proceeds,” as defined in Article 9 of the Uniform Commercial Code, with respect to the
Collateral, and (b) whatever is recoverable or recovered when any Collateral is sold, exchanged, collected, or disposed of,
whether voluntarily or involuntarily.
“Property”
shall mean any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible.
“Real Property”
shall mean any right, title or interest in and to real property, including any fee interest, leasehold interest, easement, or license
and any other right to use or occupy real property.
“Receivables”
shall mean all of the following now owned or hereafter arising or acquired assets of any ABL Credit Party: (a) all amounts
at any time payable to any ABL Credit Party in respect of the sale or other Disposition of any Account; (b) all interest,
fees, late charges, penalties, collection fees, and other amounts due or to become due or otherwise payable in connection with
any Account; (c) all credit card receivables and other payment intangibles; and (d) all other contract rights, chattel
paper, instruments, or other forms of rights to payment, in each case arising from the sale, lease, or other Disposition of Inventory,
the licensing of Inventory, the rendition of services, or otherwise related to any Accounts or Inventory of an ABL Credit Party
(including, choses in action, causes of action, or other rights and claims against carriers or shippers, rights to indemnification,
and identifiable proceeds thereof, casualty or similar types of insurance, in each case relating to ABL Priority Collateral and
identifiable proceeds thereof).
“Restricted
Subsidiary” means (a) with respect to ABL Credit Parties, any “Restricted Subsidiary” under and
as defined in any ABL Credit Agreement and (b) with respect to the Term Credit Parties, any “Restricted Subsidiary”
under and as defined in any Term Credit Agreement.
“Second
Lien Term Agent” shall have the meaning assigned to that term in the introduction to this Agreement.
“Second
Lien Term Credit Agreement” (i) shall mean the Second Lien Term Credit Agreement referred to in the recitals
to this Agreement (as such agreement may be amended, restated, amended and restated, supplemented or otherwise modified from time
to time or refunded, refinanced, restructured, replaced, renewed, repaid, increased or extended from time to time (whether in whole
or in part, whether with the original administrative agent and lenders or other agents and lenders or otherwise, and whether provided
under the original credit agreement or one or more other credit agreements, indentures, financing agreements or otherwise, including
any agreement extending the maturity thereof, otherwise restructuring all or any portion of the Indebtedness thereunder, increasing
the amount loaned or issued thereunder, altering the maturity thereof or providing for other Indebtedness), in each case as and
to the extent permitted by this Agreement, unless such agreement, instrument or document expressly provides that it is not intended
to be and is not a Second Lien Term Credit Agreement) and (ii) shall include any one or more other agreements, indentures
or facilities relating to additional Second Lien Term Obligations joined to this Agreement pursuant to Section 7.20
hereof.
“Second
Lien Term Credit Agreement Obligations” shall have the meaning assigned to that term in the definition of “Second
Lien Term Obligations”.
“Second
Lien Term Documents” shall mean any Second Lien Term Credit Agreement, any Term Guaranty relating to the Second Lien
Term Obligations, any Term Collateral Document relating to the Second Lien Term Obligations, any other ancillary agreement executed
and delivered by a Term Credit Party as to which any Second Lien Term Secured Party is a party or a beneficiary relating to the
Second Lien Term Obligations and all other agreements, instruments, documents and certificates, now or hereafter executed by or
on behalf of any Term Credit Party, and delivered to the Second Lien Term Agent or any other Second Lien Term Secured Party, in
connection with any of the foregoing or any Second Lien Term Credit Agreement, in each case as the same may be amended, restated,
amended and restated, extended, supplemented or otherwise modified from time to time.
“Second
Lien Term Lender” shall have the meaning assigned to that term in the introduction to this Agreement, and shall include
any Person that is a “Lender” or similar term under any Second Lien Term Credit Agreement.
“Second
Lien Term Obligations” (i) shall mean any and all obligations of every nature of each Term Credit Party from
time to time owed to the Second Lien Term Secured Parties, or any of them, under, in connection with, or evidenced or secured by
any Second Lien Term Document, including, without limitation, all “Obligations” (as defined in the Second Lien Term
Credit Agreement) or similar term, and whether for principal, interest, fees, expenses (including interest, fees, or expenses which,
but for the filing of a petition in bankruptcy with respect to such Term Credit Party, would have accrued on any Second Lien Term
Obligation, whether or not a claim is allowed against such Term Credit Party for such interest, fees, or expenses in the related
bankruptcy proceeding) indemnification or otherwise, and all other amounts owing or due from any Term Credit Party under the terms
of any Second Lien Term Document, as amended, restated, modified, renewed, refunded, replaced or refinanced in whole or in part
from time to time (the “Second Lien Term Credit Agreement Obligations”) and (ii) all Other Second
Lien Term Obligations.
“Second
Lien Term Secured Parties” shall have the meaning assigned to that term in the introduction to this Agreement and
all other Persons holdings Second Lien Term Obligations.
“Secured
Parties” shall mean the ABL Secured Parties and the Term Secured Parties. “Subsidiary”
shall mean, with respect to any Person, any corporation, partnership, limited liability company, association, joint venture or
other business entity of which more than 50% of the total voting power of stock or other ownership interests entitled (without
regard to the occurrence of any contingency) to vote in the election of the Person or Persons (whether directors, trustees or other
Persons performing similar functions) having the power to direct or cause the direction of the management and policies thereof
is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other subsidiaries of such Person
or a combination thereof, in each case to the extent such entity’s financial results are required to be included in such
Person’s consolidated financial statements under GAAP; provided that in determining the percentage of ownership interests
of any Person controlled by another Person, no ownership interests in the nature of a “qualifying share” of the former
Person shall be deemed to be outstanding. Unless otherwise specified, “subsidiary” shall mean any subsidiary of the
Borrower.
“Term Agents”
shall have the meaning assigned to that term in the introduction to this Agreement and shall include any successor thereto as well
as any Person designated as the “Agent”, “Administrative Agent”, “Collateral Agent”, “Trustee”,
“Collateral Trustee” or similar term under any Term Credit Agreement that become party to this Agreement.
“Term Arranger”
means any Person that has acted as an arranger, bookrunner or in a similar role under any Term Document.
“Term Bankruptcy
Sale” shall have the meaning set forth in Section 6.4 hereof.
“Term Cash
Management Affiliate” shall mean any Term Cash Management Bank (together with its respective successors, assigns
and transferees) that is owed Term Cash Management Obligations by any Term Credit Party and which Term Cash Management Obligations
are secured by Liens granted under one or more Term Collateral Documents under the First Lien Term Credit Agreement.
“Term Cash
Management Agreement” shall mean any agreement entered into between a Term Credit Party and a Term Cash Management
Bank in connection with Cash Management Services.
“Term Cash
Management Bank” shall mean any Term Agent, Term Arranger or Term Lender or any of their respective Affiliates that
has entered into a Term Cash Management Agreement.
“Term Cash
Management Obligations” means, in connection with any First Lien Term Credit Agreement, obligations owed by any Term
Credit Party to any Term Cash Management Bank in respect of or in connection with any Cash Management Services pursuant to any
Term Cash Management Agreement.
“Term Cash
Proceeds Notice” shall mean a written notice delivered by the relevant Term Agent to the ABL Agent (a) stating
that an Event of Default has occurred and is continuing under any Term Document and specifying the relevant Event of Default and
(b) stating that certain cash proceeds which may be deposited in an ABL Deposit and Securities Account constitute Term Priority
Collateral, and reasonably identifying the amount of such proceeds and specifying the origin thereof.
“Term Collateral
Documents” shall mean all “Collateral Documents” (as defined in any Term Credit Agreement) or similar
term, executed and delivered by one or more Term Credit Parties, and all other security agreements, mortgages, deeds of trust and
other collateral documents executed and delivered by any Term Credit Party in connection with any Term Credit Agreement (in each
case, other than any “Collateral Document” (as defined in any Term Credit Agreement) or similar term, security agreement,
mortgage, deed of trust or other collateral document to the extent relating to any Term Exclusive Credit Party or any Term Exclusive
Collateral), in each case as the same may be amended, restated, amended and restated, extended, supplemented or otherwise modified
from time to time.
“Term Credit
Agreements” shall mean any First Lien Term Credit Agreement and any Second Lien Term Credit Agreement and shall include
any one or more other agreements, indentures or facilities (i) extending the maturity of, consolidating, restructuring, refunding,
replacing or refinancing all or any portion of the Term Obligations, whether by the same or any other agent, trustee, lender, group
of lenders, creditor or group of creditors and whether or not increasing the amount of any Indebtedness that may be incurred or
issued thereunder and (ii) relating to additional Term Obligations joined to this Agreement pursuant to Section 7.20
hereof.
“Term Credit
Parties” shall have the meaning assigned to that term in the recitals to this Agreement.
“Term DIP
Financing” shall have the meaning set forth in Section 6.1(b) hereof.
“Term Documents”
shall mean any Term Credit Agreement, any Term Guaranty, any Term Collateral Document, the Term Loan Intercreditor Agreement, any
Cash Management Services between any Term Credit Party and any Term Cash Management Affiliate, any Term Hedging Agreements between
any Term Credit Party and any Term Hedging Affiliate, any other ancillary agreement executed and delivered by a Term Credit Party
as to which any Term Secured Party is a party or a beneficiary and all other agreements, instruments, documents and certificates,
now or hereafter executed by or on behalf of any Term Credit Party, and delivered to the relevant Term Agent or any other Term
Secured Party in connection with any of the foregoing or any Term Credit Agreement, in each case as the same may be amended, restated,
amended and restated, extended, supplemented or otherwise modified from time to time.
“Term Exclusive
Collateral” shall have the meaning assigned to that term in the definition of “Term Priority Collateral”.
“Term Exclusive
Credit Parties” shall mean the collective reference to (x) each “Guarantor” (as defined in any Term
Credit Agreement) and (y) each borrower under any Term Credit Agreement that, in the case of each of the foregoing clauses
(x) and (y), does not also guarantee any ABL Obligations or become a borrower under any ABL Credit Agreement.
“Term Guarantors”
shall mean the collective reference to Holdings and all “Subsidiary Guarantors” under and as defined in the Term Credit
Agreements, in each case, other than any Term Exclusive Credit Party.
“Term Guaranty”
shall have the meaning assigned to that term in the recitals to this Agreement and shall also include any other guaranty made by
a Term Guarantor guaranteeing, inter alia, the payment and performance of any Term Obligations.
“Term Hedging
Bank” shall mean any Term Agent, Term Arranger or Term Lender or any of their respective Affiliates that has entered
into a Term Hedging Agreement.
“Term Hedging
Affiliate” shall mean any Term Hedging Bank (together with its respective successors, assigns and transferees) that
has entered into a Term Hedging Agreement with any Term Credit Party with the obligations of such Term Credit Party thereunder
being secured by Liens granted under one or more Term Collateral Documents under the First Lien Term Credit Agreement.
“Term Hedging
Agreement” shall mean any agreement entered into between a Term Credit Party and a Term Hedging Bank in connection
with Secured Hedging Obligations under, and as defined in, the First Lien Term Credit Agreement.
“Term Lenders”
shall have the meaning assigned to that term in the introduction to this Agreement, and shall include any Person designated as
a “Lender” or similar term under any Term Credit Agreement.
“Term Loan
Intercreditor Agreement” shall mean the Term Intercreditor Agreement, dated as of the date hereof, by and among the
First Lien Term Agent for the First Lien Term Secured Parties, the Second Lien Term Agent for the Second Lien Term Secured Parties,
Holdings, the Borrower and the other Term Credit Parties party thereto, as amended, restated, amended and restated, extended, supplemented
or otherwise modified.
“Term Loan
Priority Accounts” means the Asset Sale Proceeds Pledged Account and any Deposit Accounts, Securities Accounts or
Commodity Accounts, in each case that contain solely Term Priority Collateral or identifiable proceeds of the Term Priority Collateral
(it being understood that any property in such Deposit Accounts, Securities Accounts or Commodities Accounts which is not Term
Priority Collateral or identifiable proceeds of Term Priority Collateral shall not be Term Priority Collateral solely by virtue
of being on deposit in any such Deposit Account, Securities Account or Commodity Account).
“Term Obligations”
shall mean collectively the First Lien Term Obligations and the Second Lien Term Obligations.
“Term Priority
Collateral” shall mean all Collateral (including, for the avoidance of doubt, any such assets that, but for the application
of Section 552 of the Bankruptcy Code or any similar provision in any foreign Debtor Relief Laws, would constitute Collateral)
consisting of the following:
(1) all
Equipment, Fixtures, Real Property, Intellectual Property, intercompany indebtedness between or among the Credit Parties or
their Affiliates, except to the extent constituting ABL Priority Collateral, and Investment Property (other than any Investment
Property that constitutes ABL Priority Collateral);
(2) except
to the extent constituting ABL Priority Collateral, all Instruments, Documents and General Intangibles (including contract rights);
(3) Term
Loan Priority Accounts;
(4) all
other Collateral, other than the ABL Priority Collateral; and
(5) all
collateral security and guarantees with respect to any of the foregoing, items referred to in the preceding clauses (1) through
(4) constituting Term Priority Collateral and all cash, Money, cash equivalents, insurance proceeds, Instruments, Securities
and Financial Assets received as Proceeds of, and any other Proceeds of, any of the foregoing items referred to in the preceding
clauses (1) through (4) and this clause (5) constituting Term Priority Collateral, other than the ABL Priority Collateral
(“Term Priority Proceeds”).
For the avoidance of
doubt, it is understood and agreed that “Term Priority Collateral” shall include any Collateral consisting of assets
or property of any Term Exclusive Credit Party and any Proceeds thereof which would not otherwise constitute Term Priority Collateral
or ABL Priority Collateral (such assets and property, the “Term Exclusive Collateral”).
“Term Priority
Proceeds” shall have the meaning assigned to that term in the definition of “Term Priority Collateral”.
“Term Recovery”
shall have the meaning set forth in Section 5.3(b) hereof.
“Term Secured
Hedging Obligations” shall mean, in connection with the First Lien Term Credit Agreement, obligations owed by any
Term Credit Party to any Term Hedging Bank in respect of or in connection with any Term Hedging Agreement.
“Term Secured
Parties” shall have the meaning assigned to that term in the introduction to this Agreement.
“Trademark
License” shall mean any written agreement, now or hereafter in effect, granting to any third party any right to use
any Trademark now or hereafter owned by any Credit Party or that any Credit Party otherwise has the right to license to a third
party, or granting to any Credit Party any right to use any Trademark now or hereafter owned by any third party, and all rights
of any Credit Party under any such agreement (not including vendor or distribution agreements that allow incidental use of intellectual
property rights in connection with the sale or distribution of such products or services).
“Trademarks”
shall mean the following: (a) all trademarks (including service marks), common law marks, trade names, trade dress, domain
names and logos, slogans and other indicia of origin under the laws of any jurisdiction in the world, and the registrations and
applications for registration thereof and the goodwill of the business connected to the use of and symbolized by the foregoing;
(b) all renewals of the foregoing; (c) all income, royalties, damages, and payments now or hereafter due or payable with
respect thereto, including, without limitation, damages, claims and payments for past, present and future infringements or dilutions
thereof; (d) all rights to sue for past, present, and future infringements or dilutions of any of the foregoing, including
the right to settle suits involving claims and demands for royalties owing; and (e) all rights corresponding to any of the
foregoing.
“Uniform
Commercial Code” or “UCC” shall mean the Uniform Commercial Code as in effect from time
to time in the State of New York; provided that, if by reason of mandatory provisions of law, perfection, or the effect
of perfection or non-perfection or the priority of a security interest in any Collateral or the availability of any remedy hereunder
is governed by the Uniform Commercial Code as in effect in a jurisdiction other than New York, “Uniform Commercial Code”
means the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such
perfection or effect of perfection or non-perfection or priority or availability of such remedy, as the case may be.
“Use Period”
means the period commencing on the date that the ABL Agent or an agent acting on its behalf (or an ABL Credit Party acting with
the consent of the ABL Agent) commences the liquidation and sale of the ABL Priority Collateral in a manner as provided in Section 3.6
hereof (having theretofore furnished the Controlling Term Agent with an Enforcement Notice) and ending 180 days thereafter. If
any stay or other order that prohibits any of the ABL Agent, the other ABL Secured Parties or any ABL Credit Party (with the consent
of the ABL Agent) from commencing and continuing to Exercise Any Secured Creditor Remedies or from liquidating and selling the
ABL Priority Collateral has been entered by a court of competent jurisdiction, such 180-day period shall be tolled during the pendency
of any such stay or other order and the Use Period shall be so extended.
Section 1.3
Rules of Construction. Unless the context of this Agreement clearly requires otherwise, references to the plural
include the singular, references to the singular include the plural, the term “including” is not limiting and shall
be deemed to be followed by the phrase “without limitation,” 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 refer to this Agreement as a whole and not to
any particular provision of this Agreement. Article, section, subsection, clause, schedule and exhibit references herein are to
this Agreement unless otherwise specified. Any reference in this Agreement to any agreement, instrument, or document shall include
all alterations, amendments, changes, restatements, extensions, modifications, renewals, replacements, substitutions, joinders,
and supplements thereto and thereof, as applicable (subject to any restrictions on such alterations, amendments, changes, restatements,
extensions, modifications, renewals, replacements, substitutions, joinders, and supplements set forth herein). Any reference herein
to any Person shall be construed to include such Person’s successors and assigns. Any reference herein to the repayment in
full of an obligation shall mean the payment in full in cash of such obligation, or in such other manner as may be approved in
writing by the requisite holders or representatives in respect of such obligation.
ARTICLE 2
LIEN PRIORITY
Section 2.1 Priority
of Liens.
(a) Subject
to the order of application of proceeds set forth in sub-clauses (b) and (c) of Section 4.1
hereof, notwithstanding (i) the date, time, method, manner, or order of grant, attachment or perfection (including any defect
or deficiency or alleged defect or deficiency in any of the foregoing) of any Liens granted to the ABL Secured Parties in respect
of all or any portion of the Collateral or of any Liens granted to the Term Secured Parties in respect of all or any portion of
the Collateral and regardless of how any such Lien was acquired (whether by grant, statute, operation of law, subrogation or otherwise),
(ii) the order or time of filing or recordation of any document or instrument for perfecting the Liens in favor of the ABL
Agent or any Term Agent (or ABL Secured Parties or Term Secured Parties) in any Collateral, (iii) any provision of the Uniform
Commercial Code, Debtor Relief Laws or any other applicable law, or of the ABL Documents or the Term Documents, (iv) whether
the ABL Agent or any Term Agent, in each case, either directly or through agents, holds possession of, or has control over, all
or any part of the Collateral, (v) the date on which the ABL Obligations or the Term Obligations are advanced or made available
to the Credit Parties, (vi) the fact that any such Liens in favor of the ABL Agent or the ABL Secured Parties or any Term
Agent or the Term Secured Parties securing any of the ABL Obligations or Term Obligations, respectively, are (x) subordinated
to any Lien securing any obligation of any Credit Party other than the Term Obligations or the ABL Obligations, respectively, or
(y) otherwise subordinated, voided, avoided, invalidated or lapsed, or (vii) any other circumstance of any kind or nature
whatsoever, the ABL Agent, on behalf of itself and the ABL Secured Parties, and each of the Term Agents, on behalf of itself and
the relevant Term Secured Parties, hereby agree that:
(1) any
Lien in respect of all or any portion of the ABL Priority Collateral now or hereafter held by or on behalf of any Term Agent or
any Term Secured Party that secures all or any portion of the Term Obligations shall in all respects be junior and subordinate
to all Liens granted to the ABL Agent and the ABL Secured Parties in such ABL Priority Collateral to secure all or any portion
of the ABL Obligations;
(2) any
Lien in respect of all or any portion of the ABL Priority Collateral now or hereafter held by or on behalf of the ABL Agent or
any ABL Secured Party that secures all or any portion of the ABL Obligations shall in all respects be senior and prior to all Liens
granted to any Term Agent or any Term Secured Party in such ABL Priority Collateral to secure all or any portion of the Term Obligations;
(3) any
Lien in respect of all or any portion of the Term Priority Collateral now or hereafter held by or on behalf of the ABL Agent or
any ABL Secured Party that secures all or any portion of the ABL Obligations shall in all respects be junior and subordinate to
all Liens granted to any Term Agent and the Term Secured Parties in such Term Priority Collateral to secure all or any portion
of the Term Obligations; and
(4) any
Lien in respect of all or any portion of the Term Priority Collateral now or hereafter held by or on behalf of any Term Agent or
any Term Secured Party that secures all or any portion of the Term Obligations shall in all respects be senior and prior to all
Liens granted to the ABL Agent or any ABL Secured Party in such Term Priority Collateral to secure all or any portion of the ABL
Obligations.
(b) Notwithstanding
any failure by any ABL Secured Party or Term Secured Party to perfect its security interests in the Collateral or any avoidance,
invalidation, priming or subordination by any third party or court of competent jurisdiction of the security interests in the Collateral
granted to the ABL Secured Parties or the Term Secured Parties (but, for the avoidance of doubt, subject to the order of application
of proceeds set forth in sub-clauses (b) and (c) of Section 4.1 hereof), the priority and rights as between
the ABL Secured Parties and the Term Secured Parties with respect to the Collateral shall be as set forth herein.
(c) Each
Term Agent, for and on behalf of itself and the Term Secured Parties represented by such Term Agent, acknowledges and agrees that,
concurrently herewith, the ABL Agent, for the benefit of itself and the ABL Secured Parties, has been, or may be, granted Liens
upon all of the Collateral (other than any Term Exclusive Collateral) in which the Term Agents have been granted Liens and the
Term Agents hereby consent thereto. The ABL Agent, for and on behalf of itself and the ABL Secured Parties, acknowledges and agrees
that, concurrently herewith, each Term Agent, for the benefit of itself and the Term Secured Parties represented by such Term Agent,
has been, or may be, granted Liens upon all of the Collateral (other than any ABL Exclusive Collateral) in which the ABL Agent
has been granted Liens and the ABL Agent hereby consents thereto. The subordination of Liens by the Term Agents and the ABL Agent
in favor of one another as set forth herein shall not be deemed to subordinate any Term Agent’s or the ABL Agent’s
Liens to the Liens of any other Person, nor shall such subordination be affected by the subordination of such Liens to any Lien
of any other Person.
Section 2.2 Waiver
of Right to Contest Liens.
(a) Each
Term Agent, for and on behalf of itself and the Term Secured Parties represented by such Term Agent, agrees that it and the Term
Secured Parties represented by it shall not (and hereby waive any right to) take any action to contest or challenge (or assist
or support any other Person in contesting or challenging), directly or indirectly, whether or not in any proceeding (including
in any Insolvency Proceeding), the validity, priority, enforceability, or perfection of the Liens of the ABL Agent and the ABL
Secured Parties in respect of the Collateral, the allowability of the claims asserted by the ABL Secured Parties with respect to
the ABL Obligations in any Insolvency Proceeding, or the provisions of this Agreement. Each Term Agent, for itself and on behalf
of the Term Secured Parties represented by such Term Agent, agrees that neither it nor the Term Secured Parties represented by
it will take any action that would hinder or interfere with any Exercise of Secured Creditor Remedies undertaken by the ABL Agent
or any ABL Secured Party under the ABL Documents with respect to the ABL Priority Collateral. Each Term Agent, for itself and on
behalf of the Term Secured Parties represented by such Term Agent, hereby waives any and all rights it or the Term Secured Parties
represented by it may have as a junior lien creditor or otherwise to contest, protest, object to, or interfere with the manner
in which the ABL Agent or any ABL Lender seeks to enforce its Liens in any ABL Priority Collateral. The foregoing shall not be
construed to prohibit any Term Agent from enforcing the provisions of this Agreement.
(b) The
ABL Agent, for and on behalf of itself and the ABL Secured Parties, agrees that it and they shall not (and hereby waives any right
to) take any action to contest or challenge (or assist or support any other Person in contesting or challenging), directly or indirectly,
whether or not in any proceeding (including in any Insolvency Proceeding), the validity, priority, enforceability, or perfection
of the Liens of the Term Agents or the Term Secured Parties in respect of the Collateral, the allowability of the claims asserted
by the Term Secured Parties with respect to the Term Obligations in any Insolvency Proceeding, or the provisions of this Agreement.
Except to the extent expressly set forth in Section 3.6 of this Agreement, the ABL Agent, for itself and on behalf
of the ABL Secured Parties, agrees that none of the ABL Agent or the ABL Secured Parties will take any action that would hinder
or interfere with any Exercise of Secured Creditor Remedies undertaken by any Term Agent or any Term Secured Party under the Term
Documents with respect to the Term Priority Collateral. The ABL Agent, for itself and on behalf of the ABL Secured Parties, hereby
waives any and all rights it or the ABL Secured Parties may have as a junior lien creditor or otherwise to contest, protest, object
to, or interfere with the manner in which either Term Agent or any Term Secured Party seeks to enforce its Liens in any Term Priority
Collateral. The foregoing shall not be construed to prohibit the ABL Agent from enforcing the provisions of this Agreement.
(c) For
the avoidance of doubt, the assertion of priority rights established under the terms of this Agreement shall not be considered
a challenge to, or contesting of, the Lien priority of any Party prohibited by this Section 2.2.
Section 2.3 Remedies
Standstill.
(a) Each
Term Agent, on behalf of itself and the Term Secured Parties represented by such Term Agent, agrees that, from the date hereof
until the date upon which the Discharge of ABL Obligations shall have occurred, no Term Agent nor any Term Secured Party will Exercise
Any Secured Creditor Remedies with respect to any of the ABL Priority Collateral without the written consent of the ABL Agent,
and, subject to Section 3.7, will not take, receive or accept any Proceeds of ABL Priority Collateral, it being understood
and agreed that the temporary deposit of Proceeds of ABL Priority Collateral in a Deposit Account controlled by any Term Agent
shall not constitute a breach of this Agreement so long as such Proceeds are treated in accordance with the provisions of Section 3.7
and Section 4.1(a). From and after the date upon which the Discharge of ABL Obligations shall have occurred (or prior
thereto upon obtaining the written consent of the ABL Agent) and prior to the date upon which the Discharge of Term Obligations
shall have occurred, the Controlling Term Agent on behalf of the Term Secured Parties may Exercise Any Secured Creditor Remedies
under the Term Documents or applicable law as to any ABL Priority Collateral; provided, however, that any Exercise
of Secured Creditor Remedies with respect to any Collateral by the Controlling Term Agent or the Term Secured Parties is at all
times subject to the provisions of this Agreement.
(b) The
ABL Agent, on behalf of itself and the ABL Secured Parties, agrees that, from the date hereof until the date upon which the Discharge
of Term Obligations shall have occurred, neither the ABL Agent nor any ABL Secured Party will Exercise Any Secured Creditor Remedies
with respect to the Term Priority Collateral without the written consent of the Controlling Term Agent, and, subject to Section 3.7,
will not take, receive or accept any Proceeds of the Term Priority Collateral, it being understood and agreed that the temporary
deposit of Proceeds of Term Priority Collateral in a Deposit Account controlled by the ABL Agent shall not constitute a breach
of this Agreement so long as such Proceeds are treated in accordance with the provisions of Section 3.7 and Section 4.1(a).
From and after the date upon which the Discharge of Term Obligations (or prior thereto upon obtaining the written consent of the
Controlling Term Agent) and prior to the date upon which the Discharge of ABL Obligations shall have occurred, the ABL Agent or
any ABL Secured Party may Exercise Any Secured Creditor Remedies under the ABL Documents or applicable law as to any Term Priority
Collateral; provided, however, that any Exercise of Secured Creditor Remedies with respect to any Collateral by the
ABL Agent or the ABL Secured Parties is at all times subject to the provisions of this Agreement.
(c) Notwithstanding
the provisions of Sections 2.3(a), 2.3(b) or any other provision of this Agreement, nothing contained herein
shall be construed to prevent any Agent or any Secured Party from (i) filing a claim or statement of interest with respect
to the ABL Obligations or Term Obligations owed to it in any Insolvency Proceeding commenced by or against any Credit Party, (ii) taking
any action (not adverse to the priority status of the Liens of the other Agents or other Secured Parties on the Collateral in which
such other Agent or other Secured Party has a priority Lien or the rights of the other Agents or any of the other Secured Parties
to Exercise Any Secured Creditor Remedies in respect thereof) in order to create, perfect, preserve or protect (but not enforce)
its Lien on any Collateral, (iii) filing any necessary or appropriate responsive or defensive pleadings in opposition to any
motion, adversary proceeding or other pleading filed by any Person objecting to or otherwise seeking disallowance of the claim
or Lien of such Agent or Secured Party or (iv) voting on any plan of reorganization, proposal or plan of compromise or arrangement
or filing any proof of claim in any Insolvency Proceeding of any Credit Party, in each case under clauses (i) through (iv) above
to the extent not inconsistent with the express terms of this Agreement.
Section 2.4 Exercise
of Rights.
(a) No
Other Restrictions. Except as otherwise set forth in this Agreement (including any provisions prohibiting or restricting any
party from taking various actions or making various objections), each Term Secured Party and each ABL Secured Party shall have
any and all rights and remedies it may have as an unsecured creditor or a secured creditor under applicable law, including the
right to the Exercise of Secured Creditor Remedies, in each case to the extent not inconsistent with or contrary to the provisions
of this Agreement; provided, however, that the Exercise of Secured Creditor Remedies with respect to the Collateral
shall be subject to the Lien Priority and to the provisions of this Agreement. The ABL Agent may enforce the provisions of the
ABL Documents, the Term Agents may enforce the provisions of the Term Documents and each may Exercise Any Secured Creditor Remedies,
all in such order and in such manner as each may determine in the exercise of its sole discretion, consistent with the terms of
this Agreement, and mandatory provisions of applicable law and, in the case of the Term Agents, any intercreditor agreement between
the Term Agents; provided, however, that each of the ABL Agent and the Controlling Term Agent agrees to provide to
each other (x) an Enforcement Notice prior to the commencement of an Exercise of Any Secured Creditor Remedies and (y) copies
of any notices that it is required under applicable law to deliver to any Credit Party; provided, further, however,
that the ABL Agent’s failure to provide the Enforcement Notice (other than in connection with Section 3.6 hereof)
or any such copies to any of the Term Agents shall not impair any of the ABL Agent’s rights hereunder or under any of the
ABL Documents and the Controlling Term Agent’s failure to provide the Enforcement Notice or any such copies to the ABL Agent
shall not impair any Term Agent’s rights hereunder or under any of the Term Documents. Each of the Term Agents, each Term
Secured Party, the ABL Agent and each ABL Secured Party agrees that it will not institute any suit or other proceeding or assert
in any suit, Insolvency Proceeding or other proceeding any claim, in the case of each Term Agent and each Term Secured Party,
against either the ABL Agent or any other ABL Secured Party, and in the case of the ABL Agent and each other ABL Secured Party,
against any Term Agent or any other Term Secured Party, seeking damages from or other relief by way of specific performance, instructions
or otherwise, with respect to any action taken or omitted to be taken by such Person with respect to the Collateral which is consistent
with the terms of this Agreement, and none of such Parties shall be liable for any such action taken or omitted to be taken.
In the event any ABL Secured Party becomes
a judgment lien creditor in respect of Term Priority Collateral as a result of its enforcement of its rights as an unsecured creditor,
such judgment lien shall be subordinated to the Liens thereon securing Term Obligations, in each case, on the same basis as the
other Liens on the Term Priority Collateral securing the ABL Obligations are so subordinated to the Term Obligations under this
Agreement. In the event any Term Secured Party becomes a judgment lien creditor in respect of ABL Priority Collateral as a result
of its enforcement of its rights as an unsecured creditor, such judgment lien shall be subordinated to the Liens thereon securing
ABL Obligations, in each case, on the same basis as the other Liens on the ABL Priority Collateral securing the Term Obligations
are so subordinated to such ABL Obligations under this Agreement.
(b) Release
of Liens.
(i) In
the event of (A) any private or public sale of all or any portion of the ABL Priority Collateral in connection with any Exercise
of Secured Creditor Remedies by or with the consent of the ABL Agent, or (B) any sale, transfer or other disposition of all
or any portion of the ABL Priority Collateral (other than in connection with a refinancing as described in Section 5.2(c) hereof),
so long as such sale, transfer or other disposition is then permitted by the ABL Documents or consented to by the requisite ABL
Lenders, each Term Agent agrees, on behalf of itself and the Term Secured Parties represented by such Term Agent, that, so long
as such Term Agent, for the benefit of the relevant Term Secured Parties, shall retain a Lien on the proceeds of such sale, transfer
or other disposition (to the extent that such proceeds are not applied to the ABL Obligations as provided in Section 4.1(b) hereof),
such sale, transfer or other disposition will be free and clear of the Liens on such ABL Priority Collateral (but not the proceeds
thereof) securing the Term Obligations, and each of the Term Agents’ and the Term Secured Parties’ Liens with respect
to the ABL Priority Collateral (but not the proceeds thereof) so sold, transferred, or disposed shall terminate and be automatically
released without further action concurrently with, and to the same extent as, the release of the ABL Secured Parties’ Liens
on such ABL Priority Collateral. In furtherance of, and subject to, the foregoing, each of the Term Agents agrees that it will
promptly execute any and all Lien releases or other documents reasonably requested by the ABL Agent in connection therewith. The
Term Agents each hereby appoint the ABL Agent and any officer or duly authorized person of the ABL Agent, with full power of substitution,
as its true and lawful attorney-in-fact with full irrevocable power of attorney in the place and stead of such Term Agent and in
the name of such Term Agent or in the ABL Agent’s own name, from time to time, in the ABL Agent’s sole discretion,
for the purposes of carrying out the terms of this paragraph, to take any and all appropriate action and to execute and deliver
any and all documents and instruments as may be necessary or desirable to accomplish the purposes of this paragraph, including
any financing statements, endorsements, assignments, releases or other documents or instruments of transfer (which appointment,
being coupled with an interest, is irrevocable).
(ii) In
the event of (A) any private or public sale of all or any portion of the Term Priority Collateral in connection with any Exercise
of Secured Creditor Remedies by or with the consent of the Controlling Term Agent, or (B) any sale, transfer or other disposition
of all or any portion of the Term Priority Collateral (other than in connection with a refinancing as described in Section 5.2(c) hereof),
so long as such sale, transfer or other disposition is then permitted by the Term Documents or consented to by the requisite Term
Lenders, the ABL Agent agrees, on behalf of itself and the ABL Secured Parties, that, so long as the ABL Agent, for the benefit
of the ABL Secured Parties, shall retain a Lien on the proceeds of such sale, transfer or other disposition (to the extent that
such proceeds are not applied to the Term Obligations as provided in Section 4.1(c) hereof), such sale, transfer
or disposition will be free and clear of the Liens on such Term Priority Collateral (but not the proceeds thereof) securing the
ABL Obligations and the ABL Agent’s and the ABL Secured Parties’ Liens with respect to the Term Priority Collateral
(but not the proceeds thereof) so sold, transferred, or disposed shall terminate and be automatically released without further
action concurrently with, and to the same extent as, the release of the Term Secured Parties’ Liens on such Term Priority
Collateral. In furtherance of, and subject to, the foregoing, the ABL Agent agrees that it will promptly execute any and all Lien
releases or other documents reasonably requested by the Controlling Term Agent in connection therewith. The ABL Agent hereby appoints
the Controlling Term Agent and any officer or duly authorized person of the Controlling Term Agent, with full power of substitution,
as its true and lawful attorney-in-fact with full irrevocable power of attorney in the place and stead of the ABL Agent and in
the name of the ABL Agent or in the Controlling Term Agent’s own name, from time to time, in the Controlling Term Agent’s
sole discretion, for the purposes of carrying out the terms of this paragraph, to take any and all appropriate action and to execute
and deliver any and all documents and instruments as may be necessary or desirable to accomplish the purposes of this paragraph,
including any financing statements, endorsements, assignments, releases or other documents or instruments of transfer (which appointment,
being coupled with an interest, is irrevocable).
Section 2.5 No
New Liens.
(a) It
is the anticipation of the parties, that until the date upon which the Discharge of ABL Obligations shall have occurred, no Term
Secured Party shall acquire or hold any consensual Lien on any assets of any Credit Party securing any Term Obligation (other than
any Term Exclusive Collateral) which assets are not also subject to the Lien of the ABL Agent under the ABL Documents. If any Term
Secured Party shall (nonetheless and in breach hereof) acquire or hold any such Lien on any assets of any Credit Party securing
any Term Obligation (other than any Term Exclusive Collateral or any Liens on Real Property) which assets are not also subject
to the Lien of the ABL Agent under the ABL Documents, then the Controlling Term Agent shall, without the need for any further consent
of any other Term Secured Party, the Borrower or any Term Credit Party and notwithstanding anything to the contrary in any other
Term Document, be deemed to also hold and have held such Lien as agent or bailee for the benefit of the ABL Agent as security for
the ABL Obligations (subject to the Lien Priority and other terms hereof) and shall promptly notify the ABL Agent in writing of
the existence of such Lien upon becoming aware thereof.
(b) It
is the anticipation of the parties, that until the date upon which the Discharge of Term Obligations shall have occurred, no ABL
Secured Party shall acquire or hold any consensual Lien on any assets of any Credit Party securing any ABL Obligation (other than
any ABL Exclusive Collateral) which assets are not also subject to the Lien of the Term Agents under the Term Documents. If any
ABL Secured Party shall (nonetheless and in breach hereof) acquire or hold any such Lien on any assets of any Credit Party securing
any ABL Obligation (other than any ABL Exclusive Collateral) which assets are not also subject to the Lien of the Term Agents under
the Term Documents, then the ABL Agent shall, without the need for any further consent of any other ABL Secured Party, the Borrower
or any ABL Credit Party and notwithstanding anything to the contrary in any other ABL Document be deemed to also hold and have
held such Lien as agent or bailee for the benefit of the relevant Term Agents as security for the Term Obligations (subject to
the Lien Priority and other terms hereof) and shall promptly notify the relevant Term Agent in writing of the existence of such
Lien upon becoming aware thereof.
(c) The
Term Secured Parties and ABL Secured Parties agree that any amounts received or distributed to any of them as a result of Liens
granted in contravention of this Section 2.5 shall be subject to Section 3.9.
Section 2.6 Waiver
of Marshalling.
(a) Until
the Discharge of ABL Obligations, each Term Agent, on behalf of itself and the Term Secured Parties represented by such Term Agent,
agrees not to assert and hereby waives, to the fullest extent permitted by law, any right to demand, request, plead or otherwise
assert or otherwise claim the benefit of, any marshalling, appraisal, valuation or other similar right that may otherwise be available
under applicable law with respect to the ABL Priority Collateral or any other similar rights a junior secured creditor may have
under applicable law.
(b) Until
the Discharge of Term Obligations, the ABL Agent, on behalf of itself and the ABL Secured Parties, agrees not to assert and hereby
waives, to the fullest extent permitted by law, any right to demand, request, plead or otherwise assert or otherwise claim the
benefit of, any marshalling, appraisal, valuation or other similar right that may otherwise be available under applicable law with
respect to the Term Priority Collateral or any other similar rights a junior secured creditor may have under applicable law.
ARTICLE 3
ACTIONS OF THE PARTIES
Section 3.1 Certain
Actions Permitted. The Term Agents and the ABL Agent may make such demands or file such claims in respect of the Term Obligations
or the ABL Obligations, as applicable, as are necessary to prevent the waiver or bar of such claims under applicable statutes of
limitations or other statutes, court orders, or rules of procedure at any time. Nothing in this Agreement shall prohibit the
receipt by any Term Agent or any Term Secured Party of the required payments of interest, principal and other amounts owed in respect
of the Term Obligations so long as such receipt is not the direct or indirect result of the exercise by such Term Agent or any
Term Secured Party of rights or remedies as a secured creditor (including set-off) with respect to ABL Priority Collateral or enforcement
in contravention of this Agreement of any Lien held by any of them. Nothing in this Agreement shall prohibit the receipt by the
ABL Agent or any ABL Secured Party of the required payments of interest, principal and other amounts owed in respect of the ABL
Obligations so long as such receipt is not the direct or indirect result of the exercise by the ABL Agent or any ABL Secured Party
of rights or remedies as a secured creditor (including set-off) with respect to Term Priority Collateral or enforcement in contravention
of this Agreement of any Lien held by any of them.
Section 3.2 Agent
for Perfection. The ABL Agent, for and on behalf of itself and each ABL Secured Party, and each Term Agent, for and on
behalf of itself and each Term Secured Party each agree to hold all Collateral (other than any ABL Exclusive Collateral or any
Term Exclusive Collateral, as applicable) in its possession, custody, or control (including as defined in Sections 9-104, 9-105,
9-106, 9-107 and 8-106 of the UCC and similar provisions of other applicable law) (or in the possession, custody, or control of
agents or bailees for either) as gratuitous bailee for the other (provided that no Term Agent or other Term Secured Party
shall hold any Real Property as gratuitous bailee for any ABL Agent or any other ABL Secured Party) solely for the purpose of perfecting
or maintaining the perfection of the security interest granted to each in such Collateral, subject to the terms and conditions
of this Section 3.2. None of the ABL Agent, the ABL Secured Parties, the Term Agents, or the Term Secured Parties,
as applicable, shall have any obligation whatsoever to the others to assure that the Collateral is genuine or owned by the Borrower,
any other Credit Party, or any other Person or to preserve rights or benefits of any Person. The duties or responsibilities of
the ABL Agent and the Term Agents under this Section 3.2 are and shall be limited solely to holding or maintaining
control of the Control Collateral as gratuitous bailee and/or agent for the other Party for purposes of perfecting the Lien held
by the Term Agents or the ABL Agent, as applicable. The ABL Agent is not and shall not be deemed to be a fiduciary of any kind
for the Term Secured Parties or any other Person. Without limiting the generality of the foregoing, the ABL Secured Parties shall
not be obligated to see to the application of any Proceeds of the Term Priority Collateral deposited into any Deposit Account or
be answerable in any way for the misapplication thereof. The Term Agents are not and shall not be deemed to be fiduciaries of any
kind for the ABL Secured Parties, or any other Person. Without limiting the generality of the foregoing, the Term Secured Parties
shall not be obligated to see to the application of any Proceeds of the ABL Priority Collateral deposited into any Deposit Account
or be answerable in any way for the misapplication thereof. In addition, the Term Agents, on behalf of the relevant Term Secured
Parties, hereby agree and acknowledge that other than with respect to ABL Priority Collateral that may be perfected through the
filing of a UCC financing statement or similar financing statement under other applicable law, the ABL Agent’s Liens may
be perfected on certain items of ABL Priority Collateral with respect to which such Term Agent’s Liens would not be perfected
but for the provisions of this Section 3.2, and such Term Agent, on behalf of the relevant Term Secured Parties, hereby
further agrees that the foregoing described in this sentence shall not be deemed a breach of this Agreement or any Term Document.
Section 3.3 Sharing
of Information and Access. In the event that the ABL Agent shall, in the exercise of its rights under the ABL Collateral
Documents or otherwise, receive possession or control of any books and records of any Term Credit Party which contain information
identifying or pertaining to the Term Priority Collateral, the ABL Agent shall, upon request from the Controlling Term Agent and
as promptly as practicable thereafter, either make available to the Controlling Term Agent such books and records for inspection
and duplication or provide to the Controlling Term Agent copies thereof. In the event that any Term Agent shall, in the exercise
of its rights under the Term Collateral Documents or otherwise, receive possession or control of any books and records of any ABL
Credit Party which contain information identifying or pertaining to any of the ABL Priority Collateral, such Term Agent shall,
upon request from the ABL Agent and as promptly as practicable thereafter, either make available to the ABL Agent such books and
records for inspection and duplication or provide the ABL Agent copies thereof.
Section 3.4 Insurance.
Proceeds of Collateral include insurance proceeds and, therefore, the Lien Priority shall govern the ultimate disposition of casualty
insurance proceeds. The ABL Agent and the Term Agents shall each be named as additional insured or loss payee, as applicable, with
respect to all insurance policies relating to the Collateral as set forth in the Term Credit Agreements or the ABL Credit Agreement,
as applicable. The ABL Agent shall have the sole and exclusive right, as against the Term Agents, to adjust settlement of insurance
claims in the event of any covered loss, theft or destruction of ABL Priority Collateral. The Controlling Term Agent shall have
the sole and exclusive right, as against the ABL Agent, to adjust settlement of insurance claims in the event of any covered loss,
theft or destruction of Term Priority Collateral. If any insurance claim includes both ABL Priority Collateral and Term Priority
Collateral, the insurer will not settle such claim separately with respect to ABL Priority Collateral and Term Priority Collateral,
and if the Parties are unable after negotiating in good faith to agree on the settlement for such claim, either Party may apply
to a court of competent jurisdiction to make a determination as to the settlement of such claim, and the court’s determination
shall be binding upon the Parties. All proceeds of such insurance shall be remitted to the ABL Agent or the Controlling Term Agent,
as the case may be, and each of the Term Agents and ABL Agent shall cooperate (if necessary) in a reasonable manner in effecting
the payment of insurance proceeds in accordance with Section 4.1 hereof. Any proceeds of such insurance received by
the ABL Agent or the Controlling Agent, as the case may be, in contravention of this Section 3.4 shall be paid over
to the ABL Agent or the Controlling Term Agent, as the case may be, in accordance with Section 3.9 hereof.
Section 3.5 No
Additional Rights For the Credit Parties Hereunder. Except as provided in Section 3.6 hereof, if any ABL Secured
Party or Term Secured Party shall enforce its rights or remedies in violation of the terms of this Agreement, the Credit Parties
shall not be entitled to use such violation as a defense to any action by any ABL Secured Party or Term Secured Party, nor to assert
such violation as a counterclaim or basis for set off or recoupment against any ABL Secured Party or Term Secured Party.
Section 3.6 Inspection
and Access Rights. (a) Without limiting any rights the ABL Agent or any other ABL Secured Party may otherwise have
under applicable law or by agreement, in the event of any liquidation of the ABL Priority Collateral (or any other Exercise of
Any Secured Creditor Remedies by the ABL Agent) and whether or not the Term Agents or any other Term Secured Party has commenced
and is continuing to Exercise Any Secured Creditor Remedies, the ABL Agent or any other Person (including any ABL Credit Party)
acting with the consent, or on behalf, of the ABL Agent, shall have the right (i) during the Use Period during normal business
hours on any Business Day, to access ABL Priority Collateral that (A) is stored or located in or on, (B) has become an
accession with respect to (within the meaning of Section 9-335 of the Uniform Commercial Code), or (C) has been commingled
with (within the meaning of Section 9-336 of the Uniform Commercial Code) Term Priority Collateral (collectively, the “ABL
Joint Collateral”), and (ii) during the Use Period, shall have the irrevocable right to use the Term Priority
Collateral (including, without limitation, Equipment, Fixtures, Intellectual Property, General Intangibles and Real Property)
on a rent-free, royalty-free basis, each of the foregoing solely for the limited purposes of assembling, inspecting, copying or
downloading information stored on, taking actions to perfect its Lien on, completing a production run of Inventory involving, taking
possession of, moving, preparing and advertising for sale, selling (by public auction, private sale or a “going out of business”
or similar sale, whether in bulk, in lots or to customers in the ordinary course of business or otherwise and which sale may include
augmented Inventory of the same type sold in any ABL Credit Party’s business), storing or otherwise dealing with the ABL
Priority Collateral, in each case without the involvement of or interference by any Term Secured Party or liability to any Term
Secured Party, but with reasonable advance notice to each Term Agent and at the sole cost and expense of the ABL Agent or such
other Person acting with the consent, or on behalf, of the ABL Agent; provided, however, that the expiration of the
Use Period shall be without prejudice to the sale or other disposition of the ABL Priority Collateral in accordance with this Agreement
and applicable law. In the event that any ABL Secured Party has commenced and is continuing the Exercise of Any Secured Creditor
Remedies with respect to any ABL Joint Collateral or any other sale or liquidation of the ABL Joint Collateral has been commenced
by an ABL Credit Party (with the consent of the ABL Agent), the Term Agents may not sell, assign or otherwise transfer the related
Term Priority Collateral prior to the expiration of the Use Period, unless the purchaser, assignee or transferee thereof agrees
in writing to be bound by the provisions of this Section 3.6. If the ABL Agent or any other Person acting with the
consent, or on behalf, of the ABL Agent conducts a public auction or private sale of the ABL Priority Collateral at any of the
Real Property included within the Term Priority Collateral, the ABL Agent or such other Person shall use reasonable efforts to
hold such auction or sale in a manner which would not unduly disrupt any Term Agent’s use of such Real Property for the benefit
of the Term Secured Parties.
(b) During
the period of actual occupation, use and/or control by the ABL Secured Parties and/or the ABL Agent (or their respective employees,
agents, advisers and representatives) of any Term Priority Collateral, the ABL Secured Parties and the ABL Agent shall be obligated
to repair at their expense any physical damage (but not any diminution in value resulting from ordinary wear and tear) to such
Term Priority Collateral resulting from such occupancy, use or control, and to leave such Term Priority Collateral in substantially
the same condition as it was at the commencement of such occupancy, use or control, ordinary wear and tear excepted. Notwithstanding
the foregoing, in no event shall the ABL Secured Parties or the ABL Agent have any liability to the Term Secured Parties and/or
to the Term Agents pursuant to this Section 3.6 as a result of any condition (including any environmental condition,
claim or liability) on or with respect to the Term Priority Collateral existing prior to the date of the exercise by the ABL Secured
Parties (or the ABL Agent, as the case may be) of their rights under this Section 3.6 and the ABL Secured Parties shall
have no duty or liability to maintain the Term Priority Collateral in a condition or manner better than that in which it was maintained
prior to the use thereof by the ABL Secured Parties, or for any diminution in the value of the Term Priority Collateral that results
from ordinary wear and tear resulting from the use of the Term Priority Collateral by the ABL Secured Parties in the manner and
for the time periods specified under this Section 3.6. Without limiting the rights granted in this Section 3.6,
the ABL Secured Parties and the ABL Agent shall reasonably cooperate with the Controlling Term Agent in connection with any efforts
made by the Controlling Term Agent, on behalf of the Term Secured Parties, to sell the Term Priority Collateral, at the expense
of the Credit Parties.
(c) Other
than as set forth in clauses (ii) and (iii) of Section 3.6(d) below, the ABL Agent and the ABL Secured
Parties shall not be obligated to pay any amounts to the Term Agents or the Term Secured Parties (or any person claiming by, through
or under the Term Secured Parties, including any purchaser of the Term Priority Collateral) or to the ABL Credit Parties, for or
in respect of the use by the ABL Agent and the ABL Secured Parties of the Term Priority Collateral.
(d) The
ABL Secured Parties shall (i) use the Term Priority Collateral in accordance with applicable law; (ii) insure for damage
to property and liability to persons, including property and liability insurance for the benefit of the Term Secured Parties; and
(iii) reimburse the Term Secured Parties for any injury or damage to Persons or property (ordinary wear-and- tear excepted)
caused by the acts or omissions of Persons under their control (except for those arising from the gross negligence or willful misconduct
of any Term Secured Party); provided, however, that the ABL Secured Parties will not be liable for any diminution
in the value of the Term Priority Collateral caused by the absence of the ABL Priority Collateral therefrom.
(e) The
Term Agents and the other Term Secured Parties shall use commercially reasonable efforts to not hinder or obstruct the ABL Agent
and the other ABL Secured Parties from exercising the rights described in Section 3.6(a) hereof.
(f) Subject
to the terms hereof, the Controlling Term Agent may advertise and conduct public auctions or private sales of the Term Priority
Collateral without notice (except as required by applicable law) to any ABL Secured Party, the involvement of or interference by
any ABL Secured Party or liability to any ABL Secured Party as long as, in the case of an actual sale, the respective purchaser
assumes and agrees to the obligations of the Term Agents and the Term Secured Parties under this Section 3.6.
(g) In
furtherance of the foregoing in this Section 3.6, the Term Agents, in their capacities as secured parties (or as a
purchaser, assignee or transferee, as applicable), and to the extent of its interest therein, hereby grants to the ABL Agent a
nonexclusive, irrevocable, royalty-free, worldwide license to use, license or sublicense any and all Intellectual Property now
owned or hereafter acquired by the Credit Parties (except to the extent such grant is prohibited by any rule of law, statute
or regulation), included as part of the Term Priority Collateral (and including in such license access to all media in which any
of the licensed items may be recorded or stored and to all computer software and programs used for the compilation or printout
thereof) as is or may be necessary or advisable in the ABL Agent’s reasonable judgment for the ABL Agent to process, ship,
produce, store, supply, lease, complete, sell, liquidate or otherwise deal with the ABL Priority Collateral, or to collect or otherwise
realize upon any Accounts (as defined in the ABL Credit Agreement) comprising ABL Priority Collateral, in each case solely in connection
with any Exercise of Secured Creditor Remedies; provided that (i) any such license shall terminate upon the sale of
the applicable ABL Priority Collateral and shall not extend or transfer to the purchaser of such ABL Priority Collateral, (ii) the
ABL Agent’s use of such Intellectual Property shall be reasonable and lawful, and (iii) any such license is granted
on an “AS IS” basis, without any representation or warranty whatsoever; provided, further, however,
any license granted by the ABL Agent to a third party shall include reasonable and customary terms and restrictions necessary to
preserve the existence, validity and value of the affected Intellectual Property. The Term Agents (i) acknowledge and consent
to the grant to the ABL Agent by the Credit Parties of the license referred to in Section 5.03 of the US Security Agreement
(as defined in the ABL Credit Agreement) and (ii) agree that its Liens in the Term Priority Collateral shall be subject in
all respects to such license. Furthermore, the Term Agents agree that, in connection with any Exercise of Secured Creditor Remedies
conducted by any Term Agent in respect of Term Priority Collateral, (x) any notice required to be given by such Term Agent
in connection with such Exercise of Secured Creditor Remedies shall contain an acknowledgement of the existence of such license
and (y) such Term Agent shall provide written notice to any purchaser, assignee or transferee pursuant to an Exercise of Secured
Creditor Remedies that the applicable assets are subject to such license.
Section 3.7 Tracing
of and Priorities in Proceeds. The ABL Agent, for itself and on behalf of the ABL Secured Parties, and each Term Agent,
for itself and on behalf of the Term Secured Parties represented by it, further agrees that prior to an issuance of any notice
of Exercise of Any Secured Creditor Remedies by such Secured Party (unless a bankruptcy or insolvency Event of Default then exists),
any proceeds of Collateral, whether or not deposited under control agreements, which are used by any Credit Party to acquire other
property which is Collateral shall not (solely as between the Agents and the Lenders) be treated as Proceeds of Collateral for
purposes of determining the relative priorities in the Collateral which was so acquired.
Section 3.8 Mixed
Collateral Proceeds. Notwithstanding anything to the contrary contained in this Agreement (including in the definitions
of ABL Priority Collateral and Term Priority Collateral), in the event that proceeds of Collateral are received from (or are otherwise
attributable to the value of) a sale or other disposition of Collateral that involves a combination of ABL Priority Collateral
and Term Priority Collateral, the portion of such proceeds that shall be allocated as proceeds of ABL Priority Collateral for purposes
of this Agreement shall be an amount equal to the net book value of such ABL Priority Collateral (except in the case of Accounts
and cash, which amount shall be equal to the face amount of such Accounts and cash). In addition, notwithstanding anything to the
contrary contained in this Agreement (including in the definitions of ABL Priority Collateral and Term Priority Collateral), to
the extent proceeds of Collateral are proceeds received from (or are otherwise attributable to the value of) the sale or disposition
of all or substantially all of the Equity Interests of any of the Subsidiaries of Holdings which is a Credit Party, or all or substantially
all of the assets of any such Subsidiary, such proceeds shall constitute (1) first, in an amount equal to the face amount
of the Accounts and cash (other than to the extent constituting identifiable proceeds of Term Priority Collateral) and the net
book value of the Inventory owned by such Subsidiary at the time of such sale or disposition, ABL Priority Collateral and (2) second,
to the extent in excess of the amounts described in preceding clause (1), Term Priority Collateral. In the event that amounts
are received in respect of Equity Interests of or intercompany loans issued to any Credit Party in an Insolvency Proceeding, such
amounts shall be deemed to be proceeds received from a sale or disposition of ABL Priority Collateral and Term Priority Collateral
and shall be, subject to the last sentence of Section 6.4, allocated as proceeds of ABL Priority Collateral and Term
Priority Collateral in proportion to the ABL Priority Collateral and Term Priority Collateral owned at such time by the issuer
of such Equity Interests.
Section 3.9 Payments
Over.
(a) So
long as the Discharge of Term Obligations has not occurred, subject to the provisions of Section 3.7 and Section 4.1(a) hereof,
any Term Priority Collateral or Proceeds thereof not constituting ABL Priority Collateral received by the ABL Agent or any other
ABL Secured Party in connection with the exercise of any right or remedy (including set off) relating to the Term Priority Collateral
in contravention of this Agreement shall be segregated and held in trust and forthwith paid over to the Controlling Term Agent
for the benefit of the Term Secured Parties in the same form as received, with any necessary endorsements or as a court of competent
jurisdiction may otherwise direct. The Controlling Term Agent is hereby authorized to make any such endorsements as agent for the
ABL Agent or any such other ABL Secured Parties. This authorization is coupled with an interest and is irrevocable until such time
as this Agreement is terminated in accordance with its terms.
(b) So
long as the Discharge of ABL Obligations has not occurred, subject to the provisions of Section 3.7, any ABL Priority
Collateral or Proceeds thereof not constituting Term Priority Collateral received by any Term Agent or any Term Secured Parties
in connection with the exercise of any right or remedy (including set off) relating to the ABL Priority Collateral in contravention
of this Agreement shall be segregated and held in trust and forthwith paid over to the ABL Agent for the benefit of the ABL Secured
Parties in the same form as received, with any necessary endorsements or as a court of competent jurisdiction may otherwise direct.
The ABL Agent is hereby authorized to make any such endorsements as agent for the Term Agents or any such Term Secured Parties.
This authorization is coupled with an interest and is irrevocable until such time as this Agreement is terminated in accordance
with its terms.
ARTICLE 4
APPLICATION OF PROCEEDS
Section 4.1 Application
of Proceeds.
(a) Revolving
Nature of ABL Obligations and Certain Term Obligations. Each Term Agent, for and on behalf of itself and the Term Secured Parties
represented by it, expressly acknowledges and agrees that (i) the ABL Credit Agreement includes a revolving commitment, that
in the ordinary course of business the ABL Agent and the ABL Lenders will apply payments and make advances thereunder, and that
no application of any ABL Priority Collateral or the release of any Lien by the ABL Agent upon any portion of the Collateral in
connection with a permitted disposition by the ABL Credit Parties under any ABL Credit Agreement shall constitute the Exercise
of Secured Creditor Remedies under this Agreement; (ii) the amount of the ABL Obligations that may be outstanding at any time
or from time to time may be increased or reduced and subsequently reborrowed, and that, subject to Section 5.2, the terms
of the ABL Obligations may be modified, extended or amended from time to time, and that the aggregate amount of the ABL Obligations
may be increased, replaced or refinanced, in each event, without notice to or consent by the Term Secured Parties and without affecting
the provisions hereof; and (iii) all ABL Priority Collateral received by the ABL Agent may be
applied, reversed, reapplied, credited, or reborrowed, in whole or in part, to the ABL Obligations at any time; provided,
however, that from and after the date on which the ABL Agent (or any ABL Secured Party) or any Term Agent (or any Term Secured
Party) commences the Exercise of Any Secured Creditor Remedies, all amounts received by the ABL Agent or any ABL Lender shall be
applied as specified in this Section 4.1. The ABL Agent, for and on behalf of the ABL Secured Parties, expressly acknowledges
and agrees that (i) any First Lien Term Credit Agreement may include a revolving commitment, that in the ordinary course of
business the applicable First Lien Term Agent and applicable First Lien Term Lenders will apply payments and make advances thereunder,
and that no application of any Term Priority Collateral or the release of any Lien by the applicable First Lien Term Agent upon
any portion of the Collateral in connection with a permitted disposition by the Term Credit Parties under any such First Lien Term
Credit Agreement shall constitute the Exercise of Secured Creditor Remedies under this Agreement; (ii) the
amount of the First Lien Term Obligations under any facility with respect to any Incremental Revolving Commitments (as defined
in any applicable First Lien Term Credit Agreement), or any other revolving credit facility under any First Lien Term Credit Agreement,
that may be outstanding at any time or from time to time may be increased or reduced and subsequently reborrowed, and that, subject
to Section 5.2, the terms of the First Lien Term Obligations under any facility with respect to any Incremental Revolving
Commitments (as defined in any applicable First Lien Term Credit Agreement), or any other revolving credit facility under any First
Lien Term Credit Agreement, may be modified, extended or amended from time to time, and that the aggregate amount of the First
Lien Term Obligations under any facility with respect to any Incremental Revolving Commitments (as defined in any applicable First
Lien Term Credit Agreement), or any other revolving credit facility under any First Lien Term Credit Agreement, may be increased,
replaced or refinanced, in each event, without notice to or consent by the ABL Secured Parties and without affecting the provisions
hereof; and (iii) all Term Priority Collateral received by the applicable First Lien Term Agent
may be applied, reversed, reapplied, credited, or reborrowed, in whole or in part, to the First Lien Term Obligations under any
facility with respect to any Incremental Revolving Commitments (as defined in any applicable First Lien Term Credit Agreement),
or any other revolving credit facility under any First Lien Term Credit Agreement, at any time; provided, however,
that from and after the date on which any First Lien Term Agent (or any First Lien Term Secured Party) or the ABL Agent (or any
ABL Secured Party) commences the Exercise of Any Secured Creditor Remedies, all amounts received by the First Lien Term Agent or
any First Lien Term Lender shall be applied as specified in this Section 4.1. The Lien Priority shall not be altered
or otherwise affected by any such amendment, modification, supplement, extension, repayment, reborrowing, increase, replacement,
renewal, restatement or refinancing of either the ABL Obligations or the Term Obligations, or any portion thereof. Notwithstanding
anything to the contrary contained in this Agreement, any Term Document or any ABL Document, each Credit Party and each Term Agent,
for itself and on behalf of the Term Secured Parties represented by it, agrees that, until the Discharge of ABL Obligations occurs,
(i) only Term Priority Collateral or proceeds of the Term Priority Collateral shall be deposited in the Term Loan Priority
Accounts and (ii) prior to the receipt of a Term Cash Proceeds Notice, the ABL Secured Parties are hereby permitted to treat
all cash, cash equivalents, Money, collections and payments deposited in any ABL Deposit and Securities Account or otherwise received
by any ABL Secured Parties as ABL Priority Collateral, and no such amounts credited to any such ABL Deposit and Securities Account
or received by any ABL Secured Parties or applied to the ABL Obligations shall be subject to disgorgement or deemed to be held
in trust for the benefit of the Term Secured Parties (and all claims of the Term Agents or any other Term Secured Party to such
amounts are hereby waived).
(b) Application
of Proceeds of ABL Priority Collateral. The ABL Agent and each of the Term Agents hereby agree that all ABL Priority Collateral,
ABL Priority Proceeds and all other Proceeds thereof, received by either of them in connection with any Exercise of Secured Creditor
Remedies with respect to the ABL Priority Collateral shall be applied,
first, to the
payment of costs and expenses of the ABL Agent in connection with such Exercise of Secured Creditor Remedies,
second, to the
payment, discharge or cash collateralization of the ABL Obligations in accordance with the ABL Documents until the Discharge of
ABL Obligations shall have occurred,
third, to the
payment of the Term Obligations in accordance with the Term Documents until the Discharge of Term Obligations shall have occurred
(provided that no Proceeds of ABL Exclusive Collateral shall be applied under this clause third), and
fourth, the
balance, if any, to the Credit Parties or as a court of competent jurisdiction may direct.
(c) Application
of Proceeds of Term Priority Collateral. The ABL Agent and each of the Term Agents hereby agree that all Term Priority Collateral,
Term Priority Proceeds and all other Proceeds thereof, received by either of them in connection with any Exercise of Secured Creditor
Remedies with respect to the Term Priority Collateral shall be applied,
first, to the
payment of costs and expenses of each Term Agent in connection with such Exercise of Secured Creditor Remedies,
second, to the
payment, discharge or cash collateralization of the Term Obligations in accordance with the Term Documents until the Discharge
of Term Obligations shall have occurred,
third, to the
payment of the ABL Obligations in accordance with the ABL Documents until the Discharge of ABL Obligations shall have occurred
(provided that no Proceeds of Term Exclusive Collateral shall be applied under this clause third), and
fourth, the
balance, if any, to the Credit Parties or as a court of competent jurisdiction may direct.
(d) Limited
Obligation or Liability. In exercising remedies, whether as a secured creditor or otherwise, the ABL Agent shall have no obligation
or liability to the Term Agents or to any Term Secured Party, and the Term Agents shall have no obligation or liability to the
ABL Agent or any ABL Secured Party, regarding the adequacy of any Proceeds or for any action or omission, except solely for an
action or omission that breaches the express obligations undertaken by each Party under the terms of this Agreement.
(e) Turnover
of Collateral After Discharge. Upon the Discharge of ABL Obligations, the ABL Agent shall deliver to the Controlling Term Agent
or shall execute such documents as the Controlling Term Agent may reasonably request to enable such Term Agent to have control
over any Control Collateral still in the ABL Agent’s possession, custody, or control in the same form as received with any
necessary endorsements, or as a court of competent jurisdiction may otherwise direct. Upon the Discharge of Term Obligations, the
Term Agents shall deliver to the ABL Agent or shall execute such documents as the ABL Agent may reasonably request to enable the
ABL Agent to have control over any Control Collateral still in any Term Agent’s possession, custody or control in the same
form as received with any necessary endorsements, or as a court of competent jurisdiction may otherwise direct.
Section 4.2 Specific
Performance. Each of the ABL Agent and each of the Term Agents is hereby authorized to demand specific performance of this
Agreement, whether or not the Borrower or any other Credit Party shall have complied with any of the provisions of any of the Credit
Documents, at any time when the other Party shall have failed to comply with any of the provisions of this Agreement applicable
to it. Each of the ABL Agent, for and on behalf of itself and the ABL Secured Parties, and each of the Term Agents, for and on
behalf of itself and the Term Secured Parties represented by such Term Agent, hereby irrevocably waives any defense based on the
adequacy of a remedy at law that might be asserted as a bar to such remedy of specific performance.
ARTICLE 5|
INTERCREDITOR ACKNOWLEDGEMENTS AND WAIVERS
Section 5.1 Notice
of Acceptance and Other Waivers.
(a) All
ABL Obligations at any time made or incurred by the Borrower or any other Credit Party shall be deemed to have been made or incurred
in reliance upon this Agreement, and each Term Agent, on behalf of itself and the Term Secured Parties represented by it, hereby
waives notice of acceptance, or proof of reliance by the ABL Agent or any ABL Secured Party of this Agreement, and notice of the
existence, increase, renewal, extension, accrual, creation, or non-payment of all or any part of the ABL Obligations. All Term
Obligations at any time made or incurred by the Borrower or any other Credit Party shall be deemed to have been made or incurred
in reliance upon this Agreement, and the ABL Agent, on behalf of itself and the ABL Secured Parties, hereby waives notice of acceptance,
or proof of reliance, by any Term Agent or any Term Secured Party of this Agreement, and notice of the existence, increase, renewal,
extension, accrual, creation, or non-payment of all or any part of the Term Obligations.
(b) None
of the ABL Agent, any ABL Secured Party, or any of their respective Affiliates, directors, officers, employees, or agents shall
be liable for failure to demand, collect, or realize upon any of the Collateral or any Proceeds, or for any delay in doing so,
or shall be under any obligation to sell or otherwise dispose of any Collateral or Proceeds thereof or to take any other action
whatsoever with regard to the Collateral or any part or Proceeds thereof, except as specifically provided in this Agreement. If
the ABL Agent or any ABL Secured Party honors (or fails to honor) a request by the Borrower for an extension of credit pursuant
to any ABL Credit Agreement or any of the other ABL Documents, whether the ABL Agent or any ABL Secured Party has knowledge that
the honoring of (or failure to honor) any such request would constitute a default under the terms of any Term Credit Agreement
or any other Term Document or an act, condition, or event that, with the giving of notice or the passage of time, or both, would
constitute such a default, or if the ABL Agent or any ABL Secured Party otherwise should exercise any of its contractual rights
or remedies under any ABL Documents (subject to the express terms and conditions hereof), neither the ABL Agent nor any ABL Secured
Party shall have any liability whatsoever to any Term Agent or any Term Secured Party as a result of such action, omission, or
exercise (so long as any such exercise does not breach the express terms and provisions of this Agreement). The ABL Agent and the
ABL Secured Parties shall be entitled to manage and supervise their loans and extensions of credit under any ABL Credit Agreement
and any of the other ABL Documents as they may, in their sole discretion, deem appropriate, and may manage their loans and extensions
of credit without regard to any rights or interests that any Term Agent or any of the Term Secured Parties have in the Collateral,
except as otherwise expressly set forth in this Agreement. Each Term Agent, on behalf of itself and the Term Secured Parties represented
by it, agrees that neither the ABL Agent nor any ABL Secured Party shall incur any liability as a result of a sale, lease, license,
application, or other disposition of all or any portion of the Collateral or Proceeds thereof, pursuant to the ABL Documents, so
long as such disposition is conducted in accordance with mandatory provisions of applicable law and does not breach the provisions
of this Agreement.
(c) None
of the Term Agents, any Term Secured Party or any of their respective Affiliates, directors, officers, employees, or agents shall
be liable for failure to demand, collect, or realize upon any of the Collateral or any Proceeds, or for any delay in doing so,
or shall be under any obligation to sell or otherwise dispose of any Collateral or Proceeds thereof or to take any other action
whatsoever with regard to the Collateral or any part or Proceeds thereof, except as specifically provided in this Agreement. If
any Term Agent or any Term Secured Party honors (or fails to honor) a request by the Borrower for an extension of credit pursuant
to any Term Credit Agreement or any of the other Term Documents, whether any Term Agent or any Term Secured Party has knowledge
that the honoring of (or failure to honor) any such request would constitute a default under the terms of any ABL Credit Agreement
or any other ABL Document or an act, condition, or event that, with the giving of notice or the passage of time, or both, would
constitute such a default, or if any Term Agent or any Term Secured Party otherwise should exercise any of its contractual rights
or remedies under the Term Documents (subject to the express terms and conditions hereof), neither any Term Agent nor any Term
Secured Party shall have any liability whatsoever to the ABL Agent or any ABL Secured Party as a result of such action, omission,
or exercise (so long as any such exercise does not breach the express terms and provisions of this Agreement). The Term Agents
and the Term Secured Parties shall be entitled to manage and supervise their loans and extensions of credit under the Term Documents
as they may, in their sole discretion, deem appropriate, and may manage their loans and extensions of credit without regard to
any rights or interests that the ABL Agent or any ABL Secured Party has in the Collateral, except as otherwise expressly set forth
in this Agreement. The ABL Agent, on behalf of itself and the ABL Secured Parties, agrees that none of the Term Agents or the Term
Secured Parties shall incur any liability as a result of a sale, lease, license, application, or other disposition of the Collateral
or any part or Proceeds thereof, pursuant to the Term Documents, so long as such disposition is conducted in accordance with mandatory
provisions of applicable law and does not breach the provisions of this Agreement.
Section 5.2 Modifications
to ABL Documents and Term Documents.
(a) Each
Term Agent, on behalf of itself and the Term Secured Parties represented by it, hereby agrees that, without affecting the obligations
of the Term Agents and the Term Secured Parties hereunder, the ABL Agent and the ABL Secured Parties may, at any time and from
time to time, in their sole discretion without the consent of or notice to any Term Agent or any Term Secured Party (except to
the extent such notice or consent is required pursuant to the express provisions of this Agreement), and without incurring any
liability to any Term Agent or any Term Secured Party or impairing or releasing the subordination provided for herein, amend, restate,
supplement, replace, refinance, extend, consolidate, restructure, or otherwise modify any of the ABL Documents in any manner whatsoever
(other than in a manner which would contravene the provisions of this Agreement), including, without limitation, to:
(i) change
the manner, place, time, or terms of payment or renew, alter or increase, all or any of the ABL Obligations or otherwise amend,
restate, supplement, or otherwise modify in any manner, or grant any waiver or release with respect to, all or any part of the
ABL Obligations or any of the ABL Documents;
(ii) subject
to Section 2.5 hereof, retain or obtain a Lien on any Property of any Person to secure any of the ABL Obligations,
and in connection therewith to enter into any additional ABL Documents;
(iii) amend,
or grant any waiver, compromise, or release with respect to, or consent to any departure from, any guaranty or other obligations
of any Person obligated in any manner under or in respect of the ABL Obligations;
(iv) release
its Lien on any Collateral or other Property;
(v) exercise
or refrain from exercising any rights against the Borrower, any other Credit Party, or any other Person;
(vi) subject
to Section 2.5 hereof, retain or obtain the primary or secondary obligation of any other Person with respect to any
of the ABL Obligations; and
(vii) otherwise
manage and supervise the ABL Obligations as the ABL Agent shall deem appropriate.
(b) The
ABL Agent, on behalf of itself and the ABL Secured Parties, hereby agrees that, without affecting the obligations of the ABL Agent
and the ABL Secured Parties hereunder, the Term Agents and the Term Secured Parties may, at any time and from time to time, in
their sole discretion without the consent of or notice to the ABL Agent or any ABL Secured Party (except to the extent such notice
or consent is required pursuant to the express provisions of this Agreement), and without incurring any liability to the ABL Agent
or any ABL Secured Party or impairing or releasing the subordination provided for herein, amend, restate, supplement, replace,
refinance, extend, consolidate, restructure, or otherwise modify any of the Term Documents in any manner whatsoever (other than
in a manner which would contravene the provisions of this Agreement), including, without limitation, to:
(i) change
the manner, place, time, or terms of payment or renew, alter or increase, all or any of the Term Obligations or otherwise amend,
restate, supplement, or otherwise modify in any manner, or grant any waiver or release with respect to, all or any part of the
Term Obligations or any of the Term Documents;
(ii) subject
to Section 2.5 hereof, retain or obtain a Lien on any Property of any Person to secure any of the Term Obligations,
and in connection therewith to enter into any additional Term Documents;
(iii) amend,
or grant any waiver, compromise, or release with respect to, or consent to any departure from, any guaranty or other obligations
of any Person obligated in any manner under or in respect of the Term Obligations;
(iv) release
its Lien on any Collateral or other Property;
(v) exercise
or refrain from exercising any rights against the Borrower, any other Credit Party, or any other Person;
(vi) subject
to Section 2.5 hereof, retain or obtain the primary or secondary obligation of any other Person with respect to any
of the Term Obligations; and
(vii) otherwise
manage and supervise the Term Obligations as each Term Agent shall deem appropriate.
(c) The
ABL Obligations and the Term Obligations may be refunded, replaced or refinanced (including (without limitation), by means of any
Refinancing Indebtedness (as defined in the ABL Credit Agreement and each Term Credit Agreement, as applicable)), in whole or in
part, from time to time, in each case, without notice to, or the consent (except to the extent a consent is required to permit
such refinancing transaction under any ABL Document or any Term Document) of the ABL Agent, the ABL Secured Parties, the Term Agents
or the Term Secured Parties, as the case may be, all without affecting the Lien Priorities provided for herein or the other provisions
hereof, provided, however, that the holders of any class or series of such Refinancing Indebtedness (or an authorized
agent or trustee on their behalf) bind themselves in writing to the terms of this Agreement pursuant to such documents or agreements
(including amendments or supplements to this Agreement) as the ABL Agent or any Term Agent, as the case may be, shall reasonably
request and in form and substance reasonably acceptable to the Borrower, the ABL Agent or such Term Agent, as the case may be,
and any such refinancing transaction shall be in accordance with any applicable provisions of both the ABL Documents and the Term
Documents (to the extent such documents survive the refinancing).
Section 5.3 Reinstatement
and Continuation of Agreement.
(a) If
the ABL Agent or any ABL Secured Party is required in any Insolvency Proceeding or otherwise to turn over or otherwise pay to the
estate of the Borrower, any other Credit Party, or any other Person any payment made in satisfaction of all or any portion of the
ABL Obligations (an “ABL Recovery”), then the ABL Obligations shall be reinstated to the extent of such
ABL Recovery. If this Agreement shall have been terminated prior to such ABL Recovery, this Agreement shall be reinstated in full
force and effect in the event of such ABL Recovery, and such prior termination shall not diminish, release, discharge, impair,
or otherwise affect the obligations of the Parties from such date of reinstatement. All rights, interests, agreements, and obligations
of the ABL Agent, the Term Agents, the ABL Secured Parties, and the Term Secured Parties under this Agreement shall remain in full
force and effect and shall continue irrespective of the commencement of, or any discharge, confirmation, conversion, or dismissal
of, any Insolvency Proceeding by or against the Borrower or any other Credit Party or any other circumstance which otherwise might
constitute a defense available to, or a discharge of the Borrower or any other Credit Party in respect of the ABL Obligations or
the Term Obligations. No priority or right of the ABL Agent or any ABL Secured Party shall at any time be prejudiced or impaired
in any way by any act or failure to act on the part of the Borrower or any Guarantor or by the noncompliance by any Person with
the terms, provisions, or covenants of any of the ABL Documents, regardless of any knowledge thereof which the ABL Agent or any
ABL Secured Party may have.
(b) If
any Term Agent or any Term Secured Party is required in any Insolvency Proceeding or otherwise to turn over or otherwise pay to
the estate of the Borrower, any other Credit Party, or any other Person any payment made in satisfaction of all or any portion
of the Term Obligations (a “Term Recovery”), then the Term Obligations shall be reinstated to the extent
of such Term Recovery. If this Agreement shall have been terminated prior to such Term Recovery, this Agreement shall be reinstated
in full force and effect in the event of such Term Recovery, and such prior termination shall not diminish, release, discharge,
impair, or otherwise affect the obligations of the Parties from such date of reinstatement. All rights, interests, agreements,
and obligations of the ABL Agent, the Term Agents, the ABL Secured Parties, and the Term Secured Parties under this Agreement shall
remain in full force and effect and shall continue irrespective of the commencement of, or any discharge, confirmation, conversion,
or dismissal of, any Insolvency Proceeding by or against the Borrower or any other Credit Party or any other circumstance which
otherwise might constitute a defense available to, or a discharge of the Borrower or any other Credit Party in respect of the ABL
Obligations or the Term Obligations. No priority or right of any Term Agent or any Term Secured Party shall at any time be prejudiced
or impaired in any way by any act or failure to act on the part of the Borrower or any other Credit Party or by the noncompliance
by any Person with the terms, provisions, or covenants of any of the Term Documents, regardless of any knowledge thereof which
any Term Agent or any Term Secured Party may have.
ARTICLE 6
INSOLVENCY PROCEEDINGS
Section 6.1 DIP
Financing.
(a) If
the Borrower or any other Credit Party shall be subject to any Insolvency Proceeding at any time prior to the Discharge of ABL
Obligations, and the ABL Agent or the ABL Secured Parties shall seek to provide the Borrower or any other Credit Party with, or
consent to a third party providing, any financing under Section 364 of the Bankruptcy Code (or any similar provision in or
order made under any foreign Debtor Relief Laws) or consent to any order for the use of cash collateral constituting ABL Priority
Collateral under Section 363 of the Bankruptcy Code (or any similar provision of any foreign Debtor Relief Laws or under a
court order in respect of measures granted with similar effect under any foreign Debtor Relief Laws) (each, an “ABL
DIP Financing”), with such ABL DIP Financing to be secured at least in part by all or any portion of the ABL Priority
Collateral (including assets that, but for the application of Section 552 of the Bankruptcy Code (or any similar provision
of any foreign Debtor Relief Laws) would be ABL Priority Collateral), then each Term Agent, on behalf of itself and the Term Secured
Parties represented by such Term Agent, agrees that it will raise no objection and will not support any objection to such ABL DIP
Financing or use of cash collateral or to the Liens securing the same on the grounds of a failure to provide “adequate protection”
for the Liens of the Term Agents securing the Term Obligations or on any other grounds (and will not request any adequate protection
solely as a result of such ABL DIP Financing or use of cash collateral that is ABL Priority Collateral except as permitted by Section 6.3(c)(i) hereof),
so long as (i) the relevant Term Agent retains its Lien on the Collateral to secure the Term Obligations (in each case, including
Proceeds thereof arising after the commencement of the case under any Debtor Relief Laws) and, as to the Term Priority Collateral
only, such Lien has the same priority as existed prior to the commencement of the case under the subject Debtor Relief Laws and
any Lien on the Term Priority Collateral securing such ABL DIP Financing is junior and subordinate to the Lien of the Term Agents
on the Term Priority Collateral, (ii) all Liens on ABL Priority Collateral securing any such ABL DIP Financing shall be senior
to or on a parity with the Liens of the ABL Agent and the ABL Secured Parties securing the ABL Obligations on ABL Priority Collateral,
(iii) any proceeds of the Term Priority Collateral are applied to the Term Obligations or as otherwise agreed by the Controlling
Term Agent and (iv) the foregoing provisions of this Section 6.1(a) shall not prevent the Term Agents and
the Term Secured Parties from objecting to any provision in any ABL DIP Financing relating to any provision or content of a plan
of reorganization or other plan of similar effect under any Debtor Relief Laws. The Term Agents agree that they shall not, and
nor shall any of the Term Secured Parties, directly or indirectly, provide, offer to provide, or support any debtor in possession
financing or use of cash collateral secured by a Lien on the ABL Priority Collateral senior to or pari passu with the Liens securing
the ABL Obligations. If, in connection with any ABL DIP Financing, any Liens on the ABL Priority Collateral held by the ABL Secured
Parties to secure the ABL Obligations are subject to a surcharge or are subordinated to an administrative priority claim, a professional
fee “carve- out,” or fees owed to the United States Trustee, then the Liens on the ABL Priority Collateral of the Term
Secured Parties securing the Term Obligations shall also be subordinated to such interest or claim and shall remain subordinated
to the Liens on the ABL Priority Collateral of the ABL Secured Parties consistent with this Agreement.
(b) If
the Borrower or any other Credit Party shall be subject to any Insolvency Proceeding at any time prior to the Discharge of Term
Obligations, and any Term Agents or any Term Secured Parties shall seek to provide the Borrower or any other Credit Party with,
or consent to a third party providing, any financing under Section 364 of the Bankruptcy Code or consent to any order for
the use of cash collateral constituting Term Priority Collateral under Section 363 of the Bankruptcy Code (or any similar
provision of any foreign Debtor Relief Laws or under a court order in respect of measures granted with similar effect under any
foreign Debtor Relief Laws) (each, a “Term DIP Financing”), with such Term DIP Financing to be secured
at least in part by all or any portion of the Term Priority Collateral (including assets that, but for the application of Section 552
of the Bankruptcy Code (or any similar provision of any foreign Debtor Relief Laws) would be Term Priority Collateral), then the
ABL Agent, on behalf of itself and the ABL Secured Parties, agrees that it will raise no objection and will not support any objection
to such Term DIP Financing or to the Liens securing the same on the grounds of a failure to provide “adequate protection”
for the Liens of the ABL Agent securing the ABL Obligations or on any other grounds (and will not request any adequate protection
solely as a result of such Term DIP Financing), so long as (i) the ABL Agent retains its Lien on the Collateral to secure
the ABL Obligations (in each case, including Proceeds thereof arising after the commencement of the case under any Debtor Relief
Law) and, as to the ABL Priority Collateral only, such Lien has the same priority as existed prior to the commencement of the case
under the subject Debtor Relief Laws and any Lien on ABL Priority Collateral securing such Term DIP Financing furnished by the
Term Agents or Term Secured Parties is junior and subordinate to the Lien of the ABL Agent on the ABL Priority Collateral, (ii) all
Liens on Term Priority Collateral securing any such Term DIP Financing furnished by the Term Agents or Term Secured Parties shall
be senior to or on a parity with the Liens of the Term Agents and the Term Secured Parties securing the Term Obligations on Term
Priority Collateral, (iii) any proceeds of the ABL Priority Collateral are applied to the ABL Obligations or as otherwise
agreed by the ABL Agent and (iv) the foregoing provisions of this Section 6.1(b) hereof shall not prevent
the ABL Agent and the ABL Secured Parties from objecting to any provision in any Term DIP Financing relating to any provision or
content of a plan of reorganization or other plan of similar effect under any Debtor Relief Laws. The ABL Agent agrees that it
shall not, and nor shall any of the ABL Secured Parties, directly or indirectly, provide, offer to provide, or support any debtor
in possession financing or use of cash collateral secured by a Lien on the Term Priority Collateral senior to or pari passu with
the Liens securing the Term Obligations. If, in connection with any Term DIP Financing, any Liens on the Term Priority Collateral
held by the Term Secured Parties to secure the Term Obligations are subject to a surcharge or are subordinated to an administrative
priority claim, a professional fee “carve-out,” or fees owed to the United States Trustee, then the Liens on the Term
Priority Collateral of the ABL Secured Parties securing the ABL Obligations shall also be subordinated to such interest or claim
and shall remain subordinated to the Liens on the Term Priority Collateral of the Term Secured Parties consistent with this Agreement.
(c) All
Liens granted to the ABL Agent or any Term Agent in any Insolvency Proceeding, whether as adequate protection or otherwise, are
intended by the Parties to be and shall be deemed to be subject to the Lien Priority and the other terms and conditions of this
Agreement.
Section 6.2
Relief From Stay. Until the Discharge of ABL Obligations has occurred, each Term
Agent, on behalf of itself and the Term Secured Parties represented by it, agrees not to seek relief from the automatic stay
or any other stay in any Insolvency Proceeding in respect of any portion of the ABL Priority Collateral without the ABL
Agent’s express written consent. Until the Discharge of Term Obligations has occurred, the ABL Agent, on behalf of
itself and the ABL Secured Parties, agrees not to seek relief from the automatic stay or any other stay in any Insolvency
Proceeding in respect of any portion of the Term Priority Collateral without the Controlling Term Agent’s express
written consent. In addition, none of the Term Agents or the ABL Agent shall seek any relief from the automatic stay with
respect to any Collateral without providing three (3) days’ prior written notice to the others, unless such period
is agreed by the ABL Agent and the Term Agents to be modified or unless the ABL Agent or Term Agents, as applicable, make a
good faith determination that either (A) the ABL Priority Collateral or the Term Priority Collateral, as applicable,
will decline speedily in value or (B) the failure to take any action will have a reasonable likelihood of endangering
the ABL Agent’s or the Term Agents’ ability to realize upon its Collateral.
Section 6.3 No
Contest; Adequate Protection.
(a) The
Term Agents, on behalf of themselves and the relevant Term Secured Parties, agree that, prior to the Discharge of ABL Obligations,
none of them shall seek or accept any form of adequate protection under any or all of §361, §362, §363 or §364
of the Bankruptcy Code with respect to the ABL Priority Collateral, except as set forth in Section 6.1 hereof and this
Section 6.3 or as may otherwise be consented to in writing by the ABL Agent in its sole and absolute discretion. The
Term Agents, on behalf of themselves and the relevant Term Secured Parties, agree that, prior to the Discharge of ABL Obligations,
none of them shall contest (or support any other Person contesting) (i) any request by the ABL Agent or any ABL Secured Party
for adequate protection of its interest in the Collateral (unless in contravention of Section 6.1(b) above or
the other provisions of this Section 6.3), (ii) any proposed provision of ABL DIP Financing by the ABL Agent and
the ABL Secured Parties (or any other Person proposing to provide an ABL DIP Financing with the consent of the ABL Agent) (unless
in contravention of Section 6.1(a) above) or (iii) any objection by the ABL Agent or any ABL Secured Party
to any motion, relief, action, or proceeding based on a claim by the ABL Agent or any ABL Secured Party that its interests in the
Collateral (unless in contravention of Section 6.1(b) above or the other provisions of this Section 6.3))
are not adequately protected (or any other similar request under any law applicable to an Insolvency Proceeding), so long as any
Liens granted to the ABL Agent as adequate protection of its interests are subject to this Agreement.
(b) The
ABL Agent, on behalf of itself and the ABL Secured Parties, agrees that, prior to the Discharge of Term Obligations, none of them
shall seek or accept any form of adequate protection under any or all of §361, §362, §363 or §364 of the Bankruptcy
Code with respect to the Term Priority Collateral, except as set forth in Section 6.1 hereof and this Section 6.3
or as may otherwise be consented to in writing by any Term Agent in its sole and absolute discretion. The ABL Agent, on behalf
of itself and the ABL Secured Parties, agrees that, prior to the Discharge of Term Obligations, none of them shall contest (or
support any other Person contesting) (i) any request by any Term Agent or any Term Secured Party for adequate protection of
its interest in the Collateral (unless in contravention of Section 6.1(a) above or the other provisions of this
Section 6.3), (ii) any proposed provision of Term DIP Financing by any Term Agent or any Term Secured Parties
(or any other Person proposing to provide a Term DIP Financing with the consent of any Term Agent) (unless in contravention of
Section 6.1(b) above) or (iii) any objection by any Term Agent or any Term Secured Party to any motion, relief,
action or proceeding based on a claim by any Term Agent or any Term Secured Party that its interests in the Collateral (unless
in contravention of Section 6.1(a) above or the other provisions of this Section 6.3) are not adequately
protected (or any other similar request under any law applicable to an Insolvency Proceeding), so long as any Liens granted to
such Term Agent as adequate protection of its interests are subject to this Agreement.
(c) Notwithstanding
the foregoing provisions in this Section 6.3, in any Insolvency Proceeding:
(i) if
the ABL Secured Parties (or any subset thereof) are granted adequate protection with respect to the ABL Priority Collateral in
the form of a Lien on additional or replacement collateral (even if such collateral is not of a type which would otherwise have
constituted ABL Priority Collateral), then the ABL Agent, on behalf of itself and the ABL Secured Parties, agrees that any Term
Agent, on behalf of itself or any of the Term Secured Parties represented by it, may seek or request (and the ABL Secured Parties
will not oppose such request) adequate protection with respect to their interests in such Collateral in the form of a Lien on the
same additional or replacement collateral, which Lien will be subordinated to the Liens securing and providing adequate protection
with respect to the ABL Obligations on the same basis as the other Liens of the Term Agents’ on ABL Priority Collateral;
and
(ii) in
the event any Term Agent, on behalf of itself or any of the Term Secured Parties represented by it, are granted adequate protection
in respect of Term Priority Collateral in the form of a Lien on additional or replacement collateral (even if such collateral is
not of a type which would otherwise have constituted Term Priority Collateral), then the Term Agents, on behalf of themselves and
any of the Term Secured Parties, agree that the ABL Agent on behalf of itself or any of the ABL Secured Parties, may seek or request
(and the Term Secured Parties will not oppose such request) adequate protection with respect to its interests in such Collateral
in the form of a Lien on the same additional or replacement collateral, which Lien will be subordinated to the Liens securing and
providing adequate protection with respect to the Term Obligations on the same basis as the other Liens of the ABL Agent on Term
Priority Collateral.
(iii) Except
as otherwise expressly set forth in Section 6.1 hereof or in connection with the exercise of remedies with respect
to the ABL Priority Collateral, nothing herein shall limit the rights of any Term Agent or the Term Secured Parties from seeking
adequate protection with respect to their rights in the Term Priority Collateral in any Insolvency Proceeding (including adequate
protection in the form of a cash payment, periodic cash payments or otherwise, provided that such cash payments do not come from
the Proceeds of ABL Priority Collateral). Except as otherwise expressly set forth in Section 6.1 hereof or in connection
with the exercise of remedies with respect to the Term Priority Collateral, nothing herein shall limit the rights of the ABL Agent
or the ABL Secured Parties from seeking adequate protection with respect to their rights in the ABL Priority Collateral in any
Insolvency Proceeding (including adequate protection in the form of a cash payment, periodic cash payments or otherwise, provided
that such cash payments do not come from the Proceeds of Term Priority Collateral).
Section 6.4 Asset
Sales. The Term Agents agree, on behalf of themselves and the Term Secured Parties, that they will not oppose (and will
not support any other Person in opposing), and hereby consent to, any sale consented to by the ABL Agent of any ABL Priority Collateral
pursuant to Sections 363(f) or 1129 of the Bankruptcy Code (or any similar provision under the law applicable to any Insolvency
Proceeding or under a court order in respect of measures granted with similar effect under any foreign Debtor Relief Laws) (each
an “ABL Bankruptcy Sale”) or any motion seeking approval for proposed bidding procedures in respect of
any such ABL Bankruptcy Sale, so long as (i) the Term Agents, for the benefit of the Term Secured Parties, shall retain a
Lien on the proceeds of such sale (to the extent such proceeds are not applied to the ABL Obligations in accordance with Section 4.1(b) hereof)
subject to the priorities set forth in this Agreement, and (ii) the applicable motion to approve such sale does not impair,
subject to the priorities set forth in this Agreement, the rights of the Term Secured Parties to credit bid their Liens on the
ABL Priority Collateral under Section 363(k) of the Bankruptcy Code (so long as the Discharge of ABL Obligations would
occur in connection therewith). The ABL Agent agrees, on behalf of itself and the ABL Secured Parties, that it will not oppose
(and will not support any other Person in opposing), and hereby consents to, any sale consented to by any Term Agent of any Term
Priority Collateral pursuant to Sections 363(f) or 1129 of the Bankruptcy Code (or any similar provision under the law applicable
to any Insolvency Proceeding or under a court order in respect of measures granted with similar effect under any foreign Debtor
Relief Laws) (each a “Term Bankruptcy Sale”) or any motion seeking approval for proposed bidding procedures
in respect of any such Term Bankruptcy Sale, so long as (i) any such sale is made in accordance with Section 3.6 hereof,
(ii) the ABL Agent, for the benefit of the ABL Secured Parties, shall retain a Lien on the proceeds of such sale (to the extent
such proceeds are not applied to the Term Obligations in accordance with Section 4.1(c) hereof) subject to the
priorities set forth in this Agreement, and (iii) the applicable motion to approve such sale does not impair, subject to the
priorities set forth in this Agreement, the rights of the ABL Secured Parties to credit bid their Liens on the Term Priority Collateral
under Section 363(k) of the Bankruptcy Code (so long as the Discharge of Term Obligations would occur in connection therewith).
If such sale of Collateral includes both ABL Priority Collateral and Term Priority Collateral and the Parties are unable after
negotiating in good faith to agree on the allocation of the purchase price between the ABL Priority Collateral and Term Priority
Collateral, either Party may apply to the court in such Insolvency Proceeding to make a determination of such allocation, and the
court’s determination shall be binding upon the Parties.
Section 6.5 Separate
Grants of Security and Separate Classification. Each Term Secured Party and each ABL Secured Party acknowledges and agrees
that (i) the grants of Liens pursuant to the ABL Collateral Documents and the Term Collateral Documents constitute two separate
and distinct grants of Liens and (ii) because of, among other things, their differing rights in the Collateral, the Term Obligations
are fundamentally different from the ABL Obligations and must be separately classified in any plan of reorganization (or other
plan of similar effect under any Debtor Relief Laws) proposed, confirmed, or adopted in an Insolvency Proceeding. To further effectuate
the intent of the parties as provided in the immediately preceding sentence, if it is held that the claims of the ABL Secured Parties
and the Term Secured Parties in respect of the Collateral constitute only one secured claim (rather than separate classes of secured
claims subject to the priorities set forth herein), then the ABL Secured Parties and the Term Secured Parties hereby acknowledge
and agree that all distributions from the Collateral shall be made as if there were separate classes of ABL Obligation claims and
Term Obligation claims against the Credit Parties, with the effect being that (a) to the extent that the aggregate value of
the ABL Priority Collateral is sufficient (for this purpose ignoring all claims held by the Term Secured Parties), the ABL Secured
Parties shall be entitled to receive, in addition to amounts distributed to them in respect of principal, pre-petition interest
and other claims, all amounts owing in respect of post-petition interest, fees and expenses (regardless of whether any claim therefor
is allowed or allowable in any such Insolvency Proceeding) that is available from the ABL Priority Collateral for the ABL Secured
Parties, before any distribution is made in respect of the claims held by the Term Secured Parties from the ABL Priority Collateral,
with the Term Secured Parties hereby acknowledging and agreeing to turn over to the ABL Secured Parties amounts otherwise received
or receivable by them from the ABL Priority Collateral to the extent necessary to effectuate the intent of this sentence, even
if such turnover has the effect of reducing their aggregate recovery, and (b) to the extent that the aggregate value of the
Term Priority Collateral is sufficient (for this purpose ignoring all claims held by the ABL Secured Parties), the Term Secured
Parties shall be entitled to receive, in addition to amounts distributed to them in respect of principal, pre-petition interest
and other claims, all amounts owing in respect of post- petition interest, fees and expenses (regardless of whether any claim therefor
is allowed or allowable in any such Insolvency Proceeding) that is available from the Term Priority Collateral for the Term Secured
Parties, before any distribution is made in respect of the claims held by the ABL Secured Parties from the Term Priority Collateral,
with the ABL Secured Parties hereby acknowledging and agreeing to turn over to the Term Secured Parties amounts otherwise received
or receivable by them from the Term Priority Collateral to the extent necessary to effectuate the intent of this sentence, even
if such turnover has the effect of reducing their aggregate recovery.
Section 6.6 Enforceability.
This Agreement shall be applicable both before and after the commencement of any Insolvency Proceeding and all converted or succeeding
cases in respect thereof. Notwithstanding the provisions of Section 1129(b)(1) (or any other applicable provision) of
the Bankruptcy Code, the relative rights of Secured Parties in or to any distributions from or in respect of any Collateral or
Proceeds of Collateral shall continue after the commencement of any Insolvency Proceeding. Accordingly, the provisions of this
Agreement (including, without limitation, Section 2.1 hereof) are intended to be and shall be enforceable as a “subordination
agreement” within the meaning of Section 510(a) of the Bankruptcy Code or any applicable personal property security
law.
Section 6.7 ABL
Obligations Unconditional. All rights of the ABL Agent hereunder, and all agreements and obligations of the Term Agents
and the Credit Parties (to the extent applicable) hereunder, shall remain in full force and effect irrespective of:
(a) any
lack of validity or enforceability of any ABL Document;
(b) any
change in the time, place or manner of payment of, or in any other term of, all or any portion of the ABL Obligations, or any amendment,
waiver or other modification, whether by course of conduct or otherwise, or any refinancing, replacement, refunding or restatement
of any ABL Document;
(c) any
exchange, release, voiding, avoidance or non-perfection of any security interest in any Collateral or any other collateral, or
any release, amendment, waiver or other modification, whether by course of conduct or otherwise, or any refinancing, replacement,
refunding, restatement or increase of all or any portion of the ABL Obligations or any guarantee or guaranty thereof; or
(d) any
other circumstances that otherwise might constitute a defense available to, or a discharge of, any Credit Party in respect of the
ABL Obligations, or of any of the Term Agents or any Credit Party, to the extent applicable, in respect of this Agreement.
Section 6.8 Term
Obligations Unconditional. All rights of the Term Agents hereunder, and all agreements and obligations of the ABL Agent
and the Credit Parties (to the extent applicable) hereunder, shall remain in full force and effect irrespective of:
(a) any
lack of validity or enforceability of any Term Document;
(b) any
change in the time, place or manner of payment of, or in any other term of, all or any portion of the Term Obligations, or any
amendment, waiver or other modification, whether by course of conduct or otherwise, or any refinancing, replacement, refunding
or restatement of any Term Document;
(c) any
exchange, release, voiding, avoidance or non-perfection of any security interest in any Collateral, or any other collateral, or
any release, amendment, waiver or other modification, whether by course of conduct or otherwise, or any refinancing, replacement,
refunding, restatement or increase of all or any portion of the Term Obligations or any guarantee or guaranty thereof; or
(d) any
other circumstances that otherwise might constitute a defense available to, or a discharge of, any Credit Party in respect of the
Term Obligations, or of any of the ABL Agent or any Credit Party, to the extent applicable, in respect of this Agreement.
Section 6.9 Plan
of Reorganization.
(a) If,
in any Insolvency Proceeding, debt obligations of the reorganized debtor secured by Liens upon any property of the reorganized
debtor are distributed (in whole or in part) pursuant to a plan of reorganization, proposal or plan of compromise or arrangement
or similar dispositive restructuring plan, both on account of ABL Obligations and on account of Term Obligations, then, to the
extent the debt obligations distributed on account of the ABL Obligations and on account of the Term Obligations are secured by
Liens upon the same property, the provisions of this Agreement will survive the distribution of such debt obligations pursuant
to such plan and will apply with like effect to the Liens securing such debt obligations.
(b) Each
Term Agent, for itself and on behalf of the applicable Term Secured Parties, and the ABL Agent, for itself and on behalf of the
ABL Secured Parties, acknowledges and agrees that no ABL Secured Party nor any Term Secured Party shall propose, vote for, or otherwise
support directly or indirectly any plan of reorganization, proposal or plan of compromise or arrangement or other dispositive restructuring
plan that is inconsistent with the priorities or other provisions of this Agreement.
Section 6.10 Certain
Waivers as to Sections 506(c) and 1111(b)(2) of theBankruptcy Code.
(a) No
Term Agent nor Term Secured Party will object to, or oppose the right of, the ABL Secured Parties to make an election under Section 1111(b)(2) of
the Bankruptcy Code (or any similar provision in or order made under any Debtor Relief Law) with respect to the ABL Priority Collateral.
The ABL Agent and the ABL Secured Parties will not object to, or oppose the right of, the Term Secured Parties to make an election
under Section 1111(b)(2) of the Bankruptcy Code (or any similar provision in or order made under any Debtor Relief Law)
with respect to the Term Priority Collateral.
(b) Until
the Discharge of ABL Obligations has occurred, no Term Agent, on behalf of itself and the other Term Secured Parties represented
by it, will assert or enforce any claim under Section 506(c) of the Bankruptcy Code (or any similar provision in or order
made under any Debtor Relief Law) senior to or on a parity with the Liens on ABL Priority Collateral securing the ABL Obligations
for costs or expenses of preserving or disposing of any ABL Priority Collateral. Until the Discharge of Term Obligations has occurred,
the ABL Agent, on behalf of itself and the other ABL Secured Parties, will not assert or enforce any claim under Section 506(c) of
the Bankruptcy Code (or any similar provision in or order made under any Debtor Relief Law) senior to or on a parity with the Liens
on Term Priority Collateral securing the Term Obligations for costs or expenses of preserving or disposing of any Term Priority
Collateral.
Section 6.11 Post-Petition
Interest.
(a) No
Term Agent nor any Term Secured Party shall oppose or seek to challenge any claim by the ABL Agent or any ABL Secured Party for
allowance in any Insolvency Proceeding of ABL Obligations consisting of post-petition interest, fees or expenses to the extent
of the value of the Lien on the Collateral securing any ABL Secured Party’s claim, without regard to the existence of the
Lien of the Term Agents on behalf of the Term Secured Parties on the ABL Priority Collateral (but after taking into account the
Lien of the Term Agents on the Term Priority Collateral).
(b) Neither
the ABL Agent nor any other ABL Secured Party shall oppose or seek to challenge any claim by any Term Agent or any Term Secured
Party for allowance in any Insolvency Proceeding of Term Obligations consisting of post-petition interest, fees or expenses to
the extent of the value of the Lien on the Collateral securing any Term Secured Party’s claim, without regard to the existence
of the Lien of any ABL Agent on behalf of the ABL Secured Parties on the Term Priority Collateral (but after taking into account
the Lien of the ABL Agent on the ABL Priority Collateral).
ARTICLE 7
MISCELLANEOUS
Section 7.1 Rights
of Subrogation. Each Term Agent, for and on behalf of itself and the Term Secured Parties represented by it, agrees that
no payment to the ABL Agent or any ABL Secured Party pursuant to the provisions of this Agreement shall entitle any Term Agent
or any Term Secured Party to exercise any rights of subrogation in respect thereof until the Discharge of ABL Obligations shall
have occurred. Following the Discharge of ABL Obligations, the ABL Agent agrees to execute such documents, agreements, and instruments
as the Controlling Term Agent may reasonably request to evidence the transfer by subrogation to any such Person of an interest
in the ABL Obligations resulting from payments to the ABL Agent by such Person, so long as all costs and expenses (including all
reasonable legal fees and disbursements) incurred in connection therewith by the ABL Agent are paid by such Person upon request
for payment thereof. The ABL Agent, for and on behalf of itself and the ABL Secured Parties, agrees that no payment to the Term
Agents or any Term Secured Party pursuant to the provisions of this Agreement shall entitle the ABL Agent or any ABL Secured Party
to exercise any rights of subrogation in respect thereof until the Discharge of Term Obligations shall have occurred. Following
the Discharge of Term Obligations, the Term Agents agree to execute such documents, agreements, and instruments as the ABL Agent
or any ABL Secured Party may reasonably request to evidence the transfer by subrogation to any such Person of an interest in the
Term Obligations resulting from payments to the relevant Term Agent by such Person, so long as all costs and expenses (including
all reasonable legal fees and disbursements) incurred in connection therewith by the relevant Term Agent are paid by such Person
upon request for payment thereof.
Section 7.2 Further
Assurances. The Parties will, at their own expense and at any time and from time to time, promptly execute and deliver
all further instruments and documents, and take all further action, that may be necessary or desirable, or that either Party may
reasonably request, in order to protect any right or interest granted or purported to be granted hereby or to enable the ABL Agent
or the Term Agents to exercise and enforce its rights and remedies hereunder; provided, however, that no Party shall
be required to pay over any payment or distribution, execute any instruments or documents, or take any other action referred to
in this Section 7.2, to the extent that such action would contravene any law, order or other legal requirement or any
of the terms or provisions of this Agreement, and in the event of a controversy or dispute, such Party may interplead any payment
or distribution in any court of competent jurisdiction, without further responsibility in respect of such payment or distribution
under this Section 7.2.
Section 7.3 Representations.
Each Term Agent represents and warrants to the ABL Agent that it has the requisite power and authority under the Term Documents
to enter into, execute, deliver, and carry out the terms of this Agreement on behalf of itself and the relevant Term Secured Parties
and that this Agreement shall be binding obligations of such Term Agent and such Term Secured Parties enforceable against such
Term Agent and the respective Term Secured Parties in accordance with its terms. The ABL Agent represents and warrants to the Term
Agents that it has the requisite power and authority under the ABL Documents to enter into, execute, deliver, and carry out the
terms of this Agreement on behalf of itself and the ABL Secured Parties and that this Agreement shall be binding obligations of
the ABL Agent and the ABL Secured Parties, enforceable against the ABL Agent and the ABL Secured Parties in accordance with its
terms.
Section 7.4 Amendments.
No amendment or waiver of any provision of this Agreement nor consent to any departure by any Party hereto shall be effective unless
it is in a written agreement executed by each Term Agent, the ABL Agent and the Borrower, and then such amendment, waiver or consent
shall be effective only in the specific instance and for the specific purpose for which given; provided that the consent
of the Borrower to any such amendment or waiver of, or consent to departure from, any provision of this Agreement shall only be
required if the provisions of such amendment, waiver or consent materially and adversely impact the rights or obligations of any
Credit Party under the ABL Documents or the Term Documents; provided, further, that the Borrower shall be given notice
of any amendment or waiver of, or consent to departure from, any provision of this Agreement promptly after effectiveness thereof.
Notwithstanding the foregoing, without the consent of any ABL Secured Party, any Person may become a party hereto by execution
and delivery of a joinder agreement in accordance with Section 7.20 of this Agreement and upon such execution and delivery,
such Person and the “Secured Parties” and Term Obligations for which such Person is acting shall be subject to the
terms hereof.
Section 7.5 Addresses
for Notices. Unless otherwise specifically provided herein, any notice or other communication herein required or permitted
to be given shall be in writing and may be personally served, telecopied, emailed, or sent by overnight express courier service
or United States mail and shall be deemed to have been given when delivered in person or by courier service, upon receipt of a
telecopy, upon delivery of an email or five (5) days after deposit in the United States mail (certified, with postage prepaid
and properly addressed). For the purposes hereof, the addresses of the parties hereto (until notice of a change thereof is delivered
as provided in this Section 7.5) shall be as set forth below or, as to each party, at such other address as may be
designated by such party in a written notice to all of the other parties.
ABL Agent: Bank of America, N.A. Four Penn Center
1600 JFK Blvd.
Philadelphia, PA 19103
Attention: Christy
Bowen
Email: Christy.kuklinski@baml.com
Facsimile: 267-675-0175
with a copy (which shall not constitute notice) to:
Davis Polk & Wardwell LLP
Attention: John
(JW) Perry
Telephone: (212)
450-4949
Facsimile: (212)
701-5949
Email: john.perry@davispolk.com
First Lien Term Agent: Bank of America, N.A.
135 S. LaSalle Street
Mail Code: IL4-135-09-61
Attention: Denise
Jones
Email: denise.j.jones@baml.com
Telephone: 312.828.1846
Facsimile: 877.206.8413
with a copy (which shall not constitute notice) to:
Davis Polk & Wardwell LLP
Attention: John
(JW) Perry
Telephone: (212)
450-4949
Facsimile: (212)
701-5949
Email: john.perry@davispolk.com
Second Lien Term Agent: Bank of America, N.A.
135 S. LaSalle Street
Mail Code: IL4-135-09-61
Attention: Denise
Jones
Email: denise.j.jones@baml.com
Telephone: 312.828.1846
Facsimile: 877.206.8413
with a copy (which shall not constitute notice) to:
Davis Polk & Wardwell LLP
Attention: John (JW)
Perry
Telephone: (212)
450-4949
Facsimile: (212)
701-5949
Email: john.perry@davispolk.com
The Borrower or any other Credit Party: to such Credit
Party in the care of the Borrower at:
620 Division Street
Elizabeth, New Jersey 07207
Attention: Co-Chairman
of the Board
Facsimile: (908)
351-4492
Email: rdavis@hayward.com
with a copy (which will not constitute notice) to:
c/o CCMP Capital Advisors, LLC
277 Park Avenue, 37th Floor
New York, New York 10172
Attention: Richard
Jansen, Esq.
Fax No.: (212)
599-3481
Email: richard.jansen@ccmpcapital.com
and
c/o MSD Partners, L.P.
645 Fifth Avenue, 21st Floor
New York, New York 10022
Attention: Marcello
Liguori
Fax No.: (212) 303-1772
Email: mliguori@msdcapital.com
and
c/o Alberta Investment Management Corporation First
Canadian Place
100 King Street West
Suite 5120, P.O. Box 51
Toronto, Ontario M5X 1B1, Canada
Attention: Jason
Peters
and
c/o Alberta Investment Management Corporation
1100 – 10830 Jasper Avenue
Edmonton, Alberta T5J 2B3, Canada
Attention: Christina
Luison
with a copy to:
Ropes & Gray LLP
1211 Avenue of the Americas
New York, New York 10036
Attention: Jay Kim
Fax No.: (212) 497-3626
Email: jay.kim@ropesgray.com
and
Dechert LLP 2929 Arch Street
Philadelphia, Pennsylvania 19104
Attention: Geraldine
Sinatra and Eric Siegel
Fax No.: (215) 994-2222
Email: geraldine.sinatra@dechert.com
eric.siegel@dechert.com
and
Torys LLP
The Grace Building
1114 Avenue of the Americas
New York, New York 10036
Attention: Jared
Fontaine
Fax No.: (212) 682-0200
Email: jfontaine@torys.com
Section 7.6 No
Waiver; Remedies. No failure on the part of any Party to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any right hereunder preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided
by law.
Section 7.7 Continuing
Agreement; Transfer of Secured Obligations. This Agreement is a continuing agreement and shall (a) remain in full
force and effect until the earlier of the Discharge of ABL Obligations or the Discharge of Term Obligations shall have occurred,
(b) be binding upon the Parties and their successors and assigns, and (c) inure to the benefit of and be enforceable
by the Parties and their respective successors, transferees and assigns. Except as set forth in Section 7.4 hereof,
nothing herein is intended, or shall be construed to give, any other Person any right, remedy or claim under, to or in respect
of this Agreement or any Collateral. All references to any Credit Party shall include any Credit Party as debtor-in- possession
and any receiver or trustee for such Credit Party in any Insolvency Proceeding. Without limiting the generality of the foregoing
clause (c), the ABL Agent, any ABL Secured Party, any Term Agent, or any Term Secured Party may assign or otherwise transfer all
or any portion of the ABL Obligations or the Term Obligations in accordance with the ABL Credit Agreement or the Term Credit Agreement,
in each case, as applicable, to any other Person (in each case, except as otherwise provided in such ABL Credit Agreement or such
Term Credit Agreement, as applicable), and such other Person shall thereupon become vested with all the rights and obligations
in respect thereof granted to the ABL Agent, any Term Agent, any ABL Secured Party, or any Term Secured Party, as the case may
be, herein or otherwise. The ABL Secured Parties and the Term Secured Parties may continue, at any time and without notice to the
other parties hereto, to extend credit and other financial accommodations, lend monies and provide Indebtedness to, or for the
benefit of, any Credit Party on the faith hereof.
Section 7.8 GOVERNING
LAW; ENTIRE AGREEMENT. THIS AGREEMENT AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS AGREEMENT,
WHETHER IN TORT, CONTRACT (AT LAW OR IN EQUITY) OR OTHERWISE, SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK. This Agreement constitutes the entire agreement and understanding among the Parties with
respect to the subject matter hereof and supersedes any prior agreements, written or oral, with respect thereto.
Section 7.9 Counterparts.
This Agreement may be executed in any number of counterparts, and it is not necessary that the signatures of all Parties be contained
on any one counterpart hereof, each counterpart will be deemed to be an original, and all together shall constitute one and the
same document. Delivery of an executed signature page to this Agreement by facsimile or other electronic transmission (in
.pdf or similar format) shall be as effective as delivery of a manually signed counterpart of this Agreement.
Section 7.10 No
Third Party Beneficiaries. This Agreement is solely for the benefit of the ABL Agent, ABL Secured Parties, Term Agents
and Term Secured Parties, the Borrower and the other Credit Parties. Except as set forth in Section 7.4 hereof, no
other Person shall be deemed to be a third party beneficiary of this Agreement.
Section 7.11 Headings.
The headings of the articles and sections of this Agreement are inserted for purposes of convenience only and shall not be construed
to affect the meaning or construction of any of the provisions hereof.
Section 7.12 Severability.
To the extent permitted by law, any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting
the validity, legality and enforceability of the remaining provisions thereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other jurisdiction.
Section 7.13 Attorneys’
Fees. The Parties agree that if any dispute, arbitration, litigation, or other proceeding is brought with respect to the
enforcement of this Agreement or any provision hereof, the prevailing party in such dispute, arbitration, litigation, or other
proceeding shall be entitled to recover its reasonable attorneys’ fees and all other costs and expenses incurred in the enforcement
of this Agreement, irrespective of whether suit is brought.
Section 7.14 VENUE;
JURY TRIAL WAIVER.
(a) EACH
PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION (SUBJECT
TO THE LAST SENTENCE OF THIS PARAGRAPH (a)) OF ANY U.S. FEDERAL OR NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN, IN
THE CITY OF NEW YORK (OR ANY APPELLATE COURT THEREFROM) OVER ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT AND AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING SHALL (EXCEPT AS PERMITTED BELOW) BE HEARD AND
DETERMINED IN SUCH NEW YORK STATE OR, TO THE EXTENT PERMITTED BY LAW, FEDERAL COURT. EACH PARTY HERETO AGREES THAT SERVICE OF ANY
PROCESS, SUMMONS, NOTICE OR DOCUMENT BY REGISTERED MAIL ADDRESSED TO SUCH PERSON SHALL BE EFFECTIVE SERVICE OF PROCESS AGAINST
SUCH PERSON FOR ANY SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT. EACH PARTY HERETO AGREES THAT A FINAL JUDGMENT IN ANY
SUCH ACTION OR PROCEEDING MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY
LAW. EACH PARTY HERETO AGREES THAT THE ADMINISTRATIVE AGENT AND THE SECURED PARTIES RETAIN THE RIGHT TO BRING PROCEEDINGS AGAINST
ANY LOAN PARTY IN THE COURTS OF ANY OTHER JURISDICTION SOLELY IN CONNECTION WITH THE EXERCISE OF ANY RIGHTS UNDER ANY COLLATERAL
DOCUMENT.
(b) EACH
PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO THIS AGREEMENT IN ANY COURT REFERRED TO IN PARAGRAPH (a) OF THIS SECTION 7.14. EACH PARTY HERETO HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY CLAIM OR DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF
SUCH ACTION, SUIT OR PROCEEDING IN ANY SUCH COURT.
(c) TO
THE EXTENT PERMITTED BY LAW, EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND AGREES
THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY REGISTERED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL) DIRECTED
TO IT AT ITS ADDRESS FOR NOTICES AS PROVIDED FOR IN SECTION 7.5.
(d) EACH
PARTY HERETO HEREBY WAIVES ANY OBJECTION TO SUCH SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM
IN ANY ACTION OR PROCEEDING COMMENCED HEREUNDER THAT SERVICE OF PROCESS WAS INVALID AND INEFFECTIVE. NOTHING IN THIS AGREEMENT
WILL AFFECT THE RIGHT OF ANY PARTY TO THIS AGREEMENT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
(e) EACH
PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN ANY SUIT, ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY) DIRECTLY OR INDIRECTLY
ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH
PARTY HERETO (i) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HERETO HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (ii) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS SECTION 7.14.
Section 7.15 Intercreditor
Agreement. This Agreement is the “ABL Intercreditor Agreement” referred to in the ABL Credit Agreement and
this Agreement is the “ABL Intercreditor Agreement” referred to in the Term Credit Agreements. Nothing in this Agreement
shall be deemed to subordinate the obligations due to (i) any ABL Secured Party to the obligations due to any Term Secured
Party or (ii) any Term Secured Party to the obligations due to any ABL Secured Party (in each case, whether before or after
the occurrence of an Insolvency Proceeding), it being the intent of the Parties that this Agreement shall effectuate a subordination
of Liens but not a subordination of Indebtedness. Nothing in this Agreement shall be deemed to modify the rights, remedies and
obligations as between the First Lien Term Agent and the First Lien Secured Parties, on the one hand, and the Second Lien Term
Agent and the Second Lien Term Secured Parties, on the other hand, as set forth in the Term Loan Intercreditor Agreement. Nothing
in this Agreement shall be deemed to modify the rights, remedies and obligations as among the First Lien Secured Parties set forth
in any Pari Passu Intercreditor Agreement (as defined in the First Lien Term Credit Agreement). Nothing in this Agreement shall
be deemed to modify the rights, remedies and obligations as among the Second Lien Secured Parties set forth in any Pari Passu Intercreditor
Agreement (as defined in the Second Lien Term Credit Agreement).
Section 7.16 No
Warranties or Liability. Each Term Agent and the ABL Agent acknowledge and agree that none have made any representation
or warranty with respect to the execution, validity, legality, completeness, collectability or enforceability of any other ABL
Document or any Term Document. Except as otherwise provided in this Agreement, the Term Agents and the ABL Agent will be entitled
to manage and supervise their respective extensions of credit to any Credit Party in accordance with law and their usual practices,
modified from time to time as they deem appropriate.
Section 7.17 Conflicts.
In the event of any conflict between the provisions of this Agreement and the provisions of any ABL Document or any Term Document,
the provisions of this Agreement shall govern.
Section 7.18 Costs
and Expenses. All costs and expenses incurred by the Term Agent and the ABL Agent, including, without limitation pursuant
to Section 4.1(e), hereunder shall be reimbursed by the Borrower and the other Credit Parties as provided in Section 9.03
of the Term Credit Agreements (or any similar provision) and Section 9.03 (or any similar provision) of the ABL Credit Agreement.
Section 7.19 Information
Concerning Financial Condition of the Credit Parties. Each of the Term Agents and the ABL Agent hereby assumes responsibility
for keeping itself informed of the financial condition of the Credit Parties and all other circumstances bearing upon the risk
of nonpayment of the ABL Obligations or the Term Obligations. Each Term Agent and the ABL Agent hereby agree that no party shall
have any duty to advise any other party of information known to it regarding such condition or any such circumstances. In the event
any Term Agent or the ABL Agent, in its sole discretion, undertakes at any time or from time to time to provide any information
to any other party to this Agreement, (a) it shall be under no obligation (i) to provide any such information to such
other party or any other party on any subsequent occasion, (ii) to undertake any investigation not a part of its regular business
routine, or (iii) to disclose any other information, (b) it makes no representation as to the accuracy or completeness
of any such information and shall not be liable for any information contained therein, and (c) the Party receiving such information
hereby agrees to hold the other Party harmless from any action the receiving Party may take or conclusion the receiving Party may
reach or draw from any such information, as well as from and against any and all losses, claims, damages, liabilities, and expenses
to which such receiving Party may become subject arising out of or in connection with the use of such information.
Section 7.20 Additional
Debt Facilities. To the extent, but only to the extent, permitted by the provisions of each of the then extant ABL Documents
and Term Documents, the Credit Parties may incur or issue and sell one or more series or classes of Term Obligations. Any such
additional class or series of Term Obligations (the “Term Class Debt”) may be secured by (i) a
junior priority, subordinated Lien on ABL Priority Collateral, (ii) a Lien on Term Priority Collateral that is pari passu
with, or junior in priority to, the Lien securing the then outstanding First Lien Term Obligations and (iii) a Lien on
Term Priority Collateral that is senior to, pari passu with, or junior in priority to, the Lien securing the then outstanding
Second Lien Term Obligations, in each case under and pursuant to the relevant Term Collateral Documents for such Term Class Debt,
if and subject to the condition that the representative or agent of any such Term Class Debt (each, a “Term Class Debt
Representative”), acting on behalf of the holders of such Term Class Debt (such representative or agent and
holders in respect of any Term Class Debt being referred to as the “Term Class Debt Parties”),
becomes a party to this Agreement by satisfying conditions (a) through (c), as applicable of this Section 7.20.
In order for a Term Class Debt Representative to become a party to this Agreement:
(a) such
Term Class Debt Representative shall have executed and delivered a joinder agreement pursuant to which it becomes a “Term
Agent” hereunder, and the Term Class Debt in respect of which such Term Class Debt Representative is the Term Agent
and the related Term Class Debt Parties become subject hereto and bound hereby, and specifying whether the Term Class Debt
in respect of which such Term Class Debt Representative is the Term Agent constitutes First Lien Term Obligations or Second
Lien Term Obligations;
(b) the
Borrower shall have delivered to the ABL Agent and the Controlling Term Agent an officer’s certificate stating that the conditions
set forth in this Section 7.20 are satisfied (or waived in accordance with the terms of the ABL Documents and Term
Documents) with respect to such Term Class Debt and, if requested, true and complete copies of each of the material Term Documents,
relating to such Term Class Debt, certified as being true and correct in all material respects by an Responsible Officer (as
defined in the ABL Credit Agreement) of the Borrower; and
(c) the
Term Debt Documents relating to such Term Class Debt shall provide that each Term Class Debt Party with respect to such
Term Class Debt will be subject to and bound by the provisions of this Agreement in its capacity as a holder of such Term
Class Debt.
Section 7.21 Additional
Credit Parties. The Borrower and each other Credit Party agrees that if, after the date hereof, any Subsidiary of the Borrower
becomes a party to (a) any ABL Credit Agreement or any ABL Guaranty (in each case, other than any ABL Exclusive Credit Party)
or (b) any Term Credit Agreement or any Term Guaranty (in each case, other than any Term Exclusive Credit Party), it will
promptly cause such Subsidiary to become party hereto by such Subsidiary executing and delivering an instrument in a form reasonably
acceptable to each of the ABL Agent and the Term Agents and the Borrower. Upon such execution and delivery, such Subsidiary will
become a Credit Party hereunder with the same force and effect as if originally named as a Credit Party herein. The execution and
delivery of such instrument shall not require the consent of any other party hereunder. The rights and obligations of each Credit
Party hereunder shall remain in full force and effect notwithstanding the addition of any new Credit Party as a party to this Agreement.
[SIGNATURE PAGES FOLLOW]
IN WITNESS WHEREOF,
the ABL Agent, for and on behalf of itself and the ABL Secured Parties, and the Term Agents, in each case, for and on behalf of
itself and the Term Secured Parties represented by such Term Agent, have caused this Agreement to be duly executed and delivered
as of the date first above written.
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BANK OF AMERICA, N.A.,
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in its capacity as the ABL Agent
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By:
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Name:
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Title:
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BANK OF AMERICA, N.A.,
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in its capacity as the First Lien Term Agent
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By:
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Name:
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Title:
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BANK OF AMERICA, N.A.,
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in its capacity as the Second Lien Term Agent
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By:
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Name:
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Title:
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[Signature Page to ABL Intercreditor
Agreement]
ACKNOWLEDGMENT
The Borrower and each
Credit Party hereby acknowledges that it has received a copy of this Agreement as in effect on the date hereof and consents thereto,
agrees to recognize all rights granted thereby to the ABL Agent, the ABL Secured Parties, the Term Agents, and the Term Secured
Parties (including pursuant to Section 7.18 hereof) and will not do any act or perform any obligation which is not
in accordance with the agreements set forth in this Agreement as in effect on the date hereof. The Borrower and each Credit Party
further acknowledge and agree that (i) as between the ABL Secured Parties, the Borrower and the other Credit Parties, the
ABL Documents remain in full force and effect as written and are in no way modified hereby, and (ii) as between the Term Secured
Parties, the Borrower and the other Credit Parties, the Term Documents remain in full force and effect as written and are in no
way modified hereby.
Without limiting the
foregoing or any rights or remedies the Borrower and the other Credit Parties may have, Holdings, the Borrower and the other Credit
Parties consent to the performance by each Term Agent of the obligations set forth in Section 3.6 of this Agreement,
waive the provisions of Section 9-615(a) of the UCC (or similar provisions under any other applicable law) in connection
with the application of proceeds of Collateral in accordance with the provisions of this Agreement, and acknowledge and agree that
neither any Term Agent nor any other Term Secured Party shall ever be accountable or liable for any action taken or omitted by
the ABL Agent or any other ABL Secured Party or its or any of their officers, employees, agents successors or assigns in connection
therewith or incidental thereto or in consequence thereof, including any improper use or disclosure of any proprietary information
or other Intellectual Property by the ABL Agent or any other ABL Secured Party or its or any of their officers, employees, agents,
successors or assigns or any other damage to or misuse or loss of any property of the Credit Parties as a result of any action
taken or omitted by the ABL Agent or its officers, employees, agents, successors or assigns pursuant to, and in accordance with,
Section 3.6 of this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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CREDIT PARTIES:
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HAYWARD INTERMEDIATE, INC., as Holdings
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By:
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Name:
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Title:
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HAYWARD ACQUISITION CORP., as the Initial Borrower
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By:
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Name:
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Title:
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HAYWARD INDUSTRIES, INC., as the Borrower
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By:
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Name:
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Title:
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HAYWARD INDUSTRIAL PRODUCTS, INC.
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By:
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Name:
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GOLDLINE PROPERTIES LLC,
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By:
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Name:
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Title:
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HAYWARD/WRIGHT-AUSTIN, INC.,
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By:
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Name:
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Title:
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WEBSTER PUMPS, INC.,
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By:
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Name:
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Title:
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EXHIBIT M
[FORM OF]
TERM INTERCREDITOR AGREEMENT
[ATTACHED]
Execution Version
TERM INTERCREDITOR AGREEMENT
Term Intercreditor
Agreement (this “Agreement”), dated as of August 4, 2017, among BANK OF AMERICA, N.A., as administrative
agent and collateral agent (in such capacities, with its successors and assigns, and as more specifically defined below, the “Existing
First Priority Representative”) for the Existing First Priority Secured Creditors (as defined below) secured pursuant
to the Existing First Priority Agreement, BANK OF AMERICA, N.A., as administrative agent and collateral agent (in such capacities,
with its successors and assigns, and as more specifically defined below, the “Existing Second Priority Representative”)
for the Existing Second Priority Secured Creditors (as defined below) secured pursuant to the Existing Second Priority Agreement,
and each other First Priority Representative and Second Priority Representative that from time to time becomes a party hereto pursuant
to the terms hereof, and acknowledged and agreed to by, HAYWARD INTERMEDIATE, INC. (“Holdings”), HAYWARD
ACQUISITION CORP., as the initial borrower, to be merged with and into HAYWARD INDUSTRIES, INC. pursuant to the Merger (as
defined in the Existing First Priority Agreement) (the “Borrower”) and each of the other Loan Parties (as defined
below) party hereto.
WHEREAS, Holdings,
the Borrower, the other Loan Parties, the Existing First Priority Representative and certain financial institutions and other entities
are parties to the first lien senior secured First Lien Credit Agreement dated as of the date hereof (the “Existing First
Priority Agreement”), pursuant to which such financial institutions and other entities have agreed to make loans and
extend other financial accommodations to the Borrower; and
WHEREAS, Holdings,
the Borrower, the other Loan Parties, the Existing Second Priority Representative and certain financial institutions and other
entities are parties to the second lien senior secured Second Lien Credit Agreement dated as of the date hereof (the “Existing
Second Priority Agreement”), pursuant to which such financial institutions and other entities have agreed to make loans
to the Borrower; and
WHEREAS, the Borrower
and the other Loan Parties have granted to the Existing First Priority Representative senior security interests in the Common Collateral
(as defined below) as security for payment and performance of the First Priority Obligations under the Existing First Priority
Agreement; and
WHEREAS, the Borrower
and the other Loan Parties have granted to the Existing Second Priority Representative junior security interests in the Common
Collateral as security for payment and performance of the Second Priority Obligations under the Existing Second Priority Agreement;
and
WHEREAS, from time
to time, the Borrower may, subject to the terms and conditions hereof, designate additional Indebtedness as First Priority Obligations
or Second Priority Obligations.
NOW THEREFORE, in consideration
of the foregoing and the mutual covenants herein contained and other good and valuable consideration, the existence and sufficiency
of which are expressly recognized by all of the parties hereto, the parties agree as follows:
SECTION 1. Definitions.
1.1. Defined
Terms. The following terms, as used herein, have the following meanings:
“ABL Intercreditor
Agreement” means the ABL Intercreditor Agreement, dated as of the date hereof, by and among Bank of America, N.A. as
administrative agent and collateral agent for the ABL Secured Parties (as defined therein), the Existing First Priority Representative
for the Existing First Priority Secured Creditors and the Existing Second Priority Representative for the Existing Second Priority
Secured Creditors, as amended, restated, amended and restated, extended, supplemented or otherwise modified.
“Additional
Debt” has the meaning set forth in Section 9.4(a).
“Additional
First Priority Agreement” means any agreement evidencing Additional First Priority Debt designated as such in writing
by the Borrower to the extent permitted to be so designated under each then extant First Priority Agreement and Second Priority
Agreement.
“Additional
First Priority Debt” has the meaning set forth in Section 9.4(a).
“Additional
First Priority Representative” has the meaning set forth in the definition of First Priority Representative.
“Additional
First Priority Secured Parties” means, with respect to any Series of Additional First Priority Debt, the First Priority
Secured Parties in respect thereof.
“Additional
Representative” means, as the case may be, an Additional First Priority Representative and/or an Additional Second Priority
Representative.
“Additional
Second Priority Agreement” means any agreement evidencing Additional Second Priority Debt designated as such in writing
by the Borrower to the extent permitted to be so designated under each then extant First Priority Agreement and Second Priority
Agreement.
“Additional
Second Priority Debt” has the meaning set forth in Section 9.4(a). “Additional Second Priority Representative”
has the meaning set forth in the definition of Second Priority Representative.
“Additional
Second Priority Secured Parties” means, with respect to any Series of Additional Second Priority Debt, the Second
Priority Secured Parties in respect thereof.
“Agreement”
has the meaning set forth in the introductory paragraph hereof.
“Bankruptcy
Code” means the United States Bankruptcy Code (11 U.S.C. §101 et seq.), as amended from time to time.
“Business
Day” means any day other than a Saturday, Sunday or day on which banks in New York City are authorized or required by
law or other governmental action to close.
“Borrower”
has the meaning set forth in the introductory paragraph hereof.
“Cash Collateral”
has the meaning set forth in Section 3.7.
“Common Collateral”
means all assets that are both First Priority Collateral and Second Priority Collateral.
“Comparable
Second Priority Collateral Document” means, in relation to any Common Collateral subject to any First Priority Collateral
Document, that Second Priority Collateral Document that creates a security interest in the same Common Collateral, granted by the
same Loan Party, as applicable.
“Designated
First Priority Representative” means (i) if at any time there is only one Series of First Priority Obligations
then extant, the First Priority Representative for the First Priority Secured Parties in such Series and (ii) at any
time when clause (i) does not apply, the “Applicable Authorized Representative” (as defined in the First Priority
Pari Passu Intercreditor Agreement) at such time.
“Designated
Second Priority Representative” means (i) if at any time there is only one Series of Second Priority Obligations
then extant, the Second Priority Representative for the Second Priority Secured Parties in such Series and (ii) at any
time when clause (i) does not apply, the “Applicable Authorized Representative” (as defined in the Second Priority
Pari Passu Intercreditor Agreement) at such time.
“DIP Financing”
has the meaning set forth in Section 5.2.
“Enforcement
Action” means, with respect to the First Priority Obligations or the Second Priority Obligations, the exercise of any
rights and remedies with respect to any Common Collateral securing such obligations or the commencement or prosecution of enforcement
of any of the rights and remedies with respect to the Common Collateral under, as applicable, the First Priority Documents or the
Second Priority Documents, or applicable law, including the exercise of any rights of set-off or recoupment, and the exercise of
any rights or remedies of a secured creditor under the Uniform Commercial Code of any applicable jurisdiction or under the Bankruptcy
Code and including, without limitation, any action to (i) foreclose, execute, levy, or collect on, take possession or control
of (other than for purposes of perfection), sell or otherwise realize upon (judicially or non-judicially), or lease, license, or
otherwise dispose of (whether publicly or privately), Common Collateral or (ii) receive a transfer of Common Collateral in
satisfaction of Indebtedness or any other obligation secured thereby.
“Existing
First Priority Agreement” has the meaning set forth in the first WHEREAS clause of this Agreement.
“Existing
First Priority Representative” has the meaning set forth in the introductory paragraph hereof.
“Existing
First Priority Secured Creditors” means the “Secured Parties” as defined in the Existing First Priority Agreement
(or any equivalent term in any Refinancing thereof).
“Existing
Second Priority Agreement” has the meaning set forth in the second WHEREAS clause of this Agreement.
“Existing
Second Priority Representative” has the meaning set forth in the introductory paragraph hereof.
“Existing
Second Priority Secured Creditors” means the “Secured Parties” as defined in the Existing Second Priority
Agreement (or any equivalent term in any Refinancing thereof).
“First Priority
Agreement” means the collective reference to (a) the Existing First Priority Agreement, (b) each Additional
First Priority Agreement and (c) any secured credit agreement, loan agreement, note agreement, promissory note, indenture
or other agreement that Refinances any other then extant First Priority Agreement pursuant to Section 9.6 hereof. Unless the
context otherwise requires, any reference to the First Priority Agreement hereunder shall be deemed a reference to each First Priority
Agreement then extant.
“First Priority
Collateral” means all assets, whether now owned or hereafter acquired by the Borrower or any other Loan Party, in which
a Lien is granted or purported to be granted to any First Priority Secured Party as security for any First Priority Obligation.
“First Priority
Collateral Documents” means the “Collateral Documents” or “Security Documents” (or equivalent
term) as defined in any First Priority Agreement, and any other documents that are designated under any First Priority Agreement
as “First Priority Collateral Documents” for purposes of this Agreement.
“First Priority
Creditors” means each “Secured Party” (or equivalent term) as defined in any First Priority Collateral Documents
or any First Priority Agreement, the First Priority Representatives and any other Persons to whom First Priority Obligations are
owing.
“First Priority
Documents” means each First Priority Agreement, each First Priority Collateral Document and each First Priority Guarantee.
“First Priority
Guarantee” means any guarantee by any Loan Party of any or all of the First Priority Obligations.
“First Priority
Lien” means any Lien created by any First Priority Collateral Documents. “First Priority Obligations”
means (a) with respect to the Existing First Priority Agreement, all “Obligations” of each Loan Party as defined
in the Existing First Priority Agreement (or any equivalent term in any Refinancing thereof) and (b) with respect to each
other First Priority Agreement, (i) all principal of and interest (including any Post-Petition Interest) and premium (if any)
on all loans made or other indebtedness issued or incurred pursuant to such First Priority Agreement, (ii) all reimbursement
obligations (if any) and interest thereon (including any Post-Petition Interest) with respect to any letter of credit or similar
instruments issued pursuant to such First Priority Agreement, (iii) all Specified Swap Agreements, (iv) all Specified
Cash Management Agreements and (v) all guarantee obligations, fees, expenses and other amounts payable from time to time pursuant
to the applicable First Priority Documents, in each case whether or not allowed or allowable in an Insolvency Proceeding. To the
extent any payment with respect to any First Priority Obligation (whether by or on behalf of any Loan Party, as proceeds of security,
enforcement of any right of setoff or otherwise) is declared to be a fraudulent conveyance or a preference in any respect, set
aside or required to be paid to a debtor in possession, any Second Priority Secured Party, receiver or similar Person, then the
obligation or part thereof originally intended to be satisfied shall, for the purposes of this Agreement and the rights and obligations
of the First Priority Secured Parties and the Second Priority Secured Parties, be deemed to be reinstated and outstanding as if
such payment had not occurred.
“First Priority
Obligations Series Payment Date” means, with respect to each Series of First Priority Obligations, the date
on which (a) the First Priority Obligations of that Series (other than those that constitute Unasserted Contingent Obligations)
have been paid in full (or cash collateralized or defeased in accordance with the terms of the First Priority Documents), (b) all
commitments to extend credit under the First Priority Documents for that Series have been terminated and (c) there are
no outstanding letters of credit or similar instruments issued under the First Priority Documents for that Series (other than
such as have been cash collateralized or defeased in accordance with the terms of the First Priority Documents). Upon the written
request by any Second Priority Representative or the Borrower, the applicable First Priority Representative for that Series shall
promptly deliver a written notice to each Second Priority Representative and the Borrower stating that (to the extent such events
have occurred) the events described in clauses (a), (b) and (c) have occurred.
“First Priority
Obligations Payment Date” means the date on which the First Priority Obligations Series Payment Date has occurred
for each Series of First Priority Obligations.
“First Priority
Pari Passu Intercreditor Agreement” means an agreement among each First Priority Representative allocating rights among
the various Series of First Priority Obligations, in the form set forth on Exhibit N to the Existing First Priority Agreement.
“First Priority
Representative” means (i) in the case of the First Priority Obligations or First Priority Secured Parties secured
pursuant to the Existing First Priority Agreement, the Existing First Priority Representative, and (ii) in the case of any
Additional First Priority Debt or any Additional First Priority Secured Parties of any Series, the trustee, administrative agent,
collateral or similar agent named as the First Priority Representative for such Series in the applicable Joinder Agreement
(each, in the case of this clause (ii), together with its successors and assigns in such capacity, an “Additional First
Priority Representative”).
“First Priority
Secured Parties” means each First Priority Representative, each First Priority Creditor and any other holders of the
First Priority Obligations.
“Insolvency
Proceeding” means any voluntary or involuntary case or proceeding of which any Loan Party is the subject and in respect
of bankruptcy, insolvency, winding up, receivership, dissolution, liquidation, reorganization or assignment for the benefit of
creditors, in each of the foregoing events whether under the Bankruptcy Code or any similar federal, state or foreign bankruptcy,
insolvency, reorganization, receivership or similar law.
“Joinder Agreement”
means a supplement to this Agreement in the form of Exhibit A hereto, required to be delivered by an Additional Representative
to each other then-existing First Priority Representative and Second Priority Representative pursuant to Section 9.4 hereof.
“Lien”
means any mortgage, deed of trust, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other),
charge, or preference, priority or other security interest or preferential arrangement of any kind or nature whatsoever (including
any conditional sale or other title retention agreement, any easement, right of way or other encumbrance on title to real property,
and any capital lease having substantially the same economic effect as any of the foregoing), in each case in the nature of security;
provided that in no event shall an operating lease in and of itself be deemed to constitute a Lien on any asset.
“Loan Party”
means Holdings, the Borrower and each of its Subsidiaries that is a party, or which at any time becomes a party, to any First Priority
Document or Second Priority Document as a guarantor. All references in this Agreement to any Loan Party shall include such Loan
Party as a debtor-in- possession and any receiver or trustee for such Loan Party in any Insolvency Proceeding.
“Maximum First
Priority Obligations Amount” means an amount equal to the aggregate principal amount of debt for borrowed money permitted
to be incurred as First Priority Obligations pursuant to the terms of the Existing Second Priority Agreement as in effect on the
Closing Date, as amended, restated, modified, supplemented, substituted, renewed, replaced or Refinanced in accordance with the
terms hereof, but without giving effect to any such amendment, restatement, modification, supplement, substitution, renewal, replacement
or Refinancing that has the effect, directly or indirectly, of reducing the amount of such debt for borrowed money permitted to
be incurred as First Priority Obligations pursuant to the terms of the Existing Second Priority Agreement without the prior written
consent of the Borrower and each First Priority Representative.
“Maximum Second
Priority Obligations Amount” means an amount equal to the aggregate principal amount of debt for borrowed money permitted
to be incurred as Second Priority Obligations pursuant to the terms of the Existing First Priority Agreement as in effect on the
Closing Date, as amended, restated, modified, supplemented, substituted, renewed, replaced or Refinanced in accordance with the
terms hereof, but without giving effect to any such amendment, restatement, modification, supplement, substitution, renewal, replacement
or Refinancing that has the effect, directly or indirectly, of reducing the amount of such debt for borrowed money permitted to
be incurred as Second Priority Obligations pursuant to the terms of the Existing First Priority Agreement without the prior written
consent of the Borrower and each Second Priority Representative.
“Person”
means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, governmental
authority or other entity.
“Post-Petition
Interest” means any interest or entitlement to fees or expenses or other charges that accrues after the commencement
of any Insolvency Proceeding, whether or not allowed or allowable in any such Insolvency Proceeding.
“Purchase”
has the meaning set forth in Section 3.7. “Purchase Notice” has the meaning set forth in Section 3.7.
“Purchase Price” has the meaning set forth in Section 3.7. “Purchasing Parties” has
the meaning set forth in Section 3.7. “Recovery” has the meaning set forth in Section 5.5.
“Refinance”
means, in respect of any indebtedness, to refinance, extend, renew, defease, amend, increase, modify, supplement, restructure,
refund, replace or repay, or to issue other indebtedness or enter into alternative financing arrangements, in exchange or replacement
for such indebtedness (in whole or in part), including by adding or replacing lenders, creditors, agents, borrowers and/or guarantors,
and including in each case, but not limited to, after the original instrument giving rise to such indebtedness has been terminated
and including, in each case, through any credit agreement, indenture or other agreement. “Refinanced” and “Refinancing”
have correlative meanings.
“Second Priority
Agreement” means the collective reference to (a) the Existing Second Priority Agreement, (b) each Additional
Second Priority Agreement and (c) any secured credit agreement, loan agreement, note agreement, promissory note, indenture
or other agreement that Refinances any other then extant Second Priority Agreement pursuant to Section 9.6 hereof. Unless
the context otherwise requires, any reference to the Second Priority Agreement hereunder shall be deemed a reference to each Second
Priority Agreement then extant.
“Second Priority
Collateral” means all assets, whether now owned or hereafter acquired by the Borrower or any Loan Party, in which a Lien
is granted or purported to be granted to any Second Priority Secured Party as security for any Second Priority Obligation.
“Second Priority
Collateral Documents” means the “Collateral Documents” or “Security Documents” (or equivalent
term) as defined in any Second Priority Agreement and any documents that are designated under any Second Priority Agreement as
“Second Priority Collateral Documents” for purposes of this Agreement.
“Second Priority
Creditors” means the “Secured Parties” (or equivalent term) as defined in any Second Priority Collateral
Documents or any Second Priority Agreement, the Second Priority Representatives and any other Persons to whom Second Priority Obligations
are owing.
“Second Priority
Documents” means each Second Priority Agreement, each Second Priority Collateral Document and each Second Priority Guarantee.
“Second Priority
Guarantee” means any guarantee by any Loan Party of any or all of the Second Priority Obligations.
“Second Priority
Lien” means any Lien created by any Second Priority Collateral Documents.
“Second Priority
Obligations” means (a) all “Obligations” of each Loan Party as defined in the Existing Second Priority
Agreement (or any equivalent term in any Refinancing thereof) and (b) with respect to each other Second Priority Agreement,
(i) all principal of and interest (including any Post- Petition Interest) and premium (if any) on all loans made or other
indebtedness issued or incurred pursuant to such Second Priority Agreement, (ii) all reimbursement obligations (if any) and
interest thereon (including any Post-Petition Interest) with respect to any letter of credit or similar instruments issued pursuant
to such Second Priority Agreement and (iii) all guarantee obligations, fees, expenses and other amounts payable from time
to time pursuant to the applicable Second Priority Documents, in each case whether or not allowed or allowable in an Insolvency
Proceeding. To the extent any payment with respect to any Second Priority Obligation (whether by or on behalf of any Loan Party,
as proceeds of security, enforcement of any right of setoff or otherwise) is declared to be a fraudulent conveyance or a preference
in any respect, set aside or required to be paid to a debtor in possession, any First Priority Secured Party, receiver or similar
Person, then the obligation or part thereof originally intended to be satisfied shall, for the purposes of this Agreement and the
rights and obligations of the First Priority Secured Parties and the Second Priority Secured Parties hereunder, be deemed to be
reinstated and outstanding as if such payment had not occurred.
“Second Priority
Pari Passu Intercreditor Agreement” means an agreement among each Second Priority Representative allocating rights among
the various Series of Second Priority Obligations, substantially in the form set forth on Exhibit N to the Existing First
Priority Agreement (but modified to reflect the second priority nature of the obligations subject thereto).
“Second Priority
Representative” means (i) in the case of the Second Priority Obligations or the Second Priority Secured Parties
secured pursuant to the Existing Second Priority Agreement, the Existing Second Priority Representative, and (ii) in the case
of any Additional Second Priority Debt or any Additional Second Priority Secured Parties of any Series, the trustee, administrative
agent, collateral or similar agent named as the Second Priority Representative for such Series in the applicable Joinder Agreement
(each, in the case of this clause (ii), together with its successors and assigns in such capacity, an “Additional Second
Priority Representative”).
“Second Priority
Secured Parties” means each Second Priority Representative, each Second Priority Creditor and any other holders of the
Second Priority Obligations.
“Secured Parties”
means the First Priority Secured Parties and the Second Priority Secured Parties.
“Series”
means, (i) with respect to First Priority Debt or Second Priority Debt, all First Priority Debt or Second Priority Debt,
as applicable, represented by the same First Priority Representative or Second Priority Representative acting in the same capacity
and (ii) with respect to First Priority Obligations or Second Priority Obligations, all such obligations secured by the same
First Priority Collateral Documents or same Second Priority Collateral Documents, as the case may be.
“Specified
Cash Management Agreement” means any agreement providing for treasury, depositary or cash management services or any
similar transactions, including overdraft, credit card processing, credit or debit cards, purchase cards, electronic funds transfers
and other cash management services between any Loan Party and any holder of First Priority Obligations (other than solely as a
result of such Specified Cash Management Agreement), or an affiliate thereof, as permitted under the First Priority Documents at
the time such Specified Cash Management Agreement is entered into.
“Specified
Swap Agreement” means any Swap Agreement in respect of interest rates, currency exchange rates or commodity prices entered
into by any Loan Party and any Person that is holder of First Priority Obligations (other than solely as a result of such Specified
Swap Agreement) or an affiliate thereof, as permitted under the First Priority Documents at the time such Swap Agreement is entered
into.
“Standstill
Period” has the meaning set forth in Section 3.2.
“Surviving
Obligations” has the meaning set forth in Section 3.7.
“Swap Agreement”
means any (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions,
commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or
bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward
foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency
rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing
(including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any
master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms
and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc.,
any International Foreign Exchange Master Agreement, or any other master agreement, including any such obligations or liabilities
under any such master agreement.
“Unasserted
Contingent Obligations” shall mean, at any time, First Priority Obligations for taxes, costs, indemnifications, reimbursements,
damages and other liabilities (excluding (a) the principal of, and interest and premium (if any) on, and fees and expenses
relating to, any First Priority Obligation and (b) contingent reimbursement obligations in respect of amounts that may be
drawn under outstanding letters of credit) in respect of which no assertion of liability (whether oral or written) and no claim
or demand for payment (whether oral or written) has been made (and, in the case of First Priority Obligations for indemnification,
no notice for indemnification has been issued by the indemnitee) at such time.
“Uniform Commercial
Code” shall mean the Uniform Commercial Code as in effect from time to time in the applicable jurisdiction.
1.2 Terms
Generally. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”,
“includes” and “including” shall be deemed to be followed by the phrase “without limitation”.
The word “will” shall be construed to have the same meaning and effect as the word “shall”. Unless the
context requires otherwise (i) any definition of or reference to any agreement, instrument or other document herein shall
be construed as referring to such agreement, instrument or other document as from time to time amended, restated, supplemented
or otherwise modified, (ii) any reference herein to any Person shall be construed to include such Person’s successors
or permitted assigns, (iii) the words “herein”, “hereof” and “hereunder”, and words of
similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (iv) all
references herein to Sections shall be construed to refer to Sections of this Agreement and (v) the words “asset”
and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible
assets and properties, including cash, securities, accounts and contract rights.
SECTION 2. Lien
Priorities.
2.1 Subordination
of Liens. (a) Subject to the order of application of proceeds set forth in Section 4.1, any and all Liens now existing
or hereafter created or arising in favor of any Second Priority Secured Party securing the Second Priority Obligations, regardless
of how or when acquired, whether by grant, statute, operation of law, subrogation or otherwise are expressly junior in priority,
operation and effect to any and all Liens on the Common Collateral now existing or hereafter created or arising in favor of the
First Priority Secured Parties securing the First Priority Obligations, notwithstanding (i) anything to the contrary contained
in any agreement or filing to which any Second Priority Secured Party may now or hereafter be a party, and regardless of the time,
order or method of grant, attachment, recording or perfection of any financing statements or other security interests, assignments,
pledges, deeds, mortgages and other Liens, or any defect or deficiency or alleged defect or deficiency in any of the foregoing,
(ii) any provision of the Uniform Commercial Code or any applicable law or any First Priority Document or Second Priority
Document or any other circumstance whatsoever and (iii) the fact that any such Liens in favor of any First Priority Secured
Party securing any of the First Priority Obligations are (x) subordinated to any Lien securing any obligation of any Loan
Party other than the Second Priority Obligations or (y) otherwise subordinated, voided, avoided, invalidated or lapsed.
(b) No First Priority
Secured Party or Second Priority Secured Party shall object to or contest, or support any other Person in contesting or objecting
to, in any proceeding (including any Insolvency Proceeding), the validity, extent, perfection, priority or enforceability of any
security interest in the Common Collateral granted to the other. Notwithstanding any failure by any First Priority Secured Party
or Second Priority Secured Party to perfect its security interests in the Common Collateral or any avoidance, invalidation or subordination
by any third party or court of competent jurisdiction of the security interests in the Common Collateral granted to the First Priority
Secured Parties or the Second Priority Secured Parties (but, for the avoidance of doubt, subject to the order of application of
proceeds set forth in Section 4.1), the priority and rights as between the First Priority Secured Parties and the Second Priority
Secured Parties with respect to the Common Collateral shall be as set forth herein.
2.2 Nature
of First Priority Obligations. Each Second Priority Representative on behalf of itself and the other Second Priority Secured
Parties represented by it acknowledges that a portion of the First Priority Obligations may represent debt that is revolving in
nature and that the amount thereof that may be outstanding at any time or from time to time may be increased or reduced and subsequently
reborrowed, and that, subject to Section 6, the terms of the First Priority Obligations may be modified, extended or amended
from time to time, and that the aggregate amount of the First Priority Obligations may be increased, replaced or refinanced, in
each event, without notice to or consent by the Second Priority Secured Parties and without affecting the provisions hereof, but
only so long as, except in the case of any DIP Financing, any such obligations are permitted to be incurred pursuant to the Second
Priority Documents. The lien priorities provided in Section 2.1 shall not be altered or otherwise affected by any such amendment,
modification, supplement, extension, repayment, reborrowing, increase, replacement, renewal, restatement or refinancing of either
the First Priority Obligations or the Second Priority Obligations, or any portion thereof.
2.3 Agreements
Regarding Actions to Perfect Liens. (a) Each Second Priority Representative on behalf of itself and the other Second Priority
Secured Parties represented by it agrees that UCC-1 financing statements, patent, trademark or copyright filings or other filings
or recordings filed or recorded by or on behalf of the Second Priority Representative with respect to the Common Collateral shall
be in form reasonably satisfactory to the Designated First Priority Representative.
(b) Each
Second Priority Representative agrees on behalf of itself and the other Second Priority Secured Parties represented by it that
each Second Priority Collateral Document securing Common Collateral in favor of or for the benefit of such Second Priority Representative
and the other Second Priority Secured Parties represented by it shall, unless otherwise agreed to by the Designated First Priority
Representative, contain the following notation (or language to similar effect approved by the Designated First Priority Representative):
“Notwithstanding anything herein to the contrary, the lien and security interest created by this agreement on the property
described herein and the exercise of any right or remedy by the collateral agent hereunder is subject to the provisions of the
Term Intercreditor Agreement dated as of August 4, 2017 among Bank of America, N.A., as administrative agent and collateral
agent for the Existing First Priority Secured Creditors, Bank of America, N.A., as administrative agent and collateral agent for
the Existing Second Priority Secured Creditors, and each other First Priority Representative and Second Priority Representative
from time to time party thereto, and acknowledged and agreed to by Hayward Industries, Inc., a New Jersey corporation, as
Borrower, and the Loan Parties referred to therein, as amended, modified or supplemented from time to time.”
(c) Each
First Priority Representative hereby acknowledges that, to the extent that it holds, or a third party holds on its behalf, physical
possession of or “control” (as defined in the Uniform Commercial Code) over Common Collateral pursuant to the First
Priority Collateral Documents, such possession or control is also for the benefit of and on behalf of, and the First Priority Representative
or such third party holds such possession or control as bailee and agent for, the Second Priority Representative and the other
Second Priority Secured Parties solely to the extent required to perfect their security interest in such Common Collateral (such
bailment and agency for perfection being intended, among other things, to satisfy the requirements of Sections 8-301(a)(2) and
9-313(c) of the Uniform Commercial Code). Nothing in the preceding sentence shall be construed to impose any duty on any First
Priority Representative (or any third party acting on its behalf) with respect to such Common Collateral or provide the Second
Priority Representative or any other Second Priority Secured Party with any rights with respect to such Common Collateral beyond
those specified in this Agreement; provided that subsequent to the occurrence of the First Priority Obligations Payment
Date, the First Priority Representative shall (i) deliver to the Second Priority Representative, at the Borrower’s sole
cost and expense, the Common Collateral in its possession or control together with any necessary endorsements to the extent required
by the Second Priority Documents (and to the extent not so required, such delivery shall be made to the Borrower) or (ii) direct
and deliver such Common Collateral as a court of competent jurisdiction otherwise directs, and provided, further,
that the provisions of this Agreement are intended solely to govern the respective Lien priorities as between the First Priority
Secured Parties on the one hand and the Second Priority Secured Parties on the other hand and shall not impose on the First Priority
Secured Parties any obligations in respect of the disposition of any Common Collateral (or any proceeds thereof) that would conflict
with prior perfected Liens or any claims thereon in favor of any other Person that is not a Secured Party.
2.4 No
New Liens; Release of Liens. So long as the First Priority Obligations Payment Date has not occurred, the parties hereto agree
that (i) there shall be no Lien, and no Loan Party shall have any right to create any Lien, on any assets of any Loan Party
securing any Second Priority Obligation if these same assets are not subject to, and do not become subject to, one or more Liens
securing each of the First Priority Obligations (including as a result of the release of any Lien securing the First Priority Obligations)
and (ii) if any Second Priority Secured Party shall acquire or hold any Lien on any assets of any Loan Party securing any
Second Priority Obligation which assets are not also subject to the first- priority Lien of each First Priority Representative
under the respective First Priority Documents (including as a result of the release of any Lien securing the First Priority Obligations),
then such Second Priority Representative, upon demand by any First Priority Representative, will without the need for any further
consent of any other Second Priority Secured Party, notwithstanding anything to the contrary in any other Second Priority Document
either (x) release such Lien or (y) assign it to such First Priority Representative as security for the applicable First
Priority Obligations (in which case the Second Priority Representative may retain a junior Lien on such assets subject to the terms
hereof). To the extent that the foregoing provisions are not complied with for any reason, without limiting any other rights and
remedies available to the First Priority Secured Parties, the Second Priority Representative and the other Second Priority Secured
Parties agree that any amounts received by or distributed to any of them pursuant to or as a result of Liens granted in contravention
of this Section 2.4 shall be subject to Section 4.1.
SECTION 3. Enforcement
Rights.
3.1 Exclusive
Enforcement. Until the First Priority Obligations Payment Date has occurred, whether or not an Insolvency Proceeding has been
commenced by or against any Loan Party, the First Priority Secured Parties shall have the exclusive right to take and continue
any Enforcement Action with respect to the Common Collateral, without any consultation with or consent of any Second Priority Secured
Party, but subject to the provisos set forth in Sections 3.2 and 5.1. Upon the occurrence and during the continuance of an “Event
of Default” under and as defined in the First Priority Documents, the First Priority Representative and the other First Priority
Secured Parties may (except as otherwise agreed amongst themselves in the First Priority Pari Passu Intercreditor Agreement) take
and continue any Enforcement Action with respect to the First Priority Obligations and the Common Collateral permitted under the
First Priority Documents in such order and manner as they may determine in their sole discretion.
3.2 Standstill
and Waivers. Each Second Priority Representative, on behalf of itself and the other Second Priority Secured Parties represented
by it, agrees that, until the First Priority Obligations Payment Date has occurred, subject to the proviso set forth in Section 5.1:
(a) they
will not take or cause to be taken any Enforcement Action;
(b) they
will not take or cause to be taken any action, the purpose or effect of which is to make any Lien in respect of any Second Priority
Obligation pari passu with or senior to, or to give any Second Priority Secured Party any preference or priority relative to, the
Liens with respect to the First Priority Obligations or the First Priority Secured Parties;
(c) they
will not contest, oppose, object to, interfere with, hinder or delay, in any manner, whether by judicial proceedings (including
the filing or commencement of, or the joining in the filing or commencement of, an Insolvency Proceeding) or otherwise, any foreclosure,
sale, lease, exchange, transfer or other disposition of the Common Collateral by any First Priority Secured Party or any other
Enforcement Action taken (or any forbearance from taking any Enforcement Action) by or on behalf of any First Priority Secured
Party;
(d) they
have no right to (i) direct either any First Priority Representative or any other First Priority Secured Party to exercise
any right, remedy or power with respect to the Common Collateral or pursuant to the First Priority Collateral Documents or (ii) consent
or object to the exercise by any First Priority Representative or any other First Priority Secured Party of any right, remedy or
power with respect to the Common Collateral or pursuant to the First Priority Collateral Documents or to the timing or manner in
which any such right is exercised or not exercised (or, to the extent they may have any such right described in this clause (d),
whether as a junior lien creditor or otherwise, they hereby irrevocably waive such right);
(e) they
will not institute any suit or other proceeding or assert in any suit, Insolvency Proceeding or other proceeding any claim
against any First Priority Secured Party seeking damages from or other relief by way of specific performance, injunction or otherwise,
with respect to, and no First Priority Secured Party shall be liable for, any action taken or omitted to be taken by any First
Priority Secured Party with respect to the Common Collateral or pursuant to the First Priority Documents; and
(f) they
will not seek, and hereby waive any right, to have the Common Collateral or any part thereof marshaled upon, or in connection with,
any foreclosure or other disposition of the Common Collateral; provided that, notwithstanding the foregoing, any Second
Priority Secured Party may exercise its rights and remedies in respect of the Common Collateral, including taking any Enforcement
Actions, under, and to the extent provided for in, the Second Priority Collateral Documents or applicable law after the passage
of a period of 180 days (the “Standstill Period”) from the date of delivery of a notice in writing by the applicable
Second Priority Representative to each First Priority Representative of its intention to exercise such rights and remedies, which
notice may only be delivered following the occurrence of and during the continuation of an “Event of Default” under
and as defined in the applicable Second Priority Agreement and the applicable Second Priority Representative has demanded repayment
of all the principal amount of any Second Priority Obligations thereunder; provided, further, however, that, notwithstanding
the foregoing, in no event shall any Second Priority Secured Party exercise or continue to exercise any such rights or remedies
if, notwithstanding the expiration of the Standstill Period, (i) any First Priority Secured Party shall have commenced and
be diligently pursuing the exercise of any of its rights and remedies with respect to all or any material portion of the Common
Collateral (prompt notice of such exercise to be given to each Second Priority Representative) or (ii) an Insolvency Proceeding
in respect of any Loan Party shall have been commenced; and provided, further, that in any Insolvency Proceeding
commenced by or against any Loan Party, each Second Priority Representative and the other Second Priority Secured Parties may take
any action expressly permitted by Section 5.1.
Notwithstanding the
foregoing, the Second Priority Representative and the Second Priority Secured Parties may:
(1) file
a claim or statement of interest with respect to the Second Priority Obligations; provided that an Insolvency Proceeding
has been commenced by or against the Loan Parties;
(2) take
any action (not adverse to the priority status of the Liens on the First Priority Collateral, or the rights of any First Priority
Representative or the First Priority Secured Parties to exercise remedies in respect thereof) in order to create, perfect, preserve
or protect its Lien on the Common Collateral;
(3) file
any necessary or appropriate responsive or defensive pleadings in opposition to any motion, claim, adversary proceeding or other
pleading made by any Person objecting to or otherwise seeking the disallowance of the claims of the Second Priority Secured Parties,
including any claims secured by the Common Collateral, if any, in each case in accordance with the terms of this Agreement;
(4) file
any pleadings, objections, motions or agreements or take any positions that assert rights or interests available to unsecured creditors
of the Loan Parties arising under either any Insolvency Proceeding or applicable non-bankruptcy law, in each case not inconsistent
with the terms of this Agreement;
(5) vote
on any plan of reorganization, file any proof of claim, make other filings and make any arguments and motions that are, in each
case, in accordance with the terms of this Agreement, with respect to the Second Priority Obligations and the Common Collateral;
(6) exercise
any of its rights or remedies with respect to the Common Collateral after the termination of the Standstill Period to the extent
permitted by this Section 3.2;
(7) present
a cash or credit bid (in each case, so long as such bid provides for payment in full in cash of the First Priority Obligations)
at any Section 363 hearing or with respect to any other Common Collateral disposition; and
(8) bid
for or purchase Common Collateral at any private or judicial foreclosure upon such Common Collateral initiated by the First Priority
Representative and the First Priority Secured Parties, so long as the cash proceeds of such bid are sufficient to cause the First
Priority Obligations Payment Date to occur.
3.3 Judgment
Creditors. In the event that any Second Priority Secured Party becomes a judgment lien creditor as a result of its enforcement
of its rights as an unsecured creditor, any such judgment lien shall be subject to the terms of this Agreement for all purposes
(including in relation to the First Priority Liens and the First Priority Obligations) to the same extent as other Liens securing
the Second Priority Obligations are subject to the terms of this Agreement.
3.4 Cooperation.
Each Second Priority Representative, on behalf of itself and the other Second Priority Secured Parties represented by it, agrees
that each of them shall take such actions as any First Priority Representative shall reasonably request in writing in connection
with the exercise by the First Priority Secured Parties of their rights set forth herein.
3.5 No
Additional Rights For the Loan Parties Hereunder. Except as provided in Section 3.6, if any First Priority Secured Party
or Second Priority Secured Party shall enforce its rights or remedies in violation of the terms of this Agreement, no Loan Party
shall be entitled to use such violation as a defense to any action by any First Priority Secured Party or Second Priority Secured
Party, nor to assert such violation as a counterclaim or basis for set off or recoupment against any First Priority Secured Party
or Second Priority Secured Party.
3.6 Actions
Upon Breach. (a) If any Second Priority Secured Party, contrary to this Agreement, commences or participates in any action
or proceeding against any Loan Party or the Common Collateral, then unless the First Priority Representative shall object in writing,
such Loan Party may interpose as a defense or dilatory plea the making of this Agreement, and any First Priority Secured Party
may intervene and interpose such defense or plea in its or their name or in the name of such Loan Party.
(b) Should
any Second Priority Secured Party, contrary to this Agreement, in any way take, attempt to or threaten to take any action with
respect to the Common Collateral (including any attempt to realize upon or enforce any remedy with respect to this Agreement in
a manner contrary to this Agreement), or fail to take any action expressly required by this Agreement to be taken by such Second
Priority Secured Party, any First Priority Secured Party (in its own name or in the name of the relevant Loan Party) or the relevant
Loan Party may obtain relief against such Second Priority Secured Party by injunction, specific performance and/or other appropriate
equitable relief, it being understood and agreed by the Second Priority Representative on behalf of each Second Priority Secured
Party that (i) the First Priority Secured Parties’ damages from its actions may at that time be difficult to ascertain
and may be irreparable, and (ii) each Second Priority Representative, on behalf of itself and the other Second Priority Secured
Parties represented by it, hereby waives (to the extent it may lawfully do so) any defense any Second Priority Secured Party may
have that the Loan Parties and/or the First Priority Secured Parties cannot demonstrate damage and/or be made whole by the awarding
of damages.
3.7 Option
to Purchase. (a) Each First Priority Representative agrees that it will give each Second Priority Representative written
notice within five Business Days of: (i) the commencement of an Enforcement Action or the institution of any Insolvency Proceeding
or (ii) the acceleration of the First Priority Obligations. Upon receipt of such notice by each Second Priority Representative,
any Second Priority Secured Party shall have the option, but in no event the obligation, by irrevocable written notice (the “Purchase
Notice”) delivered by such Second Priority Representative to each First Priority Representative no later than ten Business
Days after receipt by such Second Priority Representative of such notice, to purchase all (but not less than all) of the First
Priority Obligations from the First Priority Secured Parties. If any Second Priority Representative so delivers the Purchase Notice,
the First Priority Representative shall terminate any existing Enforcement Actions and shall not take any further Enforcement Actions,
provided, that the Purchase (as defined below) shall have been consummated on the date specified in the Purchase Notice
in accordance with this Section 3.7. If more than one Second Priority Representative exercises its purchase option, the purchase
shall be allocated among such purchasing Second Priority Representatives pro rata by principal amount of Second Priority Obligations.
(b) On
the date specified by the Second Priority Representative in the Purchase Notice (which shall be a Business Day not less than five
Business Days, nor more than ten Business Days, after receipt by the First Priority Representative of the Purchase Notice), the
First Priority Secured Parties shall, subject to any required approval of any court or other governmental authority then in effect,
sell to the Second Priority Secured Parties electing to purchase pursuant to Section 3.7(a) (the “Purchasing
Parties”), and the Purchasing Parties shall purchase (the “Purchase”) from the First Priority Secured
Parties, the First Priority Obligations; provided, that the First Priority Obligations purchased shall not include any rights
of First Priority Secured Parties with respect to indemnification and other obligations of the Loan Parties under the First Priority
Documents that are expressly stated to survive the termination of the First Priority Documents (the “Surviving Obligations”).
(c) Without
limiting the obligations of the Loan Parties under the First Priority Documents to the First Priority Secured Parties with respect
to the Surviving Obligations (which shall not be transferred in connection with the Purchase), on the date of the Purchase, the
Purchasing Parties shall (i) pay to the First Priority Secured Parties as the purchase price (the “Purchase Price”)
therefor the full amount of all First Priority Obligations then outstanding and unpaid at par (including principal, accrued and
unpaid interest at the contract rate, fees, breakage costs, attorneys’ fees and expenses, and, in the case of any Specified
Swap Agreements, the amount that would be payable by the relevant Loan Party thereunder if it were to terminate such Specified
Swap Agreements on the date of the Purchase or, if not terminated, an amount determined by the relevant First Priority Secured
Party to be reasonably necessary to collateralize its credit risk arising out of such Specified Swap Agreements), (ii) furnish
cash collateral (the “Cash Collateral”) to the First Priority Secured Parties in such amounts as the relevant
First Priority Secured Parties determine is reasonably necessary to secure such First Priority Secured Parties in connection with
any outstanding letters of credit (not to exceed 103% of the aggregate undrawn face amount of such letters of credit), (iii) agree
to reimburse the First Priority Secured Parties for any loss, cost, damage or expense (including attorneys’ fees and expenses)
in connection with any fees, costs or expenses related to any checks or other payments provisionally credited to the First Priority
Obligations or as to which the First Priority Secured Parties have not yet received final payment and (iv) agree, after written
request from the First Priority Representative, to reimburse the First Priority Secured Parties in respect of indemnification obligations
of the Loan Parties under the First Priority Documents as to matters or circumstances known to the Purchasing Parties at the time
of the Purchase which could reasonably be expected to result in any loss, cost, damage or expense to any of the First Priority
Secured Parties, provided that, in no event shall any Purchasing Party have any liability for such amounts in excess of
proceeds of Common Collateral actually received by the Purchasing Parties.
(d) The
Purchase Price and Cash Collateral shall be remitted by wire transfer in immediately available funds to such account(s) of
each applicable First Priority Representative as it shall designate to the Purchasing Parties. Each First Priority Representative
shall, promptly following its receipt thereof, distribute the amounts received by it in respect of the Purchase Price to the First
Priority Secured Parties represented by it in accordance with the respective First Priority Agreement (subject to the First Priority
Pari Passu Intercreditor Agreement). Interest shall be calculated to but excluding the day on which the Purchase occurs if the
amounts so paid by the Purchasing Parties to the account designated by the First Priority Representative are received in such account
prior to 12:00 noon, New York City time, and interest shall be calculated to and including such day if the amounts so paid by the
Purchasing Parties to the account designated by the First Priority Representative are received in such account later than 12:00
noon, New York City time.
(e) The
Purchase shall be made without representation or warranty of any kind by the First Priority Secured Parties as to the First Priority
Obligations, the Common Collateral or otherwise and without recourse to the First Priority Secured Parties, except that the First
Priority Secured Parties shall represent and warrant: (i) the amount of the First Priority Obligations being purchased, (ii) that
the First Priority Secured Parties own the First Priority Obligations being purchased free and clear of any Liens and (iii) that
the First Priority Secured Parties have the right to assign the First Priority Obligations being assigned and the assignment is
duly authorized.
(f) For
the avoidance of doubt, the parties hereto hereby acknowledge and agree that in no event shall the Second Priority Representative
(i) be deemed to be a Purchasing Party for purposes of this Section 3.7, (ii) be subject to or liable for any obligations
of a Purchasing Party pursuant to this Section
3.7 or
(iii) incur any liability to any First Priority Secured Party or any other Person in connection with any Purchase pursuant
to this Section 3.7.
(g) To
the extent that any First Priority Secured Party is in breach of the provisions of this Section 3.7, a Purchasing Party may,
but shall not be obligated to, extend the date of the proposed Purchase on a day for day basis during the period of any breach
by such First Priority Secured Party.
3.8 Rights
as Unsecured Creditors. Except as specifically set forth in this Agreement, the Second Priority Representative and the Second
Priority Secured Parties may exercise rights and remedies available to unsecured creditors against the Loan Parties, in each case
not inconsistent with the terms of this Agreement; provided that in the event that any Second Priority Secured Party becomes
a judgment Lien creditor in respect of the Common Collateral as a result of its enforcement of its rights as an unsecured creditor
with respect to the Second Priority Obligations, such judgment Lien shall be subject to the terms of this Agreement for all purposes
(including in relation to the First Priority Obligations) as the other Liens securing the Second Priority Obligations are subject
to this Agreement.
3.9 Second
Lien Interest, Principal, Etc. Except as otherwise provided in Section 3.2 hereof, nothing in this Agreement shall prohibit
the receipt by the Second Priority Representative or any Second Priority Secured Parties of the required payments of interest,
principal and other amounts owed in respect of the Second Priority Obligations so long as such receipt is not the direct or indirect
result of the exercise by the Second Priority Representative or any Second Priority Secured Parties of rights or remedies as a
secured creditor (including set off) or enforcement in contravention of this Agreement of any Lien held by any of them. Nothing
in this Agreement impairs or otherwise adversely affects any rights or remedies the First Priority Representative or the First
Priority Secured Parties may have with respect to the Common Collateral.
SECTION 4. Application
of Proceeds of Common Collateral; Dispositions and Releases of Common Collateral; Inspection and Insurance.
4.1 Application
of Proceeds; Turnover Provisions. Until the First Priority Obligations Payment Date has occurred, all Common Collateral and
proceeds of Common Collateral (including any interest earned thereon) received in connection with an Enforcement Action, whether
or not pursuant to an Insolvency Proceeding, shall be distributed as follows: first to the respective First Priority Representatives
for application to the respective First Priority Obligations in accordance with the terms of the respective First Priority Documents
(and, if then in effect, the First Priority Pari Passu Intercreditor Agreement); provided that the aggregate principal amount
of First Priority Obligations constituting debt for borrowed money eligible for application under this clause “first”
shall not exceed the Maximum First Priority Obligations Amount (it being understood that the foregoing shall not limit the application
to First Priority Obligations constituting accrued and unpaid interest (including interest accruing at the default rate and any
Post-Petition Interest), premiums (including tender premiums and prepayment premiums), underwriting discounts, fees, commissions
and expenses (including original issue discount, upfront fees or initial yield payments), attorneys’ fees, costs, expenses
and indemnities), second, to the respective Second Priority Representatives for application to the respective Second Priority
Obligations in accordance with the terms of the respective Second Priority Documents (and, if then in effect, the Second Priority
Pari Passu Intercreditor Agreement); provided that the aggregate principal amount of Second Priority Obligations constituting
debt for borrowed money eligible for application under this clause “second” shall not exceed the Maximum Second Priority
Obligations Amount (it being understood that the foregoing shall not limit the application to Second Priority Obligations constituting
accrued and unpaid interest (including interest accruing at the default rate and any Post-Petition Interest), premiums (including
tender premiums and prepayment premiums), underwriting discounts, fees, commissions and expenses (including original issue discount,
upfront fees or initial yield payments), attorneys’ fees, costs, expenses and indemnities), third to the respective
First Priority Representatives for application to all remaining respective First Priority Obligations in accordance with the terms
of the respective First Priority Documents (and, if then in effect, the First Priority Pari Passu Intercreditor Agreement), until
the First Priority Obligations Payment Date has occurred and fourth, to the respective Second Priority Representatives for
application to all remaining respective Second Priority Obligations in accordance with the terms of the respective Second Priority
Documents (and, if then in effect, the Second Priority Pari Passu Intercreditor Agreement). Until the occurrence of the First Priority
Obligations Payment Date, any Common Collateral, including any such Common Collateral constituting proceeds, that may be received
by any Second Priority Secured Party in violation of this Agreement shall be segregated and held in trust and promptly paid over
to the Designated First Priority Representative, for the benefit of the First Priority Secured Parties, in the same form as received,
with any necessary endorsements, and each Second Priority Secured Party hereby authorizes the Designated First Priority Representative
to make any such endorsements as agent for the Second Priority Representative (which authorization, being coupled with an interest,
is irrevocable).
4.2 Releases
of Second Priority Lien. (a) Upon any release, sale or disposition of Common Collateral permitted pursuant to the terms
of the First Priority Documents that results in the release of the First Priority Lien on any Common Collateral (excluding any
sale or other disposition that is expressly prohibited by the Second Priority Agreement as in effect on the date hereof (except
to the extent more restrictive than the Second Priority Agreement) unless such sale or disposition is consummated (x) in connection
with an Enforcement Action or (y) after the institution of any Insolvency Proceeding), (i) the Second Priority Lien on
such Common Collateral (excluding any portion of the proceeds of such Common Collateral remaining after the First Priority Obligations
Payment Date occurs), (and in the case of any release, sale or disposition of all or substantially all of the equity interests
or assets of any Loan Party that has guaranteed any Second Priority Obligations, such Loan Party’s liability in respect of
the Second Priority Obligations) shall be automatically and unconditionally released to the same extent as so released by the First
Priority Secured Parties with no further consent or action of any Person, and (ii) the Second Priority Creditors shall be
deemed to have consented under the Second Priority Documents to such release, sale or disposition of such Common Collateral (and
in the case of any release, sale or disposition of all or substantially all of the equity interests or assets of any Loan Party
that has guaranteed any Second Priority Obligations, the release of such Loan Party’s liability in respect of the Second
Priority Obligations), and to have waived the provisions of the Second Priority Documents to the extent necessary to permit such
release, sale or disposition (and in the case of any release, sale or disposition of all or substantially all of the equity interests
or assets of any Loan Party that has guaranteed any Second Priority Obligations, the release of such Loan Party’s liability
in respect of the Second Priority Obligations).
(b) Upon
delivery to each Second Priority Representative of a notice from the applicable First Priority Representative or the Borrower,
which notice states that any release of Liens securing or supporting any First Priority Obligations has become effective (or shall
become effective upon the satisfaction of any condition or occurrence of any event, including the release by each Second Priority
Representative), each Second Priority Representative shall, at the sole cost of the Borrower, promptly execute and deliver such
release documents and instruments and shall take such further actions as any First Priority Representative shall reasonably request
in writing to evidence any release of the Second Priority Lien or any release of the applicable Loan Party guarantor of the Second
Priority Obligations (which shall be subject to identical conditions or contingencies, if applicable), in each case as provided
in paragraph (a) of this Section 4.2. Each Second Priority Representative hereby appoints each First Priority
Representative and any officer or duly authorized person of the First Priority Representative, with full power of substitution,
as its true and lawful attorney-in-fact with full irrevocable power of attorney in the place and stead of the Second Priority
Representative and in the name of the Second Priority Representative or in such First Priority Representative’s own name,
from time to time, in such First Priority Representative’s sole discretion, for the purposes of carrying out the terms of
this Section 4.2, to take any and all appropriate action and to execute and deliver any and all documents and instruments
as may be necessary or desirable to accomplish the purposes of this Section 4.2, including any financing statements, endorsements,
assignments, releases or other documents or instruments of transfer (which appointment, being coupled with an interest, is irrevocable).
4.3 Inspection
Rights and Insurance. (a) Until the First Priority Obligations Payment Date has occurred, any First Priority Secured
Party and its representatives may at any time inspect, repossess, remove and otherwise deal with the Common Collateral to the
extent permitted in accordance with the terms of the First Priority Documents, and the First Priority Representative may advertise
and conduct public auctions or private sales of the Common Collateral, in each case without the involvement of or interference
by any Second Priority Secured Party or liability to any Second Priority Secured Party, but with a prior written notice to the
Designated Second Priority Representative.
(b) Proceeds
of Common Collateral include insurance proceeds in respect of such Common Collateral and therefore the lien priorities provided
in Section 2.1 shall govern the ultimate disposition of casualty insurance proceeds. The First Priority Representative and
Second Priority Representative are to be named as additional insureds and loss payees with respect to all insurance policies relating
to Common Collateral to the extent required in the First Priority Documents and the Second Priority Documents, as applicable.
Until the First Priority Obligations Payment Date has occurred, the Designated First Priority Representative shall have the sole
and exclusive right, as against the Second Priority Representative, to adjust or settle any insurance claims in the event of any
covered loss, theft or destruction of Common Collateral to the extent provided for, and in accordance with, the First Priority
Agreements. To the extent provided in the applicable First Priority Documents or Second Priority Documents, as the case may be,
all proceeds of such insurance shall be remitted to the Designated First Priority Representative or the Designated Second Priority
Representative, as the case may be, and each of the Second Priority Representatives and First Priority Representatives shall cooperate
(if necessary) in a reasonable manner in effecting the payment of insurance proceeds in accordance with Section 4.1.
SECTION 5. Insolvency
Proceedings.
5.1 Filing
of Motions. Until the First Priority Obligations Payment Date has occurred, each Second Priority Representative agrees on
behalf of itself and the other Second Priority Secured Parties represented by it that no Second Priority Secured Party shall,
in or in connection with any Insolvency Proceeding, file any pleadings or motions, take any position at any hearing or proceeding
of any nature, or otherwise take any action whatsoever, in each case that (a) violates, or is prohibited by, this Agreement,
(b) asserts any right, benefit or privilege that arises in favor of the Second Priority Secured Parties, in whole or in part,
as a result of their interest in the Common Collateral (unless the assertion of such right is expressly permitted by this Agreement)
or (c) challenges the validity, priority, enforceability or voidability of any Liens or claims held by any First Priority
Representative or any other First Priority Secured Party with respect to the Common Collateral, or the extent to which the First
Priority Obligations constitute secured claims or the value thereof under Section 506(a) of the Bankruptcy Code or otherwise;
provided that the Second Priority Representative may (i) file a proof of claim in an Insolvency Proceeding and (ii) file
any necessary responsive or defensive pleadings in opposition to any motion or other pleadings made by any Person objecting to
or otherwise seeking the disallowance of any claims of the Second Priority Secured Parties on the Common Collateral, subject to
the limitations contained in this Agreement and only if consistent with the terms and the limitations on the Second Priority Representative
imposed hereby. Each First Priority Representative agrees on behalf of itself and the other First Priority Secured Parties represented
by it that no First Priority Secured Party shall, in or in connection with any Insolvency Proceeding, file any pleadings or motions,
take any position at any hearing or proceeding of any nature, or otherwise take any action whatsoever, in each case that challenges
the validity, priority, enforceability or voidability of any Liens or claims held by any Second Priority Representative or any
other Second Priority Secured Party, or the extent to which the Second Priority Obligations constitute secured claims under Section 506(a) of
the Bankruptcy Code or otherwise.
5.2 Financing
Matters. If any Loan Party becomes subject to any Insolvency Proceeding at any time prior to the First Priority Obligations
Payment Date, and if any First Priority Representative or the other First Priority Secured Parties desire to consent (or not object)
to the use of cash collateral under the Bankruptcy Code or to provide financing to any Loan Party under the Bankruptcy Code or
to consent (or not object) to the provision of such financing to any Loan Party by any third party (any such financing, “DIP
Financing”), then each Second Priority Representative agrees, on behalf of itself and the other Second Priority Secured
Parties represented by it, that each Second Priority Secured Party (a) will be deemed to have consented to, will raise no
objection to, nor support any other Person objecting to, the use of such cash collateral or to such DIP Financing, (b) will
not request or accept adequate protection or any other relief in connection with the use of such cash collateral or such DIP Financing
except as set forth in Section 5.4 below, (c) will subordinate (and will be deemed hereunder to have subordinated) the
Second Priority Liens (i) to such DIP Financing on the same terms as the First Priority Liens are subordinated thereto (and
such subordination will not alter in any manner the terms of this Agreement), (ii) to any adequate protection provided to
the First Priority Secured Parties and (iii) to any “carve-out” agreed to by the First Priority Representative
or the other First Priority Secured Parties, and (d) agrees that notice received two calendar days prior to the entry of
an order approving such usage of cash collateral or approving such financing shall be adequate notice and that notice received
15 calendar days prior to a hearing to approve DIP Financing or use of cash collateral on a final basis shall be adequate; provided
that (i) the Second Priority Representative retains the right to object to any ancillary agreements or arrangements regarding
the cash collateral use or the DIP Financing that are materially prejudicial to their interests and (ii) (A) the DIP
Financing does not compel the Borrower to seek confirmation of a specific plan of reorganization for which all or substantially
all of the material terms are set forth in the DIP Financing documentation or a related document or (B) the DIP Financing
documentation or cash collateral order does not expressly require the sale or other liquidation of the Common Collateral prior
to a default under the DIP Financing documentation or cash collateral order.
No Second Priority
Creditor may propose or provide any DIP Financing which (i) rolls-up or otherwise includes or refinances all or any portion
of any pre-petition Second Priority Obligations, (ii) compels the Borrower to seek confirmation of a specific plan of reorganization
for which all or substantially all of the material terms are set forth in the DIP Financing documentation or a related document,
(iii) expressly requires the sale or other liquidation of the Common Collateral prior to a default under such DIP Financing
documentation or (iv) is otherwise inconsistent with any provision of this Agreement.
5.3 Relief
From the Automatic Stay. Each Second Priority Representative agrees, on behalf of itself and the other Second Priority Secured
Parties represented by it, that none of them will seek relief from the automatic stay or from any other stay in any Insolvency
Proceeding or take any action in derogation thereof, in each case in respect of any Common Collateral, without the prior written
consent of each First Priority Representative unless each First Priority Representative have concurrently sought relief from the
automatic stay or from any other stay in any Insolvency Proceeding and the Second Priority Representative and/or the other Second
Priority Secured Parties are not seeking relief from the automatic stay or from any other stay in any Insolvency Proceeding in
order to take any Enforcement Action in any manner in violation of or otherwise inconsistent with the provisions of this Agreement.
5.4 Adequate
Protection. Each Second Priority Representative, on behalf of itself and the other Second Priority Secured Parties represented
by it, agrees that, prior to the First Priority Obligations Payment Date, none of them shall object, contest, or support any other
Person objecting to or contesting, (a) any request by any First Priority Representative or the other First Priority Secured
Parties for adequate protection of its interest in the Common Collateral or any adequate protection provided to such First Priority
Representative or the other First Priority Secured Parties, (b) any objection by any First Priority Representative or any
other First Priority Secured Parties to any motion, relief, action or proceeding based on a claim of a lack of adequate protection
in the Common Collateral or (c) the payment of interest, fees, expenses or other amounts to any First Priority Representative
or any other First Priority Secured Party under Section 506(b) or 506(c) of the Bankruptcy Code or otherwise. Each
Second Priority Representative, on behalf of itself and the other Second Priority Secured Parties represented by it, further agrees
that, prior to the First Priority Obligations Payment Date, none of them shall assert or enforce any claim under Section 506(b) or
506(c) of the Bankruptcy Code or otherwise that is senior to or on a parity with the First Priority Liens for costs or expenses
of preserving or disposing of any Common Collateral. Notwithstanding anything to the contrary set forth in this Section and
in Section 5.2(c)(ii), but subject to all other provisions of this Agreement (including Section 5.2(c)(i) and Section 5.3),
in any Insolvency Proceeding, (i) if the First Priority Secured Parties (or any subset thereof) are granted adequate protection
consisting of additional collateral (with replacement Liens on such additional collateral) and/or superpriority claims in connection
with any DIP Financing or use of cash collateral with respect to the Common Collateral, and the Second Priority Secured Parties
do not object to the adequate protection being provided to the First Priority Secured Parties, then in connection with any such
DIP Financing or use of cash collateral each Second Priority Representative, on behalf of itself and any of the Second Priority
Secured Parties, may, as adequate protection of their interests in the Common Collateral, seek or accept (and the First Priority
Representative and the First Priority Secured Parties shall not object to) adequate protection consisting solely of (x) a
replacement Lien on the same additional collateral, subordinated to the Liens securing the First Priority Obligations and such
DIP Financing on the same basis as the other Second Priority Liens on the Common Collateral are so subordinated to the First Priority
Obligations under this Agreement and/or (y) superpriority claims junior in all respects to the superpriority claims granted
to the First Priority Secured Parties; provided, however, that the inability of the Second Priority Secured Parties to
receive any such junior replacement Lien or junior superpriority claims shall not affect the agreements and waivers set forth
in this Section 5.4; provided, further, that each Second Priority Representative shall have irrevocably agreed, pursuant
to Section 1129(a)(9) of the Bankruptcy Code, on behalf of itself and the Second Priority Secured Parties represented
by it, in any stipulation and/or order granting such adequate protection, that such junior superpriority claims may be paid under
any plan of reorganization in any combination of cash, debt, equity or other property having a value on the effective date of
such plan equal to the allowed amount of such claims; (ii) if the First Priority Secured Parties are granted, as adequate
protection or otherwise, post-petition interest (in an amount that is equal to or exceeds the pre-default rate) and reasonable
fees and expenses of counsel and financial advisors and consultants of any First Priority Representative, then each Second Priority
Representative, on behalf of itself and any of the Second Priority Secured Parties represented by it, may seek or accept, whether
as adequate protection or otherwise, and the First Priority Secured Parties shall consent to, and shall not object, contest or
support any other Person objecting to or contesting, (x) the payment of post-petition interest (in an amount that is equal
to or exceeds the pre-default rate) and (y) the reasonable fees and expenses of counsel and financial advisors and consultants
for the Second Priority Representative; (iii) if the First Priority Secured Parties (or any subset thereof) are granted any
other adequate protection not described in clauses (i) or (ii) above, then each Second Priority Representative, on behalf
of itself and any of the Second Priority Secured Parties represented by it, may seek or accept, and the First Priority Secured
Parties shall consent to and not object, contest or support any other Person objecting to or contesting, the same adequate protection
(which, if applicable, shall be junior in all respects to such adequate protection granted to the First Priority Secured Parties);
provided, however, in the event any Second Priority Representative, on behalf of itself and the Second Priority Secured
Parties represented by it, seeks or accepts adequate protection in accordance with clause (i) above and such adequate protection
is granted in the form of additional collateral, then such Second Priority Representative, on behalf of itself or any of the Second
Priority Secured Parties represented by it, agrees that each First Priority Representative shall also be granted a senior Lien
on such additional collateral as security for the applicable First Priority Obligations and any such DIP Financing and that any
Lien on such additional collateral securing the Second Priority Obligations shall be subordinated to the Liens on such collateral
securing the First Priority Obligations and any such DIP Financing (and all Obligations relating thereto) and any other Liens
granted to the First Priority Secured Parties as adequate protection, with such subordination to be on the same terms that the
other Liens securing the Second Priority Obligations are subordinated to such First Priority Obligations under this Agreement.
Each Second Priority Representative, on behalf of itself and the other Second Priority Secured Parties represented by it, agrees
that except as expressly set forth in this Section none of them shall seek or accept adequate protection with respect to
their interests in the Common Collateral or any payments of post-petition interest, expenses or other amounts in respect of the
Second Priority Obligations, in each case, without the prior written consent of the Designated First Priority Representative.
None of the Second Priority Representatives or Second Priority Secured Parties shall oppose or seek to challenge any claim by
any First Priority Representative or any other First Priority Secured Party for allowance in any Insolvency Proceeding of First
Lien Obligations consisting of Post-Petition Interest to the extent of the value of the Lien of the First Priority Representatives
on behalf of the First Priority Secured Parties on the Common Collateral or any other First Priority Secured Party’s Lien
on the Common Collateral, without regard to the existence of the Liens of the Second Priority Representatives or the other Second
Priority Secured Parties on the Common Collateral. None of the First Priority Representatives or First Priority Secured Parties
shall oppose or seek to challenge any claim by any Second Priority Representative or any other Second Priority Secured Party for
allowance in any Insolvency Proceeding of Second Lien Obligations consisting of Post-Petition Interest to the extent of the value
of the Lien of the Second Priority Representatives on behalf of the Second Priority Secured Parties on the Common Collateral or
any other Second Priority Secured Party’s Lien on the Common Collateral, after taking into account the First Priority Obligations.
5.5 Avoidance
Issues. If any First Priority Secured Party is required in any Insolvency Proceeding or otherwise to disgorge, turn over or
otherwise pay to the estate of any Loan Party any amount (a “Recovery”), whether received as proceeds of security,
enforcement of any right of set-off or otherwise, because such amount was avoided or ordered to be paid or disgorged for any reason,
including because it was found to be a fraudulent or preferential transfer, then the First Priority Obligations shall be reinstated
to the extent of such Recovery and deemed to be outstanding as if such payment had not occurred and the First Priority Obligations
Payment Date shall be deemed not to have occurred. If this Agreement shall have been terminated prior to such Recovery, this Agreement
shall be reinstated in full force and effect, and such prior termination shall not diminish, release, discharge, impair or otherwise
affect the obligations of the parties hereto. Each Second Priority Representative, on behalf of itself and each of the other Second
Priority Secured Parties represented by it, agrees that none of them shall be entitled to benefit from any avoidance action affecting
or otherwise relating to any distribution or allocation made in accordance with this Agreement, whether by preference or otherwise,
it being understood and agreed that the benefit of such avoidance action otherwise allocable to them shall instead be allocated
and turned over for application in accordance with the priorities set forth in this Agreement.
5.6 Asset
Dispositions in an Insolvency Proceeding. In an Insolvency Proceeding, neither the Second Priority Representative nor any
other Second Priority Secured Party shall oppose any sale or disposition of any assets of any Loan Party that is supported by
any First Priority Representative and the Second Priority Representative and each other Second Priority Secured Party will be
deemed to have consented under Section 363 of the Bankruptcy Code (and otherwise) to any sale or disposition supported by
the First Priority Secured Parties and to have released their Liens on such assets.
5.7 Separate
Grants of Security and Separate Classification. Each Secured Party acknowledges and agrees that (a) the grants of Liens
pursuant to the First Priority Collateral Documents and the Second Priority Collateral Documents constitute separate and distinct
grants of Liens and (b) because of, among other things, their differing rights in the Common Collateral, the First Priority
Obligations and the Second Priority Obligations are fundamentally different from each other and must be separately classified
in any plan of reorganization proposed or adopted in an Insolvency Proceeding. To further effectuate the intent of the parties
as provided in the immediately preceding sentence, if it is held that the claims of the First Priority Secured Parties and Second
Priority Secured Parties in respect of the Common Collateral constitute only one secured claim (rather than separate classes of
senior and junior secured claims), then each Second Priority Representative, on behalf of itself and the other Second Priority
Secured Parties represented by it, hereby acknowledges and agrees that all distributions shall be made as if there were separate
classes of senior and junior secured claims against the Loan Parties in respect of the Common Collateral, with the effect being
that, to the extent that the aggregate value of the Common Collateral is sufficient (for this purpose ignoring all claims held
by the Second Priority Secured Parties), the First Priority Secured Parties shall be entitled to receive, in addition to amounts
distributed to them in respect of principal, pre-petition interest and other claims, all amounts owing in respect of Post- Petition
Interest before any distribution is made in respect of the claims held by the Second Priority Secured Parties. Each Second Priority
Representative, on behalf of itself and the other Second Priority Secured Parties represented by it, hereby acknowledges and agrees
to turn over to the Designated First Priority Representative amounts otherwise received or receivable by them to the extent necessary
to effectuate the intent of the preceding sentence, even if such turnover has the effect of reducing the claim or recovery of
the Second Priority Secured Parties.
5.8 No
Waivers of Rights of First Priority Secured Parties. Nothing contained herein shall prohibit or in any way limit any First
Priority Representative or any other First Priority Secured Party from objecting in any Insolvency Proceeding or otherwise to
any action taken by any Second Priority Secured Party not expressly permitted hereunder, including the seeking by any Second Priority
Secured Party of adequate protection (except as provided in Section 5.4).
5.9 Other
Matters. To the extent that any Second Priority Representative or any Second Priority Secured Party has or acquires rights
under Section 363 or Section 364 of the Bankruptcy Code with respect to any of the Common Collateral, the Second Priority
Representative agrees, on behalf of itself and the other Second Priority Secured Parties not to assert any of such rights without
the prior written consent of the Designated First Priority Representative unless expressly permitted to do so hereunder.
5.10 Effectiveness
in Insolvency Proceedings. This Agreement, which the parties hereto expressly acknowledge is a “subordination agreement”
under section 510(a) of the Bankruptcy Code, shall be effective before, during and after the commencement of an Insolvency
Proceeding.
5.11 Reorganization
Securities. If, in any Insolvency Proceeding, debt obligations of the reorganized debtor secured by Liens upon any property
of the reorganized debtor are distributed pursuant to a plan of reorganization or similar dispositive restructuring plan, both
on account of First Priority Obligations and on account of Second Priority Obligations, then, to the extent the debt obligations
distributed on account of the First Priority Obligations and on account of the Second Priority Obligations are secured by Liens
upon the same property, the provisions of this Agreement will survive the distribution of such debt obligations pursuant to such
plan and will apply with like effect to the Liens securing such debt obligations, provided that this provision shall not
affect the relative rankings of the First Priority Obligations and the Second Priority Obligations in such Insolvency Proceeding.
SECTION 6. Security
Documents.
(a) Each
Loan Party and each Second Priority Representative, on behalf of itself and the Second Priority Secured Parties represented by
it, agrees that it shall not at any time execute or deliver any amendment or other modification to any of the Second Priority
Documents in violation of this Agreement.
(b) Each
Loan Party and the First Priority Representative, on behalf of itself and the First Priority Secured Parties represented by it,
agrees that it shall not at any time execute or deliver any amendment or other modification to any of the First Priority Documents
in violation of this Agreement.
(c) In
the event any First Priority Representative enters into any amendment, waiver or consent in respect of any of its First Priority
Collateral Documents for the purpose of adding to, or deleting from, or waiving or consenting to any departures from any provisions
of, any First Priority Collateral Document or changing in any manner the rights of any parties thereunder, in each case solely
with respect to any Common Collateral, then such amendment, waiver or consent shall apply automatically to any comparable provision
of the Comparable Second Priority Collateral Document without the consent of or action by any Second Priority Secured Party (with
all such amendments, waivers and modifications subject to the terms hereof); provided that (i) no such amendment,
waiver or consent shall have the effect of releasing assets subject to the Lien of any Second Priority Collateral Document, except
to the extent that a release of such Lien is permitted or required by Section 4.2, (ii) any such amendment, waiver or
consent that materially and adversely affects the rights of the Second Priority Secured Parties and does not affect the First
Priority Secured Parties in a like or similar manner shall not apply to the Second Priority Collateral Documents without the consent
of the Second Priority Representative, (iii) no such amendment, waiver or consent with respect to any provision applicable
to the rights, interests or obligations of the Second Priority Representative under the Second Priority Documents shall be made
without the prior written consent of such Second Priority Representative and (iv) notice of such amendment, waiver or consent
shall be given to the Second Priority Representative no later than ten Business Days after its effectiveness, provided
that the failure to give such notice shall not affect the effectiveness and validity thereof.
SECTION 7. Reliance;
Waivers; etc.
7.1 Reliance.
All extensions of credit under the First Priority Documents made after the date hereof are deemed to have been made or incurred,
in reliance upon this Agreement. Each Second Priority Representative, on behalf of itself and the Second Priority Secured Parties
represented by it, expressly waives all notice of the acceptance of and reliance on this Agreement by the First Priority Secured
Parties. The Second Priority Documents are deemed to have been executed and delivered and all extensions of credit thereunder
are deemed to have been made or incurred, in reliance upon this Agreement. Each First Priority Representative, on behalf of itself
and the other First Priority Secured Parties represented by it, expressly waives all notices of the acceptance of and reliance
on this Agreement by the Second Priority Representative and the other Second Priority Secured Parties.
7.2 No
Warranties or Liability. Each Second Priority Representative and the each First Priority Representative acknowledges and agrees
that it has not made any representation or warranty with respect to the execution, validity, legality, completeness, collectability
or enforceability of any First Priority Document or any Second Priority Document. Except as otherwise provided in this Agreement
(and except as separately agreed among the First Priority Representatives in the First Priority Pari Passu Intercreditor Agreement
or as separately agreed among the Second Priority Representatives in the Second Priority Pari Passu Intercreditor Agreement),
each Second Priority Representative and each First Priority Representative will be entitled to manage and supervise their respective
extensions of credit to any Loan Party in accordance with law and their usual practices, modified from time to time as they deem
appropriate.
7.3 No
Waivers. No right or benefit of any party hereunder shall at any time in any way be prejudiced or impaired by any act or failure
to act on the part of such party or any other party hereto or by any noncompliance by any Loan Party with the terms and conditions
of any of the First Priority Documents or the Second Priority Documents.
SECTION 8. Obligations
Unconditional.
8.1 First
Priority Obligations Unconditional. All rights and interests of the First Priority Secured Parties hereunder, and all agreements
and obligations of the Second Priority Secured Parties (and, to the extent applicable, the Loan Parties) hereunder, shall remain
in full force and effect irrespective of:
(a) any
lack of validity or enforceability of any First Priority Document;
(b) any
change in the time, place or manner of payment of, or in any other term of, all or any portion of the First Priority Obligations,
or any amendment, waiver or other modification, whether by course of conduct or otherwise, or any refinancing, replacement, refunding
or restatement of any First Priority Document;
(c) prior
to the First Priority Obligations Payment Date, any exchange, release, voiding, avoidance or non-perfection of any security interest
in any Common Collateral or any other collateral, or any release, amendment, waiver or other modification, whether by course of
conduct or otherwise, or any refinancing, replacement, refunding or restatement of all or any portion of the First Priority Obligations
or any guarantee or guaranty thereof; or
(d) any
other circumstances that otherwise might constitute a defense available to, or a discharge of, any Loan Party in respect of the
First Priority Obligations, or of any of the Second Priority Representative or any other Second Priority Secured Party, or any
Loan Party, to the extent applicable, in respect of this Agreement (other than the occurrence of the First Priority Obligations
Payment Date).
8.2 Second
Priority Obligations Unconditional. All rights and interests of the Second Priority Secured Parties hereunder, and all agreements
and obligations of the First Priority Secured Parties (and, to the extent applicable, the Loan Parties) hereunder, shall remain
in full force and effect irrespective of:
(a) any
lack of validity or enforceability of any Second Priority Document;
(b) any
change in the time, place or manner of payment of, or in any other term of, all or any portion of the Second Priority Obligations,
or any amendment, waiver or other modification, whether by course of conduct or otherwise, or any refinancing, replacement, refunding
or restatement of any Second Priority Document;
(c) any
exchange, release, voiding, avoidance or non-perfection of any security interest in any Common Collateral or any other collateral,
or any release, amendment, waiver or other modification, whether by course of conduct or otherwise, or any refinancing, replacement,
refunding or restatement of all or any portion of the Second Priority Obligations or any guarantee or guaranty thereof; or
(d) any
other circumstances that otherwise might constitute a defense available to, or a discharge of, any Loan Party in respect of the
Second Priority Obligations or any First Priority Secured Party in respect of this Agreement other than payment in full of the
Second Priority Obligations.
SECTION 9. Miscellaneous.
9.1 Conflicts.
In the event of any conflict between the provisions of this Agreement and the provisions of any First Priority Document or any
Second Priority Document, the provisions of this Agreement shall govern. Notwithstanding the foregoing, the parties hereto acknowledge
that the terms of this Agreement are not intended to and shall not, as between the Loan Parties and the Secured Parties, negate,
impair, waive or cancel any rights granted to, or create any liability or obligation of, any Loan Party in the First Priority
Documents and the Second Priority Documents or impose any additional obligations on the Loan Parties (other than as expressly
set forth herein). Notwithstanding the foregoing, solely as among the First Priority Representatives and First Priority Secured
Parties, in the event of any conflict between this Agreement and the First Priority Pari Passu Intercreditor Agreement, the provisions
of the First Priority Pari Passu Intercreditor Agreement shall govern and control. Notwithstanding the foregoing, solely as among
the Second Priority Representatives and Second Priority Secured Parties, in the event of any conflict between this Agreement and
the Second Priority Pari Passu Intercreditor Agreement, the provisions of the Second Priority Pari Passu Intercreditor Agreement
shall govern and control. Notwithstanding the foregoing, solely in respect of the relative rights between the ABL Secured Parties
on the one hand and the First Priority Secured Parties and Second Priority Secured Parties, collectively, on the other hand, and
not to any rights or obligations between the First Priority Secured Parties and the Second Priority Secured Parties, in the event
of any conflict between this Agreement and the ABL Intercreditor Agreement, the provisions of the ABL Intercreditor Agreement
shall govern.
9.2 Continuing
Nature of Provisions. This Agreement shall continue to be effective, and shall not be revocable by any party hereto, until
the First Priority Obligation Payment Date shall have occurred subject to the reinstatement as expressly set forth herein. This
is a continuing agreement and the First Priority Secured Parties and the Second Priority Secured Parties may continue, at any
time and without notice to the other parties hereto, to extend credit and other financial accommodations, lend monies and provide
indebtedness to, or for the benefit of, Borrower or any other Loan Party on the faith hereof.
9.3 Amendments;
Waivers. (a) No amendment or modification of any of the provisions of this Agreement shall be effective unless the same
shall be in writing and signed by (i) each First Priority Representative (in accordance with the applicable First Priority
Agreement) and each Second Priority Representative (in accordance with the applicable Second Priority Agreement) with respect
to any amendment or modification, and (ii) the Loan Parties, solely with respect to (x) any amendments or modifications
of Sections 3.6, 5.2, 5.4, 5.10, 6(a), 6(b), 6(c), 9.1, 9.2, 9.3, 9.4, 9.5, 9.6, 9.7, 9.8, 9.9, 9.10, 9.11, 9.12, 9.13, 9.14 or
9.15, or (y) any amendments or modifications that (I) adversely affect any obligation or right of the Loan Parties hereunder
or under the First Priority Documents or the Second Priority Documents or that would impose any additional obligations on the
Loan Parties or (II) change the rights of the Loan Parties to refinance the First Priority Obligations or the Second Priority
Obligations. In addition, each waiver, if any, with respect to any aspect of this Agreement shall be a waiver only with respect
to the specific instance involved and shall in no way impair the rights of the parties making such waiver or the obligations of
the other parties to such party in any other respect or at any other time.
9.4 Additional
Debt Facilities.
(a) To
the extent, but only to the extent, permitted by the provisions of each then extant First Priority Agreement and Second Priority
Agreement (including, in each case, pursuant to any consent or waiver thereto or thereunder), the Borrower may incur or issue
and sell one or more series or classes of Indebtedness that the Borrower designates as Additional First Priority Debt (“Additional
First Priority Debt”) and/or one or more series or classes of Indebtedness that the Borrower designates as Additional
Second Priority Debt (“Additional Second Priority Debt” and, together with Additional First Priority Debt,
“Additional Debt”).
Any such series or
class of Additional First Priority Debt may be secured by a first-priority, senior Lien on the Common Collateral, in each case
under and pursuant to the First Priority Collateral Documents for such Series of Additional First Priority Debt, if and subject
to the condition that, unless such Indebtedness is part of an existing Series of Additional First Priority Debt represented
by a First Priority Representative already party to this Agreement and the First Priority Pari Passu Intercreditor Agreement,
the Additional First Priority Representative with respect to any such Additional First Priority Debt becomes a party to this Agreement
and the First Priority Pari Passu Intercreditor Agreement by satisfying the conditions set forth in this Section 9.4. Upon
any Additional First Priority Representative so becoming a party hereto and becoming a party to the First Priority Pari Passu
Intercreditor Agreement in accordance with the terms thereof, all First Priority Obligations of such Series shall also be
entitled to be so secured by a senior Lien on the Common Collateral in accordance with the terms hereof and thereof.
Any such series or
class of Additional Second Priority Debt may be secured by a junior-priority, subordinated Lien on the Common Collateral, in each
case under and pursuant to the relevant Second Priority Collateral Documents for such Series of Additional Second Priority
Debt, if and subject to the condition, unless such Indebtedness is part of an existing Series of Additional Second Priority
Debt represented by a Second Priority Representative already party to this Agreement and the Second Priority Pari Passu Intercreditor
Agreement, the Additional Second Priority Representative with respect to any such Additional Second Priority Debt becomes a party
to this Agreement and the Second Priority Pari Passu Intercreditor Agreement by satisfying the conditions set forth in this Section 9.4.
Upon any Additional Second Priority Representative so becoming a party hereto and becoming a party to the Second Priority Pari
Passu Intercreditor Agreement in accordance with the terms thereof, all Second Priority Obligations of such Series shall
also be entitled to be so secured by a subordinated Lien on the Common Collateral in accordance with the terms hereof and thereof.
(b) In
order for an Additional Representative to become a party to this Agreement:
(i) such
Additional Representative shall have executed and delivered to each other then-existing First Priority Representative and Second
Priority Representative a Joinder Agreement substantially in the form of Exhibit A hereto (with such changes as may be reasonably
approved by the Designated First Priority Representative and such Additional Representative) pursuant to which such Additional
Representative becomes an Additional First Priority Representative or Additional Second Priority Representative hereunder and
the related First Priority Secured Parties or Second Priority Secured Parties, as applicable, become subject hereto and bound
hereby;
(ii) the
Borrower shall have delivered a designation to each other then-existing First Priority Representative and Second Priority Representative
substantially in the form of Exhibit B hereto, pursuant to which an officer of the Borrower shall (A) identify the Indebtedness
to be designated as Additional First Priority Debt or Additional Second Priority Debt, as applicable, and the initial aggregate
principal amount of such Indebtedness, (B) identify the Additional First Priority Agreement or Additional Second Priority
Agreement as applicable, (C) specify the name and address of the applicable Additional Representative, (D) certify that
such Additional Debt, is permitted to be incurred, secured and guaranteed by each then extant First Priority Agreement and Second
Priority Agreement and (D) attach to such designation true and complete copies of each of the First Priority Agreement or
Second Priority Agreement, as applicable, relating to such Additional First Priority Debt or Additional Second Priority Debt,
as applicable.
(iii) Upon
the execution and delivery of a Joinder Agreement by an Additional First Priority Representative or an Additional Second Priority
Representative, as the case may be, in each case in accordance with this Section 9.4, each other First Priority Representative
and Second Priority Representative shall acknowledge receipt thereof by countersigning a copy thereof and returning the same to
such Additional Representative; provided that the failure of any First Priority Representative or Second Priority Representative
to so acknowledge or return the same shall not affect the status of such Additional Debt as Additional First Priority Debt or
Additional Second Priority Debt, as the case may be, if the other requirements of this Section 9.4 are complied with.
(c) With
respect to any incurrence, issuance or sale of Indebtedness after the date hereof under any Additional First Priority Agreement
or Additional Second Priority Agreement, in each case, of a Series of Additional First Priority Debt or Series of Additional
Second Priority Debt whose Representative is already a party to each of this Agreement and the First Priority Pari Passu Intercreditor
Agreement or Second Priority Pari Passu Intercreditor Agreement, as applicable, the requirements of Section 9.4 shall not
be applicable and such Indebtedness shall automatically constitute Additional First Priority Debt or Additional Second Priority
Debt so long as such Indebtedness is permitted to be incurred, secured and guaranteed by each First Priority Agreement and Second
Priority Agreement.
9.5 Information
Concerning Financial Condition of the Borrower and the Loan Parties. Neither any Second Priority Representative nor any First
Priority Representative hereby assumes responsibility for keeping each other informed of the financial condition of the Borrower
and of any of the Loan Parties and all other circumstances bearing upon the risk of nonpayment of the First Priority Obligations
or the Second Priority Obligations. Each Second Priority Representative and each First Priority Representative hereby agree that
no party shall have any duty to advise any other party of information known to it regarding such condition or any such circumstances.
In the event any Second Priority Representative or any First Priority Representative, in its sole discretion, undertakes at any
time or from time to time to provide any information to any other party to this Agreement, it shall be under no obligation (a) to
provide or update any such information to such other party or any other party on any subsequent occasion, (b) to undertake
any investigation not a part of its regular business routine, or (c) to disclose any other information. Neither any First
Priority Representative nor any Second Priority Representative shall have any responsibility to monitor or verify the financial
condition of the Borrower or of any of the Loan Parties.
9.6 Refinancings.
The First Priority Obligations and the Second Priority Obligations may be Refinanced, in whole or in part, in each case, without
notice to, or the consent (except to the extent a consent is otherwise required to permit the refinancing transaction under any
First Priority Agreement or any Second Priority Agreement) of, any First Priority Representative or Second Priority Representative
or any Secured Party, all without affecting the Lien priorities provided for herein or the other provisions hereof; provided,
that (i) such Refinancing is permitted pursuant to the terms of each then extant First Priority Agreement and Second Priority
Agreement and (ii) the Representative for the holders of obligations in respect of such Refinancing shall have become party
to this Agreement pursuant to, and by satisfying the conditions set forth in, Section 9.4 hereof.
9.7 Governing
Law. THIS AGREEMENT AND ANY CLAIMS, CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE)
BASED UPON, ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
9.8 Submission
to Jurisdiction. (a) Each First Priority Representative, on behalf of itself and the other First Priority Secured Parties
represented by it, and each Second Priority Representative, on behalf of itself and the other Second Priority Secured Parties
represented by it, and the Loan Parties hereby agree that each First Priority Secured Party, each Second Priority Secured Party
and each Loan Party shall irrevocably and unconditionally submit, for itself and its property, to the exclusive general jurisdiction
of the Supreme Court of the State of New York and of the United States District Court of the Southern District of New York, sitting
in the Borough of Manhattan in the City of New York, and any appellate court from any thereof (except that, (x) in the case
of any Mortgage or other Security Document, proceedings may also be brought by the applicable First Priority Representative or
Second Priority Representative in the state in which the respective mortgaged property or Common Collateral is located or any
other relevant jurisdiction and (y) in the case of any Insolvency Proceedings with respect to any Loan Party, actions or
proceedings related to this Agreement and the other First Priority Documents or Second Priority Documents may be brought in such
court holding such Insolvency Proceedings), in any action or proceeding arising out of or relating to this Agreement, or for recognition
or enforcement of any judgment with respect to this Agreement, and each First Priority Representative, on behalf of itself and
the other First Priority Secured Parties represented by it, and each Second Priority Representative, on behalf of itself and the
other Second Priority Secured Parties represented by it, and the Loan Parties hereby irrevocably and unconditionally agree that
all of their respective claims in respect of any such action or proceeding may be heard and determined in such New York State
court or, to the extent permitted by law, in such Federal court. Each First Priority Representative, on behalf of itself and the
other First Priority Secured Parties represented by it, and each Second Priority Representative, on behalf of itself and the other
Second Priority Secured Parties represented by it, and the Loan Parties hereby further agree 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 applicable law.
(b) Each
First Priority Representative, on behalf of itself and the other First Priority Secured Parties represented by it, each Second
Priority Representative, on behalf of itself and the other Second Priority Secured Parties represented by it, and the Loan Parties
hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so (i) any objection
it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement
in any court referred to in the first sentence of paragraph (a) of this Section and (ii) the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.
(c) Each
First Priority Representative, on behalf of itself and the other First Priority Secured Parties represented by it, each Second
Priority Representative, on behalf of itself and the other Second Priority Secured Parties represented by it, and the Loan Parties
hereby irrevocably consents to service of process in the manner provided for notices (other than facsimile or email) in Section 9.9.
Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted
by applicable law.
9.9 Notices.
(a) Unless
otherwise specifically provided herein, all notices and other communications given to any party hereto in accordance with the
provisions of this Agreement shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified
or registered mail or sent by facsimile or email.
(b) All
such notices and other communications (i) sent by hand or overnight courier service, or mailed by certified or registered
mail, shall be deemed to have been given when delivered in person or by courier service and signed for against receipt thereof
or three Business Days after dispatch if sent by certified or registered mail, in each case, delivered, sent or mailed (properly
addressed) to the relevant party as provided in this Section 9.9 or in accordance with the latest unrevoked direction from
such party given in accordance with this Section 9.9 or (ii) sent by facsimile shall be deemed to have been given when
sent and when receipt has been confirmed by telephone; provided that received notices and other communications sent by
telecopier shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient,
such notices or other communications shall be deemed to have been given at the opening of business on the next Business Day for
the recipient). Notices and other communications delivered through electronic communications to the extent provided in clause
(c) below shall be effective as provided in such clause (c).
(c) Notices
and other communications hereunder may be delivered or furnished by electronic communications (including e-mail and Internet or
Intranet websites) pursuant to procedures set forth herein or otherwise approved by the parties hereto. Each party hereto may,
in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures
set forth herein or otherwise approved by it; provided that approval of such procedures may be limited to particular notices
or communications. All such notices and other communications (i) sent to an e-mail address shall be deemed received upon
the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested”
function, as available, return e-mail or other written acknowledgement); provided that if not given during the normal business
hours of the recipient, such notice or communication shall be deemed to have been given at the opening of business on the next
Business Day for the recipient, and (ii) posted to an Internet or Intranet website shall be deemed received upon the deemed
receipt by the intended recipient at its e-mail address as described in the foregoing clause (b)(i) of notification that
such notice or communication is available and identifying the website address therefor.
(d) For
the purposes hereof, the addresses of the parties hereto (until notice of a change thereof is delivered as provided in this Section)
shall be as set forth below each party’s name on the signature pages hereof, or, as to each party, at such other address
as may be designated by such party in a written notice to all of the other parties.
9.10 Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of each of the parties hereto and each of
the First Priority Secured Parties and Second Priority Secured Parties and their respective successors and permitted assigns,
and nothing herein is intended, or shall be construed to give, any other Person any right, remedy or claim under, to or in respect
of this Agreement or any Common Collateral.
9.11 Headings.
Section headings used herein are for convenience of reference only, are not part of this Agreement and shall not affect the
construction of, or be taken into consideration in interpreting, this Agreement.
9.12 Severability.
To the extent permitted by law, any provision of this Agreement that is held to be invalid, illegal or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without
affecting the validity, legality and enforceability of the remaining provisions hereof, and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.
9.13 Counterparts;
Integration; Effectiveness. This Agreement may be executed by one or more of the parties to this Agreement on any number of
separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument.
Delivery of an executed signature page of this Agreement by e-mail or facsimile transmission shall be effective as delivery
of a manually executed counterpart hereof. A set of the copies of this Agreement signed by all the parties shall be lodged with
the Borrower, each First Priority Representative and each Second Priority Representative. This Agreement shall become effective
when it shall have been executed by each party hereto.
9.14 WAIVER
OF JURY TRIAL. EACH FIRST PRIORITY REPRESENTATIVE, ON BEHALF OF ITSELF AND THE OTHER FIRST PRIORITY SECURED PARTIES
REPRESENTED BY IT, EACH SECOND PRIORITY REPRESENTATIVE, ON BEHALF OF ITSELF AND THE OTHER SECOND PRIORITY SECURED PARTIES REPRESENTED
BY IT, THE LOAN PARTIES, AND EACH OTHER PARTY HERETO, HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY SUIT, ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT,
TORT OR ANY OTHER THEORY) DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREBY
OR THEREBY. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HERETO HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER
AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.14.
9.15 Additional
Loan Parties. Each Person that becomes a Loan Party after the date hereof shall become a party to this Agreement upon execution
and delivery by such Person of an Assumption Agreement in the form of Exhibit C hereto.
[Remainder of page intentionally
left blank]
IN WITNESS WHEREOF,
the parties hereto have executed this Agreement as of the date first written above.
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BANK OF AMERICA, N.A., as Existing First Priority Representative for and on behalf of the Existing First Priority Secured Creditors
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Title:
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Address for Notices:
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Attention of Account Officer –
Hayward Industries
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Address: 135 S. LaSalle Street,
Mail Code: IL4-135-09-61
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Fax No. 877.206.8413
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Tel. No. 312.828.1846
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BANK OF AMERICA, N.A., as Existing Second Priority Representative for and on behalf of the Existing Second Priority Secured Creditors
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Address for Notices:
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Attention of Account Officer – Hayward Industries Address: 135 S. LaSalle Street, Mail Code: IL4-135-09-61
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Fax No. 877.206.8413
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Tel. No. 312.828.1846
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[Signature Page to
Term Intercreditor Agreement]
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HOLDINGS
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HAYWARD INTERMEDIATE, INC.
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By:
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Name:
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Title:
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BORROWER
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HAYWARD ACQUISITION CORP.,
as the Borrower immediately prior to the Merger
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By:
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Name:
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Title:
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HAYWARD INDUSTRIES, INC.,
as the Borrower upon and following the Merger
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By:
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Name:
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Title:
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[Signature Page to
Term Intercreditor Agreement]
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SUBSIDIARY GUARANTORS
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HAYWARD INDUSTRIAL PRODUCTS, INC.
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By:
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Name:
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Title:
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GOLDLINE PROPERTIES LLC
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By:
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Name:
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Title:
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HAYWARD/WRIGHT-AUSTIN, INC.
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By:
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Name:
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Title:
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WEBSTER PUMPS, INC.
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By:
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Name:
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Title:
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[Signature Page to
Term Intercreditor Agreement]
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Address for Notices of all Loan
Parties:
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620 Division Street
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Elizabeth, New Jersey 07207
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Attention:
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Co-Chairman of the Board
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Facsimile:
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(908) 351-4492
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Email:
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rdavis@hayward.com
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with copy to:
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c/o CCMP Capital Advisors, LLC
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277 Park Avenue, 37th
Floor
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New York, New York 10172
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Attention:
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Richard Jansen, Esq.
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Fax No.:
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(212) 599-3481
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Email:
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richard.jansen@ccmpcapital.com
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and
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c/o MSD Partners, L.P.
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645 Fifth Avenue, 21st Floor
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New York, New York 10022
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Attention:
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Marcello Liguori
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Fax No.:
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(212) 303-1772
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Email:
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mliguori@msdcapital.com
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and
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c/o Alberta Investment Management
Corporation First Canadian Place
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100 King Street West
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Suite 5120, P.O. Box 51
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Toronto, Ontario M5X 1B1, Canada
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Attention: Jason Peters
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and
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c/o Alberta Investment Management
Corporation 1100 – 10830 Jasper Avenue
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Edmonton, Alberta T5J 2B3, Canada
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Attention: Christina Luison
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[Signature Page to Term Intercreditor
Agreement]
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with a copy to:
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Ropes & Gray LLP
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1211 Avenue of the Americas
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New York, New York 10036
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Attention:
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Jay Kim
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Fax No.:
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(212) 497-3626
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Email:
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jay.kim@ropesgray.com
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and
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Dechert LLP 2929 Arch Street
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Philadelphia, Pennsylvania 19104
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Attention:
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Geraldine Sinatra and Eric Siegel
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Fax No.:
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(215) 994-2222
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Email:
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geraldine.sinatra@dechert.com
eric.siegel@dechert.com
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and
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Torys LLP
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The Grace Building
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1114 Avenue of the Americas
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New York, New York 10036
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Attention:
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Jared Fontaine
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Fax No.:
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(212) 682-0200
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Email:
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jfontaine@torys.com
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[Signature Page to Term Intercreditor
Agreement]
Exhibit A to the
Intercreditor Agreement
[FORM OF] JOINDER
AGREEMENT NO. [ ] dated as of [ ], 20[ ] to the TERM INTERCREDITOR AGREEMENT dated as of August 4,
2017 (the “Intercreditor Agreement”), among BANK OF AMERICA, N.A., as Existing First Priority Representative,
and BANK OF AMERICA, N.A., as Existing Second Priority Representative, and each other First Priority Representative and Second
Priority Representative that from time to time becomes a party thereto pursuant to the terms thereof, and acknowledged and agreed
to by, HAYWARD INTERMEDIATE, INC. (“Holdings”), HAYWARD ACQUISITION CORP., as the initial borrower, merged
with and into HAYWARD INDUSTRIES, INC., pursuant to the Merger (as defined in the Existing First Priority Agreement) (the
“Borrower”) and each of the other Loan Parties party thereto.
Capitalized terms
used herein but not otherwise defined herein shall have the meanings assigned to such terms in the Intercreditor Agreement.
As a condition to
the ability of the Borrower to incur [Additional First Priority Debt] [Additional Second Priority Debt] after the date of the
Intercreditor Agreement and to secure such [Additional First Priority Debt] [Additional Second Priority Debt] and related [First
Priority Obligations] [Second Priority Obligations] with a lien on the Common Collateral and to have such [Additional First Priority
Debt] [Additional Second Priority Debt] and related [First Priority Obligations] [Second Priority Obligations] guaranteed by the
Loan Parties, in each case under and pursuant to the applicable [First Priority Documents] [Second Priority Documents], each of
the [Additional First Priority Representative] [Additional Second Priority Representative] in respect of such [Additional First
Priority Debt] [Additional Second Priority Debt] and related [First Priority Obligations] [Second Priority Obligations] is required
to become an [Additional First Priority Representative] [Additional Second Priority Representative], under, and the related [First
Priority Secured Parties] [Second Priority Secured Parties] in respect thereof are required to become subject to and bound by,
the Intercreditor Agreement. Section 9.4 of the Intercreditor Agreement provides that such [Additional First Priority Representative]
[Additional Second Priority Representative] may become an [Additional First Priority Representative] [Additional Second Priority
Representative] under, and the related [First Priority Secured Parties] [Second Priority Secured Parties] may become subject to
and bound by, the Intercreditor Agreement pursuant to the execution and delivery by the [Additional First Priority Representative]
[Additional Second Priority Representative] of an instrument in the form of this Joinder Agreement and the satisfaction of the
other conditions set forth in Section 9.4 of the Intercreditor Agreement. The undersigned [Additional First Priority Representative]
[Additional Second Priority Representative] (the “New Representative”) is executing this Joinder Agreement
in accordance with the requirements of the Intercreditor Agreement.
Accordingly, the New
Representative agrees as follows:
In accordance with
Section 9.4 of the Intercreditor Agreement, the New Representative by its signatures below become a [First Priority Representative]
[Second Priority Representative] under, and the related [Additional First Priority Secured Parties] [Additional Second Priority
Secured Parties] represented by it become subject to and bound by, the Intercreditor Agreement with the same force and effect
as if the New Representative had originally been named therein as a [First Priority Representative] [Second Priority Representative]
and each of the New Representative, on behalf of itself and each other [Additional First Priority Secured Party] [Additional Second
Priority Secured Party] represented by it, hereby agrees to all the terms and provisions of the Intercreditor Agreement applicable
to it as a [First Priority Representative] [Second Priority Representative] and to the [Additional First Priority Secured Parties]
[Additional Second Priority Secured Parties] represented by it as [First Priority Secured Parties] [Second Priority Secured Parties].
Each reference to a [“First Priority Representative”] [“Second Priority Representative”]
in the Intercreditor Agreement shall be deemed to include the New Representative and each reference to [“First Priority
Secured Parties”] [“Second Priority Secured Parties”] shall include the [Additional First Priority Secured Parties]
[Additional Second Priority Secured Parties] represented by such New Representative. The Intercreditor Agreement is hereby incorporated
herein by reference.
Each of the New Representative
represents and warrants to the other First Priority Representatives and Second Priority Representatives and the other Secured
Parties that (i) it has full power and authority to enter into this Joinder Agreement, in its capacity as [agent][trustee],
(ii) this Joinder Agreement has been duly authorized, executed and delivered by it and constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms and the terms of the Intercreditor Agreement and (iii) the
[First Priority Documents] [Second Priority Documents] relating to such [Additional First Priority Debt] [Additional Second Priority
Debt] provides that, upon the New Representative’s entry into this Agreement, the [Additional First Priority Secured Parties]
[Additional Second Priority Secured Parties] in respect of such [Additional First Priority Debt] [Additional Second Priority Debt]
will be subject to and bound by the provisions of the Intercreditor Agreement as [First Priority Secured Parties] [Second Priority
Secured Parties].
This Joinder Agreement
may be executed by one or more of the parties to this Agreement on any number of separate counterparts, and all of said counterparts
taken together shall be deemed to constitute one and the same instrument. Delivery of an executed
signature page of this Agreement by e-mail or facsimile transmission shall be effective as delivery of a manually executed
counterpart hereof.
Except as expressly
supplemented hereby, the Intercreditor Agreement shall remain in full force and effect.
THIS JOINDER AGREEMENT,
AND ANY CLAIMS, CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE) BASED UPON, ARISING
OUT OF OR RELATING TO THIS JOINDER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.
Any provision of this
Joinder Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition
or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
All communications
and notices hereunder shall be in writing and given as provided in Section 9.9 of the Intercreditor Agreement. All communications
and notices hereunder to the New Representative shall be given to it at the address set forth below its signature hereto.
[Remainder of this page intentionally
left blank]
IN WITNESS WHEREOF,
the New Representative have duly executed this Joinder Agreement to the Intercreditor Agreement as of the day and year first above
written.
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[NAME OF NEW REPRESENTATIVE],
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as [ ] for the holders of [ ]
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By:
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Name:
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Title:
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Address for notices:
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Receipt of the foregoing acknowledged:
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[NAME OF APPLICABLE FIRST PRIORITY REPRESENTATIVE],
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as [Insert title of Representative]
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By:
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Name:
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Title:
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Receipt of the foregoing acknowledged:
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[NAME OF APPLICABLE SECOND PRIORITY REPRESENTATIVE],
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as [Insert title of Representative]
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By:
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Name:
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Title:
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Exhibit B to the
Intercreditor Agreement
[FORM OF] DEBT
DESIGNATION NO. [ ] (this “Designation”) dated as of [ ], 20[ ] with respect
to the TERM INTERCREDITOR AGREEMENT dated as of August 4, 2017 (the “Intercreditor Agreement”), among BANK
OF AMERICA, N.A., as Existing First Priority Representative, and BANK OF AMERICA, N.A., as Existing Second Priority Representative,
and each other First Priority Representative and Second Priority Representative that from time to time becomes a party thereto
pursuant to the terms thereof, and acknowledged and agreed to by, HAYWARD INTERMEDIATE, INC. (“Holdings”),
HAYWARD ACQUISITION CORP., as the initial borrower, merged with and into HAYWARD INDUSTRIES, INC., pursuant to the Merger
(as defined in the Existing First Priority Agreement) (the “Borrower”) and each of the other Loan Parties party
thereto.
Capitalized terms used
herein but not otherwise defined herein shall have the meanings assigned to such terms in the Intercreditor Agreement.
This Designation is
being executed and delivered in order to designate additional secured Obligations of the Borrower and the Loan Parties as [Additional
First Priority Debt][Additional Second Priority Debt] entitled to the benefit of and subject to the terms of the Intercreditor
Agreement.
The undersigned, the
duly appointed [specify title of Responsible Officer] of the Borrower hereby certifies on behalf of the Borrower that:
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1.
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Borrower intends to incur Indebtedness (the “Designated Obligations”) in the
initial aggregate principal amount of [ ] pursuant to the following agreement: [describe credit/loan agreement indenture
or other agreement giving rise to Additional First Priority Debt or Additional Second Priority Debt, as the case may be] (the
“Designated Agreement”) which will be [Additional First Priority Debt][Additional Second Priority Debt].
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2.
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The incurrence of the Designated Obligations is permitted to be incurred, secured and guaranteed
by each extant First Priority Document and Second Priority Document.
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3.
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The name and address of the Additional Representative for such Designated Obligations is:
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[Insert name and all capacities; Address]
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4.
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Attached hereto are true and complete copies of each of the [First/Second] Priority Agreement relating to such Additional [First/Second]
Priority Debt.
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[Remainder of this page intentionally
left blank]
IN WITNESS WHEREOF,
the Borrower has caused this Designation to be duly executed by the undersigned Responsible Officer as of the day and year first
above written.
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HAYWARD INDUSTRIES, INC.
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By:
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Name:
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Title:
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Exhibit C to the
Intercreditor Agreement
[FORM OF] LOAN
PARTY JOINDER AGREEMENT NO. [ ] dated as of [ ], 20[ ] (the “Loan Party Joinder Agreement”)
to the TERM INTERCREDITOR AGREEMENT dated as of August 4, 2017 (the “Intercreditor Agreement”), among BANK
OF AMERICA, N.A., as Existing First Priority Representative, and BANK OF AMERICA, N.A., as Existing Second Priority Representative,
and each other First Priority Representative and Second Priority Representative that from time to time becomes a party thereto
pursuant to the terms thereof, and acknowledged and agreed to by, HAYWARD INTERMEDIATE, INC. (“Holdings”),
HAYWARD ACQUISITION CORP., as the initial borrower, merged with and into HAYWARD INDUSTRIES, INC., pursuant to the Merger
(as defined in the Existing First Priority Agreement) (the “Borrower”) and each of the other Loan Parties party
thereto.
Capitalized terms used
herein but not otherwise defined herein shall have the meanings assigned to such terms in the Intercreditor Agreement.
The undersigned, [ ],
a [ ], (the “New Loan Party”) wishes to acknowledge and agree to the
Intercreditor Agreement and become a party thereto and to acquire and undertake the rights and obligations of a Loan Party thereunder.
Accordingly, the New
Loan Party agrees as follows for the benefit of the First Priority Representatives, Second Priority Representatives and the other
Secured Parties:
The New Loan Party
(a) acknowledges and agrees to, and becomes a party to the Intercreditor Agreement as a Loan Party, (b) agrees to all
the terms and provisions of the Intercreditor Agreement and (c) shall have all the rights and obligations of a Loan Party
under the Intercreditor Agreement. This Loan Party Joinder Agreement supplements the Intercreditor Agreement and is being executed
and delivered by the New Loan Party pursuant to Section 9.15 of the Intercreditor Agreement.
The New Loan Party
represents and warrants to each First Priority Representative, each Second Priority Representative and to the other Secured Parties
that (a) it has full power and authority to enter into this Loan Party Joinder Agreement, in its capacity as a Loan Party
and (b) this Loan Party Joinder Agreement has been duly authorized, executed and delivered by it and constitutes its legal,
valid and binding obligation, enforceable against it in accordance with the terms of this Loan Party Joinder Agreement.
This Loan Party Joinder
Agreement may be executed by one or more of the parties to this Loan Party Joinder Agreement on any number of separate counterparts,
and all of said counterparts taken together shall be deemed to constitute one and the same instrument. Delivery of an executed
signature page of this Loan Party Joinder Agreement by e-mail or facsimile transmission shall be effective as delivery of
a manually executed counterpart hereof.
Except as expressly
supplemented hereby, the Intercreditor Agreement shall remain in full force and effect.
THIS LOAN PARTY JOINDER
AGREEMENT, AND ANY CLAIMS, CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE) BASED UPON,
ARISING OUT OF OR RELATING TO THIS LOAN PARTY JOINDER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
Any provision of this
Loan Party Joinder Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition
or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
All communications
and notices hereunder shall be in writing and given as provided in Section 9.9 of the Intercreditor Agreement.
IN WITNESS WHEREOF, the New Loan Party has duly executed this
Loan Party Joinder Agreement to the Intercreditor Agreement as of the day and year first above written.
Exhibit 10.5
EXECUTION
VERSION
ABL CREDIT AGREEMENT
Dated as of August 4, 2017
among
HAYWARD ACQUISITION CORP.,
as Initial US Borrower,
to be merged with and into
HAYWARD INDUSTRIES, INC.,
as survivor of the Merger and US Borrower,
HAYWARD POOL PRODUCTS CANADA, INC. /
PRODUITS DE PISCINES HAYWARD CANADA, INC.,
as Canadian Borrower,
HAYWARD INTERMEDIATE, INC.,
as Holdings,
THE FINANCIAL INSTITUTIONS PARTY HERETO,
as Lenders,
BANK OF AMERICA, N.A.
as Administrative Agent, Issuing Bank and
Swingline Lender,
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, JEFFERIES FINANCE LLC,
MORGAN STANLEY SENIOR FUNDING, INC., NOMURA SECURITIES
INTERNATIONAL, INC.,
PNC CAPITAL MARKETS LLC and WELLS FARGO BANK N.A.,
as Joint Lead Arrangers and Joint Bookrunners,
and
PNC BANK, NATIONAL ASSOCIATION and WELLS FARGO BANK N.A.,
as Co-Documentation Agents
TABLE OF CONTENTS
Page
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ARTICLE 1 DEFINITIONS
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2
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Section 1.01 Defined Terms
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2
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Section 1.02 Classification of Revolving Loans and Borrowings
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68
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Section 1.03 Terms Generally
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69
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Section 1.04 Accounting Terms; GAAP
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70
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Section 1.05 Quebec Terms
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70
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Section 1.06 Effectuation of Transactions
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71
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Section 1.07 Timing of Payment of Performance
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71
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Section 1.08 Times of Day
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71
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Section 1.09 Currency Generally; Exchange Rate
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71
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Section 1.10 Cashless Rollovers
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72
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Section 1.11 Certain Conditions, Calculations and Tests
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73
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Section 1.12 Rounding
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76
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Section 1.13 Alternate Currencies
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76
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ARTICLE 2 THE CREDITS
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77
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Section 2.01 Commitments
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77
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Section 2.02 Loans and Borrowings
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77
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Section 2.03 Requests for Borrowings
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79
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Section 2.04 Overadvances
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80
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Section 2.05 Letters of Credit
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81
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Section 2.06 Protective Advances
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87
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Section 2.07 Funding of Borrowings
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88
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Section 2.08 Type; Interest Elections
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88
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Section 2.09 Termination and Reduction of Commitments
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90
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Section 2.10 Repayment of Revolving Loans; Evidence of Debt
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90
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Section 2.11 Prepayment of Revolving Loans
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91
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Section 2.12 Fees
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93
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Section 2.13 Interest
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94
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Section 2.14 Alternate Rate of Interest
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96
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Section 2.15 Increased Costs
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96
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Section 2.16 Break Funding Payments
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98
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Section 2.17 Taxes
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98
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Section 2.18 Payments Generally; Allocation of Proceeds; Sharing of Payments
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102
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Section 2.19 Mitigation Obligations; Replacement of Lenders
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105
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Section 2.20 Illegality
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107
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Section 2.21 Defaulting Lenders
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107
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Section 2.22 Incremental Credit Extensions
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110
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Section 2.23 Extensions of Revolving Loans and Additional Revolving Commitments
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112
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Section 2.24 Swingline Loans.
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114
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Section 2.25 Reallocation Mechanism.
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117
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Page
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ARTICLE 3 REPRESENTATIONS AND WARRANTIES
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118
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Section 3.01 Organization; Powers
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118
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Section 3.02 Authorization; Enforceability
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118
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Section 3.03 Governmental Approvals; No Conflicts
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118
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Section 3.04 Financial Condition; No Material Adverse Effect
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118
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Section 3.05 Properties
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119
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Section 3.06 Litigation and Environmental Matters
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119
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Section 3.07 Compliance with Laws
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119
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Section 3.08 Investment Company Status
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120
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Section 3.09 Taxes
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120
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Section 3.10 ERISA
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120
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Section 3.11 Disclosure
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120
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Section 3.12 Solvency
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121
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Section 3.13 Capitalization and Subsidiaries
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121
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Section 3.14 Security Interest in Collateral
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121
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Section 3.15 Labor Disputes
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121
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Section 3.16 Federal Reserve Regulations
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121
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Section 3.17 Economic and Trade Sanctions and Anti-Corruption Laws
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122
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Section 3.18 Borrowing Base Certificates
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122
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Section 3.19 Deposit Accounts and Securities Accounts
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122
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ARTICLE 4 CONDITIONS
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122
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Section 4.01 Closing Date
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122
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Section 4.02 Each Credit Extension
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126
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ARTICLE 5 AFFIRMATIVE COVENANTS
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127
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Section 5.01 Financial Statements and Other Reports
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127
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Section 5.02 Existence
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131
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Section 5.03 Payment of Taxes
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131
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Section 5.04 Maintenance of Properties
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131
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Section 5.05 Insurance
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131
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Section 5.06 Inspections
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132
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Section 5.07 Maintenance of Books and Records
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133
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Section 5.08 Compliance with Laws
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133
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Section 5.09 Compliance with Environmental Laws
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133
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Section 5.10 Designation of Subsidiaries
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134
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Section 5.11 Use of Proceeds
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134
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Section 5.12 Covenant to Guarantee Obligations and Give Security
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134
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Section 5.13 [Reserved]
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136
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Section 5.14 Further Assurances
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136
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Section 5.15 Cash Management
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136
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Page
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ARTICLE 6 NEGATIVE COVENANTS
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139
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Section 6.01 Indebtedness
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139
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Section 6.02 Liens
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144
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Section 6.03 No Further Negative Pledges
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147
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Section 6.04 Restricted Payments; Certain Payments of Indebtedness
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149
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Section 6.05 Restrictions on Subsidiary Distributions
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153
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Section 6.06 Investments
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155
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Section 6.07 Fundamental Changes; Disposition of Assets
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158
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Section 6.08 Sale and Lease-Back Transactions
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162
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Section 6.09 Transactions with Affiliates
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162
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Section 6.10 Conduct of Business
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164
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Section 6.11 [Reserved]
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164
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Section 6.12 Amendments of or Waivers with Respect to Restricted Debt
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164
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Section 6.13 Fiscal Year
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164
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Section 6.14 Permitted Activities of Holdings
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164
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Section 6.15 Financial Covenant
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166
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ARTICLE 7 EVENTS OF DEFAULT
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167
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Section 7.01 Events of Default
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167
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ARTICLE 8 THE ADMINISTRATIVE AGENT
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170
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Section 8.01 The Administrative Agent
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170
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ARTICLE 9 MISCELLANEOUS
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178
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Section 9.01 Notices
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178
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Section 9.02 Waivers; Amendments
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182
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Section 9.03 Expenses; Indemnity
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185
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Section 9.04 Waiver of Claim
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187
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Section 9.05 Successors and Assigns
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187
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Section 9.06 Survival
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193
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Section 9.07 Counterparts; Integration; Effectiveness; Electronic Execution
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193
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Section 9.08 Severability
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194
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Section 9.09 Right of Setoff
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194
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Section 9.10 Governing Law; Jurisdiction; Consent to Service of Process
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194
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Section 9.11 Waiver of Jury Trial
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196
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Section 9.12 Headings
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196
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Section 9.13 Confidentiality
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196
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Section 9.14 No Fiduciary Duty
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197
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Section 9.15 Several Obligations
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197
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Section 9.16 USA PATRIOT Act
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198
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Section 9.17 Canadian Anti-Money Laundering
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198
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Section 9.18 Disclosure
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198
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Section 9.19 Appointment for Perfection
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198
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Page
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Section 9.20 Interest Rate Limitation
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198
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Section 9.21 ABL Intercreditor Agreement.
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199
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Section 9.22 Conflicts
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200
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Section 9.23 Release of Guarantors
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200
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Section 9.24 Judgment Currency
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200
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Section 9.25 Acknowledgement and Consent to Bail-In of EEA Financial Institutions
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201
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Section 9.26 Lender Representation
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201
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SCHEDULES:
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Schedule 1.01(a)
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Commitment Schedule
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Schedule 1.01(d)
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Existing Letters of Credit
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Schedule 3.05
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Fee Owned Real Estate Assets
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Schedule 3.13
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Subsidiaries
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Schedule 3.19
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Deposit Accounts and Securities Accounts
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Schedule 5.10
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Unrestricted Subsidiaries
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Schedule 6.01
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Existing Indebtedness
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Schedule 6.02
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Existing Liens
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Schedule 6.06
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Existing Investments
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Schedule 6.07(s)
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Dispositions
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Schedule 9.01
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Borrower’s Website Address for Electronic Delivery
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EXHIBITS:
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Exhibit A-1
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Form of Assignment and Assumption
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Exhibit B-1
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Form of Borrowing Request
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Exhibit B-2
Exhibit B-3
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Form of Letter of Credit Request
Form of Swingline Loan Request
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Exhibit C
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Form of Compliance Certificate
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Exhibit D
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Form of Interest Election Request
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Exhibit E
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Form of Perfection Certificate
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Exhibit F
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Form of Perfection Certificate Supplement
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Exhibit G
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Form of Promissory Note
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Exhibit H
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[Reserved]
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Exhibit I
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Form of US Loan Guaranty Agreement
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Exhibit J
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Form of US Security Agreement
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Exhibit K-1
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Form of U.S. Tax Compliance Certificate (For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax Purposes)
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Exhibit K-2
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Form of U.S. Tax Compliance Certificate (For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax Purposes)
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Exhibit K-3
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Form of U.S. Tax Compliance Certificate (For Foreign Participants That Are Partnerships For U.S. Federal Income Tax Purposes)
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Exhibit K-4
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Form of U.S. Tax Compliance Certificate (For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)
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Exhibit L
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Form of Solvency Certificate
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Exhibit M
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Form of US and Canadian Borrowing Base Certificate,
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Exhibit N
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Form of Hedge Agreement Designation Notice
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Exhibit O
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Form of ABL Intercreditor Agreement
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ABL CREDIT AGREEMENT
ABL CREDIT AGREEMENT,
dated as of August 4, 2017 (this “Agreement”), by and among Hayward Acquisition Corp., a New Jersey corporation
(the “Initial US Borrower”, to be merged with and into the Company (as defined below) pursuant to the Merger
(as defined below), with the Company as survivor of the Merger, the “US Borrower”), Hayward Intermediate, Inc.,
a Delaware corporation (“Holdings”), Hayward Pool Products Canada, Inc. / Produits De Piscines Hayward Canada,
Inc., a Canadian federal corporation (the “Canadian Borrower”), the Lenders from time to time party hereto,
including Bank of America, N.A. (“Bank of America”), and Bank of America, in its capacities as administrative
agent and collateral agent (the “Administrative Agent”), the Swingline Lender and the Issuing Bank, with Merrill
Lynch, Pierce, Fenner & Smith Incorporated (“MLPFS”), Jefferies Finance LLC (“Jefferies”),
Morgan Stanley Senior Funding, Inc. (“Morgan Stanley”), Nomura Securities International, Inc. (“Nomura”),
PNC Capital Markets LLC and Wells Fargo Bank N.A. as joint lead arrangers and joint bookrunners (in such capacities, collectively,
the “Arrangers” and each an “Arranger”).
RECITALS
A. Pursuant
to the terms of the Merger Agreement, the Initial US Borrower, a wholly-owned direct subsidiary of Holdings, will merge (the “Merger”)
with and into Hayward Industries, Inc., a New Jersey corporation (the “Company”), with the Company to be the
surviving corporation of the Merger and a wholly-owned direct subsidiary of Holdings.
B. To
fund a portion of the Acquisition, the Sponsors and certain other investors (including the Co-Investors and members of management,
affiliates and direct or indirect existing shareholders of the Company and its subsidiaries prior to the Merger) will, directly
or indirectly (including through a Parent Company), make Cash equity contributions to Holdings or purchase equity interests of
a Parent Company for Cash (or, in the case of the Co-Investors, Cash or non-cash equity contributions, including through contribution,
conversion or other “rollover” of existing direct or indirect Capital Stock with respect to the Company) in respect
of Qualified Capital Stock, which, in the case of Cash shall, directly or indirectly, be contributed to the US Borrower (except
to the extent to be utilized by a direct or indirect parent of the US Borrower to make any payments required to consummate the
Transactions) in the form of Qualified Capital Stock (such contribution, purchase, retention, rollover and/or conversion, collectively,
the “Equity Contribution”), and the aggregate Equity Contribution will constitute not less than 30% of the sum
of (i) (A) the aggregate gross proceeds received from the Revolving Loans borrowed under this Agreement on the Closing Date, but
excluding (A) the aggregate gross proceeds received from the Revolving Loans borrowed to fund original issue discount or upfront
fees in respect of the “Initial Term Loans” under the First Lien Credit Agreement and to finance working capital adjustments,
the working capital needs and other general corporate purposes of the US Borrower and its subsidiaries and (B) any letter of credit
issued or deemed issued hereunder, (ii) the aggregate gross proceeds received from loans borrowed under the First Lien Credit Agreement
on the Closing Date, but excluding any gross proceeds received from any increase in the “Initial Term Loans” to fund
original issue discount or upfront fees, (iii) the aggregate gross proceeds received from the loans borrowed under the Second Lien
Credit Agreement on the Closing Date, and (iv) the Equity Contribution; provided that the Sponsors’ investment on
the Closing Date will constitute not less than 50.1% direct or indirect beneficial ownership in the US Borrower immediately upon
consummation of the Transactions.
C. The
Initial US Borrower (i) has requested that the Lenders extend credit in the form of an asset-based Revolving Facility with
Commitments in an original aggregate amount equal to $250,000,000, subject to increase as provided herein, (ii) intends to
obtain term loans under the First Lien Credit Agreement in an original aggregate principal amount equal to $850,000,000, and
(iii) intends to obtain term loans under the Second Lien Credit Agreement in an original aggregate principal amount equal to
$285,000,000.
D. The
Lenders are willing to extend such credit to the Borrowers on the terms and subject to the conditions set forth herein. Accordingly,
the parties hereto agree as follows:
ARTICLE
1
DEFINITIONS
Section 1.01
Defined Terms. As used in this Agreement, the following terms have the meanings specified below:
“30-Day Average
Availability” means, during the 30-consecutive day period immediately preceding the relevant date of calculation, the
quotient, obtained by dividing (a) the sum of each day’s Availability during the 30-consecutive day period immediately preceding
the relevant date of calculation by (b) thirty (30) days.
“ABL Intercreditor
Agreement” means (a) the ABL Intercreditor Agreement substantially in the form of Exhibit O hereto, dated as of
the Closing Date, by and among the Administrative Agent, the First Lien Agent, the Second Lien Agent and the other parties thereto
from time to time and acknowledged by the US Loan Parties, as amended, restated, amended and restated, supplemented or otherwise
modified from time to time; (b) an intercreditor agreement substantially in the form of the ABL Intercreditor Agreement as in effect
on the Closing Date with any material modifications which are reasonably acceptable to the US Borrower and the Administrative Agent
and (c) if requested by the Lead Borrower, an intercreditor agreement the terms of which are consistent with market terms governing
security arrangements for the sharing of Liens and Collateral proceeds on a Split Collateral Basis at the time the intercreditor
agreement is proposed to be established, so long as the terms of such intercreditor agreement are reasonably satisfactory to the
Administrative Agent and the Lead Borrower; provided, that (i) if required by the Administrative Agent prior to agreeing
that any form (or modification) is reasonably acceptable to it, the form of any other intercreditor agreement shall be deemed acceptable
to the Administrative Agent (and the Lenders) if posted to the Lenders and not objected to by the Required Lenders within five
(5) Business Days thereafter, and (ii) any ABL Intercreditor Agreement shall be limited to terms governing the sharing of Liens
and the relative rights and obligations of the secured parties regarding Collateral (other than Canadian Collateral) and the proceeds
thereof and shall not restrict or limit any Indebtedness or the terms and conditions thereof (including any amendments and refinancings)
to the extent such Indebtedness would otherwise be permitted by the Loan Documents.
“ABL Priority
Collateral” means US ABL Priority Collateral and Canadian Collateral.
“ABR”,
when used in reference to any Revolving Loan or Borrowing, refers to whether such Revolving Loan, or the Revolving Loans comprising
such Borrowing, bears interest at a rate determined by reference to the Alternate Base Rate.
“ABR Revolving
Loan” means a Revolving Loan to the US Borrower bearing interest at a rate determined by reference to the Alternate Base
Rate.
“Account”
has the meaning assigned to such term in the UCC (and/or, with respect to any Accounts of any Canadian Loan Party, as defined in
the PPSA), including all rights to payment for Inventory, merchandise and goods sold or leased, or for services rendered.
“Account Debtor”
means any Person obligated on an Account.
“ACH”
means automated clearing house transfers.
“Acquired Canadian
Eligible Accounts” has the meaning assigned to such term in the definition of “Canadian Borrowing Base”.
“Acquired Canadian
Eligible Inventory” has the meaning assigned to such term in the definition of “Canadian Borrowing Base”.
“Acquired US
Eligible Accounts” has the meaning assigned to such term in the definition of “US Borrowing Base”.
“Acquired US
Eligible Inventory” has the meaning assigned to such term in the definition of “US Borrowing Base”.
“Acquisition”
means (a) the acquisition of, and business combination with, the Company through the Merger and (b) the other transactions contemplated
by the Merger Agreement.
“Additional
Agreement” has the meaning assigned to such term in Article 8.
“Additional
Revolving Commitments” means any revolving credit commitment added pursuant to Section 2.22 or 2.23.
“Additional
Revolving Credit Exposure” means, with respect to any Lender at any time, the aggregate Outstanding Amount at such time
of all Additional Revolving Loans of such Lender, plus the aggregate outstanding amount at such time of such Lender’s LC
Exposure and Swingline Exposure and participation interest in Protective Advances and Overadvances, in each case, attributable
to its Additional Revolving Commitments.
“Additional
Revolving Facility” means any revolving credit facility added pursuant to Section 2.22 or 2.23.
“Additional
Revolving Lender” has the meaning assigned to such term in Section 2.22(b).
“Additional
Revolving Loans” means any Revolving Loan made hereunder pursuant to any Additional Revolving Commitments.
“Adjustment
Date” means the first day of January, April, July and October of each Fiscal Year.
“Administrative
Agent” has the meaning assigned to such term in the preamble to this Agreement.
“Administrative
Agent Account” has the meaning assigned to such term in Section 5.15(b).
“Administrative
Questionnaire” has the meaning assigned to such term in Section 2.22(d).
“Adverse
Proceeding” means any action, suit, proceeding (whether administrative, judicial or otherwise), governmental
investigation or arbitration (whether or not purportedly on behalf of Holdings, the Borrowers or any of their respective
Restricted Subsidiaries) at law or in equity, or before or by any Governmental Authority, domestic or foreign (including any
Environmental Claim), whether pending or, to the knowledge of Holdings, any Borrower or any of their respective Restricted
Subsidiaries, threatened in writing, against or affecting Holdings, the Borrowers or any of their respective Restricted
Subsidiaries or any property of Holdings, the Borrowers or any of their respective Restricted Subsidiaries.
“Affiliate” means, as applied
to any Person, any other Person directly or indirectly Controlling, Controlled by, or under common Control with, that Person. No
Person shall be an “Affiliate” of Holdings or any subsidiary thereof solely because it is an unrelated portfolio company
of the Sponsors and none of the Administrative Agent, the Arrangers, any Lender or any of their respective Affiliates or branches
shall be considered an Affiliate of Holdings or any subsidiary thereof. For purposes of this Agreement and the other Loan Documents,
Jefferies LLC and its Affiliates shall be deemed to be Affiliates of Jefferies Finance LLC and its Affiliates.
“Aggregate Commitments”
means, at any time, the sum of all Commitments at such time. As of the Closing Date, the amount of Aggregate Commitments is $250,000,000.
“Agreement”
has the meaning assigned to such term in the preamble to this ABL Credit Agreement.
“AHYDO” means an “applicable
high yield discount obligation” within the meaning of Section 163(i)(1) of the Code.
“AIMCo” has the meaning
assigned to such term in the definition of “Sponsor”.
“Alternate Base Rate” means,
for any day, a fluctuating rate per annum equal to the highest of (a) the Federal Funds Effective Rate in effect on such day
plus 0.50%, (b) to the extent ascertainable, the Published LIBO Rate (which rate shall be calculated based upon an Interest
Period of one month and shall be determined on a daily basis) plus 1.00%, (c) the Prime Rate and (d) 0.00% per annum.
Any change in the Alternate Base Rate due to a change in the Federal Funds Effective Rate or the Published LIBO Rate, as the case
may be, shall be effective from and including the effective date of such change in the Federal Funds Effective Rate or the Published
LIBO Rate, as the case may be. Any change in the Prime Rate announced by Bank of America shall be effective from and including
the opening of business on the day specified in the public announcement of such change.
“Alternate Currency”
means (a) as regards the US Borrower, any currency other than Dollars and (b) as regards the Canadian Borrower, any currency other
than Dollars and Canadian Dollars, approved by the Lenders in accordance with Section 1.13.
“Applicable Intercreditor Agreement”
means (a) in the case of Collateral, an ABL Intercreditor Agreement, and (b) otherwise, any Additional Agreement.
“Applicable
Percentage” means, with respect to any Lender for any Class, the percentage of the Aggregate Commitments for such Class
represented by such Lender’s Commitment for such Class; provided that for purposes of Section 2.21 and otherwise
herein, when there is a Defaulting Lender, any such Defaulting Lender’s Commitment shall be disregarded in the relevant calculations.
In the event the Aggregate Commitments for any Class shall have expired or been terminated, the Applicable Percentages of any Lender
of such Class shall be determined on the basis of the Revolving Credit Exposure of the applicable Lenders of such Class, giving
effect to any assignments and to any Lender’s status as a Defaulting Lender at the time of determination.
“Applicable
Rate” means, for any day,
(a)
with respect to Initial Revolving Loans, any Overadvance or any Protective Advance, the rate per annum applicable to the
relevant Class of Revolving Loans set forth below, based upon the Average Availability for the most recently ended Fiscal Quarter;
provided that until the first Adjustment Date following the completion of at least one full Fiscal Quarter ended after the
Closing Date, the “Applicable Rate” shall be the applicable rate per annum set forth below in Category 2:
|
Average Availability
|
|
ABR Revolving Loans,
Canadian Prime Rate
Revolving Loans and
Canadian Base Rate
Revolving Loans
|
|
|
LIBO Rate Revolving
Loans and CDOR
Revolving Loans
|
|
|
Category 1 ≥ 66%
|
|
|
0.25
|
%
|
|
|
1.25
|
%
|
|
Category 2 < 66% but ≥ 33%
|
|
|
0.50
|
%
|
|
|
1.50
|
%
|
|
Category 3 < 33%
|
|
|
0.75
|
%
|
|
|
1.75
|
%
|
(b)
with respect to any Additional Revolving Loan of any Class, the rate or rates per annum specified in the applicable Incremental
Revolving Facility, or Extension Amendment.
The Applicable Rate
pursuant to clause (a) shall be adjusted quarterly on a prospective basis on each Adjustment Date based upon the
Average Availability in accordance with the table above; provided that if a Borrowing Base Certificate is not
delivered when required pursuant to Section 5.01(l), the “Applicable Rate” shall be the rate per annum set
forth above in Category 3 until such Borrowing Base Certificate is delivered in compliance with Section
5.01(l).
“Approved Appraiser”
means Hilco Valuation Services, LLC or any other appraiser or consultant approved in writing by the Lead Borrower (such approval
not to be unreasonably withheld) so long as an Event of Default does not exist or is continuing, in which case the Lead Borrower’s
consultation (but not approval) shall be required with respect to the appointment of an “Approved Appraiser”.
“Approved Fund”
means, with respect to any Lender, any Person (other than a natural person or a Disqualified Institution) that is engaged in making,
purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its activities
and is administered, advised or managed by (a) such Lender, (b) any Affiliate of such Lender or (c) any entity or any Affiliate
of any entity that administers, advises or manages such Lender.
“Arrangers”
has the meaning assigned to such term in the preamble to this Agreement.
“Assignment
and Assumption” means an assignment and assumption entered into by a Lender and an assignee (with the consent of any
party whose consent is required by Section 9.05), and accepted by the Administrative Agent in the form of Exhibit A-1
or any other form approved by the Administrative Agent and the Lead Borrower.
“Availability”
means as of any applicable date, the amount by which the Line Cap exceeds the Total Revolving Credit Exposure, in each case at
such time.
“Availability
Reserve” means without duplication, (a) the Rent and Charges Reserve; (b) the Hedge Product Reserve, (c) the Banking
Services Reserve; provided that reserves of the type described in this clause (c) shall be instituted only after consultation
with the Lead Borrower; (d) the Priority Payable Reserve; (e) the GST, HST Tax Reserve; (f) the Royalty Reserve; and (g) such additional
reserves not otherwise addressed in clauses (a) through (f) above, in such amounts and with respect to such matters, as the
Administrative Agent in its Permitted Discretion may elect to establish or modify from time to time.
Notwithstanding anything
to the contrary in this Agreement, (i) such Availability Reserves shall not be established or changed except upon not less than
five (5) Business Days’ (or such shorter period as may be agreed by the Lead Borrower) prior written notice to the Lead Borrower,
which notice shall include a reasonably detailed description of such applicable Availability Reserve being established (during
which period (a) the Administrative Agent shall, if requested, discuss any such Availability Reserve or change with the Lead Borrower
and (b) the Lead Borrower may take such action as may be required so that the event, condition or matter that is the basis for
such Availability Reserve or change thereto no longer exists or exists in a manner that would result in the establishment of a
lower Availability Reserve or result in a lesser change thereto, in a manner and to the extent reasonably satisfactory to the Administrative
Agent), (ii) the amount of any Availability Reserve established by the Administrative Agent, and any change in the amount of any
Availability Reserve, shall be limited to such Availability Reserve or changes as the Administrative Agent determines in its Permitted
Discretion to be necessary (a) to reflect items that could reasonably be expected to adversely affect the value of the applicable
Eligible Accounts or Eligible Inventory or (b) to reflect items that could reasonably be expected to adversely affect the enforceability
or priority of the Administrative Agent’s Liens on the applicable Collateral, and (iii) the amount of any Availability Reserve
established by the Administrative Agent, and any change in the amount of any Availability Reserve, shall have a reasonable relationship
to the event, condition or other matter that is the basis for such Availability Reserve, criteria, rate or such change; provided
that (x) no Availability Reserves may be established after the Closing Date based on circumstances, contingencies, events, conditions
or matters known to the Administrative Agent as of the Closing Date for which no Availability Reserve was imposed on the Closing
Date or criteria included in the definitions of Eligible Accounts or Eligible Inventory, in each case, as in effect on the Closing
Date, unless such events, conditions or matters have changed in any material adverse respect since the Closing Date, (y) in no
event shall any Availability Reserve with respect to any component of the Borrowing Base duplicate any Availability Reserve or
adjustment already accounted for in determining eligibility criteria (including collection and/or advance rates) and (z) no Availability
Reserve shall be imposed on the first 5% of dilution of Accounts and thereafter no dilution Availability Reserve shall exceed 1%
for each incremental whole percentage in dilution over 5% (it being agreed that partial percentage point reserves are permitted
(e.g., a reserve for 0.1 percentage points where dilution is 5.1%). Notwithstanding clause (i) of the preceding sentence, changes
to the Availability Reserves solely for purposes of correcting mathematical or clerical errors (and such other changes as are otherwise
agreed to by the Lead Borrower) shall only be subject to a notice period of one (1) Business Day, it being understood that no Default
or Event of Default shall be deemed to result therefrom, if applicable, for a period of five (5) Business Days.
“Available Excluded Contribution
Amount” means, at any time, an amount equal to the aggregate amount of Cash or Cash Equivalents or the fair market value
of other assets or property (as reasonably determined by the Borrowers, but excluding any Cure Amount) received by the Borrowers
or any of their Restricted Subsidiaries after the Closing Date through and including such time from:
(1)
contributions in respect of Qualified Capital Stock (other than any amounts received from the Borrowers or any of their
Restricted Subsidiaries), and
(2)
the sale of Qualified Capital Stock of the Borrower or any of its Restricted Subsidiaries (other than (x) to the Borrowers
or any Restricted Subsidiary of the Borrowers, (y) pursuant to any management equity plan or stock option plan or any other management
or employee benefit plan or (z) with the proceeds of any loan or advance made pursuant to Section 6.06(h)(ii)).
The Available Excluded Contribution Amount shall be reduced
by an amount equal to the sum of (i) Restricted Payments made pursuant to Section 6.04(a)(iii), (ii) Restricted Debt Payments made
pursuant to Section 6.04(b)(vi) and (iii) Investments made pursuant to Section 6.06(r), in each case, after the Closing
Date and prior to such time or contemporaneously therewith.
“Average Availability”
means, on the applicable Adjustment Date, the quotient, expressed as a percentage, obtained by dividing (a) the average daily Availability
for the Fiscal Quarter immediately preceding such Adjustment Date by (b) the average daily Line Cap for such Fiscal Quarter. In
determining “Average Availability”, the Borrowing Base as of any day shall be calculated by reference to the most recent
Borrowing Base Certificates delivered to the Administrative Agent on or prior to such day pursuant to Section 5.01(l).
“Average Usage”
means, on the applicable Adjustment Date, the quotient, expressed as a percentage, obtained by dividing (a) the average daily Outstanding
Amount of the Total Revolving Credit Exposure for the Fiscal Quarter immediately preceding such Adjustment Date by (b) the average
daily Aggregate Commitments (other than Commitments of Defaulting Lenders) for such Fiscal Quarter.
“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.
“Banking Services”
means each and any of the following bank services provided to any Loan Party (a) under any arrangement that is in effect on the
Closing Date between any Loan Party and a counterparty that is (or is an Affiliate or branch of) the Administrative Agent, any
Lender or an Arranger as of the Closing Date or (b) under any arrangement that is entered into after the Closing Date by any Loan
Party with any counterparty that is (or is an Affiliate or branch of) the Administrative Agent, any Lender or an Arranger at the
time such arrangement is entered into: commercial credit cards, stored value cards, purchasing cards, treasury management services,
netting services, overdraft protections, check drawing services, automated payment services (including depository, overdraft, controlled
disbursement, ACH transactions, return items and interstate depository network services), employee credit card programs, cash pooling
services and any arrangements or services similar to any of the foregoing and/or otherwise in connection with Cash management and
Deposit Accounts.
“Banking Services
Obligations” means any and all obligations of any Loan Party or a Restricted Subsidiary, whether absolute or contingent
and however and whenever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof
and substitutions therefor), in connection with Banking Services, in each case, that has been designated to the Administrative
Agent in writing by the Lead Borrower as being Banking Services Obligations for the purposes of the Loan Documents, it being understood
that each counterparty thereto shall be deemed (A) to appoint the Administrative Agent as its agent under the applicable Loan Documents
and (B) to agree to be bound by the provisions of Article 8, Section 9.03 and Section 9.10 hereof and the
ABL Intercreditor Agreement as if it were a Lender.
“Banking Services
Reserve” means the aggregate amount of reserves established by the Administrative Agent from time to time in its Permitted
Discretion in respect of Secured Banking Services Obligations.
“Bankruptcy
Code” means Title 11 of the United States Code (11 U.S.C. § 101 et seq.).
“Blocked Account
Agreement” has the meaning assigned to such term in Section 5.15(a).
“Blocked Accounts”
has the meaning assigned to such term in Section 5.15(a).
“Board”
means the Board of Governors of the Federal Reserve System of the U.S.
“Borrowers”
means, collectively, the Initial US Borrower (where applicable), the US Borrower and the Canadian Borrower, and each, a “Borrower”.
“Borrower Materials”
has the meaning assigned to such term in Section 9.01(d).
“Borrowing”
means any (a) Revolving Loans of the same Type and Class made, converted or continued on the same date and, in the case of LIBO
Rate Revolving Loans or CDOR Loans, as to which a single Interest Period is in effect, (b) incurrence of Swingline Loans or (c)
Protective Advance.
“Borrowing Base”
means, at any time of calculation, the aggregate amount of the US Borrowing Base and the Canadian Borrowing Base.
“Borrowing Base
Certificates” means the US Borrowing Base Certificate or Canadian Borrowing Base Certificate, as applicable.
“Borrowing Request” means
a request by any Borrower (or the Lead Borrower on its behalf) for a Borrowing in accordance with Section 2.03 and
substantially in the form attached hereto as Exhibit B-1 or such other form that is reasonably acceptable to the Administrative
Agent and such Borrower (including any form on an electronic platform or electronic transmission system as shall be approved by
the Administrative Agent), appropriately completed and signed by a Responsible Officer of the applicable Borrower.
“Business Day”
means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City, New York or Toronto, Ontario
are authorized or required by law to remain closed; provided that (x) when used in connection with a LIBO Rate Revolving
Loan or Letter of Credit denominated in Dollars, the term “Business Day” shall also exclude any day on which banks
are not open for dealings in Dollar deposits in the London interbank market, or (y) when used in connection with any CDOR Revolving
Loan or Letter of Credit denominated in Canadian Dollars any funding, disbursement, settlement and/or payments in Canadian Dollars
in respect of such CDOR Revolving Loan or Letter of Credit or any other dealing in Canadian Dollars to be carried out pursuant
to this Agreement in respect of any such CDOR Revolving Loan or Letter of Credit, the term “Business Day” shall also
exclude any day on which banks are not open for dealings in Canadian Dollar deposits in the Toronto interbank market.
“Canadian AML
Laws” has the meaning assigned to such term in Section 9.17.
“Canadian
Base Rate” means, for any day, a rate per annum equal to the highest of (a) the per annum rate of interest
designated by Bank of America (acting through its Canada branch) from time to time as its base rate for commercial loans made
by it in Dollars, which rate is based on various factors, including its costs and desired return, general economic conditions
and other factors, and is used as a reference point for pricing some loans, which may be priced at, above or below such rate;
(b) the Federal Funds Effective Rate in effect on such day plus 0.50%, (c) to the extent ascertainable, the Published
LIBO Rate (which rate shall be calculated based upon an Interest Period of one month and shall be determined on a daily
basis) plus 1.00%; and (d) 0.00% per annum. Any change in the Canadian Base Rate due to a change in the Federal Funds
Effective Rate or the Published LIBO Rate, as the case may be, shall be effective from and including the effective date of
such change in the Federal Funds Effective Rate or the Published LIBO Rate, as the case may be. Any change in the base rate
announced by Bank of America (acting through its Canada branch) shall be effective from and including the opening of business
on the day specified in the public announcement of such change.
“Canadian Base
Rate Revolving Loans” means Revolving Loans to the Canadian Borrower denominated in Dollars and bearing interest at a
rate determined by reference to the Canadian Base Rate.
“Canadian Borrower”
has the meaning set forth in the preamble hereto.
“Canadian Borrowing
Base” means the Dollar Equivalent sum of the following as set forth in the most recently delivered Canadian Borrowing
Base Certificate:
(a)
(i) during the Peak Season, 90% of the Canadian Loan Parties’ Eligible Accounts and (ii) otherwise, 85% of the Canadian
Loan Parties’ Eligible Accounts; plus
(b)
the lesser of (i) (A) during the Peak Season, 90% of the Net Orderly Liquidation Value of the Canadian Loan Parties’
Eligible Inventory and (B) otherwise, 85% of the Net Orderly Liquidation Value of the Canadian Loan Parties’ Eligible Inventory
or (ii) (A) during the Peak Season, 75% of the book value of the Canadian Loan Parties’ Eligible Inventory and (B) otherwise,
70% of the book value of the Canadian Loan Parties’ Eligible Inventory (in each case, calculated at the lower of cost or
market value); plus
(c)
100% of Qualified Cash of the Canadian Loan Parties up to an amount not exceeding $25,000,000 in the aggregate; minus
(d)
any Availability Reserve established in connection with the foregoing.
In connection with
any Specified Transaction, the Canadian Borrower may submit a Canadian Borrowing Base Certificate reflecting a calculation of
the Canadian Borrowing Base that includes Eligible Accounts and Eligible Inventory (otherwise satisfying the criteria in
respect thereof, contained in such definition) acquired by Canadian Loan Parties in connection with such Specified
Transaction (the “Acquired Canadian Eligible Accounts” and the “Acquired Canadian Eligible
Inventory”, respectively) and, from and after the Specified Transaction Date, the Canadian Borrowing Base hereunder
shall be calculated giving effect thereto; provided that prior to the completion of a field examination and inventory
appraisal with respect to such Acquired Canadian Eligible Accounts and Acquired Canadian Eligible Inventory, such adjustment
to the Canadian Borrowing Base shall only be available if a customary desktop audit with respect to such assets reasonably
satisfactory to the Administrative Agent in its Permitted Discretion has been completed and shall be limited to, from the
Specified Transaction Date until the date that is 91 days after the Specified Transaction Date, the aggregate amount of
Acquired Canadian Eligible Accounts and Acquired Canadian Eligible Inventory included in the Canadian Borrowing Base prior to
the completion of a field examination and inventory appraisal with respect thereto, shall not exceed 10% of the Canadian
Borrowing Base (calculated after giving effect to the inclusion (up to such 10% cap) of the Acquired Canadian Eligible
Accounts and Acquired Canadian Eligible Inventory as to which a field examination and inventory appraisal has not been
performed). From the 91st day following the Specified Transaction Date (or such later date as the Administrative Agent may
agree), the Canadian Borrowing Base shall be calculated without reference to the Acquired Canadian Eligible Accounts and the
Acquired Canadian Eligible Inventory until a field examination and inventory appraisal has been completed with respect to
such assets; it being understood and agreed that (x) there shall be no Default or Event of Default solely as a result of a
failure to complete and deliver such inventory appraisal and field examination on or prior to the dates indicated above and
(y) the performance of such inventory appraisal and field examination on the Acquired Canadian Eligible Accounts and the
Acquired Canadian Eligible Inventory shall not count toward the limitations on the number of inventory appraisals and field
examinations contained in Section 5.06(b).
Notwithstanding anything
to the contrary herein, (i) for the period from and including the Closing Date until the 90th day after the Closing Date (or (A)
such earlier date on which the Canadian Borrower delivers an inventory appraisal and field examination reasonably satisfactory
to the Administrative Agent or (B) such later date as the Administrative Agent agrees to in its Permitted Discretion) and (ii)
for purposes of the Canadian Borrowing Base Certificate required to be delivered on or prior to the Closing Date), the Canadian
Borrowing Base shall be based on an alternative borrowing base equal to the greater of (a)(i) with respect to any period on or
prior to October 31, 2017, $9,000,000 and (ii) with respect to any period after October 31, 2017, $12,000,000 and (b) the sum of
65% of book value of Eligible Accounts and 40% of book value of Eligible Inventory of the Canadian Loan Parties, as determined
in good faith by the Canadian Borrower (in consultation with the Administrative Agent); provided that the Canadian Borrowing Base
shall be deemed to be $0 if the inventory appraisal and field examination are not delivered by the 91st day after the Closing Date.
“Canadian Borrowing
Base Certificate” means a certificate from a Responsible Officer of the Canadian Borrower, in substantially the form
of Exhibit M, as such form, subject to the terms hereof, may from time to time be modified as agreed by the Canadian Borrower
and the Administrative Agent or such other form which is acceptable to the Administrative Agent in its reasonable discretion.
“Canadian Collateral”
means any and all property of any Canadian Loan Party subject (or purported to be subject) to a Lien under any Collateral Document
and any and all other property of any Canadian Loan Party, now existing or hereafter acquired, that is or becomes subject (or purported
to be subject) to a Lien pursuant to any Collateral Document, in each case, to secure the Canadian Secured Obligations.
“Canadian Concentration
Account” has the meaning assigned to such term in Section 5.15(a).
“Canadian Dollars”
or “C$” refers to the lawful money of Canada.
“Canadian Employee”
means any employee or former employee of the Canadian Borrower or any other Canadian Loan Party.
“Canadian Employee
Plan” means any employee benefit, health, welfare, supplemental unemployment benefit, bonus, pension, supplemental pension,
profit sharing, retiring allowance, severance, deferred compensation, stock compensation, stock purchase, unit purchase, retirement,
life, hospitalization insurance, medical, dental, disability or other employment group or similar benefit or employment plans or
supplemental arrangements applicable to the Canadian Employees.
“Canadian Hedge
Product Amount” has the meaning assigned to such term in the definition of Canadian Secured Hedging Obligations.
“Canadian LC
Collateral Account” has the meaning assigned to such term in Section 2.05(j).
“Canadian LC
Exposure” means at any time, the sum of (a) the Dollar Equivalent of the aggregate undrawn amount of all outstanding
Canadian Letters of Credit at such time and (b) the Dollar Equivalent of the aggregate principal amount of all LC Disbursements
with respect to Canadian Letters of Credit that have not yet been reimbursed at such time. The Canadian LC Exposure of any Lender
at any time shall equal its Applicable Percentage of the aggregate Canadian LC Exposure at such time.
“Canadian Letter
of Credit” has the meaning assigned to such term in Section 2.05(a)(i)(B)
“Canadian Letter
of Credit Sublimit” means $5,000,000, subject to increase in accordance with Section 2.22.
“Canadian Line
Cap” means at any time, the lesser of (i) the aggregate Initial Canadian Commitment and (ii) the then-applicable Canadian
Borrowing Base.
“Canadian Loan
Guaranty” means the Canadian Loan Guaranty Agreement, in form and substance reasonably satisfactory to the Administrative
Agent (which shall be based on the US Loan Guaranty, with changes to be reasonably agreed), executed by each Canadian Loan Party
party thereto and the Administrative Agent for the benefit of the Secured Parties.
“Canadian Loan
Party” any Loan Party that is a Canadian Person.
“Canadian Lockbox”
has the meaning assigned to such term in Section 5.15(a).
“Canadian Obligations”
means all unpaid principal of and accrued and unpaid interest, fees and expenses (including interest accruing during the pendency
of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding)
on the Initial Canadian Revolving Loans, any Additional Revolving Loans made to the Canadian Borrower, all Canadian Overadvances,
all Canadian Protective Advances, all Canadian LC Exposure, all accrued and unpaid fees and all expenses, reimbursements, indemnities
and all other advances to, debts, liabilities and obligations of the Canadian Loan Parties to the Lenders or to any Lender, the
Administrative Agent, any Issuing Bank or any indemnified party arising under the Loan Documents in respect of any Initial Canadian
Revolving Loan, any Additional Revolving Loans made to the Canadian Borrower, Canadian Overadvance, Canadian Protective Advance,
Canadian Letter of Credit, whether direct or indirect (including those acquired by assumption), absolute, contingent, due or to
become due, now existing or hereafter arising.
“Canadian Overadvance”
has the meaning assigned to such term in Section 2.04(b).
“Canadian Pension
Plans” means each pension plan required to be registered under Canadian federal or provincial law that is maintained
or contributed to by Canadian Loan Parties for their 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 Person”
means any Person that is incorporated or organized under the laws of Canada or any province or territory thereof.
“Canadian
Prime Rate” means, on any day, the annual rate of interest equal to the greater of (i) the annual rate of interest
announced by the Administrative Agent (acting through its Canada branch) in effect as its prime rate on such day for
determining interest rates on Canadian Dollar denominated commercial loans in Canada and commonly known as “prime
rate” (which rate is based on various factors, including its costs and desired return, general economic conditions and
other factors, and is used as a reference point for pricing some loans, which may be priced at, above or below such rate) and
(ii) the annual rate of interest equal to the sum of (A) the one-month CDOR Loan Rate in effect on such day and (B) 1.00%,
with any such rate to be adjusted automatically, without notice, as of the opening of business on the effective date of any
change in such rate, provided that in no event shall the Canadian Prime Rate be less than zero.
“Canadian Prime
Rate Revolving Loans” means Revolving Loans made to the Canadian Borrower denominated in Canadian Dollars and bearing
interest at a rate determined by reference to the Canadian Prime Rate.
“Canadian Protective
Advance” has the meaning assigned to such term in Section 2.06(a).
“Canadian Required
Lenders” means, at any time, Lenders having Initial Canadian Revolving Credit Exposure or unused Initial Canadian Commitments
representing more than 50% of the sum of the total Initial Canadian Revolving Credit Exposure and such unused Initial Canadian
Commitments at such time; provided that the Initial Canadian Revolving Credit Exposure and unused Initial Canadian Commitments
of any Defaulting Lender shall be disregarding in the determination of the Canadian Required Lenders at any time.
“Canadian Restricted
Subsidiary” means, as to any Canadian Person, any subsidiary of such person that is not an Unrestricted Subsidiary.
“Canadian Secured
Banking Services Obligations” means the Banking Services Obligations of the Canadian Loan Parties provided by Secured
Banking Services Providers.
“Canadian Secured
Hedging Obligations” means all Hedging Obligations (other than any Excluded Swap Obligations) under each Hedge Agreement
between any Canadian Loan Party and a counterparty that is or becomes an Administrative Agent, a Lender, an Arranger or any Affiliate
or branch of the Administrative Agent, a Lender or an Arranger, for which such Canadian Loan Party agrees to provide security and
in each case that has been designated to the Administrative Agent in writing by the Canadian Borrower as being a Canadian Secured
Hedging Obligation for purposes of the Loan Documents, it being understood that each counterparty thereto shall be deemed (A) to
appoint the Administrative Agent as its agent under the applicable Loan Documents and (B) to agree to be bound by the provisions
of Article 8, Section 9.03, and Section 9.10 and the ABL Intercreditor Agreement as if it were a Lender;
provided that for any such Canadian Secured Hedging Obligations to constitute “Designated Hedging Obligations,”
the applicable Canadian Loan Party must have provided written notice to the Administrative Agent substantially in the form of Exhibit
N notifying the Administrative Agent of (i) the existence of the applicable Hedge Agreement and (ii) the maximum amount
of obligations of the applicable Canadian Loan Party that may arise thereunder (the “Canadian Hedge Product Amount”).
The Canadian Hedge Product Amount may be changed from time to time upon written notice to the Administrative Agent by the
applicable Secured Party and Canadian Loan Party. No Canadian Hedge Product Amount may be established or increased at any
time that a Default or Event of Default exists, or if a reserve in such amount would cause a Canadian Overadvance.
“Canadian Secured
Obligations” means all Secured Obligations of the Canadian Loan Parties.
“Canadian Security
Agreement” means the Canadian Security Agreement among the Canadian Loan Parties and the Administrative Agent for the
benefit of the Secured Parties, in form and substance reasonably acceptable to the Administrative Agent and the Canadian Borrower,
and to the extent that a Canadian Loan Party has a place of business, registered office, chief executive office or tangible property
in the province of Quebec, such term shall include each deed of hypothec and all related documents as may be applicable.
“Canadian Subsidiary”
means any direct or indirect subsidiary of the Canadian Borrower that is a Canadian Person.
“Canadian Successor
Borrower” has the meaning assigned to such term in Section 6.07(a).
“Canadian Super
Majority Lenders” means, at any time, Lenders having Initial Canadian Revolving Credit Exposure and unused Initial Canadian
Commitments representing more than 66-2/3% of the sum of the aggregate Initial Canadian Revolving Credit Exposure and such unused
Initial Canadian Commitments of all Lenders at such time; provided that the Initial Canadian Revolving Credit Exposure and
unused Initial Canadian Commitment of any Defaulting Lender shall be disregarded in the determination of the Canadian Super Majority
Lenders at any time.
“Capital Lease”
means, as applied to any Person, any lease of any property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is or should be accounted for as a capital lease on the balance sheet of that Person.
“Capital Stock”
means any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation,
any and all equivalent ownership interests in a Person (other than a corporation), including partnership interests and membership
interests, and any and all warrants, rights or options to purchase or other arrangements or rights to acquire any of the foregoing,
but excluding for the avoidance of doubt any Indebtedness convertible into or exchangeable for any of the foregoing.
“Captive Insurance
Subsidiary” means any Restricted Subsidiary of the Lead Borrower that is maintained as a self-insurance subsidiary and
is subject to regulation as an insurance company (and any Restricted Subsidiary thereof).
“Cash”
means money, currency or a credit balance in any Deposit Account.
“Cash Dominion
Period” means (a) each Liquidity Period or (b) the period during which any Specified Default has occurred and is
continuing.
“Cash Equivalents”
means, as at any date of determination, (a) readily marketable securities (i) issued or directly and unconditionally
guaranteed or insured as to interest and principal by the U.S. or Canadian government or (ii) issued by any agency or
instrumentality of the U.S. or Canada, the obligations of which are backed by the full faith and credit of the U.S. or
Canada, in each case maturing within one year after such date and, in each case, repurchase agreements and reverse repurchase
agreements relating thereto; (b) readily marketable direct obligations issued by any state of the U.S. or province or
territory of Canada or any political subdivision of any such state, province or territory or any public instrumentality
thereof or by any foreign government, in each case maturing within one year after such date and having, at the time of the
acquisition thereof, a rating of at least A-2 from S&P or at least P-2 from Moody’s (or, if at any time neither
S&P nor Moody’s shall be rating such obligations, an equivalent rating from another nationally recognized
statistical rating agency) and, in each case, repurchase agreements and reverse repurchase agreements relating thereto; (c)
commercial paper maturing no more than one year from the date of creation thereof and having, at the time of the acquisition
thereof, a rating of at least A-2 from S&P or at least P-2 from Moody’s (or, if at any time neither S&P nor
Moody’s shall be rating such obligations, an equivalent rating from another nationally recognized statistical rating
agency); (d) deposits, money market deposits, time deposit accounts, certificates of deposit or bankers’ acceptances
(or similar instruments) maturing within one year after such date and issued or accepted by any Lender or by any bank
organized under, or authorized to operate as a bank under, the laws of the U.S. or Canada, any state or province, as
applicable, thereof or the District of Columbia or any political subdivision thereof and that has capital and surplus of not
less than $100,000,000 and, in each case, repurchase agreements and reverse repurchase agreements relating thereto; and (e)
shares of any money market mutual fund that has (i) substantially all of its assets invested in the types of investments
referred to in clauses (a) through (d) above, (ii) net assets of not less than $250,000,000 and (iii) a rating
of at least A-2 from S&P or at least P-2 from Moody’s.
“Cash Equivalents”
shall also include (x) Investments of the type and maturity described in clauses (a) through (e) above of foreign
obligors, which Investments or obligors (or the parent companies thereof) have the ratings described in such clauses or equivalent
ratings from comparable foreign rating agencies and (y) other short-term Investments utilized by Foreign Subsidiaries in accordance
with normal investment practices for cash management in Investments analogous to the Investments described in clauses (a)
through (e) and in this paragraph.
“CDOR Loan Rate”
means the CDOR Rate plus the Applicable Rate.
“CDOR Rate”
means, for any day, a per annum rate of interest equal to the Canadian Dollar bankers' acceptance rate, or comparable or successor
rate approved by the Administrative Agent, determined by it at or about 10:00 a.m. (Toronto, Ontario time) on the applicable day
(or the preceding Business Day, if the applicable day is not a Business Day) for a term comparable to the CDOR Revolving Loan,
as published on the CDOR or other applicable Reuters screen page (or other commercially available source designated by the Administrative
Agent from time to time); provided that in no event shall the CDOR Rate be less than zero.
“CDOR Revolving
Loans” means Revolving Loans denominated in Canadian Dollars and bearing interest at a rate determined by reference to
the CDOR Loan Rate.
“Change in Law”
means (a) the adoption of any law, treaty, rule or regulation after the Closing Date, (b) any change in any law, treaty, rule or
regulation or in the interpretation or application thereof by any Governmental Authority after the Closing Date or (c) compliance
by any Lender (including the Swingline Lender) or any Issuing Bank (or, for purposes of Section 2.15(b), by any lending
office of such Lender or such Issuing Bank by such Lender’s or such Issuing Bank’s holding company, if any) with any
request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the
Closing Date (other than any such request, guideline or directive to comply with any law, rule or regulation that was in effect
on the Closing Date). For purposes of this definition and Section 2.15, (x) the Dodd-Frank Wall Street Reform and Consumer
Protection Act and all requests, rules, guidelines, requirements and directives thereunder or issued in connection therewith or
in implementation thereof and (y) all requests, rules, guidelines, requirements or directives promulgated by the Bank for International
Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or U.S., Canadian or foreign regulatory
authorities, in each case pursuant to Basel III, shall in each case described in clauses (a), (b) and (c)
above, be deemed to be a Change in Law, regardless of the date enacted, adopted, issued or implemented.
“Change of Control”
means the earliest to occur of:
(a)
at any time prior to a Qualifying IPO, the Permitted Holders ceasing to beneficially own, either directly or indirectly
(within the meaning of Rule 13d-3 and Rule 13d-5 under the Exchange Act), Capital Stock representing more than 50% of the total
voting power of all of the outstanding voting stock of Holdings;
(b)
at any time on or after a Qualifying IPO, the acquisition, directly or indirectly, by any Person or group (within the meaning
of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act), including any group acting for the purpose of acquiring, holding
or disposing of Securities (within the meaning of Rule 13d-5(b)(1) under the Exchange Act, but excluding (i) any employee benefit
plan and/or Person acting as the trustee, agent or other fiduciary or administrator therefor, (ii) one or more Permitted Holders,
(iii) any group directly or indirectly controlled by one or more Permitted Holders, and (iv) any underwriter in connection with
any Qualifying IPO solely for the purposes of facilitating the distribution of such Capital Stock), of Capital Stock representing
more than the greater of (A) 40% of the total voting power of all of the outstanding voting stock of Holdings and (B) the percentage
of the total voting power of all of the outstanding voting stock of Holdings beneficially owned, directly or indirectly, by the
Permitted Holders; and
(c)
the Lead Borrower ceasing to be a direct or indirect Wholly-Owned Subsidiary of Holdings (or any permitted successor hereunder);
provided
that (x) a “Change of Control” shall not be deemed to have occurred with respect to clauses (a) or (b)
above if the Permitted Holders have, at such time, the right or ability by voting power, contract or otherwise to elect or designate
for election a majority of the board of directors or similar governing body of Holdings; and (y) the creation of a Parent Company
shall not in and of itself cause a Change of Control so long as at the time such Person became a Parent Company, (1) there is no
change in the direct or indirect beneficial ownership of the total voting power of all of the outstanding voting stock of Holdings
by the Permitted Holders or (2) no Person and no group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange
Act), including any such group acting for the purpose of acquiring, holding or disposing of Securities (within the meaning of Rule
13d-5(b)(1) under the Exchange Act) (other than one or more Permitted Holders or any group directly or indirectly controlled by
one or more Permitted Holders), shall have beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act, or any
successor provisions), directly or indirectly, of 50% or more, in the case of clause (a) above, or 40% or more, in the case
of clause (b) above, of the total voting power of all of the outstanding voting stock of Holdings.
“Charge”
means any charge, fee, loss, expense, cost, accrual or reserve of any kind.
“Charged Amounts”
has the meaning assigned to such term in Section 9.20.
“Class”,
when used in reference to (a) any Revolving Loan or Borrowing, refers to whether such Revolving Loan, or the Revolving Loans
comprising such Borrowing, are Initial US Revolving Loans, Initial Canadian Revolving Loans, US Protective Advances, Canadian
Protective Advances, Additional Revolving Loans, Swingline Loans or other loans or series established as a separate
“class” pursuant to Section 2.22 or 2.23, (b) any Commitment, refers to whether such
Commitment is an Initial Commitment, an Additional Revolving Commitment of any series established as a separate
“Class” pursuant to Section 2.22 or 2.23 or a commitment to make any other Commitments under
any other Revolving Facility established as a separate “Class” and (c) any Lender, refers to whether such Lender
has a Loan or Commitment of a particular Class. For purposes of this definition, any separate series or tranche shall be
treated as a separate “Class” regardless of whether such series or tranche is specifically as a separate
“Class”. For the avoidance of doubt, the Initial US Revolving Loans and the Initial Canadian Revolving Loans
constitute separate Classes of Revolving Loans.
“Closing Date”
means the date on which the conditions specified in Section 4.01 are satisfied (or waived in accordance with Section 9.02).
“Closing Date
Material Adverse Effect” means a Material Adverse Effect (as defined in the Merger Agreement (as in effect on the Closing
Date)).
“Code”
means the Internal Revenue Code of 1986 as amended.
“Co-Investors”
means, individually and collectively, (a) any current and former officers, directors and members of the management of the US Borrower,
any Parent Company and/or any Subsidiary of the US Borrower, solely to the extent that such Persons own Capital Stock in the US
Borrower or any direct or indirect parent thereof on the Closing Date, (b) any Person directly or indirectly owning Capital Stock
of the Company immediately prior to the Merger investing directly or indirectly in any Parent Company on the Closing Date (including
by contributing, converting, exchanging or otherwise “rolling over” such Capital Stock) or is subject to a binding
agreement on the Closing Date with respect thereto, and (c) any other Person (other than the Sponsors) making a cash equity investment
directly or indirectly in any Parent Company on the Closing Date, so long as, in each case, immediately after giving effect thereto,
the Sponsors’ investment will constitute not less than 50.1% direct or indirect beneficial ownership of Holdings upon consummation
of the Transactions.
“Collateral”
means the US Collateral and the Canadian Collateral.
“Collateral
Access Agreement” means a landlord waiver, bailee letter or acknowledgment agreement of any lessor, warehouseman, processor,
consignee, mortgagee, customs broker or other Person (other than any Loan Party) having possession of, a Lien upon, or having rights
or interests in the inventory (or any books or records relating thereto) of any Loan Party, in each case in form and substance
reasonably satisfactory to the Administrative Agent and the Lead Borrower.
“Collateral
and Guarantee Requirement” means, at any time, subject to (x) the applicable limitations set forth in this Agreement
and/or any other Loan Document and (y) the time periods (and extensions thereof) set forth in Section 5.12, the requirement
that the Administrative Agent shall have received in the case of any Restricted Subsidiary that is required to become a Loan Party
after the Closing Date pursuant to Section 5.12 (including by ceasing to be an Excluded Subsidiary):
(a) (i)
in the case of any Person that will become a US Loan Party, (A) a joinder to the US Loan Guaranty in substantially the form attached
as an exhibit thereto, (B) a supplement to the US Security Agreement in substantially the form attached as an exhibit thereto,
(C) if such Restricted Subsidiary owns registrations of or applications for U.S. Patents, Trademarks and/or Copyrights that constitute
Collateral, an Intellectual Property Security Agreement, (D) a completed Perfection Certificate, (E) Uniform Commercial Code financing
statements in appropriate form for filing in such jurisdictions as the Administrative Agent may reasonably request (F) an executed
joinder to the ABL Intercreditor Agreement in substantially the form attached as an exhibit thereto, and (G) entry into a Blocked
Account Agreement with respect to each of its Blocked Accounts; and
(ii) in the case
of any Person that will become a Canadian Loan Party, (A) a joinder to the Canadian Loan Guaranty in substantially the form
attached as an exhibit thereto, (B) a supplement to the Canadian Security Agreement in substantially the form attached as an
exhibit thereto, (C) PPSA financing statements and other appropriate registration documents in appropriate form for filing in
such jurisdictions as the Administrative Agent may reasonably request, and (D) entry into a Blocked Account Agreement with
respect to each of its Blocked Accounts; and
(b) each
item of Collateral that such Restricted Subsidiary is required to deliver under Section 4.02 of the US Security Agreement
or any corresponding provision in any other Collateral Document (which, for the avoidance of doubt, shall be delivered within the
time periods set forth in Section 5.12 and shall exclude Excluded Assets);
Notwithstanding any provision
of this Agreement or any other Loan Document to the contrary,
(A) no control agreements,
other control arrangements or perfection by “control” shall be required (except as provided in clauses (y) and
(z) below) and no Loan Party shall be required to perfect a security interest in any Collateral, in each case (to the extent
applicable), other than perfection (w) by filing of a UCC-1 financing statement or a PPSA financing statement, (x) with respect
to IP Rights, by filings with the United States Patent and Trademark Office or the United States Copyright Office, (y) by delivery
of certificates evidencing Capital Stock and notes and other evidence of indebtedness, in each case, to the extent required to
be pledged as Collateral and required to be delivered pursuant to the US Security Agreement or the Canadian Security Agreement,
and (z) to the extent required pursuant to Section 5.15;
(B)(i) no action
(including any filings or registrations) outside of the United States in order to create or perfect any security interest in any
asset located outside of the United States (with respect to assets of US Loan Parties) or outside of Canada (with respect to assets
of Canadian Loan Parties) (including with respect to intellectual property and equity interests) shall be required and (ii) no
security or pledge agreements shall be governed by any other law other than the laws of New York (except the laws of any other
U.S. state may govern to the extent necessary to create or perfect a security interest in any portion of the Collateral (with respect
to US Loan Parties) and the laws of any province or territory in Canada (with respect to Canadian Loan Parties)); and
(C) the Loan Parties
shall not be required to collaterally assign to the Administrative Agent their respective rights under (w) the Merger Agreement,
(x) any documentation governing permitted acquisition or investment not prohibited under the terms of this Agreement, (y) any representation
and warranty insurance policy or (z) any business interruption policy.
With respect to any Collateral
that is not ABL Priority Collateral, to the extent that the First Lien Agent determines that any such property or assets shall
not become part of, or shall be excluded from, the “Collateral” under the First Lien Facility, or that any delivery
or notice requirement in respect of any such “Collateral” under the First Lien Facility shall be extended or waived,
the Administrative Agent shall automatically be deemed to accept such determination and shall execute any documentation, if applicable,
requested by the Lead Borrower in connection therewith, including termination and release documents.
“Collateral
Documents” means, collectively, (a) each Security Agreement, (b) each Intellectual Property Security Agreement,
(c) any supplement to any of the foregoing delivered to the Administrative Agent pursuant to the definition of “Collateral
and Guarantee Requirement” and (d) each of the other instruments and documents pursuant to which any Loan Party grants a
Lien on any Collateral as security for payment of the Secured Obligations.
“Commercial
Tort Claim” has the meaning set forth in Article 9 of the UCC.
“Commitment”
means, with respect to each Lender, such Lender’s Initial Commitment, Additional Revolving Commitment and any other commitment
to provide Loans under a Revolving Facility, as applicable, in effect as of such time.
“Commitment
Fee Rate” means on any date, with respect to the Initial Commitments, the applicable rate per annum set forth below based
upon the Average Usage; provided that until the first Adjustment Date following the completion of at least one full Fiscal
Quarter after the Closing Date, “Commitment Fee Rate” shall be the applicable rate per annum set forth below in Level
II:
|
Level
|
Average Usage
|
Unused Line Fee Rate
|
|
I
|
≥50%
|
0.250%
|
|
II
|
< 50%
|
0.375%
|
The Commitment Fee Rate
shall be adjusted quarterly on a prospective basis on each Adjustment Date based upon the Average Usage as of such Adjustment Date.
“Commitment
Schedule” means the Schedule attached hereto as Schedule 1.01(a).
“Commodity Exchange
Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.).
“Company”
has the meaning assigned to such term in the Recitals to this Agreement.
“Company Competitor”
means (a) any Person that is or becomes (i) a competitor of the Borrowers and/or any of their respective subsidiaries and/or the
Company and/or any of its subsidiaries, or (ii) an Affiliate of a Person described in clause (a)(i) and, in each case, identified
in writing to the Administrative Agent, (b) any reasonably identifiable Affiliate of any person described in clause (a)
above (on the basis of such Affiliate’s name), and/or (c) any Affiliate of any Person described in clause (a) or clause
(b) above identified by name in a written notice to the Administrative Agent.
“Compliance
Certificate” means a Compliance Certificate substantially in the form of Exhibit C.
“Confidential
Information” has the meaning assigned to such term in Section 9.13.
“Consolidated
Adjusted EBITDA” means, as to any Person for any period, an amount determined for such Person on a consolidated basis
equal to the total of (a) Consolidated Net Income for such period plus (b) the sum, without duplication, of (to the extent
deducted in calculating Consolidated Net Income, other than in respect of clauses (xi), (xiii), (xv), (xvi)
and (xviii) below) the amounts of:
(i) consolidated
total interest expense determined in accordance with GAAP and, to the extent not reflected in such consolidated total
interest expense, annual agency fees paid to the administrative agents and collateral agents under any credit facilities,
costs associated with obtaining hedging arrangements and breakage costs in respect of hedging arrangements related to
interest rates), any expense resulting from the discounting of any indebtedness in connection with the application of
recapitalization accounting or, if applicable, purchase accounting in connection with the Transactions or any acquisition,
penalties and interest relating to taxes, any “additional interest” or “liquidated damages” with
respect to other securities for failure to timely comply with registration rights obligations, amortization or expensing of
deferred financing fees, amendment and consent fees, debt issuance costs, commissions, fees, expenses and discounted
liabilities and any other amounts of non-Cash interest, any expensing of bridge, commitment and other financing fees and any
other fees related to the Transactions or any acquisitions after the Closing Date, commissions, discounts, yield and other
fees and charges (including any interest expense) related to any qualified securitization facility, any accretion of accrued
interest on discounted liabilities and any prepayment premium or penalty, interest expense attributable to a parent company
resulting from push-down accounting and any lease, rental or other expense in connection with any lease that is not a
capitalized lease, any losses on hedging obligations or other derivative instruments entered into for the purpose of hedging
interest rate risk (net of interest income and gains on such hedging obligations), costs of surety bonds in connection with
financing activities (whether amortized or immediately expensed), fees and expenses paid to (or for the benefit of) any
arranger, any administrative or collateral agent, any lender or any other secured party under the Loan Documents, the First
Lien Credit Agreement (and any related loan documents) and the Second Lien Credit Agreement (and any related loan documents)
or to (or for the benefit of) any other holder of permitted Indebtedness in connection with its services hereunder or to (or
for the benefit of) any other holder of permitted Indebtedness in connection with its services hereunder (including fees and
expenses in connection with any modifications of the Loan Documents), other bank or any other Person in connection with its
services as administrative agent or trustee, or similar capacity under any other Indebtedness permitted hereunder and
financing fees;
(ii) provision
for Taxes during such period (including pursuant to any Tax sharing arrangement or any distributions or other Restricted Payments
for the payment of any Tax), including, in each case, arising out of tax examinations, repatriation of amounts from a Foreign Subsidiary
and (without duplication) any payment to a Parent Company pursuant to Section 6.04(a)(i) and (iv) in respect of Taxes;
(iii) depreciation
and amortization (including, without limitation, amortization of goodwill, software and other intangible assets);
(iv) any
non-Cash Charge (provided, that to the extent any such non-Cash Charge represents an accrual or reserve for any actual or
potential cash items in any future period (including of the type described in clause (vii) below), (A) such Person may elect
(in its sole discretion) not to add back such non-Cash Charge in the then-current period, in which case, any cash payment in respect
thereof in any future period shall be not subtracted from Consolidated Adjusted EBITDA, and (B) to the extent such Person elects
(in its sole discretion) to add back such non-Cash Charge in the then-current period, any cash payment in respect thereof in any
subsequent periods shall be subtracted from Consolidated Adjusted EBITDA pursuant to clause (c)(v) below);
(v) (A) Transaction
Costs, and (B) transaction fees and Charges (1) incurred or amortized for such period in connection with the consummation of any
transaction (or any transaction proposed and not consummated), (2) incurred in connection with any Qualifying IPO (or any Qualifying
IPO proposed and not consummated) and/or (3) that are actually reimbursed or reimbursable by third parties pursuant to indemnification
or reimbursement provisions or similar agreements or insurance; provided, that in respect of any fee, cost, expense or reserve
that is added back in reliance on clause (3) above, such Person in good faith expects to receive reimbursement for such
fee, cost, expense or reserve within the next four Fiscal Quarters (it being understood that to the extent any reimbursement amount
is not actually received within such Fiscal Quarters, such reimbursement amount shall be deducted in calculating Consolidated Adjusted
EBITDA for such Fiscal Quarters pursuant to clause (c)(iii) below);
(vi) Public
Company Costs;
(vii) (A)
management, monitoring, consulting, transaction and advisory fees (including termination fees) and indemnities and expenses
actually paid or accrued by, or on behalf of, such Person or any of its subsidiaries (1) to the Investors (or their
Affiliates or management companies) to the extent permitted under this Agreement or (2) as permitted by Section 6.09(f);
(B) the amount of payments made to option holders of any Parent Company in connection with, or as a result of, any
distribution being made to shareholders of such Person, which payments are being made to compensate such option holders as
though they were shareholders at the time of, and entitled to share in, such distribution, including any cash consideration
for any repurchase of equity, in each case to the extent permitted under the Loan Documents and (C) the amount of fees,
expenses and indemnities paid to directors, including of Holdings or any Parent Company;
(viii) [reserved];
(ix) any
Charges (or net income) attributable to any interest, non-controlling interest and/or minority interest of any third party in any
Restricted Subsidiary;
(x) the
amount of earnout obligation expense incurred in connection with (including adjustments thereto) (A) the Acquisition, (B) acquisitions
and Investments consummated prior to the Closing Date and (C) any Permitted Acquisition or other Investment permitted by this Agreement,
in each case, which is paid or accrued during the applicable period;
(xi) pro
forma “run rate” cost savings (including sourcing and supply chain savings), operating expense reductions, operating
and productivity improvements and synergies (net of actual amounts realized) projected by the Lead Borrower in good faith that
are reasonably identifiable and factually supportable (in the good faith determination of such Person) in connection with (A) the
Transactions related to actions that have been taken (including prior to the Closing Date) or with respect to which substantial
steps have been taken or are expected to be taken (in the good faith determination of the Lead Borrower) within 24 months after
the Closing Date (or, in respect of any pricing increases only, within 12 months after the Closing Date) and (B) any permitted
acquisitions, Investments, Dispositions and other Specified Transactions, and any operating and productivity improvements, restructurings,
cost savings initiatives and other initiatives (including the modification and renegotiation of contracts and other arrangements,
pricing adjustments, supply chain optimization (including consolidating or changing suppliers, supply base reduction and reduction
in materials costs), product and warranty improvements (including lean manufacturing initiatives, design, engineering and automation
optimization and discontinuing or replacing products) and other items of the type described in clause (xii) below) projected
by the Lead Borrower in good faith to result from actions that have been taken (including prior to completion of any such acquisitions,
Investments, Dispositions and other Specified Transactions) or with respect to which substantial steps have been taken or are expected
to be taken (in the good faith determination of the Lead Borrower) within 24 months after any such acquisitions, Investments, Dispositions
and other Specified Transactions or operating improvements, restructurings, cost savings initiatives and other initiatives (or,
in respect of any pricing increases only, within 12 months after the applicable pricing increase); pro forma “run rate”
shall be the full benefit associated with any action taken, committed to be taken or with respect to which substantial steps have
been taken or are expected to be taken calculated on a Pro Forma Basis as though such cost savings, operating expense reductions
and synergies had been fully realized on the first day of the applicable period for the entirety of such period;
(xii) (A)
Charges attributable to the undertaking and/or implementation of operating improvements, operating expense reductions, cost
savings initiatives and other initiatives, transitions, openings and pre-openings, business optimization, restructurings and
integration (including inventory optimization programs, software development, systems upgrade, closure or consolidation of
facilities and plants, curtailments, entry into new markets, strategic initiatives and contracts, consulting fees, signing or
retention costs, retention or completion bonuses, expansion and relocation expenses, severance payments, modifications to
pension and post-retirement employee benefit plans or other post-employment benefit costs representing amortization of
unrecognized prior service costs, actuarial losses, including amortization of such amounts arising in prior periods,
amortization of the unrecognized net obligation (and loss or cost) existing at the date of initial application of FASB
Accounting Standards Codification 715, and any other items of a similar nature, new systems design and implementation and
startup costs), (B) reductions, improvements, enhancements, synergies and initiatives as contemplated in clause (xi)
above, and (C) Charges related to legal settlement, fines, judgments or orders, including with respect to warranty
claims;
(xiii) to
the extent not otherwise included in Consolidated Net Income, proceeds of business interruption insurance in an amount representing
the earnings for the applicable period that such proceeds are intended to replace (whether or not then received so long as such
Person in good faith expects to receive such proceeds within the next four Fiscal Quarters (it being understood that to the extent
not actually received within such Fiscal Quarters, such proceeds shall be deducted in calculating Consolidated Adjusted EBITDA
pursuant to clause (c)(iv) below)) and (B) the amount of any cash tax benefits related to the tax amortization of intangible
assets in such period;
(xiv) (A)
unrealized net losses in the Fair Market Value of any arrangements under Hedge Agreements and/or other derivative instrument pursuant
to (in the case of such other derivative instruments) FASB ASC No. 815 – Derivatives and Hedging and (B) any net loss (less
all fees and expenses or charges related thereto) attributable to the early extinguishment of indebtedness (and the termination
of any associated hedging arrangements);
(xv) the
amount of (A) any Charge to the extent that a corresponding amount is received in cash by such Person from a Person other than
such Person or any Restricted Subsidiary of such Person under any agreement providing for reimbursement of such Charge and (B)
any Charge with respect to any liability or casualty event, business interruption or any product recall, (1) so long as such Person
has submitted in good faith, and reasonably expects to receive payment in connection with, a claim for reimbursement of such amounts
under its relevant insurance policy (with a deduction in the applicable future period for any amount so added back to the extent
not so reimbursed within the next four Fiscal Quarters) or (2) without duplication of amounts included in a prior period under
clause (B)(1) above, to the extent such Charge is covered by insurance proceeds received in cash during such period (it
being understood that if the amount received in cash under any such agreement in any period exceeds the amount of Charge paid during
such period such excess amounts received may be carried forward and applied against any Charge in any future period);
(xvi) the
amount of Cash actually received (or the amount of the benefit of any netting arrangement resulting in reduced Cash Charges) during
such period, to the extent not included in Consolidated Net Income in any period or related non-Cash gain deducted in the calculation
of Consolidated Adjusted EBITDA in any prior period;
(xvii) the
excess of rent expense during such period over actual Cash rent paid over due to the use of straight line rent for GAAP purposes;
and
(xviii) Other
Agreed Adjustments,
minus (c) to the
extent such amounts increase Consolidated Net Income, without duplication:
(i) non-Cash
gains or income; provided, that to the extent any non-Cash gain or income represents an accrual or deferred income in respect
of actual potential Cash items in any future period, such Person may elect (in its sole discretion) not to deduct such non-Cash
gain or income in the then-current period;
(ii) unrealized
net gains in the Fair Market Value of any arrangements under Hedge Agreements;
(iii) the
amount added back to Consolidated Adjusted EBITDA pursuant to clause (b)(v)(B)(3) above in a prior period to the extent
the relevant reimbursement amounts were not received within the time period required by such clause and are required to be deducted
from Consolidated Adjusted EBITDA for such required time periods pursuant to clause (b)(v)(B)(3) above;
(iv) the
amount added back to Consolidated Adjusted EBITDA pursuant to clause (b)(xiii) above in a prior period to the extent the
relevant business interruption insurance proceeds were not received within the time period required by such clause and are required
to be deducted from Consolidated Adjusted EBITDA pursuant to clause (b)(xiii) above;
(v) to
the extent that such Person added back the amount of any non-Cash charge to Consolidated Adjusted EBITDA pursuant to clause
(b)(iv) above in a prior period, the cash payment in respect thereof in the relevant future period (except as otherwise provided
in clause (b)(iv) above); and
(vi) the
excess of actual Cash rent paid over rent expense during such period due to the use of straight line rent for GAAP purposes.
Notwithstanding anything
to the contrary herein, to the extent applicable, (i) Consolidated Adjusted EBITDA for the Fiscal Quarter ended on or around June
30, 2016 shall be deemed to be $51,453,000, (ii) Consolidated Adjusted EBITDA for the Fiscal Quarter ended on or around September
30, 2016 shall be deemed to be $23,046,000, (iii) Consolidated Adjusted EBITDA for the Fiscal Quarter ended on or around December
31, 2016 shall be deemed to be $55,795,000 and (iv) Consolidated Adjusted EBITDA for the Fiscal Quarter ended on or around March
31, 2017 shall be deemed to be $39,888,000, in each case, as subject to adjustment pursuant to clause (b) of this definition
to the extent applicable to any such Fiscal Quarter (and not otherwise already included in such amounts) and otherwise adjusted
on a Pro Forma Basis.
“Consolidated
First Lien Debt” means, as to any Person determined on a consolidated basis, at any date of determination, the aggregate
principal amount of Consolidated Total Debt outstanding on such date (i) under this Agreement or (ii) that is secured by a Lien
on the US Collateral on a pari passu or senior basis with the First Priority Secured Obligations (it being understood that
Consolidated Total Debt outstanding on any applicable date of determination (subject to Section 1.11) under any First Lien
Facility secured on a Split Collateral Basis shall constitute Consolidated First Lien Debt).
“Consolidated
Interest Expense” means, as to any Person determined on a consolidated basis at any date of determination, the sum,
without duplication, of (a) consolidated Cash interest of the Lead Borrower and its Restricted Subsidiaries determined in
accordance with GAAP, (i) including (A) the Cash interest component of Capital Lease obligations and (B) net Cash payments
made (less net Cash payments received) pursuant to obligations under permitted hedging arrangements related to interest
rates; but (ii) excluding (to the extent such expense was deducted in computing Consolidated Net Income and not added back in
computing Consolidated Adjusted EBITDA) (A) annual agency fees paid to the administrative agents and collateral agents under
any credit facilities, (B) costs associated with obtaining hedging arrangements and breakage costs in respect of hedging
arrangements related to interest rates), (C) any expense resulting from the discounting of any Indebtedness in connection
with the application of recapitalization accounting or, if applicable, purchase accounting in connection with the
Transactions or any acquisition, (D) penalties and interest relating to Taxes, (E) any “additional interest” or
“liquidated damages” with respect to other securities for failure to timely comply with registration rights
obligations, (F) amortization or expensing of deferred financing fees, amendment and consent fees, debt issuance costs,
commissions, fees, expenses and discounted liabilities and any other amounts of non-Cash interest, (G) any expensing of
bridge, commitment and other financing fees and any other fees related to the Transactions or any acquisitions after the
Closing Date, (H) commissions, discounts, yield and other fees and charges (including any interest expense) related to any
qualified securitization facility, (I) any accretion of accrued interest on discounted liabilities and any prepayment premium
or penalty, (J) interest expense attributable to a parent company resulting from push-down accounting and (K) any lease,
rental or other expense in connection with any lease that is not a Capital Lease, net of (b) Cash interest income of the Lead
Borrower and its Restricted Subsidiaries.
For purposes of determining the amount of
principal allocated to scheduled payments under Capital Leases under this definition, interest in respect of any Capital Lease
of any Person shall be deemed to accrue at an interest rate reasonably determined by such Person to be the rate of interest implicit
in such Capital Lease in accordance with GAAP.
“Consolidated
Net Income” means, as to any Person determined on a consolidated basis (the “Subject Person”) for
any period, the net income (or loss) of the Subject Person for such period taken as a single accounting period determined in accordance
with GAAP; provided that there shall be excluded, without duplication:
(a) (i)
the income of any Person (other than a Restricted Subsidiary of the Subject Person) in which any other Person (other than the Subject
Person or any of its Restricted Subsidiaries) has a joint interest, except that the amount of dividends or distributions or other
payments (including any ordinary course dividend, distribution or other payment) paid in cash (or to the extent converted into
cash) to the Subject Person or any of its Restricted Subsidiaries by such Person during such period (regardless of whether such
payment is in respect of the income of such Person in the current period or any prior period) shall be included in Consolidated
Net Income or (ii) the loss of any Person (other than a Restricted Subsidiary of the Subject Person) in which any other Person
(other than the Subject Person or any of its Restricted Subsidiaries) has a joint interest, other than to the extent that the Subject
Person or any of its Restricted Subsidiaries has contributed cash or Cash Equivalents to such Person in respect of such loss during
such period for the express purpose of funding such losses (but shall exclude any other Investment in such Person);
(b) gains
or losses (less all fees and expenses chargeable thereto) attributable to any sales or dispositions of Capital Stock or assets
(including asset retirement costs) or of returned surplus assets, in each case, outside of the ordinary course of business;
(c) gains
or losses from extraordinary items, any one-time event or item, and nonrecurring or unusual items (including costs of and payments
of actual or prospective legal settlements, fines, judgments or orders), including in connection with any acquisition;
(d) any
unrealized or realized net foreign currency translation or transaction gains or losses impacting net income (including currency
re-measurements of Indebtedness); provided that notwithstanding anything to the contrary herein, realized gains and losses
in respect of any Designated Operational FX Hedge shall be included in the calculation of Consolidated Net Income;
(e) any
net gains, Charges or losses with respect to (i) any disposed (other than Dispositions of assets and inventory in the ordinary
course of business), abandoned, divested and/or discontinued asset, property or operation (other than, at the option of the Lead
Borrower, any asset, property or operation pending the disposal, abandonment, divestiture and/or termination thereof), (ii) any
disposal (other than Dispositions of assets and inventory in the ordinary course of business), abandonment, divestiture and/or
discontinuation of any asset, property or operation (other than, at the option of such Person, relating to assets or property held
for sale pending the Disposition thereof) and/or (iii) facilities or plants that have been closed during such period or for which
Charges and losses were required to be recorded pursuant to GAAP;
(f) (i)
any net income or loss (less all fees and expenses or charges related thereto) attributable to the early extinguishment of Indebtedness
(and the termination of any associated Hedge Agreements) and (ii) any other losses and expenses incurred in connection with the
early termination, refinancing or prepayment of guarantee obligations, operating leases and other similar contractual obligations;
(g) (i)
any Charges incurred pursuant to any management equity plan, profits interest or stock option plan or any other management or employee
benefit plan or agreement, pension plan, any stock subscription or shareholder agreement or any distributor equity plan or agreement,
or any similar equity plan or agreement, including any fair value adjustments that may be required under liquidity puts for such
arrangements and (ii) any Charges in connection with the rollover, acceleration or payout of Capital Stock held by management of
any Parent Company, any Borrower and/or any Restricted Subsidiary, in each case, to the extent that any such Charge is funded with
net cash proceeds contributed to relevant Person as a capital contribution or as a result of the sale or issuance of Qualified
Capital Stock;
(h) accruals
and reserves that are established or adjusted within 12 months after the Closing Date (or after the closing of any consummated
acquisition or Investment) that are required to be established or adjusted as a result of the Transactions (or such acquisition
or Investment) in accordance with GAAP or as a result of the adoption or modification of accounting policies in accordance with
GAAP;
(i) any
(A) write-off or amortization made in such period of deferred financing costs and premiums paid or other expenses incurred directly
in connection with any early extinguishment of Indebtedness, (B) impairment Charges, write-offs or write-downs of any assets and
(C) amortization of intangible assets;
(j) (A)
effects of adjustments (including the effects of such adjustments pushed down to the Subject Person and its subsidiaries) in the
Subject Person’s consolidated financial statements pursuant to GAAP (including in the inventory, property and equipment,
software, goodwill, intangible assets, in-process research and development, deferred revenue, deferred rent, deferred trade incentives
and other lease-related items, advanced billings and debt line items thereof) resulting from the application of recapitalization
accounting or acquisition accounting, as the case may be, in relation to the Transactions or any consummated acquisition or Investment
or the amortization or write-off of any amounts thereof, net of Taxes and (B) the cumulative effect of changes in accounting principles
or policies made in such period in accordance with GAAP which affect Consolidated Net Income (except that, if the Lead Borrower
determines in good faith that the cumulative effects thereof are not material to the interests of the Lenders, the effects of any
change, adoption or modification of any such principles or policies may be included);
(k) the
income or loss of any Person accrued prior to the date on which such Person becomes a Restricted Subsidiary of such Person or is
merged into or consolidated or amalgamated with such Person’s assets are acquired by such Person or any Restricted Subsidiary
of such Person.
(l) any
costs or expenses incurred during such period relating to environmental remediation, litigation, or other disputes in respect of
events and exposures that occurred prior to the Closing Date; and
(m) any
deferred tax expense associated with tax deductions or net operating losses arising as a result of the Transactions, or the release
of any valuation allowance related to such items.
“Consolidated
Secured Debt” means, as to any Person determined on a consolidated basis, at any date of determination, the aggregate
principal amount of Consolidated Total Debt outstanding on such date that is secured by a Lien on the Collateral.
“Consolidated
Total Assets” means, as to any Person determined on a consolidated basis, at any date of determination, all amounts that
would, in conformity with GAAP, be set forth opposite the caption “total assets” (or any like caption) on a consolidated
balance sheet of the applicable Person at such date.
“Consolidated
Total Debt” means, as to any Person determined on a consolidated basis, at any date of determination, an amount equal
to (a) the aggregate principal amount of all Indebtedness for borrowed money (which shall be deemed to include LC Disbursements
that have not been reimbursed within the time periods required by this Agreement) and the outstanding principal balance of all
Indebtedness with respect to Capital Leases and purchase money Indebtedness, in each case, in an amount that would be reflected
on a balance sheet prepared as of such date on a consolidated basis in accordance with GAAP (but excluding, for the avoidance of
doubt, (i) any letter of credit, bank guarantees and performance or similar bonds, (ii) any intercompany Indebtedness eliminated
in accordance with GAAP during consolidation and (iii) any such Indebtedness for which such Person has irrevocably deposited in
trust or escrow the necessary funds (including Cash and Cash Equivalents) for the payment, redemption or satisfaction of Indebtedness),
minus, (b) the aggregate amount of (i) unrestricted Cash and Cash Equivalents of such Person in an amount that would be
reflected on a balance sheet prepared as of such date on a consolidated basis in accordance with GAAP and (ii) Cash and Cash Equivalents
restricted in favor of the Revolving Facility, any First Lien Facility and any Second Lien Facility (which may also include Cash
and Cash Equivalents securing other Indebtedness that is secured by a Lien on the Collateral along with the Revolving Facility,
any First Lien Facility and any Second Lien Facility).
“Contractual
Obligation” means, as applied to any Person, any provision of any Security issued by that Person or of any indenture,
mortgage, deed of trust, contract, undertaking, agreement or other instrument to which that Person is a party or by which it or
any of its properties is bound or to which it or any of its properties is subject.
“Contribution Indebtedness”
has the meaning assigned to such term in Section 6.01(r).
“Control”
means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled”
have meanings correlative thereto.
“Copyright”
means the following: (a) all copyrights, rights and interests in copyrights, works protectable by copyright whether published or
unpublished, copyright registrations and copyright applications; (b) all renewals of any of the foregoing; (c) all income, royalties,
damages, and payments now or hereafter due and/or payable under any of the foregoing, including, without limitation, damages or
payments for past, present or future infringements for any of the foregoing; (d) the right to sue for past, present, and future
infringements of any of the foregoing; and (e) all rights corresponding to any of the foregoing.
“Covenant Trigger
Period” means the period (a) commencing on any day on which Availability is less than the greater of (i) 10%
of the Line Cap and (ii)(A) $20,000,000 if calculated from January 1 to July 31 of any year and (B) $10,000,000 if calculated
from August 1 to December 31 of any year, and (b) continuing until the Availability for each day over a 30 consecutive day
period has been equal to or greater than the greater of (i) 10% of the Line Cap and (ii)(A) $20,000,000 if calculated
from January 1 to July 31 of any year and (B) $10,000,000 if calculated from August 1 to December 31 of each year.
“Credit
Extension” means each of (i) the making of a Revolving Loan or Protective Advance or (ii) the issuance, amendment,
modification, renewal or extension of any Letter of Credit (other than any such amendment, modification, renewal or extension
that does not increase the Stated Amount of the relevant Letter of Credit).
“Cure Amount”
has the meaning assigned to such term in Section 6.15(b).
“Cure Right”
has the meaning assigned to such term in Section 6.15(b).
“Debt Fund Affiliate”
means with respect to any Disqualified Institution, any debt fund, investment vehicle, regulated bank entity or unregulated lending
entity (in each case, other than any person that would otherwise be a Disqualified Institution pursuant to clause (a) or
(c) of the definition of “Disqualified Institution”) that is (i) primarily engaged in making, purchasing, holding
or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of business and (ii) managed,
sponsored or advised by any Person that is Controlling, Controlled by or under common Control with such Disqualified Institution
or Affiliate thereof, but only to the extent that no personnel associated or involved with the investment in such Disqualified
Institution or such Affiliate thereof (A) makes (or has the right to make or participate with others in making) investment decisions
on behalf of, or otherwise cause the direction of the investment policies of, such debt fund, investment vehicle, regulated bank
entity or unregulated entity or (B) has access, directly or indirectly (including through such Disqualified Institution or any
of its Affiliates), to any information (other than information that is publicly available) relating to Holdings, any Borrower,
the Company and/or any of their respective subsidiaries and/or of their respective businesses.
“Debtor Relief
Laws” means (a) the Bankruptcy Code of the U.S., (b) the Bankruptcy and Insolvency Act (Canada), (c) the Companies’
Creditors Arrangement Act (Canada), (d) the Winding-Up and Restructuring Act (Canada), and (e) and all other liquidation,
conservatorship, bankruptcy, general assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization or similar debtor relief laws of the U.S., Canada or other applicable jurisdictions from time to time in effect
and affecting the rights of creditors generally.
“Default”
means any event or condition which upon notice, lapse of time or both would become an Event of Default.
“Defaulting
Lender” means any Lender that has (a) defaulted in its obligations under this Agreement, including without
limitation, (x) to make a Revolving Loan within two Business Days of the date required to be made by it hereunder or (y) to
fund its participation in a Letter of Credit or Swingline Loan required to be funded by it hereunder within two Business Days
of such obligation arose or such Revolving Loan, Letter of Credit was required to be made or funded, (b) notified the
Administrative Agent, the Swingline Lender, any Issuing Bank or any Loan Party in writing that it does not intend to satisfy
any such obligation or has made a public statement to the effect that it does not intend to comply with its funding
obligations under this Agreement or under agreements in which it commits to extend credit generally, (c) failed, within two
Business Days after the request of Administrative Agent or the Borrowers, to confirm in writing that it will comply with the
terms of this Agreement relating to its obligations to fund prospective Revolving Loans and participations in then
outstanding Letters of Credit or Swingline Loans; provided that such Lender shall cease to be a Defaulting Lender
pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent if received prior to
the applicable funding date, (d) become (or any parent company thereof has become) (i) insolvent or been determined by any
Governmental Authority having regulatory authority over such Person or its assets, to be insolvent, or the assets or
management of which has been taken over by any Governmental Authority or (ii) the subject of a Bail-In Action or (e) become
the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, monitor, administrator,
assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or
custodian, appointed for it, or has taken any action in furtherance of, or indicating its consent to, approval of or
acquiescence in, any such proceeding or appointment, unless in the case of any Lender subject to this clause (e), the
Borrowers and the Administrative Agent shall each have determined that such Lender intends, and has all approvals required to
enable it (in form and substance satisfactory to each of the Borrowers and the Administrative Agent), to continue to perform
its obligations as a Lender hereunder; provided that no Lender shall be deemed to be a Defaulting Lender solely by
virtue of the ownership or acquisition of any Capital Stock in such Lender or its parent by any Governmental Authority; provided
that, such action does not result in or provide such Lender with immunity from the jurisdiction of courts within the U.S. or
Canada 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 contract or agreement to which such Lender is a party.
“Deposit Account”
means a demand, time, savings, passbook or like account with a bank, savings and loan association, credit union or like organization,
other than an account evidenced by a negotiable certificate of deposit.
“Derivative
Transaction” means (a) any interest-rate transaction, including any interest-rate swap, basis swap, forward rate agreement,
interest rate option (including a cap, collar or floor), and any other instrument linked to interest rates that gives rise to similar
credit risks (including when-issued securities and forward deposits accepted), (b) any exchange-rate transaction, including any
cross-currency interest-rate swap, any forward foreign-exchange contract, any currency option, and any other instrument linked
to exchange rates that gives rise to similar credit risks, (c) any equity derivative transaction, including any equity-linked swap,
any equity-linked option, any forward equity-linked contract, and any other instrument linked to equities that gives rise to similar
credit risk and (d) any commodity (including precious metal) derivative transaction, including any commodity-linked swap, any commodity-linked
option, any forward commodity-linked contract, and any other instrument linked to commodities that gives rise to similar credit
risks; provided that no phantom stock or similar plan providing for payments only on account of services provided by current
or former directors, officers, employees, members of management, managers or consultants of the Borrowers or their subsidiaries
shall be a Derivative Transaction.
“Designated
Hedging Obligations” means any Canadian Secured Hedging Obligations and US Secured Hedging Obligations for which the
applicable Loan Party has complied with the requirements of the definitions of Canadian Secured Hedging Obligations and US Secured
Hedging Obligations, as applicable, to constitute “Designated Hedging Obligations.”
“Designated
Non-Cash Consideration” means the Fair Market Value of non-Cash consideration received by any Borrower or any Restricted
Subsidiary in connection with any Disposition pursuant to Section 6.07(h) and/or Section 6.08 that is designated
as Designated Non-Cash Consideration pursuant to a certificate of a Responsible Officer of the Lead Borrower, setting forth the
basis of such valuation (which amount will be reduced by the amount of Cash or Cash Equivalents received in connection with a subsequent
sale or conversion of such Designated Non-Cash Consideration to Cash or Cash Equivalents).
“Designated
Operational FX Hedge” means any Hedge Agreement entered into for the purpose of hedging currency-related risks in respect
of the revenues, cash flows or other balance sheet items of Holdings, any Borrower and/or any Restricted Subsidiaries and designated
at the time entered into (or on or prior to the Closing Date, with respect to any Hedge Agreement entered into on or prior to the
Closing Date) as a Designated Operational FX Hedge by a Borrower in writing to the Administrative Agent.
“Disposition”
or “Dispose” means the sale, lease, sublease, or other disposition of any property of any Person.
“Disqualified
Capital Stock” means any Capital Stock which, by its terms (or by the terms of any security into which it is convertible
or for which it is exchangeable), or upon the happening of any event, (a) matures (excluding any maturity as the result of an optional
redemption by the issuer thereof) or is mandatorily redeemable (other than for Qualified Capital Stock), pursuant to a sinking
fund obligation or otherwise, or is redeemable at the option of the holder thereof (other than for Qualified Capital Stock), in
whole or in part, on or prior to 91 days following the Latest Maturity Date at the time such Capital Stock is issued (it being
understood that if any such redemption is in part, only such part coming into effect prior to 91 days following the Latest Maturity
Date shall constitute Disqualified Capital Stock), (b) is or becomes convertible into or exchangeable (unless at the sole option
of the issuer thereof) for (i) debt securities or (ii) any Capital Stock that would constitute Disqualified Capital Stock, in each
case at any time on or prior to 91 days following the Latest Maturity Date at the time such Capital Stock is issued, (c) contains
any mandatory repurchase obligation or any other repurchase obligation at the option of the holder thereof (other than for Qualified
Capital Stock), in whole or in part, which may come into effect prior to 91 days following the Latest Maturity Date at the time
such Capital Stock is issued (it being understood that if any such repurchase obligation is in part, only such part coming into
effect prior to 91 days following the Latest Maturity Date shall constitute Disqualified Capital Stock) or (d) requires scheduled
payments of dividends in Cash on or prior to 91 days following the Latest Maturity Date at the time such Capital Stock is issued;
provided that any Capital Stock that would not constitute Disqualified Capital Stock but for provisions thereof giving holders
thereof (or the holders of any security into or for which such Capital Stock is convertible, exchangeable or exercisable) the right
to require the issuer thereof to redeem such Capital Stock upon the occurrence of any change in control, Qualifying IPO or any
Disposition occurring prior to 91 days following the Latest Maturity Date at the time such Capital Stock is issued shall not constitute
Disqualified Capital Stock if (x) such Capital Stock provides that the issuer thereof will not redeem any such Capital Stock pursuant
to such provisions prior to the Termination Date or (y) such redemption is subject to events that would cause the Termination Date
to occur.
Notwithstanding the preceding
sentence, (A) if such Capital Stock is issued pursuant to any plan for the benefit of directors, officers, employees, members of
management, managers or consultants or by any such plan to such directors, officers, employees, members of management, managers
or consultants, in each case in the ordinary course of business of Holdings, any Borrower or any Restricted Subsidiary, such Capital
Stock shall not constitute Disqualified Capital Stock solely because it may be required to be repurchased by the issuer thereof
in order to satisfy applicable statutory or regulatory obligations, and (B) no Capital Stock held by any future, present or former
employee, director, officer, manager, member of management or consultant (or their respective Affiliates or Immediate Family Members)
of any Borrower (or any Parent Company or any subsidiary) shall be considered Disqualified Capital Stock because such stock is
redeemable or subject to repurchase pursuant to any management equity subscription agreement, stock option, stock appreciation
right or other stock award agreement, stock ownership plan, put agreement, stockholder agreement or similar agreement that may
be in effect from time to time.
“Disqualified
Institution” means:
(a) (i)
any Person that is identified in writing to the Administrative Agent prior to the Closing Date (or if identified after the Closing
Date the disqualification of such person is reasonably acceptable the Administrative Agent in its reasonable discretion), (ii)
any reasonably identifiable Affiliate of any Person described in clause (i) above (on the basis of such Affiliate’s
name) and (iii) any other Affiliate of any Person described in clauses (i) and/or (ii) above that is identified by
name in a written notice to the Administrative Agent;
(b) any
Company Competitor (it being understood and agreed that no Debt Fund Affiliate of any Company Competitor may be designated as Disqualified
Institution pursuant to this clause (b)); and/or
(c) any
Affiliate of any Initial Revolving Lender (other than Bank of America and MLPFS) that is engaged as a principal primarily in private
equity, mezzanine financing or venture capital;
provided, that
no written notice delivered pursuant to clauses (a)(i), (a)(iii) above or clauses (a) and/or (c) of
the definition of “Company Competitor” shall apply retroactively to disqualify any person that has previously acquired
a valid assignment or participation interest in the Revolving Loans.
“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 any currency other than Dollars, the equivalent amount thereof in Dollars as determined by the Administrative Agent at such
time on the basis of the Spot Rate (determined in respect of the most recent Revaluation Date or other relevant date of determination)
for the purchase of Dollars with such other currency.
“Dollars”
or “$” refers to lawful money of the U.S.
“Domestic Subsidiary”
means any direct or indirect subsidiary of the Lead Borrower organized under the laws of the United States, any state or the District
of Columbia.
“Early Buy Program”
means the sales incentive program where products are sold to distributors and customers in advance of the seasonal sales period.
“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 any Loan Party (other than Holdings) in the ordinary course of 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 in all material respects 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, however,
that such criteria may be revised from time to time by the Administrative Agent in the Administrative Agent’s Permitted
Discretion to address, among other things, the results of any audit performed by the Administrative Agent from time to time
after the Closing Date. In determining the amount to be included, Eligible Accounts shall be calculated net of customer
deposits and unapplied cash and shall be reduced by, without duplication, the amount of all discounts, claims, credits or
credits pending, promotional program allowances, rebated price adjustments, finance and service charges and counterclaims
(including (x) up to 100% of accruals of anticipated warranty claims related to Leslie’s Poolmart and (y) up to 25% of
accruals of anticipated warranty claims related to any other customers). Eligible Accounts shall not include the
following:
(a) Accounts (i) that are more than 60 days past due and (ii) that the Account Debtor has failed to pay within 90
days of original invoice date (or 120 days for Accounts in an aggregate amount not in excess of $2,500,000); provided that
with respect to Accounts related to any Early Buy Program, such Accounts shall not be subject to clauses (i) and (ii)
above, but they shall become ineligible if such Accounts remain unpaid for more than 30 days after the original due date shown
on the invoice,
(b) Accounts owed by an Account Debtor where 50% or more of all Accounts owed by that Account Debtor are deemed ineligible under
clause (a) above,
(c) Accounts with respect to which the Account Debtor is an Affiliate of a Loan Party, or an employee or agent of a Loan Party,
as applicable, (other than Accounts of an Affiliate that is a portfolio company of the Sponsor (and is not a Subsidiary of Holdings)
arising in the ordinary course of business on arm’s length terms),
(d) Accounts arising in a transaction wherein goods are sold pursuant to a guaranteed sale, a sale or return, a sale on approval,
a bill and hold (except where ownership in the underlying good has been transferred to the Account Debtor and in connection therewith
the Administrative Agent has in its Permitted Discretion, established an Availability Reserve), or any other terms by reason of
which the payment by the Account Debtor may be conditional,
(e) Accounts that are payable in a currency other than Dollars, Canadian Dollars and Euro,
(f) Accounts exceeding $12,500,000 in the aggregate with respect to which the Account Debtor is either (i) not domiciled in
the United States or Canada or (ii) if other than a natural Person, not organized, formed or incorporated under the laws of the
United States or Canada unless, (x) the Account is supported by an irrevocable letter of credit or other credit support reasonably
satisfactory to the Administrative Agent or (y) the Account Debtor is an Affiliate of an Account Debtor that satisfies either clause
(i) or (ii) above that has initiated the relevant purchase order on behalf of such Account Debtor in the ordinary course of business.
(g) (i) with respect to the US Borrowing Base, Accounts in excess of $7,500,000 in the aggregate with respect to which
the Account Debtor is the United States or any department, agency, or instrumentality of the United States (exclusive, however,
of Accounts with respect to which the US Borrower has complied, to the reasonable satisfaction of the Administrative Agent, with
the Assignment of Claims Act, 31 USC § 3727) or (ii) with respect to the Canadian Borrowing Base, Accounts
with respect to which the Account Debtor is Canada or any province or territory of Canada or any department, agency or instrumentality
thereof (exclusive, however, of Accounts with respect to which the Canadian Loan Party has complied, to the reasonable satisfaction
of the Administrative Agent, with Part VII of the Financial Administration Act (Canada),
(h)
Accounts with respect to which the Account Debtor is a creditor of a Borrower or any Loan Party, has or has asserted a right
of setoff, or has disputed its obligation to pay all or any portion of the Account, to the extent of such claim, right of setoff
or dispute (unless such Account Debtor has entered into a written agreement reasonably satisfactory to the Administrative Agent
to waive such claim, right of offset, or dispute), solely to the extent of such claim, right of setoff or dispute or open accounts
payable,
(i) Accounts
with respect to which an Account Debtor whose total obligations owing to the Loan Parties exceeds (a) with respect to Pool Corp.,
40% and (ii) with respect to any other Account Debtor, 20% (in each case, such percentage, as applied to a particular Account
Debtor, being subject to reduction by the Administrative Agent’s Permitted Discretion if the creditworthiness of such Account
Debtor deteriorates) of all Eligible Accounts, to the extent of the obligations owing by such Account Debtor in excess of such
percentage; provided, however, that, in each case, the amount of Eligible Accounts that are excluded because they
exceed the foregoing percentage shall be determined by the Administrative Agent based on all of the otherwise Eligible Accounts
prior to giving effect to any eliminations based upon the foregoing concentration limit but shall not be excluded in an amount
in excess of the foregoing percentage,
(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 a Borrower or any Loan Party has received notice of an imminent insolvency proceeding unless an Account
Debtor has been authorized to pay such Accounts pursuant to a valid court order (and so long as the financial condition of such
Account Debtor is reasonably satisfactory to the Administrative Agent in its Permitted Discretion),
(k) Accounts that are not subject to a valid and perfected first priority Administrative Agent’s Lien (including taking
into account the governing law of the applicable contracts evidencing the Accounts and sufficiency of the applicable Collateral
Documents to create valid and enforceable Liens with respect thereto as determined by the Administrative Agent acting in its Permitted
Discretion); provided that this clause (k) shall not exclude from Eligible Accounts those Accounts subject to unregistered
Liens created by operation of law that accrue amounts not yet due and payable, provided that such Liens are Permitted Liens,
(l) Accounts with respect to which (i) the goods giving rise to such Account have not been shipped and billed to the Account
Debtor, (ii) the services giving rise to such Account have not been performed and billed to the Account Debtor or (iii) the
services represent fees for shared warehouse space, lab fees and other miscellaneous non-trade activity,
(m) Accounts 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, and
(n) Accounts with respect to which the Account Debtor is a person described in Section 3.17(a)(i) or a country listed
in Section 3.17(a).
“Eligible Assignee”
means (a) any Lender, (b) any commercial bank, insurance company, or finance company, financial institution, any fund that invests
in loans or any other “accredited investor” (as defined in Regulation D of the Securities Act), or (c) any Affiliate
or branch of any Lender; provided that in any event, “Eligible Assignee” shall not include (i) any natural person,
(ii) any Disqualified Institution or (iii) the Borrowers or any of their Affiliates.
“Eligible
In-Transit Inventory” means Inventory owned by a Loan Party (other than Holdings) that would be Eligible Inventory
if it were not subject to a document of title and in transit from a non-Loan Party location to a location of such Loan Party
within the United States or Canada, and that the Administrative Agent, in its Permitted Discretion, deems to be Eligible
In-Transit Inventory. Without limiting the foregoing, no Inventory shall be Eligible In-Transit Inventory unless it (a) is
subject to a negotiable document of title showing the Administrative Agent (or, with the consent of the Administrative Agent,
the applicable Loan Party) as consignee, which document of title is in the possession of the Administrative Agent or such
other Person as the Administrative Agent shall approve; (b) is fully insured in a manner satisfactory to the Administrative
Agent in its Permitted Discretion; (c) is not sold by a vendor that has a right to reclaim, divert shipment of, repossess,
stop delivery, claim any reservation of title or otherwise assert Lien rights against the Inventory, or with respect to whom
any Loan Party is in default of any obligations; (d) is subject to purchase orders and other sale documentation satisfactory
to the Administrative Agent in its Permitted Discretion, and title has passed to the applicable Loan Party; (e) is shipped by
a common carrier that is not affiliated with the vendor and is not a person described in Section 3.17(a)(i) or a country
listed in Section 3.17(a) or on any specially designated nationals list maintained by OFAC or similar list maintained by the
Government of Canada and is not otherwise a “sanctioned” person under any Canadian AML Laws; and (f) is being
handled by a customs broker, freight-forwarder or other handler that has delivered a Lien waiver.
“Eligible Inventory”
means Inventory of a Loan Party (other than Holdings) consisting of raw materials, work in progress and finished goods, that complies
with each of the representations and warranties in all material respects 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, however,
that such criteria may be revised from time to time by the Administrative Agent in the Administrative Agent’s Permitted Discretion
to address, among other things, the results of any audit or appraisal performed by the Administrative 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 value on
a basis consistent with the 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 Loan
Party), unless, in each case, such Inventory is otherwise eligible pursuant to clause (d) below,
(c) it is not located at a location in (i) with respect to the US Borrowing Base, the United States or (ii) with respect to
the Canadian Borrowing Base, Canada (in each case, unless it is Eligible In-Transit Inventory),
(d) it is in-transit to or from a location of a Loan Party (other than (i) in-transit from one location of a Loan Party to another
location of a Loan Party and (ii) Eligible In-Transit Inventory),
(e) it is located on real property leased by a Loan Party or in a contract warehouse, in each case, unless (i) it is subject
to a Collateral Access Agreement or (ii) a Rent and Charges Reserve has been established by the Administrative Agent, if required
in its Permitted Discretion,
(f) it is the subject of a bill of lading or other document of title (unless it is Eligible In-Transit Inventory),
(g) it is not subject to a valid and perfected first priority Administrative Agent’s Lien; provided that this clause
(g) shall not exclude from Eligible Inventory that Inventory subject to unregistered Liens created by operation of law that
secure amounts not yet due and payable, provided such Liens are Permitted Liens,
(h) it is located at any location at which the aggregate value of all Inventory at such location is less than $500,000,
(i) it
is the portion of the Eligible Inventory that represents intercompany profit,
(j) [reserved],
(k) it is consigned to a customer,
(l) any Inventory as to which the applicable Loan Party takes a revaluation reserve, but only to the extent of the reserve,
(m) it is located at an outside processor or vendor,
(n) it consists of goods that are obsolete or slow moving, restrictive or custom items, or goods that constitute spare parts,
packaging and shipping materials, labels, supplies used or consumed in a Loan Party’s business, bill and hold goods, defective
goods, “out-of-spec”, damaged, non-standard, trial items, “seconds” or Inventory acquired on consignment,
(o) it consists of goods returned or rejected by the applicable Loan Party’s customers other than the goods that are undamaged
or resalable in the ordinary course of business,
(p) it is subject to any licensing arrangement or any other intellectual property or other proprietary rights of any Person,
the effect of which would be to limit the ability of the Administrative Agent, or any Person selling the Inventory on behalf of
the Administrative Agent, to sell such Inventory in enforcement of the Administrative Agent’s Liens without further consent
or payment to the licensor or such other Person (unless such consent has then been obtained), or
(q) it is not covered by casualty insurance maintained as required by Section 5.05.
Each reference to Loan
Parties in the foregoing definition of Eligible Inventory shall be deemed to exclude Holdings.
“Environment”
means ambient air, indoor air, surface water, groundwater, drinking water, land surface and subsurface strata and natural resources
such as wetlands, flora and fauna.
“Environmental
Claim” means any investigation, notice, notice of violation, claim, action, suit, proceeding, demand, abatement order
or other order or directive (conditional or otherwise), by any Governmental Authority or any other Person, arising (a) pursuant
to or in connection with any actual or alleged violation of any Environmental Law; (b) in connection with any Hazardous Material
or any actual or alleged Hazardous Materials Activity; or (c) in connection with any actual or alleged damage, injury, threat or
harm to the Environment.
“Environmental
Laws” means any and all current or future applicable foreign or domestic, federal, provincial or state (or any subdivision
of either of them), statutes, ordinances, orders, rules, regulations, judgments, Governmental Authorizations, or any other applicable
requirements of Governmental Authorities and the common law relating to (a) environmental matters, including those relating to
any Hazardous Materials Activity; or (b) the generation, use, storage, transportation or disposal of or exposure to Hazardous Materials,
in any manner applicable to the Borrowers or any of their Restricted Subsidiaries or any Facility.
“Environmental
Liability” means any liability, contingent or otherwise (including any liability for damages, costs of
environmental investigation or remediation, fines, penalties or indemnities), directly or indirectly resulting from or based
upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the Release or threatened Release of any
Hazardous Materials into the Environment or (e) any contract, agreement or other consensual arrangement pursuant to which
liability is assumed or imposed with respect to any of the foregoing.
“Equity Contribution”
has the meaning assigned to such term in the Recitals to this Agreement.
“ERISA”
means the Employee Retirement Income Security Act of 1974.
“ERISA Affiliate”
means, as applied to any Person, (a) any corporation which is a member of a controlled group of corporations within the meaning
of Section 414(b) of the Code of which that Person is a member; and (b) any trade or business (whether or not incorporated)
which is a member of a group of trades or businesses under common control within the meaning of Section 414(c) of the Code
of which that Person is a member.
“ERISA Event”
means (a) a “reportable event” within the meaning of Section 4043 of ERISA and the regulations issued thereunder
with respect to any Pension Plan (excluding those for which the 30-day notice period has been waived); (b) the failure to meet
the minimum funding standard of Section 412 of the Code with respect to any Pension Plan, or the filing of any request for
or receipt of a minimum funding waiver under Section 412 of the Code with respect to any Pension Plan or a failure to make a required
contribution to a Multiemployer Plan; (c) the provision by the administrator of any Pension Plan pursuant to Section 4041(a)(2)
of ERISA of a notice of intent to terminate such plan in a distress termination described in Section 4041(c) of ERISA; (d)
the withdrawal by any Borrower, any of their Restricted Subsidiaries or any of their respective ERISA Affiliates from any Pension
Plan with two or more contributing sponsors or the termination of any such Pension Plan resulting in liability to any Borrower,
any of their Restricted Subsidiaries or any of their respective ERISA Affiliates pursuant to Section 4063 or 4064 of ERISA;
(e) the institution by the PBGC of proceedings to terminate any Pension Plan; (f) the imposition of liability on any Borrower,
any of their Restricted Subsidiaries or any of their respective ERISA Affiliates pursuant to Section 4062(e) or 4069 of ERISA
or by reason of the application of Section 4212(c) of ERISA; (g) a complete or partial withdrawal (within the meaning of Sections
4203 and 4205 of ERISA) of any Borrower, any of their Restricted Subsidiaries or any of their respective ERISA Affiliates from
any Multiemployer Plan, or the receipt by any Borrower, any of their Restricted Subsidiaries or any of their respective ERISA Affiliates
of notice from any Multiemployer Plan that it is in insolvency pursuant to Section 4245 of ERISA, or that it intends to terminate
or has terminated under Section 4041A or 4042 of ERISA or is in “endangered” or “critical” status,
within the meaning of Section 432 of the Code or Section 305 of ERISA; (h) a failure by any Borrower, any of their Restricted Subsidiaries
or any of their respective ERISA Affiliates to pay when due (after expiration of any applicable grace period) any installment payment
with respect to withdrawal liability under Section 4201 of ERISA; (i) a determination that any Pension Plan is, or is reasonably
expected to be, in “at-risk” status, within the meaning of Section 430(i)(4) of the Code or Section 303(i)(4) of ERISA;
or (j) the incurrence of liability or the imposition of a Lien pursuant to Section 436 or 430(k) of the Code or pursuant
to ERISA with respect to any Pension Plan.
“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.
“Euro”
or “€” means the single currency unit of the Participating Member State.
“Event of Default”
has the meaning assigned to such term in Article 7.
“Excluded Account”
means any Deposit Account or Securities Account (as defined in the UCC or the PPSA, as applicable) (i) which is a Trust Fund
Account, (ii) any Deposit Account used by any Loan Party exclusively for disbursements and payments (including payroll) in the
ordinary course of business, (iii) which is used for the sole purpose of holding the proceeds of First Lien Collateral pending
reinvestment by the US Borrower or application against the First Lien Loans, (iv) which is a zero balance account or (v) which
has a daily balance at any time of less than $1,000,000 individually or $5,000,000 in the aggregate for all such Excluded Accounts.
“Exchange Act”
means the Securities Exchange Act of 1934 and the rules and regulations of the SEC promulgated thereunder.
“Excluded Assets”
means each of the following:
(a) any
assets (including any lease, licenses or agreement) subject to a purchase money security interest, capital lease or similar arrangement
permitted by this Agreement as to which the grant of a security interest therein would (i) constitute a violation of a restriction
in favor of a third party (other than Holdings, the Borrowers or any of their subsidiaries) or result in the abandonment, invalidation
or unenforceability of any right of the relevant Loan Party, or (ii) result in a breach, termination (or a right of termination)
or default under such contract, instrument, lease, license, agreement or other document (including pursuant to any “change
of control” or similar provision); provided, however, that any such asset will only constitute an Excluded
Asset under clause (i) or clause (ii) above to the extent such violation or breach, termination (or right of
termination) or default would not be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the UCC (or any
successor provision or provisions) of any relevant jurisdiction, the PPSA or any other applicable law; provided further
that any such asset shall cease to constitute an Excluded Asset at such time as the condition causing such violation, breach, termination
(or right of termination) or default or right to amend or require other actions no longer exists and to the extent severable, the
security interest granted under the applicable Collateral Document shall attach immediately to any portion of such contract, instrument,
lease, license, agreement or document that does not result in any of the consequences specified in clauses (i) and (ii)
above;
(b) the
Capital Stock of any (i) Immaterial Subsidiary, (ii) Captive Insurance Subsidiary, (iii) Unrestricted Subsidiary (except to
the extent the security interest in such Capital Stock may be perfected by the filing of a Form UCC-1, PPSA or similar
financing statement), (iv) not-for-profit subsidiary, (v) special purpose entity used for any permitted securitization
facility (to the extent pledge thereof is not permitted under securitization agreements applicable to such entities), (vi)
any Restricted Subsidiary that is not a Wholly-Owned Subsidiary and is not permitted to be pledged pursuant to such
entity’s organizational documents without (A) the consent of one or more unaffiliated third parties other than
Holdings, the Borrowers or any of their subsidiaries (after giving effect to Sections 9-406, 9-407, 9-408 or 9-409 of the UCC
(or any successor provision or provisions) of any relevant jurisdiction, the PPSA or any other applicable law) or (B) giving
rise to a “right of first refusal”, a “right of first offer” or a similar right that may be exercised
by any third party other than Holdings, the Borrowers or any of their subsidiaries, (vii) any subsidiary that is prohibited
from having its stock pledged by (A) any law or regulation or would require governmental (including regulatory) consent,
approval or authorization, or (B) any Contractual Obligation that exists on the Closing Date or at the same time such
subsidiary becomes a subsidiary of any Borrower and not entered into in contemplation of such subsidiary becoming a
subsidiary of such Borrower, (viii) any Restricted Subsidiary acquired by any Borrower or any of their Restricted
Subsidiaries after the Closing Date that, at the time of the relevant acquisition (and not entered into in contemplation of
such acquisition), is an obligor in respect of any Indebtedness permitted to be assumed by such Borrower or such Restricted
Subsidiary to the extent (and for so long as) the documentation governing the applicable assumed Indebtedness prohibits the
Capital Stock of such Restricted Subsidiary from being pledged, and (ix) any person that is not (A) a Borrower or (B) a
Restricted Subsidiary that is a direct, first tier subsidiary of a Borrower or a Subsidiary Guarantor;
(c) any
IP Rights in any non-U.S. jurisdictions and any intent-to-use Trademark application prior to the filing of a “Statement of
Use” or an “Amendment to Allege Use” with respect thereto, only to the extent, if any, that, and solely during
the period, if any, in which, the grant of a security interest therein would impair the validity or enforceability of such intent-to-use
Trademark application or any registration issuing therefrom under applicable law;
(d) any
asset (including governmental licenses or state or local franchises, charters, authorizations and agreements), the grant or perfection
of a security interest in which would (i) be prohibited or restricted by applicable law or (ii) require any governmental consent,
approval, license or authorization that has not been obtained (after giving effect to Sections 9-406, 9-407, 9-408 or 9-409 of
the UCC, the PPSA and other applicable laws), (iii) be prohibited by enforceable anti-assignment provisions of applicable Requirements
of Law, except, in the case of this clause (iii), to the extent such prohibition would be rendered ineffective under the
UCC, the PPSA or other applicable law notwithstanding such prohibition, or (iv) be prohibited by enforceable anti-assignment provisions
of contracts governing such asset in existence on the Closing Date or on the date of acquisition of the relevant asset (and in
each case not entered into in anticipation of the Closing Date or such acquisition and except, in each case, to the extent that
term in such contract providing for such prohibition purports to prohibit the granting of a security interest over all assets of
such Loan Party or any other Loan Party) other than to the extent such prohibition would be rendered ineffective under the UCC,
PPSA or other applicable law;
(e) (i) any
leasehold Real Estate Asset and (ii) any owned Real Estate Asset;
(f) any
leasehold interests in any other asset or property (except to the extent the security interest in such leasehold interest may be
perfected by the filing of a Form UCC-1 or PPSA financing statement);
(g) any
motor vehicles and other assets subject to certificates of title (except to the extent the security interest may be perfected by
the filing of a PPSA financing statement);
(h) any
Margin Stock;
(i) with
respect to (A) the US Obligations and US Loan Parties, any asset of a Foreign Subsidiary, a Foreign Subsidiary Holdco or any direct
or indirect subsidiary of a Foreign Subsidiary or a Foreign Subsidiary Holdco, and (B) the Canadian Loan Parties, the Capital Stock
of any Canadian Person that is not a Restricted Subsidiary;
(j) with
respect to the US Obligations and US Loan Parties, the Capital Stock of any Foreign Subsidiary or any Foreign Subsidiary Holdco,
other than 65% of the issued and outstanding Capital Stock of any Restricted Subsidiary that is a direct, first-tier Restricted
Subsidiary of the US Borrower or a Subsidiary Guarantor of the US Obligations (it being understood with respect to any Credit Extension,
Overadvance or Protective Advance made to the US Borrower, a Subsidiary Guarantor will at no time include a Foreign Subsidiary,
a Foreign Subsidiary Holdco or any direct or indirect subsidiary of a Foreign Subsidiary or a Foreign Subsidiary Holdco) and owned
by the US Borrower or such Subsidiary Guarantor;
(k) (i)
Commercial Tort Claims with a value (as reasonably estimated by the Lead Borrower) of less than $10,000,000 (except as to which
perfection of the security interest in such commercial tort claims is accomplished by the filing of a Form UCC-1 or PPSA financing
statement) and (ii) Letter-of-Credit Rights (except to the extent constituting a supporting obligation for other Collateral as
to which perfection of the security interest in such Letter-of-Credit Rights may be perfected by the filing of a Form UCC-1 or
PPSA financing statement), and (iii) Excluded Accounts;
(l) any
(i) Cash or Cash Equivalents comprised of (a) funds specially and exclusively used or to be used for payroll and payroll taxes
and other employee benefit payments to or for the benefit of any Loan Party’s employees, (b) funds used or to be used to
pay all Taxes required to be collected, remitted or withheld (including, without limitation, withholding Taxes (including employer’s
share thereof)) and (c) any other funds which any Loan Party holds as an escrow or fiduciary for the benefit of another Person
(Cash and Cash Equivalents described in this clause (l), the “Tax and Trust Funds”) as long as such Tax
and Trust Funds are deposited in a Trust Fund Account;
(m) any
accounts receivable and related assets that are sold or disposed of in connection with any factoring or similar arrangement permitted
by this Agreement;
(n) any
asset or property (including the Capital Stock of any Restricted Subsidiary), the grant or perfection of a security interest in
which would result in material and adverse tax liabilities or consequences to Holdings, the Borrowers or any Restricted Subsidiary
(including with respect to any tax distribution paid or payable to any Parent Company), as reasonably determined by the Lead Borrower
in consultation with the Administrative Agent; and
(o) any
asset with respect to which the Administrative Agent and the Lead Borrower have reasonably determined that the cost, burden, difficulty
or consequence (including any effect on the ability of the relevant Loan Party to conduct its operations and business in the ordinary
course of business) of obtaining or perfecting a security interest therein outweighs the benefit of a security interest to the
relevant Secured Parties afforded thereby;
provided that, Excluded
Assets shall not include any proceeds, substitutions or replacements of any Excluded Assets referred to in clauses (a) through
(o).
“Excluded Subsidiary”
means:
(a) any
Restricted Subsidiary that is not a Wholly-Owned Subsidiary;
(b) any
Immaterial Subsidiary;
(c) any
Restricted Subsidiary that is prohibited from providing a Guarantee by (i) law or regulation or whose provision of a Guarantee
would require a governmental (including regulatory) consent, approval, license or authorization in order to provide a Guarantee
or (ii) any contractual obligation existing on the Closing Date or at the time such Restricted Subsidiary becomes a subsidiary
(which Contractual Obligation was not entered into in contemplation of such Restricted Subsidiary becoming a subsidiary) from providing
a Loan Guaranty;
(d) any
direct or indirect subsidiary of the Lead Borrower that is (i) a not-for-profit subsidiary, (ii) a Captive Insurance Subsidiary,
(iii) a special purpose entity used for any permitted securitization or receivables facility or financing or (iv) an Unrestricted
Subsidiary,
(e) with
respect to (i) US Obligations and US Loan Parties (A) a Foreign Subsidiary or a direct or indirect subsidiary of a Foreign Subsidiary,
or (B) a Foreign Subsidiary Holdco or a direct or indirect subsidiary of a Foreign Subsidiary Holdco, and (ii) Canadian Obligations
and Canadian Loan Parties, any Subsidiary of the Canadian Loan Parties that is not a Restricted Subsidiary;
(f) any
Restricted Subsidiary with respect to which, in the reasonable judgment of the Lead Borrower (in consultation with the Administrative
Agent), the burden or cost of providing a Loan Guaranty outweighs the benefits afforded thereby;
(g) solely
in the case of any obligation under any Secured Hedging Obligations that constitutes a “swap” within the meaning of
section 1(a)(47) of the Commodity Exchange Act, any subsidiary of Holdings that is not an “Eligible Contract Participant”
as defined under the Commodity Exchange Act (after giving effect to any applicable customary “keepwell” provision under
the Loan Guaranty);
(h) any
Restricted Subsidiary acquired by a Borrower or any of its Restricted Subsidiaries after the Closing Date that, at the time of
the relevant acquisition (and not entered into in contemplation of such acquisition), is an obligor in respect of assumed Indebtedness
that is permitted hereunder to the extent (and for so long as) the documentation governing the applicable assumed Indebtedness
prohibits such Restricted Subsidiary from providing a Loan Guaranty;
(i) any
subsidiary of a Borrower where the provision of a Loan Guaranty would result in material adverse tax consequences to Holdings,
the Borrowers or any Restricted Subsidiary, as reasonably determined by the Lead Borrower in consultation with the Administrative
Agent; and
(j) any
subsidiary as reasonably agreed between the Lead Borrower and the Administrative Agent.
“Excluded Swap
Obligation” means, with respect to any Guarantor, any Swap Obligation if, and to the extent that, all or a portion of
the Loan Guaranty of such Guarantor of, or the grant by such Guarantor of a security interest to secure, such Swap Obligation (or
any Loan 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 Guarantor’s failure
for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations
thereunder (determined after giving effect to Section 3.19 of the Loan Guaranty and any other “keepwell,” support
or other agreement for the benefit of such Guarantor) at the time the Loan Guaranty of such Guarantor 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 Loan Guaranty or security interest is or becomes illegal.
“Excluded Taxes”
means, with respect to the Administrative Agent or any Lender (which for purposes of this term shall include any Issuing Bank and
any Swingline Lender) or any other recipient of any payment to be made by or on account of any obligation of any Loan Party hereunder
or under any other Loan Document (each such person, a “Recipient”), (a) Taxes imposed on (or measured by) its
net income (however denominated) or franchise Taxes, (i) by the jurisdiction under the laws of which such recipient is organized
or in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located or
(ii) that are Other Connection Taxes, (b) any branch profits Taxes imposed under Section 884(a) of the Code or any similar
Tax imposed by any jurisdiction described in clause (a), (c) in the case of any Lender, any U.S. federal withholding Tax
that is imposed on amounts that are (or would be) required to be withheld pursuant to a Requirement of Law in effect at the time
such Lender becomes a party to this Agreement (or designates a new lending office), except (i) pursuant to an assignment or designation
of a new lending office under Section 2.19 and (ii) to the extent that such Lender (or its assignor, if any) was entitled,
immediately prior to the designation of a new lending office (or assignment), to receive additional amounts from any Loan Party
with respect to such withholding Tax pursuant to Section 2.17, (d) any Tax imposed as a result of a failure by the
Administrative Agent or any Lender to comply with Section 2.17(f), (e) any U.S. federal withholding Tax or Canadian Tax,
in each case, under FATCA and (f) any Canadian withholding tax imposed by reason of the Recipient (i) not dealing at arm’s
length (within the meaning of the Income Tax Act (Canada)) with a Loan Party or (ii) being a “specified shareholder”
(as defined in subsection 18(5) of the Income Tax Act (Canada)) of a Loan Party or not dealing at arm’s length with such
a specified shareholder for purposes of the Income Tax Act (Canada).
“Existing Letter
of Credit” means any letter of credit previously issued that (a) will remain outstanding on and after the Closing Date
and (b) is listed on Schedule 1.01(d).
“Extended Revolving
Credit Commitment” has the meaning assigned to such term in Section 2.23(a).
“Extended Revolving
Facility” has the meaning assigned to such term in Section 2.23(a).
“Extended Revolving
Loans” has the meaning assigned to such term in Section 2.23(a).
“Extension”
has the meaning assigned to such term in Section 2.23(a).
“Extension Amendment”
means an amendment to this Agreement that is reasonably satisfactory to the Administrative Agent (to the extent required by Section
2.23) and the Borrowers executed by each of (a) Holdings, (b) the Borrowers, (c) the Administrative Agent and (d) each Lender
that has accepted the applicable Extension Offer pursuant hereto and in accordance with Section 2.23.
“Extension Offer”
has the meaning assigned to such term in Section 2.23(a).
“Facility”
means any real property (including all buildings, fixtures or other improvements located thereon) now, hereafter or, except with
respect to Articles 5 and 6, hereof owned, leased, operated or used by any Borrower or any of their Restricted Subsidiaries.
“Fair Market
Value” means, with respect to any property, assets (including Capital Stock and Indebtedness) or obligations, the fair
market value thereof as reasonably determined by the Lead Borrower (after taking into account, with respect to property and assets,
any liabilities with respect thereto that impact such fair market value).
“FATCA”
means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively
comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof,
any agreements entered into pursuant to current Section 1471(b)(1) of the Code (or any amended or successor version described above),
any intergovernmental agreement between the U.S. and any other jurisdiction that facilitates the implementation of such Sections
of the Code and any treaty, law, regulation or other official guidance enacted in any other jurisdiction relating to any such intergovernmental
agreement.
“FCPA”
has the meaning assigned to such term in Section 3.17(b).
“Federal Funds
Effective Rate” means, for any day, 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 that is a Business Day, the average of the quotations for such day for such transactions
received by Administrative Agent from three Federal funds brokers of recognized standing selected by it.
“First Lien
Agent” means the administrative agent, the trustee or other similar representative under the First Lien Credit Agreement.
“First Lien
Credit Agreement” means the First Lien Credit Agreement, dated as of the Closing Date, among, inter alios, Holdings,
the US Borrower, the First Lien Agent and the lenders from time to time party thereto and any other document governing any First
Lien Facility.
“First Lien
Collateral” means Term Priority Collateral (as defined in the ABL Intercreditor Agreement).
“First
Lien Facility” means the credit facility governed by the First Lien Credit Agreement and one or more debt
facilities or other financing arrangements (including indentures) providing for loans, notes or other long-term indebtedness
that replace or refinance such credit facility, including any such replacement or refinancing facility or other financing
arrangements (including indentures) that increases or decreases the amount permitted to be borrowed thereunder or alters the
maturity thereof and whether by the same or any other agent, lender or group of lenders, and any amendments, supplements,
modifications, extensions, renewals, restatements, amendments and restatements or refundings thereof or any such indentures
or credit facilities that replace or refinance such credit facility (or any subsequent replacement thereof) to the extent
permitted pursuant to Section 6.01(p) (or any other provision in Section 6.01, so long as, if applicable, any
corresponding Lien is permitted by Section 6.02).
“First Lien
Facility Documentation” means the First Lien Facility and all related notes, collateral documents, letters of credit
and guarantees, instruments and agreements executed in connection therewith, and any appendices, exhibits or schedules to any of
the foregoing (as the same may be in effect from time to time).
“First Lien
Loans” shall mean the loans under the First Lien Facility.
“First Lien
Obligations” means (a) the “Secured Obligations” as defined in the First Lien Credit Agreement and with respect
to any other First Lien Facility, any equivalent term under such First Lien Facility, (b) all unpaid principal and accrued and
unpaid interest and fees owing respect to any “Incremental Loans” and “Incremental Equivalent Debt” (each
as defined in the First Lien Credit Agreement or any equivalent term under any documentation governing any First Lien Facility)
and (c) all unpaid principal and accrued and unpaid interest and fees owing with respect to any Refinancing Indebtedness in respect
of any or all of the foregoing.
“First Lien
Leverage Ratio” means the ratio, as of any date of determination, of (a) Consolidated First Lien Debt to (b) Consolidated
Adjusted EBITDA, in each case for the Lead Borrower and its Restricted Subsidiaries on a consolidated basis.
“Fee Letter”
means that certain Fee Letter, dated as of June 7, 2017, between Bank of America, MLPFS, Jefferies, Morgan Stanley, Nomura and
the Borrower and any other fee letter with respect to the Revolving Facility in effect on or after the Closing Date.
“First Priority”
means, with respect to any Lien purported to be created on any US Collateral or Canadian Collateral pursuant to any Collateral
Document, that, subject to the ABL Intercreditor Agreement, such Lien is senior in priority to any other Lien to which such US
Collateral or Canadian Collateral is subject, other than any Permitted Lien.
“First Priority
Secured Obligations” means the Secured Obligations in respect of the Initial Revolving Facility and any other Revolving
Facility secured by the Collateral on a pari passu basis with the Initial Revolving Facility (as incurred and secured on
the Closing Date).
“Fiscal Quarter”
means a fiscal quarter of any Fiscal Year.
“Fiscal Year”
means the fiscal year of the Lead Borrower ending on December 31 of each calendar year.
“Fixed
Charge Coverage Ratio” means, for any Test Period, the ratio, determined on a consolidated basis for the Lead
Borrower and its Restricted Subsidiaries, of (a) Consolidated Adjusted EBITDA for such Test Period minus
(i) capital expenditures paid in cash during such Test Period (except to the extent financed with the proceeds of
Dispositions, long term Indebtedness (other than the Revolving Loans)) and (ii) the aggregate amount of federal, state,
local and foreign income Taxes actually paid or payable currently in cash during such Test Period to (b) Fixed Charges
actually paid or payable currently in cash during such Test Period, in each case, of the Lead Borrower and its Restricted
Subsidiaries on a consolidated basis.
“Fixed Charges”
means without duplication, during any applicable period, the sum of (a) Consolidated Interest Expense, (b) scheduled
principal amortization payments in respect of Indebtedness for borrowed money paid or payable in cash (other than payments made
by the Borrowers or their Restricted Subsidiaries to the Borrowers or any of their Subsidiaries and, in any case, excluding any
earn-out obligation or purchase price adjustment), all calculated for the Lead Borrower and its Restricted Subsidiaries on a consolidated
basis, (c) solely for purposes of testing Section 6.15, unfinanced Restricted Payments made in reliance on the Payment
Conditions and (d) solely to the extent testing compliance with the Payment Conditions, Restricted Payments made in reliance on
the Payment Conditions.
“Fixed Basket”
means any category of exceptions, thresholds, baskets, or other provisions in this Agreement based on a fixed Dollar amount and/or
percentage of Consolidated Adjusted EBITDA or Consolidated Total Assets as of any date of determination (including in Article
VI and the Fixed Incremental Amount (as defined in the definition of “Incremental Cap”) and clause (b) of
the definition of “Incremental Cap”).
“Foreign Lender”
means any Lender that is not a “United States person” within the meaning of Section 7701(a)(30) of the Code.
“Foreign Subsidiary”
means any Restricted Subsidiary that is not a Domestic Subsidiary.
“Foreign Subsidiary
Holdco” means a direct or indirect Restricted Subsidiary of any Borrower that (i) has no material assets other than the
capital stock and, if applicable, indebtedness of one or more subsidiaries that are Foreign Subsidiaries or other Foreign Subsidiary
Holdcos or (ii) is treated as a disregarded entity for U.S. federal income tax purposes and owns capital stock of one or more Foreign
Subsidiaries or other Foreign Subsidiary Holdcos.
“Fronting Exposure”
means, at any time there is a Defaulting Lender, (a) with respect to the Issuing Bank, such Defaulting Lender’s Applicable
Percentage of the outstanding LC Obligations, but other than such LC Obligations as to which such Defaulting Lender’s participation
obligation has been reallocated to other Lenders or Cash collateralized in accordance with the terms hereof, and (b) with respect
to the Swingline Lender, such Defaulting Lender’s Applicable Percentage of Swingline Loans, but other than such Swingline
Loans as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders in accordance with
the terms hereof.
“Funding Account”
has the meaning assigned to such term in Section 2.03(h).
“GAAP”
means generally accepted accounting principles in the U.S. in effect and applicable to the accounting period in respect of which
reference to GAAP is made, subject to Section 1.04(a); provided, that, unless the Lead Borrower elects otherwise
or exercises its rights under Section 1.04(a), the accounting for operating leases and capital leases under GAAP as in effect
on the date hereof (including, without limitation, Accounting Standards Codification 840) shall apply for the purposes of determining
compliance with the provisions of this Agreement (including the definition of Capital Lease, Consolidated Total Debt and Indebtedness),
as applied by the Lead Borrower in good faith.
“Governmental
Authority” means any federal, provincial, territorial, state, municipal, national or other government, governmental
department, commission, board, bureau, court, agency or instrumentality or political subdivision thereof or any entity or
officer exercising executive, legislative, judicial, taxing, regulatory or administrative functions of or pertaining to any
government or any court, in each case whether associated with a state or locality of the U.S., the U.S., a province or
territory of Canada, Canada, or a foreign government or any other political subdivision thereof, including central banks and
supra national bodies.
“Governmental
Authorization” means any permit, license, authorization, plan, directive, consent order or consent decree of or from
any Governmental Authority.
“Granting Lender”
has the meaning assigned to such term in Section 9.05(e).
“GST, HST Tax
Reserve” means an amount determined by the Administrative Agent in its Permitted Discretion from time to time representing
an estimate of potential prior or pari passu ranking capital gains tax, value added tax, goods and services tax, harmonized sales
tax and/or any other taxes and the costs of any administration or winding-up.
“Guarantee”
of or by any Person (the “Guarantor”) means any obligation, contingent or otherwise, of the Guarantor guaranteeing
or having the economic effect of guaranteeing any Indebtedness or other monetary obligation of any other Person (the “Primary
Obligor”) in any manner and including any obligation of the Guarantor (a) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Indebtedness or other monetary obligation or to purchase (or to advance or supply funds for
the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose
of assuring the owner of such Indebtedness or other monetary obligation of the payment thereof, (c) to maintain working capital,
equity capital or any other financial statement condition or liquidity of the Primary Obligor so as to enable the Primary Obligor
to pay such Indebtedness or other monetary obligation, (d) as an account party in respect of any letter of credit or letter of
guaranty issued to support such Indebtedness or monetary obligation, (e) entered into for the purpose of assuring in any other
manner the obligee in respect of such Indebtedness or other monetary obligation of the payment or performance thereof or to protect
such obligee against loss in respect thereof (in whole or in part) or (f) secured by any Lien on any assets of such Guarantor
securing any Indebtedness or other monetary obligation of any other Person, whether or not such Indebtedness or monetary other
obligation is assumed by such Guarantor (or any right, contingent or otherwise, of any holder of such Indebtedness or other monetary
obligation to obtain any such Lien); provided that the term “Guarantee” shall not include endorsements for collection
or deposit in the ordinary course of business, or customary and reasonable indemnity obligations in effect on the Closing Date
or entered into in connection with any acquisition, Disposition or other transaction permitted under this Agreement (other than
such obligations with respect to Indebtedness). The amount of any Guarantee shall be deemed to be an amount equal to the stated
or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if
not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person
in good faith.
“Hazardous Materials”
means any chemical, material, substance or waste, or any constituent thereof, which is prohibited, defined, listed or regulated
as “toxic”, “hazardous” or as a “pollutant” or “contaminant” or words of similar
meaning or effect by any Environmental Law, including asbestos and asbestos-related material.
“Hazardous Materials
Activity” means any past, current, proposed or threatened activity, event or occurrence involving any Hazardous Material,
including the use, manufacture, possession, storage, holding, presence, existence, location, Release, threatened Release, discharge,
placement, generation, transportation, processing, construction, treatment, abatement, removal, remediation, disposal, disposition
or handling of any Hazardous Material, and any corrective action or response action with respect to any of the foregoing.
“Hedge Agreement”
means any agreement with respect to any Derivative Transaction between any Loan Party or any Restricted Subsidiary and any other
Person.
“Hedge Product
Reserve” means the aggregate amount of reserves established by the Administrative Agent from time to time in its Permitted
Discretion in respect of Designated Hedging Obligations, which shall not exceed the sum of all Canadian Hedge Product Amounts and
US Hedge Product Amounts in respect of Designated Hedging Obligations at such time.
“Hedging Obligations”
means, with respect to any Person, the obligations of such Person under any Hedge Agreement.
“Holdings”
has the meaning assigned to such term in the preamble to this Agreement.
“IFRS”
means international accounting standards within the meaning of the IAS Regulation 1606/2002, as in effect from time to time (subject
to the provisions of Section 1.04), to the extent applicable to the relevant financial statements.
“Immaterial
Subsidiary” means, as of any date of determination, any Restricted Subsidiary of the Lead Borrower that has been designated
by the Lead Borrower as an “Immaterial Subsidiary” for purposes of this Agreement, provided that the Consolidated
Total Assets and Consolidated Adjusted EBITDA (as so determined) of all Immaterial Subsidiaries shall not exceed 5.0% of Consolidated
Total Assets and 5.0% of Consolidated Adjusted EBITDA, in each case, of the Lead Borrower and its Restricted Subsidiaries for the
relevant Test Period; provided further that, at all times prior to the first delivery of financial statements pursuant to
Section 5.01(a) or (b), this definition shall be applied based on the pro forma consolidated financial statements
delivered pursuant to Section 4.01.
“Immediate Family
Member” means, with respect to any individual, such individual’s child, stepchild, grandchild or more remote descendant,
parent, stepparent, grandparent, spouse, former spouse, domestic partner, former domestic partner, sibling, mother-in-law, father-in-law,
son-in-law and daughter-in-law (including adoptive relationships), any trust, partnership or other bona fide estate-planning vehicle
the only beneficiaries of which are any of the foregoing individuals, such individual’s estate (or an executor or administrator
acting on its behalf), heirs or legatees or any private foundation or fund that is controlled by any of the foregoing individuals
or any donor-advised fund of which any such individual is the donor.
“Incremental
Cap” means:
(a) the greatest of (i) $100,000,000 (the “Fixed Incremental Amount”), (ii) the maximum amount
such that after giving pro forma effect to any Incremental Revolving Facility implemented in reliance on this clause (a)(ii)
(assuming a full drawing of such Incremental Revolving Facility), the First Lien Leverage Ratio does not exceed 5.00:1.00, and
(iii) the amount by which the Borrowing Base (as defined on the Closing Date without giving effect to any subsequent modifications
or amendments so long as the Second Lien Facility is then outstanding) exceeds the Aggregate Commitments at such time, plus
(b) the amount of any permanent voluntary reduction of any Aggregate Commitment, plus
(c) in the case of any Incremental Revolving Facility that effectively replaces any Aggregate Commitment terminated in accordance
with Section 2.19, an amount equal to the relevant terminated Aggregate Commitment.
“Incremental
Revolving Commitment” means any commitment made by a lender to provide all or any portion of any Incremental Revolving
Facility or Incremental Revolving Loans.
“Incremental
Revolving Facility Amendment” means an amendment to this Agreement executed by (a) Holdings, the Lead Borrower and, if
the initial Canadian Commitment is being increased pursuant to Section 2.22, the Canadian Borrower, (b) solely to the extent adversely
affecting the rights and interests of the Administrative Agent, the Administrative Agent and (c) each Lender that agrees to provide
all or any portion of such Incremental Revolving Facility being incurred pursuant thereto and in accordance with Section 2.22.
“Incremental
Revolving Facility” has the meaning assigned to such term in Section 2.22(a).
“Incremental
Revolving Lender” means, with respect to any Incremental Revolving Facility, each Lender providing any portion of such
Incremental Revolving Facility.
“Incremental
Revolving Loans” has the meaning assigned to such term in Section 2.22(a).
“Incurrence-Based
Basket” means any category of exceptions, thresholds, baskets, or other provisions in this Agreement based on complying
(including on a Pro Forma Basis) with any financial ratio (including, without limitation any First Lien Leverage Ratio, any Fixed
Charge Coverage Ratio and/or clause (a)(ii) of the definition of Incremental Cap).
“Indebtedness”
as applied to any Person means, without duplication, (a) all indebtedness for borrowed money; (b) that portion of obligations
with respect to Capital Leases to the extent recorded as a liability on a balance sheet (excluding the footnotes thereto) of
such Person prepared in accordance with GAAP; (c) all obligations of such Person evidenced by bonds, debentures, notes or
similar instruments to the extent the same would appear as a liability on a balance sheet (excluding the footnotes thereto)
of such Person prepared in accordance with GAAP; (d) any obligation owed for all or any part of the deferred purchase price
of property or services (other than any earn out obligation, purchase price and working capital adjustment obligations and
any similar obligation except to the extent reflected as a liability on the balance sheet (excluding the footnotes thereto)
in accordance with GAAP and not paid within thirty (30) days after becoming due and payable), which purchase price is due
more than three hundred sixty four (364) days from the date of incurrence of the obligation in respect thereof; (e) all
Indebtedness of other Persons secured by any Lien on any property or asset owned or held by such Person regardless of whether
the Indebtedness secured thereby shall have been assumed by such Person in an amount equal to the lesser of (i) the aggregate
unpaid amount of such Indebtedness and (ii) the Fair Market Value of the property or asset subject to such Lien; (f) the face
amount of any letter of credit issued for the account of such Person or as to which such Person is otherwise liable for
reimbursement of drawings; (g) the Guarantee by such Person of the Indebtedness of another; (h) all obligations of such
Person in respect of any Disqualified Capital Stock and (i) all net obligations of such Person in respect of any Derivative
Transaction, including any Hedge Agreement, whether or not entered into for hedging or speculative purposes. For all purposes
hereof, the Indebtedness of any Person shall include the Indebtedness of any partnership or any joint venture (other than any
joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or a joint
venturer, except to the extent such Person’s liability for such Indebtedness is otherwise limited and only to the
extent such Indebtedness would otherwise be included in the calculation of Consolidated Total Debt; provided that,
notwithstanding anything herein to the contrary, the term “Indebtedness” shall exclude, and shall be calculated
without giving effect to, (A) the effects of Accounting Standards Codification Topic 815 and related interpretations to the
extent such effects would otherwise increase or decrease an amount of Indebtedness for any purpose hereunder as a result of
accounting for any embedded derivatives created by the terms of such Indebtedness and any such amounts that would have
constituted Indebtedness hereunder but for the application of this proviso shall not be deemed an incurrence of Indebtedness
hereunder, (B) the effects of Statement of Financial Accounting Standards No. 133 and related interpretations to the extent
such effects would otherwise increase or decrease an amount of Indebtedness for any purpose under this Agreement as a result
of accounting for any embedded derivative created by the terms of such Indebtedness (it being understood that any such
amounts that would have constituted Indebtedness under this Agreement but for the application of this sentence shall not be
deemed to be an incurrence of Indebtedness under this Agreement), (C) liabilities under vendor agreements to the extent such
liabilities may be satisfied exclusively through non-cash means such as purchase volume earning credits, (D) reserves for
deferred taxes, (E) any obligations incurred under ERISA or applicable law relating to Canadian Pension Plans or Canadian
Employee Plans, (F) accrued expenses and trade accounts payable in the ordinary course of business (including on an
inter-company basis), (G) liabilities associated with customer prepayments and deposits), (H) Indebtedness that is
non-recourse to the credit of such Person and (I) for all purposes under this Agreement other than for purposes of Section
6.01, intercompany Indebtedness among Holdings and its Restricted Subsidiaries.
“Indemnified
Taxes” means Taxes, other than Excluded Taxes or Other 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.
“Indemnitee”
has the meaning assigned to such term in Section 9.03(b).
“Information”
has the meaning set forth in Section 3.11(a).
“Initial Canadian
Commitment” means with respect to each Lender, the commitment of such Lender to make Initial Canadian Revolving Loans
(and acquire participations in Canadian Letters of Credit) hereunder as set forth on the Commitment Schedule, or in the Assignment
and Assumption pursuant to which such Lender assumed its Initial Canadian Commitment, as applicable, as the same may be (a) reduced
from time to time pursuant to Section 2.09 or 2.10, (b) reduced or increased from time to time pursuant to reallocations
pursuant to Section 2.25, (c) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant
to Section 2.22, or (d) established or increased from time to time pursuant to Section 2.22 in connection with an
Incremental Revolving Facility. The aggregate amount of the Initial Canadian Commitments as of the Closing Date is $30,000,000.
“Initial Canadian
Revolving Credit Exposure” means, with respect to any Initial Canadian Revolving Lender at any time (a) the aggregate
Outstanding Amount at such time of all Initial Canadian Revolving Loans of such Initial Canadian Revolving Lender, plus (b) the
aggregate amount at such time of such Initial Canadian Revolving Lender’s Canadian LC Exposure and participation interest
in Canadian Protective Advances and Canadian Overadvances, in each case attributable to its Initial Canadian Commitment.
“Initial Canadian
Revolving Lender” means any Lender with an Initial Canadian Commitment and which is a financial institution that is listed
on Schedule I, II, or III of the Bank Act (Canada) or is not a foreign bank for purposes of the Bank Act (Canada), and if such
financial institution is not resident in Canada and is not deemed to be resident in Canada for purposes of the Income Tax Act (Canada),
that financial institution deals at arm’s length with the Canadian Borrower for purposes of the Income Tax Act (Canada).
“Initial Canadian
Revolving Loan” means any loan made pursuant to Section 2.01(b).
“Initial Commitment”
means with respect to any Lender, such Lender’s Initial US Commitment and/or Initial Canadian Commitment.
“Initial Revolving
Credit Exposure” means with respect to any Lender at any time, the aggregate Outstanding Amount at such time of all Initial
Revolving Loans of such Lender, plus the aggregate amount at such time of such Lender’s LC Exposure and Swingline
Exposure and participation interest in Protective Advances and Overadvances, in each case, attributable to its Initial Commitments.
“Initial Revolving
Credit Maturity Date” means the date that is five years after the Closing Date.
“Initial Revolving
Facility” means the Initial Commitments and the Initial Revolving Loans and other extensions of credit thereunder.
“Initial Revolving
Lender” means any Lender with an Initial Commitment or any Initial Revolving Credit Exposure.
“Initial Revolving
Loan” means any Initial US Revolving Loan and/or any Initial Canadian Revolving Loan.
“Initial US
Commitment” means with respect to each Lender, the commitment of such Lender to make Initial US Revolving Loans (and
acquire participations in US Letters of Credit and Swingline Loans) hereunder as set forth on the Commitment Schedule, or in the
Assignment and Assumption pursuant to which such Lender assumed its Initial US Commitment, as the same may be (a) reduced from
time to time pursuant to Section 2.09 or 2.10, (b) reduced or increased from time to time pursuant to reallocations
pursuant to Section 2.25, (c) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant
to Section 2.22, or (d) established or increased from time to time pursuant to Section 2.22 in connection with an
Incremental Revolving Facility. The aggregate amount of the Initial US Commitments as of the Closing Date is $220,000,000.
“Initial US
Revolving Credit Exposure” means, with respect to any Initial US Revolving Lender at any time (a) the aggregate Outstanding
Amount at such time of all Initial US Revolving Loans of such Initial US Revolving Lender, plus (b) the aggregate amount at such
time of such Initial US Revolving Lender’s US LC Exposure and Swingline Exposure and participation interest in US Protective
Advances and US Overadvances, in each case attributable to its Initial US Commitment.
“Initial US
Revolving Lender” means any Lender with an Initial US Commitment.
“Initial US
Revolving Loan” means any loan made pursuant to Section 2.01(a).
“Intellectual
Property Security Agreement” means any agreement executed on or after the Closing Date confirming or effecting the grant
of any Lien on IP Rights owned by any Loan Party to the Administrative Agent, for the benefit of the Secured Parties, in accordance
with this Agreement and the US Security Agreement, including any of the following: (a) a Trademark Security Agreement substantially
in the form attached as an exhibit to the US Security Agreement, (b) a Patent Security Agreement substantially in the form attached
as an exhibit to the US Security Agreement or (c) a Copyright Security Agreement attached as an exhibit to the US Security Agreement,
together with any and all supplements or amendments thereto.
“Interest Election
Request” means a request by the applicable Borrower in the form of Exhibit D or another form reasonably acceptable
to the Administrative Agent to convert or continue a Borrowing in accordance with Section 2.08.
“Interest Payment
Date” means (a) with respect to any ABR Revolving Loan (including Swingline Loans), Canadian Base Rate Revolving Loan
or Canadian Prime Rate Revolving Loan, the last Business Day of each March, June, September and December (commencing on September
30, 2017) or the maturity date applicable to such Revolving Loan, (b) with respect to any LIBO Rate Revolving Loan or CDOR Revolving
Loan, the last day of the Interest Period applicable to the Borrowing of which such Revolving Loan is a part and, in the case of
a LIBO Rate Borrowing or CDOR Rate Borrowing with an Interest Period of more than three months’ duration, each day that would
have been an Interest Payment Date had successive Interest Periods of three months’ duration been applicable to such Borrowing
and (c) to the extent necessary to create a fungible Class of Loans in connection with the incurrence of any Additional Revolving
Loans, as reasonably determined by the Administrative Agent and the Lead Borrower, the date of the incurrence of such Additional
Revolving Loans.
“Interest Period”
means with respect to any CDOR Rate Borrowing or LIBO Rate Borrowing, the period commencing on the date of such Borrowing and ending
on the numerically corresponding day in the calendar month that is one, two, three or six months (or, to the extent available to
all relevant affected Lenders, twelve months) thereafter, as the applicable Borrower may elect; provided that (i) if any
Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business
Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end
on the next preceding Business Day, (ii) any Interest Period that commences on the last Business Day of a calendar month (or on
a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the
last Business Day of the last calendar month of such Interest Period, (iii) the applicable Borrower may not elect any interest
period that would result in such Interest Period extending beyond the Maturity Date. For purposes hereof, the date of a Borrowing
initially shall be the date on which such Borrowing is made and thereafter shall be the effective date of the most recent conversion
or continuation of such Borrowing and (iv) the initial Interest Period after the Closing Date shall be deemed to end on August
31, 2017.
“Inventory”
has the meaning assigned to such term in the UCC (and/or, with respect to any Inventory of a Canadian Loan Party, as defined in
the PPSA).
“Investment”
means (a) any purchase or other acquisition by the Borrowers or any of their Restricted Subsidiaries of any of the Securities of
any other Person (other than any Loan Party), (b) the acquisition by purchase or otherwise (other than any purchase or other acquisition
of inventory, materials, supplies and/or equipment in the ordinary course of business) of all or substantially all of the business,
property or fixed assets of any other Person or any division or line of business or other business unit of any other Person and
(c) any loan, advance (other than any advance to any current or former employee, officer, director, member of management, manager,
consultant or independent contractor of the Borrowers, any Restricted Subsidiary or any Parent Company for moving, entertainment
and travel expenses, drawing accounts and similar expenditures in the ordinary course of business) or capital contribution by the
Borrowers or any of their Restricted Subsidiaries to any other Person. Subject to Section 5.10, the amount of any Investment
shall be the original cost of such Investment, plus the cost of all additions thereto, without any adjustments for increases
or decreases in value, or write-ups, write-downs or write-offs with respect thereto, but giving effect to any repayments of principal
in the case of any Investment in the form of a loan and any return of capital or return on Investment in the case of any equity
Investment (whether as a distribution, dividend, redemption or sale but not in excess of the amount of the relevant initial Investment).
“Investors”
means (a) the Sponsors, (b) the Co-Investors and (c) any other Person making a cash equity investment directly or indirectly in
any Parent Company after the Closing Date, so long as in the case of this clause (c), (i) no such Person’s direct
or indirect beneficial ownership of Holdings is greater than the Sponsors’ direct or indirect beneficial ownership of Holdings,
and (ii) the aggregate direct or indirect beneficial ownership of Holdings by such Persons does not exceed 40% of the aggregate
direct or indirect beneficial ownership of Holdings of all Investors collectively, in each case, other than any Person who is a
Lender on the Closing Date (and such Person shall not be deemed to be an Affiliate of an Investor under this Agreement).
“IP Rights”
has the meaning assigned to such term in Section 3.05(c).
“IRS”
means the U.S. Internal Revenue Service.
“Issuing Bank” means Bank
of America (in the case of the Canadian Letters of Credit, acting through its Canada branch) and any other Lender that, at the
request of any Borrower and with the consent of the Administrative Agent (not to be unreasonably withheld or delayed) agrees to
become an Issuing Bank; provided that the maximum amount of US Letters of Credit and Canadian Letters of Credit issued and
outstanding of any Issuing Bank shall not exceed the amount set forth on Schedule 1.01(a) (as such schedule may be updated
from time to time pursuant to Section 2.05(b) with the consent of the applicable Issuing Banks to reflect additional Issuing
Banks) at any time unless otherwise agreed in writing by such Issuing Bank. Each Issuing Bank may, in its discretion, arrange for
one or more Letters of Credit to be issued by any Affiliate or branch of such Issuing Bank, which case the term “Issuing
Bank” shall include any such Affiliate or branch with respect to Letters of Credit issued by such Affiliate or branch.
“Jefferies”
has the meaning assigned to such term in the preamble to this Agreement.
“Junior Lien Indebtedness”
means any Indebtedness that is secured by a security interest on the Collateral (other than Indebtedness among Holdings and/or
its subsidiaries) that is expressly junior or subordinated to the Lien on the Collateral securing the Secured Obligations. For
the avoidance of doubt, (i) Indebtedness outstanding under any First Lien Facility, “Incremental Equivalent Debt” (as
defined in the First Lien Credit Agreement or any equivalent term under any documentation governing any First Lien Facility) and
Indebtedness under this Agreement each shall not constitute Junior Lien Indebtedness and (ii) Indebtedness outstanding under any
Second Lien Facility shall constitute Junior Lien Indebtedness.
“Latest Maturity
Date” means, as of any date of determination, the latest maturity or expiration date applicable to any Revolving Loan
or commitment hereunder at such time, including the latest maturity or expiration date of any Initial Revolving Loan, Additional
Revolving Loan or Additional Revolving Commitment.
“LC Disbursement”
means a payment or disbursement made by an Issuing Bank pursuant to a Letter of Credit.
“LC Exposure”
means, at any time, the sum of the US LC Exposure and the Canadian LC Exposure. The LC Exposure of any Lender at any time shall
equal its Applicable Percentage of the aggregate LC Exposure at such time.
“LC Obligations”
means, at any time, the sum of (a) the amount available to be drawn under Letters of Credit then outstanding, assuming compliance
with all requirements for drawings referenced therein, plus (b) the aggregate principal amount of all unreimbursed LC Disbursements.
“LC Reimbursement
Loan” has the meaning assigned to such term in Section 2.05(e)(i).
“LCT Election”
has the meaning assigned to such term in Section 1.11(a).
“LCT Test Date”
has the meaning assigned to such term in Section 1.11(a).
“Lead Borrower”
means the US Borrower.
“Legal Reservations”
means the application of relevant Debtor Relief Laws, general principles of equity and/or principles of good faith and fair dealing.
“Lenders”
means the Initial Revolving Lenders (which as the context requires, includes the Swingline Lender), any Additional Revolving Lender,
any lender with a Commitment or an outstanding Revolving Loan and any other Person that becomes a party hereto pursuant to an Assignment
and Assumption, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption.
“Letter of Credit”
means any US Letter of Credit or Canadian Letter of Credit.
“Letter of Credit
Request” has the meaning assigned to such term in Section 2.05(b).
“Letter-of-Credit
Right” has the meaning set forth in Article 9 of the UCC.
“LIBO Rate”
means, the Published LIBO Rate, as adjusted to reflect applicable reserves prescribed by governmental authorities; provided
that, in respect of the Revolving Loans, in no event shall the LIBO Rate be less than 0.00% per annum.
“LIBO Rate Revolving
Loan” means a Revolving Loan bearing interest at a rate determined by reference to the LIBO Rate.
“Lien”
means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, or
preference, priority or other security interest or preferential arrangement of any kind or nature whatsoever (including any conditional
sale or other title retention agreement, any easement, right of way or other encumbrance on title to real property, and any Capital
Lease having substantially the same economic effect as any of the foregoing), in each case, in the nature of security and any deemed
trust (statutory or otherwise); provided that in no event shall an operating lease in and of itself be deemed to constitute
a Lien on any asset.
“Limited Condition
Transaction” has the meaning assigned to such term in Section 1.11(a).
“Line Cap”
means at any time, the lesser of (i) the Aggregate Commitments and (ii) the then-applicable Borrowing Base.
“Liquidity Period”
means any period (a) beginning on the date on which Availability shall have been less than the greater of (i) 10% of the Line
Cap and (ii) $20,000,000, in either case for each day during a period of 5 consecutive Business Days, and (b) ending on the
date on which Availability is equal to or greater than the greater of (i) 10% of the Line Cap and (ii) $25,000,000 for
each day during a period of 30 consecutive calendar days.
“Loan Documents”
means this Agreement, any Promissory Note, each Loan Guaranty, the Collateral Documents, each Blocked Account Agreement, the ABL
Intercreditor Agreement, the Fee Letter and any other document or instrument designated by the Lead Borrower and the Administrative
Agent as a “Loan Document.” Any reference in this Agreement or any other Loan Document to a Loan Document shall include
all appendices, exhibits or schedules thereto.
“Loan Guaranty”
means (a) the US Loan Guaranty, (b) the Canadian Loan Guaranty, and (c) each other guaranty agreement in substantially the form
attached as Exhibit I, another form of guaranty that is otherwise reasonably satisfactory to the Administrative Agent and
the Lead Borrower or any supplement or joinder to the guaranty agreement, in each case, executed by any Person pursuant to Section
5.12 or as provided in the definition of “Subsidiary Guarantor”.
“Loan Parties”
means Holdings, the Borrowers, each Subsidiary Guarantor, and in each case their respective successors and permitted assigns.
“Margin Stock”
has the meaning assigned to such term in Regulation U.
“Material Account”
means any Deposit Account or Securities Account of a Loan Party other than any Excluded Account.
“Material Adverse
Effect” means (a) for any purpose on or prior to the Closing Date, a Closing Date Material Adverse Effect and (b) for
any purpose after the Closing Date, a material adverse effect on (i) the business, assets, financial condition or results of operations,
in each case, of Holdings, the Lead Borrower and its Restricted Subsidiaries, taken as a whole, (ii) the rights and remedies (taken
as a whole) of the Administrative Agent (on behalf of the Lenders) under the applicable Loan Documents or (iii) the ability of
the Loan Parties (taken as a whole) to perform their payment obligations under the applicable Loan Documents.
“Material Debt
Instrument” means any promissory note payable to, or in favor, of a Loan Party with an aggregate principal amount outstanding,
in each case, of not less than $15,000,000.
“Maturity Date”
means (a) with respect to the Initial Revolving Loans, the Initial Revolving Credit Maturity Date, (b) with respect to any Incremental
Revolving Facility, the final maturity date set forth in the applicable Incremental Revolving Facility Amendment and (c) with respect
to any Extended Revolving Credit Commitment, the final maturity date set forth in the applicable Extension Amendment.
“Maximum Rate”
has the meaning assigned to such term in Section 9.20.
“Merger” has the meaning
assigned to such term in the Recitals to this Agreement.
“Merger Agreement”
means that certain Agreement and Plan of Merger, dated as of June 7, 2017, by and among, inter alios, Holdings, the Initial
US Borrower, the Company and the other parties thereto, together with the exhibits and disclosure schedules thereto.
“Minimum Extension
Condition” has the meaning assigned to such term in Section 2.23(b).
“MLPFS”
has the meaning assigned to such term in the preamble to this Agreement.
“Moody’s”
means Moody’s Investors Service, Inc.
“Morgan Stanley”
has the meaning assigned to such term in the preamble to this Agreement.
“Multiemployer
Plan” means any employee benefit plan which is a “multiemployer plan” as defined in Section 3(37) of
ERISA, that is subject to the provisions of Title IV of ERISA, and in respect of which the Lead Borrower or any of its Restricted
Subsidiaries, or any of their respective ERISA Affiliates, makes or is obligated to make contributions or with respect to which
any of them has any ongoing obligation or liability, contingent or otherwise.
“Narrative Report”
means, with respect to the financial statements with respect to which it is delivered, a management discussion and narrative report
describing the operations of Holdings, the Lead Borrower and its Restricted Subsidiaries for the applicable Fiscal Quarter or Fiscal
Year and for the period from the beginning of the then-current Fiscal Year to the end of the period to which the relevant financial
statements relate.
“Net Orderly
Liquidation Value” means with respect to Eligible Inventory of any Person, the orderly liquidation value thereof, net
of all costs and expenses reasonably estimated to be incurred in connection with such liquidation, as determined based upon the
most recent Inventory appraisal conducted in accordance with this Agreement.
“Net Proceeds”
means, with respect to any issuance or incurrence of Indebtedness or Capital Stock, the Cash proceeds thereof, net of all Taxes
and customary fees, commissions, costs, underwriting discounts and other fees and expenses incurred in connection therewith.
“Nomura”
has the meaning assigned to such term in the preamble to this Agreement.
“Non-Consenting
Lender” has the meaning assigned to such term in Section 2.19(b).
“Notice of Intent
to Cure” has the meaning assigned to such term in Section 6.15(b).
“Obligations”
means, collectively, the US Obligations and the Canadian Obligations.
“OFAC”
has the meaning assigned to such term in Section 3.17.
“Organizational
Documents” means (a) with respect to any corporation, its certificate and/or articles of incorporation or organization
and its by-laws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction), (b) with respect
to any limited partnership, its certificate of limited partnership and its partnership agreement, (c) with respect to any general
partnership, its partnership agreement, (d) with respect to any limited liability company, its articles of organization or certificate
of formation, and its operating agreement (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction),
and (e) with respect to any other form of entity, such other organizational documents required by local law or customary under
such jurisdiction to document the formation and governance principles of such type of entity. In the event that any term or condition
of this Agreement or any other Loan Document requires any Organizational Document to be certified by a secretary of state or similar
governmental official, the reference to any such “Organizational Document” shall only be to a document of a type customarily
certified by such governmental official.
“Other
Agreed Adjustments” means any add-backs and adjustments (including pro forma adjustments pursuant to clause
(b)(xi) of the definition of “Consolidated Adjusted EBITDA”), to the extent not otherwise included in
Consolidated Net Income, of the type reflected in (a) the Sponsor Model (b) the quality of earnings report delivered to the
Arrangers on or prior to June 7, 2017 and (c) the confidential information memorandum in respect of the Initial Revolving
Loans, in each case, which add-backs and adjustments shall not, for the avoidance of doubt, be limited to the time periods or
amounts in respect of which such add backs and adjustments were identified therein.
“Other Connection
Taxes” means, with respect to any Lender, any Issuing Bank, any Swingline Lender or the Administrative Agent, Taxes imposed
as a result of a present or former connection between such recipient and the jurisdiction imposing such Tax (other than connections
arising from such recipient having executed, delivered, become a party to, performed its obligations under, received payments under,
received or perfected a security interest under, or engaged in any other transaction pursuant to or enforced any Loan Document,
or sold or assigned an interest in any Revolving Loan or Loan Document).
“Other Taxes”
means any and all present or future stamp, court or documentary taxes or any intangible, recording, filing or other similar Taxes,
charges or similar levies arising from any payment made hereunder or from the execution, delivery or enforcement of, or otherwise
with respect to, this Agreement or any other Loan Document, but not including, for the avoidance of doubt, any such Taxes that
are Other Connection Taxes imposed with respect to an assignment, grant of a participation, designation of a different lending
office or other transfer (other than an assignment or designation of a different lending office made pursuant to Section 2.19)
or Excluded Taxes.
“Outstanding
Amount” means (a) with respect to Revolving Loans on any date, the Dollar Equivalent amount of the aggregate outstanding
principal amount thereof after giving effect to any borrowings and prepayments or repayments of Revolving Loans occurring on such
date, (b) with respect to any Letters of Credit, the Dollar Equivalent of the aggregate amount available to be drawn under such
Letters of Credit after giving effect to any changes in the aggregate amount available to be drawn under such Letters of Credit
or the issuance or expiry of any Letters of Credit, including as a result of any LC Disbursements and (c) with respect to any LC
Disbursements on any date, the Dollar Equivalent of the amount of the aggregate outstanding amount of such LC Disbursements on
such date after giving effect to any disbursements with respect to any Letter of Credit occurring on such date and any other changes
in the aggregate amount of the LC Disbursements as of such date, including as a result of any reimbursements by any Borrower of
unreimbursed LC Disbursements.
“Overadvance”
means a US Overadvance or a Canadian Overadvance.
“Parent Company”
means Holdings and any other Person of which the US Borrower is an indirect Wholly-Owned Subsidiary.
“Participant”
has the meaning assigned to such term in Section 9.05(c).
“Participant
Register” has the meaning assigned to such term in Section 9.05(c).
“Participating
Member State” means any member state of the European Union that adopts or has adopted the Euro as its lawful currency
in accordance with the legislation for the European Union relating to Economic and Monetary Union.
“Patent”
means the following: (a) any and all patents and patent applications; (b) all inventions described and claimed therein; (c) all
reissues, divisions, continuations, renewals, extensions and continuations in part thereof; (d) all income, royalties, damages,
claims, and payments now or hereafter due or payable under and with respect thereto, including, without limitation, damages and
payments for past, present and future infringements thereof; (e) all rights to sue for past, present, and future infringements
thereof; and (f) all rights corresponding to any of the foregoing.
“Payment Conditions”
means as to any transaction, (i) no Specified Default exists or would result from any such transaction, and (ii) Availability
(calculated on a Pro Forma Basis) on the date of the proposed transaction and the 30-Day Average Availability immediately preceding
such transaction would be greater than (a) in the case of Restricted Payments, (x) if the Fixed Charge Coverage Ratio (calculated
on a Pro Forma Basis) is greater than or equal to 1.00:1.00, the greater of 15% of the Line Cap and $25,000,000 and (y) if the
Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) is less than 1.00:1.00, the greater of 17.5% of the Line Cap and
$30,000,000 and (b) in the case of Investments, Restricted Debt Payments and any other similar transaction subject to Payment Conditions,
(x) if the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) is greater than or equal to 1.00:1.00, the greater of
12.5% of the Line Cap and $20,000,000 and (y) if the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) is less than
1.00:1.00, the greater of 15.0% of the Line Cap and $25,000,000.
“PBGC”
means the Pension Benefit Guaranty Corporation.
“Peak Season”
means the period from February 1 through May 31 of each year; provided that the Lead Borrower shall have the right to modify such
period (which period, in any event, shall not exceed four (4) consecutive calendar months) by providing written notice to the Administrative
Agent at least 30 days prior to the commencement of the Peak Season then in effect. For the avoidance of doubt, the Peak Season
shall begin and end on the dates set forth in the preceding sentence, regardless of the date as of which the then applicable Borrowing
Base Certificates were prepared.
“Pension Plan”
means any “employee pension benefit plan”, as defined in Section 3(2) of ERISA (other than a Multiemployer Plan), that
is subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, which the Lead Borrower or
any of its Restricted Subsidiaries, or any of their respective ERISA Affiliates, maintains or contributes to or has an obligation
to contribute to, or otherwise has any liability, contingent or otherwise.
“Perfection
Certificate” means a certificate substantially in the form of Exhibit E.
“Perfection
Certificate Supplement” means a supplement to the Perfection Certificate substantially in the form of Exhibit F.
“Perfection
Requirements” means the filing of appropriate financing statements with the office of the Secretary of State, the PPSA
register or other appropriate office or security register of the jurisdiction of organization (and, as applicable, of the jurisdiction
of the registered office, chief executive office or location where such Loan Party maintains Collateral) of each Loan Party, the
filing of appropriate assignments or notices with the U.S. Patent and Trademark Office and the U.S. Copyright Office, in each case
in favor of the Administrative Agent for the benefit of the Secured Parties (or the First Lien Agent as bailee and agent for the
Administrative Agent) and the delivery to the Administrative Agent of any stock certificate or Material Debt Instrument required
to be delivered pursuant to the applicable Loan Documents, together with instruments of transfer executed in blank and entry into
a Blocked Account Agreement with respect to each Blocked Account, in each case, subject in all respects to the definitions of “Collateral
and Guarantee Requirement” and “Excluded Assets” and the last paragraph of Section 4.01.
“Permitted
Acquisition” means any acquisition by the Borrowers or any of their Restricted Subsidiaries, whether by purchase,
merger, amalgamation or otherwise, of all or substantially all of the assets of, or any business line, unit or division or
product line of, any Person or of a majority of the outstanding Capital Stock of any Person (but in any event including any
Investment in (x) any Person that results in such Person becoming a Restricted Subsidiary of a Borrower, (y) any Restricted
Subsidiary which serves to increase the Borrowers’ or any Restricted Subsidiary’s respective equity ownership in
such Restricted Subsidiary or (z) any joint venture for the purpose of increasing the Borrowers’ or their relevant
Restricted Subsidiary’s ownership interest in such joint venture); provided, that the total consideration paid
by Loan Parties (including pursuant to an Investment in any Restricted Subsidiary) for (a) the Capital Stock of any Person
that does not become a Guarantor and (b) in the case of an asset acquisition, assets that are not acquired by any Borrower or
any Guarantor, when taken together with the total consideration for all such Persons and assets so acquired after the Closing
Date, shall not exceed an amount outstanding equal to the sum of (i) the greater of $60,000,000 and 35.0% of Consolidated
Adjusted EBITDA and (ii) amounts otherwise available under clauses (b)(iii), (d) (solely with respect to
Investments in joint ventures), (q), (r), (bb) and (dd) of Section 6.06; provided, further,
that the limitation described in the foregoing proviso shall not apply (A) to any acquisition to the extent such acquisition
is made with the proceeds of sales of the Qualified Capital Stock of, or common equity capital contributions to, the
Borrowers or any Restricted Subsidiary, (B) to any acquisition to the extent at least 75.0% of the Consolidated Adjusted
EBITDA (as determined by the Lead Borrower in good faith) of the Person(s) (or assets) acquired in such acquisition (for this
purpose and for the component definitions used therein, determined on a consolidated basis for such Persons and their
respective Restricted Subsidiaries) is generated by Person(s) that will become (or, in the case of asset acquisitions, are
acquired by) Subsidiary Guarantors (or, if less than 75.0%, after giving pro forma effect thereto, the percentage of
Consolidated Adjusted EBITDA attributable to Loan Parties would be greater than the percentage immediately prior thereto),
(C) to the portion of such consideration provided by Restricted Subsidiaries that are not Loan Parties, including through
cash flow, asset sale proceeds and Indebtedness proceeds of such Restricted Subsidiaries and/or (D) if the Payment Conditions
are satisfied, on a Pro Forma Basis. In the event the amount available under the first proviso above is reduced as a result
of any acquisition of any Restricted Subsidiary that does not become a Loan Party (or any assets that are not transferred to
a Loan Party) and such Restricted Subsidiary subsequently becomes a Loan Party (or such assets are subsequently transferred
to a Loan Party), the amount available under such limit shall be proportionately increased as a result thereof.
“Permitted Discretion”
means the reasonable (from the perspective of a secured asset-based lender) business judgment exercised in good faith in accordance
with customary business practices of the Administrative Agent for comparable asset-based lending transactions.
“Permitted Holders”
means (a) the Investors and (b) any Person with which one or more Investors form a “group” (within the meaning of Section
14(d) of the Exchange Act) so long as, in the case of this clause (b), the relevant Investors beneficially own more than
50% of the relevant voting stock beneficially owned by the group.
“Permitted Liens”
means Liens permitted pursuant to Section 6.02.
“Person”
means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental
Authority or any other entity.
“Plan”
means any “employee pension benefit plan” within the meaning of Section 3(2) of ERISA (other than a Multiemployer Plan)
maintained by the US Borrower or any of its Restricted Subsidiaries for employees of the US Borrower or any of its Restricted Subsidiaries
or any such Pension Plan to which the US Borrower or any of its Restricted Subsidiaries is required to contribute on behalf of
any of its employees.
“Platform”
has the meaning assigned to such term in Section 9.01(d).
“PPSA”
means the Personal Property Security Act (Ontario) or similar legislation of any other Canadian province or territory the laws
of which are required by such legislation to be applied in connection with the issue, perfection, enforcement, validity or effect
of security interests.
“Primary Obligor”
has the meaning assigned to such term in the definition of “Guarantee”.
“Prime Rate”
means the rate set by Bank of America based upon various factors including Bank of America’s costs and desired return, general
economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above,
or below such announced rate.
“Priority Payable
Reserve” means, in each case other than items reflected in the GST, HST Tax Reserve and the Rent and Charges Reserves,
with respect to the Canadian Loan Parties, the total amount of liabilities at such time of the Canadian Loan Parties which are
secured by a Lien, choate or inchoate, which ranks or is capable of ranking prior to or pari passu with the Administrative Agent’s
Liens in respect of Canadian Loan Parties’ Eligible Accounts or Canadian Loan Parties’ Eligible Inventory, including
amounts owing for wages (including amounts protected by the Wage Earner Protection Program Act (Canada)), vacation pay, employee
deductions, sales tax, excise tax, tax payable pursuant to Part IX of the Excise Tax Act (Canada) (net of GST input credits), income
tax, workers’ compensation, government royalties, employee and employer pension plan contributions (including “normal
cost”, “special payments” and any other payments in respect of any funding deficiencies or shortfalls), Taxes,
and other statutory or other claims that have or may have priority over, or rank pari passu with, the Administrative Agent’s
Liens.
“Pro Forma Basis”
or “pro forma effect” means, as to any calculation of any financial ratio or test (including the First Lien
Leverage Ratio, the Fixed Charge Coverage Ratio, Consolidated Adjusted EBITDA, Consolidated Total Assets or any component definitions
of any of the foregoing), such financial ratio or test shall be calculated on a pro forma basis in accordance with Section
1.11 and shall give pro forma effect to any Specified Transactions (and if applicable, any Limited Condition Transaction)
and other pro forma adjustments pursuant to Section 1.11.
“Projections”
means the projections of the Lead Borrower and its subsidiaries included in the Sponsor Model, including any financial estimates,
forecasts and other forward looking financial information set forth therein.
“Promissory
Note” means a promissory note of the relevant Borrower payable to any Lender or its registered assigns, in substantially
the form of Exhibit G, evidencing the aggregate outstanding principal amount of Revolving Loans of such Borrower to
such Lender resulting from the Revolving Loans made by such Lender.
“Protective
Advance” has the meaning assigned to such term in Section 2.06(a).
“Public Company
Costs” means any Charge associated with, or in anticipation of, or preparation for, compliance with the requirements
of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in connection therewith and Charges relating to compliance
with the provisions of the Securities Act and the Exchange Act (and, in each case, similar Requirements of Law under other jurisdictions),
as applicable to companies with equity or debt securities held by the public, the rules of national securities exchange companies
with listed equity or debt securities, directors’ or managers’ compensation, fees and expense reimbursement, any Charge
relating to investor relations, shareholder meetings and reports to shareholders or debtholders, directors’ and officers’
insurance and other executive costs, legal and other professional fees and listing fees.
“Public Lender”
has the meaning assigned to such term in Section 9.01(d).
“Published
LIBO Rate” means, with respect to any Interest Period when used in reference to any Revolving Loan or Borrowing,
(a) the rate of interest as published on the applicable Bloomberg screen page (or on any successor or substitute page of such
service, or any successor to such service as determined by Administrative Agent) as the London interbank offered rate for
deposits in the applicable currency for a term comparable to such Interest Period, at approximately 11:00 a.m. (London time)
on the date which is two Business Days prior to the commencement of such Interest Period (but if more than one rate is
specified on such page, the rate will be an arithmetic average of all such rates) and (b) if such rate is not available at
such time for any reason, then the “Published LIBO Rate” for such Interest Period shall be the interest rate per
annum reasonably determined by the Administrative Agent in good faith to be the rate per annum at which deposits in the
applicable currency for delivery on the first day of such Interest Period in immediately available funds in the approximate
amount of the LIBO Rate Revolving Loan being made, continued or converted by the Administrative Agent and with a term
equivalent to such Interest Period would be offered to the Administrative Agent by major banks in the London or other
offshore interbank market for the applicable currency at their request at approximately 11:00 a.m. (London time) two Business
Days prior to the commencement of such Interest Period.
“Qualified Capital
Stock” of any Person means any Capital Stock of such Person that is not Disqualified Capital Stock.
“Qualified Cash”
means the amount of unrestricted cash and cash equivalents of the applicable Loan Parties at such time to the extent held in an
account both (a) maintained with the Administrative Agent and (b) subject to a Blocked Account Agreement in favor of
the Administrative Agent and in compliance with Section 5.15.
“Qualifying
IPO” means the issuance and sale by the Lead Borrower or any Parent Company of its common Capital Stock in an underwritten
primary public offering (other than a public offering pursuant to a registration statement on Form S-8) pursuant to an effective
registration statement filed with the SEC in accordance with the Securities Act (whether alone or in connection with a secondary
public offering) pursuant to which Net Proceeds of at least $35,000,000 are received by, or contributed to, the Lead Borrower.
“Real Estate
Asset” means, at any time of determination, all right, title and interest (fee, leasehold or otherwise) of any Loan Party
in and to real property (including, but not limited to, land, improvements and fixtures thereon).
“Reallocation” has the
meaning assigned to such term in Section 2.25(a).
“Reallocation Date” has
the meaning assigned to such term in Section 2.25(a).
“Refinancing”
has the meaning assigned to such term in Section 4.01(p).
“Refinancing
Indebtedness” has the meaning assigned to such term in Section 6.01(p).
“Refunding Capital
Stock” has the meaning assigned to such term in Section 6.04(a)(ix).
“Register”
has the meaning assigned to such term in Section 9.05(b).
“Regulation
D” means Regulation D of the Board as from time to time in effect and all official rulings and interpretations thereunder
or thereof.
“Regulation
T” means Regulation T of the Board as from time to time in effect and all official rulings and interpretations thereunder
or thereof.
“Regulation
U” means Regulation U of the Board as from time to time in effect and all official rulings and interpretations thereunder
or thereof.
“Regulation
X” means Regulation X of the Board as from time to time in effect and all official rulings and interpretations thereunder
or thereof.
“Related Funds”
means, with respect to any Lender that is an Approved Fund, any other Approved Fund that is managed by the same investment advisor
as such Lender or by an Affiliate of such investment advisor.
“Related Parties”
means, with respect to any specified Person, such Person’s Affiliates and the respective directors, managers, officers, trustees,
employees, partners, agents, advisors and other representatives of such Person and such Person’s Affiliates.
“Release”
means any release, spill, emission, leaking, pumping, pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping,
leaching or migration of any Hazardous Material into the Environment, including the movement of any Hazardous Material through
the air, soil, surface water or groundwater.
“Rent and Charges
Reserve” means the aggregate of (a) all past due amounts due and owing by a Loan Party to any landlord, warehouseman,
processor, repairman, mechanic, shipper, freight forwarder, broker or other Person who possesses any Eligible Inventory and could
legally assert a Lien on any Eligible Inventory; and (b) an amount equal to up to three months’ rent for all of the
Loan Parties’ leased locations or the amount that may be payable for up to three months to any third party warehouse or other
storage facilities where Eligible Inventory is located, in each case, other than (x) any such location with respect to which the
Administrative Agent shall have received a Collateral Access Agreement in form and substance reasonably satisfactory to the Administrative
Agent (it being understood that upon receipt of any such Collateral Access Agreement with respect to such location the portion
of any Rent and Charges Reserve attributable to such location shall be immediately released), (y) any amounts being disputed in
good faith and (z) any such location where Eligible Inventory not in excess of $2,000,000 is located.
“Representatives”
has the meaning assigned to such term in Section 9.13.
“Required Lenders”
means, at any time, Lenders having Revolving Credit Exposure or unused Commitments representing more than 50% of the sum of the
total Revolving Credit Exposure and such unused commitments at such time; provided that the Revolving Credit Exposure and unused
Commitments of any Defaulting Lender shall be disregarding in the determination of the Required Lenders at any time; provided,
that the amount of any participation in any Swingline Loan and unreimbursed LC Obligations that a Defaulting Lender has failed
to fund that have not been reallocated to and funded by another Lender shall be deemed to be held by the Lender that is the Swingline
Lender or Issuing Bank, as the case may be, in making such determination to the extent such Lender that is the Swingline Lender
or Issuing Bank is not a Defaulting Lender.
“Required Minimum
Balance” has the meaning assigned to such term in Section 5.15(b).
“Requirements
of Law” means, with respect to any Person, collectively, the common law and all federal, state, provincial,
territorial, local, municipal, foreign, multinational or international laws, statutes, codes, treaties, standards, rules and
regulations, guidelines, ordinances, orders, judgments, writs, injunctions, decrees (including administrative or judicial
precedents or authorities) and the interpretation or administration thereof by, and other determinations, directives,
requirements or requests of any Governmental Authority, in each case whether or not having the force of law and that are
applicable to or binding upon such Person or any of its property or to which such Person or any of its property is
subject.
“Responsible
Officer” of any Person means the chief executive officer, the president, the chief financial officer, the treasurer,
any assistant treasurer, any executive vice president, any senior vice president, any vice president or the chief operating officer
of such Person and any other individual or similar official thereof responsible for the administration of the obligations of such
Person in respect of this Agreement, and, as to any document delivered on the Closing Date, shall include any secretary or assistant
secretary or any other individual or similar official thereof with substantially equivalent responsibilities of a Loan Party and,
solely for purposes of notices given pursuant to Article 2, any other officer of the applicable Loan Party so designated
by any of the foregoing officers in a notice to the Administrative Agent or any other officer or employee of the applicable Loan
Party designated in or pursuant to an agreement between the applicable Loan Party and the Administrative Agent. Any document delivered
hereunder that is signed by a Responsible Officer of any Loan Party shall be conclusively presumed to have been authorized by all
necessary corporate, partnership and/or other action on the part of such Loan Party, and such Responsible Officer shall be conclusively
presumed to have acted on behalf of such Loan Party.
“Responsible
Officer Certification” means, with respect to the financial statements for which such certification is required, the
certification of a Responsible Officer of the Lead Borrower that such financial statements fairly present, in all material respects,
in accordance with GAAP, the consolidated financial condition of the Lead Borrower as at the dates indicated and its consolidated
income and cash flows for the periods indicated, subject to changes resulting from audit and normal year-end adjustments.
“Restricted
Debt” has the meaning set forth in Section 6.04(b).
“Restricted
Debt Payment” has the meaning set forth in Section 6.04(b).
“Restricted
Payment” means (a) any dividend or other distribution on account of any shares of any class of the Capital Stock of the
Lead Borrower, except a dividend payable solely in shares of Qualified Capital Stock to the holders of such class; (b) any
redemption, retirement, sinking fund or similar payment, purchase or other acquisition for value of any shares of any class of
the Capital Stock of the Lead Borrower and (c) any payment made to retire, or to obtain the surrender of, any outstanding warrants,
options or other rights to acquire shares of any class of the Capital Stock of the Lead Borrower now or hereafter outstanding.
“Restricted
Subsidiary” means, as to any Person, any subsidiary of such Person that is not an Unrestricted Subsidiary. Unless otherwise
specified, “Restricted Subsidiary” shall mean any Restricted Subsidiary of the Lead Borrower.
“Revaluation
Date” means (a) with respect to any Revolving Loan, each of the following: (i) the date of the Borrowing of such Revolving
Loan, (ii) each date of any continuation of such Revolving Loan pursuant to the terms of this Agreement, (iii) the date of delivery
of any Borrowing Base Certificate required to be delivered pursuant to Section 5.01(l) (without giving effect to the proviso
thereto) and (iv) the date of any voluntary reduction of the related Commitment pursuant to Section 2.09(c); (b) with
respect to any Letter of Credit, each of the following: (i) the date of on which such Letter of Credit is issued, (ii) the date
of any amendment of such Letter of Credit that has the effect of increasing the face amount thereof and (iii) the date of delivery
of any Borrowing Base Certificate required to be delivered pursuant to Section 5.01(l) (without giving effect to the proviso
thereto); and (c) any additional date as the Administrative Agent or the relevant Issuing Bank, as applicable, may determine or
the Required Lenders may require at any time.
“Revolving Credit
Exposure” means, with respect to any Lender at any time, such Lender’s Applicable Percentage of the Total Revolving
Credit Exposure, at such time.
“Revolving Facility”
means the Initial Revolving Facility, any Incremental Revolving Facility and/or any Extended Revolving Facility.
“Revolving Loans”
means the Initial Revolving Loans, the Swingline Loans and the Additional Revolving Loans.
“Royalty Reserve”
means, as of any date of determination, the aggregate of (a) all past due royalty payments owing by a Loan Party as of such date
of determination, plus (b) an amount equal to projected royalty payments anticipated to be owing by the Loan Parties in
the three months following such date of determination.
“S&P”
means Standard & Poor’s Financial Services LLC, a subsidiary of the McGraw-Hill Companies, Inc.
“Sale and Lease-Back
Transaction” has the meaning assigned to such term in Section 6.08.
“Sanctions”
has the meaning assigned to such term in Section 3.17.
“SEC”
means the Securities and Exchange Commission, or any Governmental Authority succeeding to any or all of its functions.
“Second Lien
Agent” means the administrative agent under the Second Lien Credit Agreement.
“Second Lien
Credit Agreement” means the Second Lien Credit Agreement, dated as of the Closing Date, among, inter alios, Holdings,
the Borrower, the Second Lien Agent and the lenders from time to time party thereto and any other document governing any Second
Lien Facility.
“Second Lien
Facility” means the credit facility governed by the Second Lien Credit Agreement and one or more debt facilities or other
financing arrangements (including indentures) providing for loans, notes or other long-term indebtedness, including any such replacement
or refinancing facility or other financing arrangements (including indentures) that increases or decreases the amount permitted
to be borrowed thereunder or alters the maturity thereof and whether by the same or any other agent, lender or group of lenders,
and any amendments, supplements, modifications, extensions, renewals, restatements, amendments and restatements or refundings thereof
or any such indentures or credit facilities that replace or refinance such credit facility (or any subsequent replacement thereof),
in each case to the extent permitted pursuant to Section 6.01(p) (or any other provision in Section 6.01, so long
as, if applicable, any corresponding Lien is (x) junior to the Lien securing the Initial Revolving Loans and (y) permitted by Section
6.02).
“Second Lien
Facility Documentation” means the Second Lien Facility and all related notes, collateral documents, letters of credit
and guarantees, instruments and agreements executed in connection therewith, and any appendices, exhibits or schedules to any of
the foregoing (as the same may be in effect from time to time).
“Second Lien
Loans” shall mean the loans under the Second Lien Facility.
“Second Lien
Obligations” means (a) the “Secured Obligations” as defined in the Second Lien Credit Agreement and with
respect to any other Second Lien Facility, any equivalent term under such Second Lien Facility, (b) all unpaid principal and accrued
and unpaid interest and fees owing respect to any “Incremental Loans” and “Incremental Equivalent Debt”
(each as defined in the Second Lien Credit Agreement or any equivalent term under any documentation governing any Second Lien Facility)
and (c) all unpaid principal and accrued and unpaid interest and fees owing with respect to any refinancing Indebtedness in respect
of any or all of the foregoing.
“Secured Banking
Services Obligations” means the US Secured Banking Services Obligations and the Canadian Secured Banking Services Obligations.
“Secured Banking
Services Provider” means the Administrative Agent, any Lender or any Arranger or an Affiliate of the Administrative Agent,
any Lender or any Arranger as of the Closing Date or when such an arrangement is entered into, that is providing Banking Services.
“Secured Hedging
Obligations” means Canadian Secured Hedging Obligations and US Secured Hedging Obligations.
“Secured Obligations”
means all Obligations, together with (a) all Secured Banking Services Obligations and (b) all Secured Hedging
Obligations.
“Secured Parties”
means (a) the Lenders, (b) the Issuing Banks, (c) the Administrative Agent, (d) each counterparty to a Hedge Agreement with a Loan
Party the obligations under which constitute Secured Hedging Obligations, (e) Secured Banking Services Provider, (f) the Arrangers
and (g) the beneficiaries of each indemnification obligation undertaken by any Loan Party under any Loan Document.
“Securities”
means any stock, shares, units, partnership interests, voting trust certificates, certificates of interest or participation in
any profit-sharing agreement or arrangement, options, warrants, bonds, debentures, notes, or other evidences of indebtedness, secured
or unsecured, convertible, subordinated or otherwise, or in general any instruments commonly known as “securities”
or any certificates of interest, shares or participations in temporary or interim certificates for the purchase or acquisition
of, or any right to subscribe to, purchase or acquire, any of the foregoing; provided that “Securities” shall
not include any earn-out agreement or obligation or any employee bonus or other incentive compensation plan or agreement.
“Securities
Act” means the Securities Act of 1933 and the rules and regulations of the SEC promulgated thereunder.
“Security Agreements”
means the US Security Agreement and the Canadian Security Agreement.
“SPC”
has the meaning assigned to such term in Section 9.05(e).
“Specified Default”
means any Event of Default arising under Section 6.15(a) after the expiration of any cure periods set forth in Section
6.15(b), Section 7.01(a) (solely with respect to principal, interest and recurring fees), Section 7.01(d)
(with respect to any material misrepresentation in any Borrowing Base Certificate that resulted in its material overstatement of
the Borrowing Base), Section 7.01(e)(i), Section 7.01(e)(ii), Section 7.01(f) or Section 7.01(g).
“Specified Merger
Agreement Representations” means the representations and warranties made by or on behalf of (or related to) the Company,
its subsidiaries or their respective businesses in the Merger Agreement which are material to the interests of the Lenders, but
which are required to be true and correct only to the extent that the Lead Borrower (or its applicable Affiliate) has the right
to terminate, taking into account any cure provisions, its obligations under the Merger Agreement or to decline to consummate the
Acquisition as a result of a breach of such representations and warranties.
“Specified Representations”
means the representations and warranties set forth in Section 3.01(a)(i), Section 3.01(b) (as it relates to
the due authorization, execution, delivery and performance of the Loan Documents and the enforceability thereof), Section 3.02
(as it relates to the due authorization, execution, delivery and performance of the Loan Documents and the enforceability thereof),
Section 3.03(b)(i), Section 3.08, Section 3.12, Section 3.14 (as it relates to the creation, validity
and perfection of the security interests in the Collateral, subject to the last paragraph of Section 4.01), Section 3.16
and Sections 3.17(a)(ii), (b)(ii) and (c).
“Specified Transaction”
means (a) (i) any incurrence or issuance of any Indebtedness (excluding any borrowings under this Agreement or any Additional Revolving
Facility incurred substantially concurrently with such Specified Transaction), and (ii) any prepayment, redemptions, repurchases
and other retirements of any Indebtedness (in the case of any Additional Revolving Facility, to the extent accompanied by a permanent
reduction in the commitments thereunder), (b) to the extent applicable in determining the First Lien Leverage Ratio, the incurrence
of any Lien on Collateral, (c) any Permitted Acquisition and any Investment that results in a Person becoming a Restricted Subsidiary,
(d) any Restricted Payment, (e) any Restricted Debt Payment, (f) any Disposition, whether by purchase, merger, amalgamation or
otherwise, of (i) all or substantially all of the assets of, or any business line, unit or division or product line of, the Lead
Borrower or any Restricted Subsidiary, (ii) the Capital Stock of any Restricted Subsidiary that results in such Restricted Subsidiary
no longer being a Restricted Subsidiary of the Lead Borrower, or (iii) any asset pursuant to Section 6.07(h) having a Fair
Market Value greater than $50,000,000, (h) to the extent elected by the Lead Borrower to be excluded in calculating Consolidated
Adjusted EBITDA, any designation of operations or assets of a Borrower or a Restricted Subsidiary as discontinued operations in
accordance with GAAP, (i) solely for the purposes of determining the applicable amount of Cash and Cash Equivalents, any contribution
of capital to (and the Net Proceeds from the issuance of any Qualified Capital Stock by) a Borrower or a Restricted Subsidiary,
(j) any designation of a Restricted Subsidiary as an Unrestricted Subsidiary or an Unrestricted Subsidiary as a Restricted Subsidiary
in compliance with this Agreement, and (i) any other transaction that by the terms of this Agreement requires a financial ratio
to be calculated on “Pro Forma Basis” or after giving pro forma effect thereto.
“Specified Transaction
Date” means the date a Specified Transaction is consummated.
“Split Collateral
Basis” means, with respect to any Indebtedness, the obligations thereunder are secured by US ABL Priority Collateral
(or similar current assets) on a junior priority basis relative to the Secured Obligations and secured by all other US Collateral
on a senior priority basis relative to the Secured Obligations, in each case, as provided in an ABL Intercreditor Agreement.
“Sponsors”
means (a) CCMP Capital Advisors, LLC and any of its controlled Affiliates and funds managed or advised by any of them or any of
their respective controlled Affiliates, (b) MSD Partners, L.P. and any of its controlled Affiliates and funds managed or advised
by any of them or any of their respective controlled Affiliates and (c) The Alberta Investment Management Corporation (together
with (i) any entity to which it directly or indirectly provides or will provide investment management services pursuant to the
Alberta Investment Management Corporation Act and (ii) any entity that directly or indirectly controls, is controlled by or is
under common control with one or more of the entities described in the foregoing clause (i), “AIMCo”).
“Sponsor Model”
means the financial model delivered by the Sponsors to the Arrangers on June 10, 2017.
“Spot Rate”
means, on any date of determination, the exchange rate, as determined by the Administrative Agent, that is applicable to conversion
of one currency into another currency, which is (a) the exchange rate reported by Bloomberg (or other commercially available
source designated by the Administrative Agent) as of the end of the preceding Business Day in the financial market for the first
currency or (b) if such report is unavailable for any reason, the spot rate for the purchase of the first currency with the
second currency as in effect during the preceding Business Day in Administrative Agent's principal foreign exchange trading office
for the first currency.
“Stated Amount”
means, with respect to any Letter of Credit, at any time, the maximum amount available to be drawn thereunder, in each case determined
(x) as if any future automatic increases in the maximum available amount provided for in any such Letter of Credit had in fact
occurred at such time and (y) without regard to whether any conditions to drawing could then be met but after giving effect to
all previous drawings made thereunder.
“Subject Person”
has the meaning assigned to such term in the definition of “Consolidated Net Income”.
“Subordinated
Indebtedness” means any Indebtedness (other than Indebtedness among Holdings and/or its subsidiaries) of the Borrowers
or any of their Restricted Subsidiaries that is expressly subordinated in right of payment to the Obligations.
“subsidiary”
means, with respect to any Person, any corporation, partnership, limited liability company, association, joint venture or other
business entity of which more than 50% of the total voting power of stock or other ownership interests entitled (without regard
to the occurrence of any contingency) to vote in the election of the Person or Persons (whether directors, trustees or other Persons
performing similar functions) having the power to direct or cause the direction of the management and policies thereof is at the
time owned or controlled, directly or indirectly, by such Person or one or more of the other subsidiaries of such Person or a combination
thereof in each case to the extent such entity’s financial results are required to be included in such Person’s consolidated
financial statements under GAAP; provided that in determining the percentage of ownership interests of any Person controlled
by another Person, no ownership interests in the nature of a “qualifying share” of the former Person shall be deemed
to be outstanding. Unless otherwise specified, “subsidiary” shall mean any subsidiary of the Lead Borrower.
“Subsidiary
Guarantor” means (x) on the Closing Date, each Restricted Subsidiary of the Lead Borrower (other than any
subsidiary that is an Excluded Subsidiary) and (y) thereafter, each subsidiary of the Lead Borrower that guarantees any of
the Secured Obligations pursuant to the terms of this Agreement, in each case, until such time as the relevant subsidiary is
released from its obligations under the Loan Guaranty in accordance with the terms and provisions hereof, provided,
however, that notwithstanding the foregoing, with respect to any Credit Extension, Overadvance or Protective Advance made to
the US Borrower, a Subsidiary Guarantor will at no time include a Foreign Subsidiary, a Foreign Subsidiary Holdco or any
direct or indirect subsidiary of a Foreign Subsidiary or a Foreign Subsidiary Holdco, regardless of whether any such entity
guarantees any Secured Obligations of the Canadian Borrower. Notwithstanding the foregoing, the Lead Borrower may elect, in
its sole discretion, to cause any Restricted Subsidiary that is not otherwise required to be a Subsidiary Guarantor to
provide a Loan Guaranty by causing such Restricted Subsidiary to execute a joinder to the Loan Guaranty in substantially the
form attached as an exhibit thereto, and any such Restricted Subsidiary shall be a Loan Party and Subsidiary Guarantor
hereunder for all purposes; provided that upon such election such Restricted Subsidiary shall no longer be deemed to
be an Excluded Subsidiary; provided, further, that the Lead Borrower may elect to re-designate such Restricted
Subsidiary as an Excluded Subsidiary (and such Restricted Subsidiary shall be released from its Loan Guaranty pursuant to Section
9.23), provided that, at the time of such designation, the Investments in such Restricted Subsidiary made while such
Restricted Subsidiary was a Loan Party and the Indebtedness and Liens of such Restricted Subsidiary incurred while such
Restricted Subsidiary was a Loan Party will be deemed to constitute Investments, Indebtedness and Liens of a Restricted
Subsidiary that is not a Loan Party for purposes of this Agreement.
“Supporting
Information” means (a) a detailed aging, by total, of the Loan Parties’ Accounts, together with reconciliation
and supporting documentation for any reconciling items noted and (b) a listing of the Loan Parties Inventory pursuant to a
detailed Inventory system/perpetual report together with a reconciliation to the Loan Parties’ general ledger accounts.
“Swap Obligations”
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.
“Swingline Commitment”
means $25,000,000. The Swingline Commitment is part of and not in addition to the Commitments.
“Swingline Exposure”
means, at any time, the aggregate principal amount of all Swingline Loans outstanding at such time. The Swingline Exposure of any
Revolving Lender at any time shall equal to its Applicable Percentage of the aggregate Swingline Exposure at such time.
“Swingline Lender”
means Bank of America, in its capacity as lender of Swingline Loans hereunder, or any successor lender of Swingline Loans hereunder.
“Swingline Loan”
means any Loan made pursuant to Section 2.24(a).
“Swingline Loan
Request” means a notice of a Swingline Loan Borrowing pursuant to Section 2.24(b), which shall be substantially
in the form of Exhibit B-3 or such other form as approved by the Administrative Agent.
“Tax and Trust
Funds” has the meaning specified in the definition of “Excluded Asset”.
“Taxes”
means any and all present and future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments,
fees or other charges in the nature of a tax imposed by any Governmental Authority, including any interest, additions to tax or
penalties applicable thereto.
“Termination
Date” means the date that all or any Commitments have expired or terminated and the principal of and interest on each
Revolving Loan and all fees, expenses and other amounts payable under any Loan Document, Banking Services Obligations and Hedging
Obligations have been paid in full (other than (a) contingent indemnification obligations and (b) Banking Services Obligations
or Hedging Obligations that are not being terminated as to which arrangements reasonably satisfactory to the applicable counterparty
have been made), all Letters of Credit, Swingline Loans and Protective Advances have expired or have been terminated (or have been
collateralized or back-stopped by a letter of credit or otherwise in a manner reasonably satisfactory to the relevant Issuing Bank)
and all LC Disbursements have been reimbursed.
“Test Period”
means, as of any date, the period of four consecutive Fiscal Quarters determined in accordance with, and subject to, Section
1.11(c).
“Threshold Amount”
means $40,000,000.
“Total Revolving
Credit Exposure” means at any time, the sum of the Initial Revolving Credit Exposure and the Additional Revolving Credit
Exposure.
“Trademark”
means the following: (a) all trademarks (including service marks), common law marks, trade names, trade dress, domain names and
logos, slogans and other indicia of origin under the laws of any jurisdiction in the world, and the registrations and applications
for registration thereof and the goodwill of the business connected to the use of and symbolized by the foregoing; (b) all renewals
of the foregoing; (c) all income, royalties, damages, and payments now or hereafter due or payable with respect thereto, including,
without limitation, damages, claims and payments for past, present and future infringements or dilutions thereof; (d) all rights
to sue for past, present, and future infringements or dilutions of any of the foregoing, including the right to settle suits involving
claims and demands for royalties owing; and (e) all rights corresponding to any of the foregoing.
“tranche”
has the meaning assigned to such term in Section 2.23(a).
“Transaction
Costs” means fees, premiums, expenses and other transaction costs (including original issue discount or upfront fees)
payable or otherwise borne by Holdings and its subsidiaries in connection with the Transactions and the transactions contemplated
thereby.
“Transactions”
means, collectively, (a) the execution, delivery and performance by the Loan Parties of the Loan Documents to which they are
a party and the Borrowing of Revolving Loans hereunder, (b) the transactions contemplated by the Merger Agreement on the Closing
Date, (c) the Equity Contribution, (d) the Refinancing, (e) the execution, delivery and performance by the Loan Parties
of the Loan Documents (as defined in the First Lien Credit Agreement) to which they are a party and the incurrence of Indebtedness
under the First Lien Credit Agreement on the Closing Date (f) the execution, delivery and performance by the Loan Parties of the
Loan Documents (as defined in the Second Lien Credit Agreement) to which they are a party and the incurrence of Indebtedness under
the Second Lien Agreement on the Closing Date and (g) the payment of the Transaction Costs.
“Treasury Capital
Stock” has the meaning assigned to such term in Section 6.04(a)(ix).
“Treasury Regulations”
means the U.S. federal income tax regulations promulgated under the Code.
“Trust Fund
Account” means any account containing Cash and Cash Equivalents consisting solely of Tax and Trust Funds.
“Trust Fund
Certificate” means a certificate of a Responsible Officer of the Lead Borrower certifying (a) the type and amount of
any Tax and Trust Funds contained or held in a Blocked Account, and (b) that (x) the obligation requiring such Tax and Trust Funds
is due and payable within 15 Business Days of delivery of such certificate and (y) amounts on deposit in any applicable Trust Fund
Account are insufficient to make such payment.
“Type”,
when used in reference to any Revolving Loan or Borrowing, refers to whether the rate of interest on such Revolving Loan, or
on the Revolving Loans comprising such Borrowing, is determined by reference to the LIBO Rate, the CDOR Loan Rate, the
Canadian Prime Rate, the Canadian Base Rate or the Alternate Base Rate.
“UCC”
or “Uniform Commercial Code” means the Uniform Commercial Code as in effect from time to time in the State of
New York or any other state the laws of which are required to be applied in connection with the creation or perfection of security
interests.
“Unrestricted
Subsidiary” means any subsidiary of any Borrower designated by the Lead Borrower as an Unrestricted Subsidiary on the
Closing Date and listed on Schedule 5.10 or after the Closing Date pursuant to Section 5.10.
“U.S.”
means the United States of America.
“US ABL Priority
Collateral” means ABL Priority Collateral (as defined in the ABL Intercreditor Agreement) of the US Loan Parties.
“US Borrower”
has the meaning set forth in the preamble hereto
“US Borrowing
Base” means the sum, in Dollars, of the following as set forth in the most recently delivered US Borrowing Base Certificate:
(a)
(i) during the Peak Season, 90% of the US Loan Parties’ Eligible Accounts and (ii) otherwise, 85% of the US Loan Parties’
Eligible Accounts; plus
(b)
the lesser of (i) (A) during the Peak Season, 90% of the Net Orderly Liquidation Value of the US Loan Parties’
Eligible Inventory and (B) otherwise, 85% of the Net Orderly Liquidation Value of the US Loan Parties’ Eligible Inventory
or (ii) (A) during the Peak Season, 75% of the book value of the US Loan Parties’ Eligible Inventory if such calculation
is made at any time during the Peak Season and (B) otherwise, 70% of the book value of the US Loan Parties’ Eligible Inventory
if such calculation is made at any other time (in each case, calculated at the lower of cost or market value); plus
(c)
100% of Qualified Cash of the US Loan Parties, up to an amount not exceeding $30,000,000 in the aggregate; minus
(d)
any Availability Reserve established in connection with the foregoing.
In connection with
any Specified Transaction, the US Borrower may submit a US Borrowing Base Certificate reflecting a calculation of the US
Borrowing Base that includes Eligible Accounts and Eligible Inventory (otherwise satisfying the criteria in respect thereof,
contained in such definition) acquired by US Loan Parties in connection with such Specified Transaction (the
“Acquired US Eligible Accounts” and the “Acquired US Eligible Inventory”, respectively)
and, from and after the Specified Transaction Date, the US Borrowing Base hereunder shall be calculated giving effect
thereto; provided that prior to the completion of a field examination and inventory appraisal with respect to such Acquired
US Eligible Accounts and Acquired US Eligible Inventory, such adjustment to the US Borrowing Base shall only be available if
a customary desktop audit with respect to such assets reasonably satisfactory to the Administrative Agent in its Permitted
Discretion has been completed and shall be limited to (i) from the Specified Transaction Date until the date that is 91 days
after the Specified Transaction Date, the aggregate amount of Acquired US Eligible Accounts and Acquired US Eligible
Inventory included in the US Borrowing Base prior to the completion of a field examination and inventory appraisal with
respect thereto, shall not exceed 10% of the US Borrowing Base (calculated after giving effect to the inclusion (up to such
10% cap) of the Acquired US Eligible Accounts and Acquired US Eligible Inventory as to which a field examination and
inventory appraisal has not been performed). From the 91st day following the Specified Transaction Date (or such later date
as the Administrative Agent may agree), the US Borrowing Base shall be calculated without reference to the Acquired US
Eligible Accounts and the Acquired US Eligible Inventory until a field examination and inventory appraisal has been completed
with respect to such assets; it being understood and agreed that (x) there shall be no Default or Event of Default solely as
a result of a failure to complete and deliver such inventory appraisal and field examination on or prior to the dates
indicated above and (y) the performance of such inventory appraisal and field examination on the Acquired US Eligible
Accounts and the Acquired US Eligible Inventory shall not count toward the limitations on the number of inventory appraisals
and field examinations contained in Section 5.06(b).
Notwithstanding anything
to the contrary herein, (i) for the period from and including the Closing Date until the 90th day after the Closing Date (or (A)
such earlier date on which the US Borrower delivers an inventory appraisal and field examination reasonably satisfactory to the
Administrative Agent or (B) such later date as the Administrative Agent agrees to in its Permitted Discretion) and (ii) for purposes
of the US Borrowing Base Certificate required to be delivered on or prior to the Closing Date), the US Borrowing Base shall be
based on an alternative borrowing base equal to the greater of (a)(i) with respect to any period on or prior to October 31, 2017,
$66,000,000 and (ii) with respect to any period after October 31, 2017, $88,000,000 and (b) the sum of 65% of book value of the
Eligible Accounts and 40% of book value of Eligible Inventory of the US Loan Parties, as determined in good faith by the US Borrower
(in consultation with the Administrative Agent); provided that the US Borrowing Base shall be deemed to be $0 if the inventory
appraisal and field examination are not delivered by the 91st day after the Closing Date.
“US Borrowing
Base Certificate” means a certificate from a Responsible Officer of the Lead Borrower, in substantially the form of Exhibit
M, as such form, subject to the terms hereof, may from time to time be modified as agreed by the Lead Borrower and the Administrative
Agent or such other form which is acceptable to the Administrative Agent in its reasonable discretion.
“US Collateral”
means any and all property of any US Loan Party subject to a Lien under any Collateral Document and any and all other property
of any US Loan Party, now existing or hereafter acquired, that is or becomes subject to a Lien pursuant to any Collateral Document,
in each case, to secure the US Secured Obligations, other than any Excluded Assets.
“US Concentration
Account” has the meaning assigned to such term in Section 5.15(a).
“US Hedge Product
Amount” has the meaning assigned to such term in the definition of US Secured Hedging Obligations.
“US LC Collateral
Account” has the meaning assigned to such term in Section 2.05(j).
“US LC Exposure”
means at any time, the sum of (a) the Dollar Equivalent of the aggregate undrawn amount of all outstanding US Letters of Credit
at such time and (b) the Dollar Equivalent of the aggregate principal amount of all LC Disbursements with respect to US Letters
of Credit that have not yet been reimbursed at such time. The US LC Exposure of any Lender at any time shall equal its Applicable
Percentage of the aggregate US LC Exposure at such time.
“US Letters
of Credit” has the meaning assigned to such term in Section 2.05(a)(i)(A).
“US Letter of
Credit Sublimit” means $15,000,000, subject to increase in accordance with Section 2.22.
“US Line Cap”
means at any time, the lesser of (i) the aggregate Initial US Commitment and (ii) the then-applicable US Borrowing Base.
“US Loan Guaranty”
means the US Loan Guaranty Agreement, substantially in the form of Exhibit I, executed by each US Loan Party party thereto
and the Administrative Agent for the benefit of the Secured Parties.
“US Loan Party”
means any Loan Party that is incorporated or organized under the laws of the US, any state thereof or the District of Columbia;
provided, that a US Loan Party will at no time include a Foreign Subsidiary, a Foreign Subsidiary Holdco or any direct or
indirect subsidiary of a Foreign Subsidiary or a Foreign Subsidiary Holdco.
“US Lockbox”
has the meaning assigned to such term in Section 5.15(a).
“US Obligations”
means all unpaid principal of and accrued and unpaid interest, fees and expenses (including interest accruing during the pendency
of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding)
on the Initial US Revolving Loans, any Additional Revolving Loans made to the US Borrower, all US Overadvances, all US Protective
Advances, all US LC Exposure, all Swingline Exposure, all accrued and unpaid fees and all expenses, reimbursements, indemnities
and all other advances to, debts, liabilities and obligations of the US Loan Parties to the Lenders or to any Lender, the Administrative
Agent, any Issuing Bank or any indemnified party arising under the Loan Documents in respect of any Revolving Loan, Overadvance,
Protective Advance or Letter of Credit, whether direct or indirect (including those acquired by assumption), absolute, contingent,
due or to become due, now existing or hereafter arising.
“US Overadvance”
has the meaning assigned to such term in Section 2.04(a).
“US Protective
Advance” has the meaning assigned to such term in Section 2.06(a).
“US Required
Lenders” means, at any time, Lenders having Initial US Revolving Credit Exposure or unused Initial US Commitments representing
more than 50% of the sum of the total Initial US Revolving Credit Exposure and such unused Initial US Commitments at such time;
provided that the Initial US Revolving Credit Exposure and unused Initial US Commitments of any Defaulting Lender shall
be disregarding in the determination of the US Required Lenders at any time.
“US Secured Banking Services Obligations”
means the Banking Services Obligations of a US Loan Party provided by Secured Banking Services Providers that are not “Banking
Services Obligations” as defined in the First Lien Credit Agreement or any equivalent under the First Lien Facility.
“US
Secured Hedging Obligations” means all Hedging Obligations (other than any Excluded Swap Obligations) of any US
Loan Party under each Hedge Agreement that (a) is in effect on the Closing Date between any US Loan Party and a counterparty
that is the Administrative Agent, a Lender, an Arranger or any Affiliate of the Administrative Agent, a Lender or an Arranger
as of the Closing Date or (b) is entered into after the Closing Date between any US Loan Party and any counterparty that is
(or is an Affiliate of) the Administrative Agent, any Lender or any Arranger at the time such Hedge Agreement is entered
into, for which such US Loan Party agrees to provide security and in each case that has been designated to the Administrative
Agent in writing by the US Borrower as being a US Secured Hedging Obligation for purposes of the Loan Documents, it being
understood that each counterparty thereto shall be deemed (A) to appoint the Administrative Agent as its agent under the
applicable Loan Documents and (B) to agree to be bound by the provisions of Article 8, Section 9.03 and Section
9.10 as if it were a Lender; provided that for any such US Secured Hedging Obligations to constitute
“Designated Hedging Obligations,” the applicable US Loan Party must have provided written notice to the
Administrative Agent substantially in the form of Exhibit N notifying the Administrative Agent of (i) the
existence of the applicable Hedge Agreement and (ii) the maximum amount of obligations of the applicable US Loan Party
that may arise thereunder (the “US Hedge Product Amount”). The US Hedge Product Amount may be
changed from time to time upon written notice to the Administrative Agent by the applicable Secured Party and US Loan
Party. No US Hedge Product Amount may be established or increased at any time that a Default or Event of
Default exists, or if a reserve in such amount would cause an Overadvance.
“US Secured
Obligations” means all Secured Obligations of the US Loan Parties.
“US Security
Agreement” means the Pledge and Security Agreement, substantially in the form of Exhibit J, among the US Loan
Parties and the Administrative Agent for the benefit of the Secured Parties.
“US Successor
Borrower” has the meaning assigned to such term in Section 6.07(a).
“US Super Majority
Lenders” means, at any time, Lenders having Initial US Revolving Credit Exposure and unused Initial US Commitments representing
more than 66-2/3% of the sum of the aggregate Initial US Revolving Credit Exposure and such unused Initial US Commitments of all
Lenders at such time; provided that the Initial US Revolving Credit Exposure and unused Initial US Commitment of any Defaulting
Lender shall be disregarded in the determination of the US Super Majority Lenders at any time.
“USA PATRIOT
Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism
Act of 2001 (Title III of Pub. L. No. 107-56 (signed into law October 26, 2001)).
“U.S. Tax Compliance
Certificate” has the meaning assigned to such term in Section 2.17(f).
“Weighted Average
Life to Maturity” means, when applied to any Indebtedness at any date, the number of years obtained by dividing: (a)
the sum of the products obtained by multiplying (i) the amount of each then remaining installment, sinking fund, serial maturity
or other required scheduled payments of principal, including payment at final maturity, in respect thereof, by (ii) the number
of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment; by (b) the
then outstanding principal amount of such Indebtedness; provided that the effects of any prepayments made on such Indebtedness
shall be disregarded in making such calculation.
“Wholly-Owned
Subsidiary” of any Person means a subsidiary of such Person, 100% of the Capital Stock of which (other than directors’
qualifying shares or shares required by law to be owned by a resident of the relevant jurisdiction) shall be owned by such Person
or by one or more Wholly-Owned Subsidiaries of such Person.
“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.
Section 1.02 Classification
of Revolving Loans and Borrowings. For purposes of this Agreement, Revolving Loans may be classified and referred to by
Class (e.g., an “Initial Revolving Loan” or “Initial US Revolving Loan”) or by Type
(e.g., a “LIBO Rate Revolving Loan”) or by Class and Type (e.g., a “LIBO Rate Initial US
Revolving Loan”). Borrowings also may be classified and referred to by Class (e.g., an “Initial US
Revolving Borrowing”) or by Type (e.g., a “LIBO Rate Borrowing”) or by Class and Type (e.g.,
a “LIBO Rate Initial US Revolving Borrowing”).
Section 1.03
Terms Generally.
(a)
The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.
(b)
The words “include,” “includes” and “including” shall be deemed to be followed by the
phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as
the word “shall.”
(c)
Unless the context requires otherwise (i) any definition of or reference to any agreement, instrument or other document
herein or in any Loan Document (or any Loan Document (as defined in the First Lien Credit Agreement or the Second Lien Credit Agreement,
as applicable)) shall be construed as referring to such agreement, instrument or other document as from time to time amended, restated,
amended and restated, supplemented or otherwise modified or extended, replaced or refinanced (subject to any restrictions or qualifications
on such amendments, restatements, amendment and restatements, supplements or modifications or extensions, replacements or refinancings
set forth herein), (ii) any reference to any law in any Loan Document shall include all statutory and regulatory provisions consolidating,
amending, replacing, supplementing or interpreting such law, (iii) any reference herein or in any Loan Document to any Person shall
be construed to include such Person’s successors and permitted assigns, (iv) the words “herein,” “hereof”
and “hereunder,” and words of similar import, when used in any Loan Document, shall be construed to refer to such Loan
Document in its entirety and not to any particular provision hereof, (v) all references herein or in any Loan Document to Articles,
Sections, clauses, paragraphs, Exhibits and Schedules shall be construed to refer to Articles, Sections, clauses and paragraphs
of, and Exhibits and Schedules to, such Loan Document, (vi) in the computation of periods of time in any Loan Document from a specified
date to a later specified date, the word “from” means “from and including”, the words “to”
and “until” mean “to but excluding” and the word “through” means “to and including”
and (vii) the words “asset” and “property”, when used in any Loan Document, shall be construed to have
the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including Cash, securities,
accounts and contract rights.
(d)
Notwithstanding anything else provided herein or in any other Loan Document, any interest, fee or principal payments on
any Indebtedness due and payable (or paid) as of the last Business Day of a calendar month, calendar quarter or calendar year,
as applicable, shall be deemed to have been due and payable (or paid) as of the end of the respective fiscal month, Fiscal Quarter
or Fiscal Year, as applicable, ended closest to such calendar period for purposes of all calculations of Consolidated Secured
Debt, Consolidated First Lien Debt, Consolidated Total Debt and Consolidated Adjusted EBITDA hereunder.
Section 1.04
Accounting Terms; GAAP.
(a) All
financial statements to be delivered pursuant to this Agreement shall be prepared in accordance with GAAP as in effect from
time to time and, except as otherwise expressly provided herein, all terms of an accounting or financial nature that are used
in calculating the Fixed Charge Coverage Ratio, the First Lien Leverage Ratio, Consolidated Adjusted EBITDA or Consolidated
Total Assets shall be construed and interpreted in accordance with GAAP, as in effect from time to time; provided that
(i) if the Lead Borrower notifies the Administrative Agent that the Lead Borrower requests an amendment to any provision
hereof to eliminate the effect of any change occurring after the date of delivery of the financial statements described in Section
3.04(a) in GAAP or in the application thereof (including the conversion to IFRS as described below) on the operation of
such provision (or if the Administrative Agent notifies the Lead Borrower that the Required Lenders request an amendment to
any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or
in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied
immediately before such change becomes or became effective until such notice shall have been withdrawn or such provision
amended in accordance herewith, and (ii) if such an amendment is requested by the Lead Borrower or the Required Lenders, then
the Lead Borrower and the Administrative Agent shall negotiate in good faith to enter into an amendment of the relevant
affected provisions (without the payment of any amendment or similar fee to the Lenders) to preserve the original intent
thereof in light of such change in GAAP or the application thereof. All terms of an accounting or financial nature used
herein shall be construed, and all computations of amounts and ratios referred to herein shall be made without giving effect
to (i) any election under Accounting Standards Codification 825-10-25 (previously referred to as Statement of Financial
Accounting Standards 159) (or any other Accounting Standards Codification or Financial Accounting Standard having a similar
result or effect) to value any Indebtedness or other liabilities of any Borrower or any subsidiary at “fair
value”, as defined therein and (ii) any treatment of Indebtedness in respect of convertible debt instruments under
Accounting Standards Codification 470-20 (or any other Accounting Standards Codification or Financial Accounting Standard
having a similar result or effect) to value any such Indebtedness in a reduced or bifurcated manner as described therein, and
such Indebtedness shall at all times be valued at the full stated principal amount thereof. If the Lead Borrower notifies the
Administrative Agent that the Lead Borrower (or its applicable Parent Company) is required to report under IFRS or has
elected to do so through an early adoption policy, “GAAP” shall mean international financial reporting
standards pursuant to IFRS (provided that after such conversion, the Lead Borrower cannot elect to report under
GAAP).
(b)
Notwithstanding anything to the contrary contained in paragraph (a) above or in the definition of “Capital
Lease”, in the event of an accounting change requiring all leases to be capitalized, except as expressly provided in the
definition of GAAP with respect thereto, only those leases (assuming for purposes hereof that such leases were in existence on
the date hereof) that would constitute Capital Leases in conformity with GAAP on the date hereof shall be considered Capital Leases,
and all calculations and deliverables under this Agreement or any other Loan Document shall be made or delivered, as applicable,
in accordance therewith.
Section 1.05 Quebec
Terms. For purposes of any assets, liabilities or entities located in the Province of Quebec and for all other purposes
pursuant to which the interpretation or construction of this Agreement or any other 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 be deemed to include “movable property”, (b) “real property” shall be deemed to
include “immovable property”, (c) “tangible property” shall be deemed to include “corporeal
property”, (d) “intangible property” shall be deemed to include “incorporeal property”, (e)
“security interest”, “mortgage” and “lien” shall be deemed to include a
“hypothec”, “prior claim”, “reservation of ownership” and a “resolutory
clause”, (f) PPSA shall be deemed to include the Civil Code of Quebec and all references to filing, registering or
recording under the UCC or PPSA shall be deemed to include publication under the Civil Code of Quebec, (g) all references to
“perfection” of or “perfected” liens or security interest shall be deemed to include a reference to
an “opposable” or “set up” hypothec as against third parties, (h) any “right of offset”,
“right of setoff” or similar expression shall be deemed to include a “right of compensation”, (i)
“goods” shall be deemed to include “corporeal movable property” other than chattel paper, documents
of title, instruments, money and securities, (j) an “agent” shall be deemed to include a “mandatary”,
(k) “joint and several” shall be deemed to include “solidary”, (l) “gross negligence or willful
misconduct” shall be deemed to be “intentional or gross fault”, (m) “beneficial ownership”
shall be deemed to include “ownership”, (n) “legal title” shall be deemed to include “holding
title on behalf of an owner as mandatory or prête-nom”, (o) “priority” shall be deemed to include
“rank” or “prior claim”, as applicable, and (p) “lease” shall be deemed to include a
“leasing contract”.
Section 1.06
Effectuation of Transactions. Each of the representations and warranties contained in this Agreement (and all corresponding
definitions) is made after giving effect to the Transactions, unless the context otherwise requires.
Section 1.07
Timing of Payment of Performance. Subject to the definitions of Interest Payment Date and Interest Period, when payment
of any obligation or the performance of any covenant, duty or obligation is stated to be due or required on a day which is not
a Business Day, the date of such payment (other than as described in the definition of “Interest Period”) or performance
shall extend to the immediately succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall
be payable for the period of such extension.
Section 1.08
Times of Day. Unless otherwise specified, all references herein to times of day shall be references to New York City
time (daylight or standard, as applicable).
Section 1.09
Currency Generally; Exchange Rate.
(a) For
purposes of any determination under Article 5, Article 6 (other than Section 6.15(a) and the
calculation of compliance with any financial ratio for purposes of taking any action hereunder) or Article 7 with
respect to the amount of a Specified Transaction, in a currency other than Dollars, (i) the Dollar equivalent amount of
such Specified Transaction in a currency other than Dollars shall be calculated based on the rate of exchange quoted by the
Bloomberg Foreign Exchange Rates & World Currencies Page (or any successor page thereto, or in the event such rate does
not appear on any Bloomberg Page, by reference to such other publicly available service for displaying exchange rates as may
be agreed upon by the Administrative Agent and the Borrower) for such foreign currency, as in effect at 11:00 a.m. (London
time) on the date of such Specified Transaction (which, in the case of any Restricted Payment, shall be deemed to be the date
of the declaration thereof and, in the case of the incurrence of Indebtedness, shall be deemed to be on the date first
committed); provided that if any Indebtedness is incurred (and, if applicable, associated Lien granted) to refinance
or replace other Indebtedness denominated in a currency other than Dollars, and the relevant refinancing or replacement would
cause the applicable Dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in
effect on the date of such refinancing or replacement, such Dollar-denominated restriction shall be deemed not to have been
exceeded so long as the principal amount of such refinancing or replacement Indebtedness (and, if applicable, associated Lien
granted) does not exceed an amount sufficient to repay the principal amount of such Indebtedness being refinanced or
replaced, except by an amount equal to (x) unpaid accrued interest and premiums (including tender premiums) thereon plus
other reasonable and customary fees and expenses (including upfront fees and original issue discount) incurred in connection
with such refinancing or replacement, (y) any existing commitments unutilized thereunder and (z) additional amounts
permitted to be incurred under Section 6.01 and (ii) for the avoidance of doubt, no Default or Event of
Default shall be deemed to have occurred solely as a result of a change in the rate of currency exchange occurring after the
time of any Specified Transaction so long as such Specified Transaction was permitted at the time incurred, made, acquired,
committed, entered or declared as set forth in clause (i). For purposes of Section 6.15 and the
calculation of compliance with any financial ratio for purposes of taking any action hereunder, on any relevant date of
determination, amounts denominated in currencies other than Dollars shall be translated into Dollars at the applicable
currency exchange rate used in preparing the financial statements delivered pursuant to Section 5.01(a) or (b),
as applicable, for the relevant Test Period and will, with respect to any Indebtedness, reflect the currency translation
effects, determined in accordance with GAAP, of any Hedge Agreement permitted hereunder in respect of currency exchange risks
with respect to the applicable currency in effect on the date of determination for the Dollar Equivalent amount of such
Indebtedness. Notwithstanding the foregoing or anything to the contrary herein, to the extent that the Lead Borrower would
not be in compliance with Section 6.15 if any Indebtedness denominated in a currency other than Dollars were to
be translated into Dollars on the basis of the applicable currency exchange rate used in preparing the financial statements
delivered pursuant to Section 5.01(a) or (b), as applicable, for the relevant Test Period, but would be in
compliance with Section 6.15 if such Indebtedness that is denominated in a currency other than in Dollars were instead
translated into Dollars on the basis of the average relevant currency exchange rates over such Test Period (taking into
account the currency effects of any Hedge Agreement permitted hereunder and entered into with respect to the currency
exchange risks relating to such Indebtedness), then, solely for purposes of compliance with Section 6.15, the Fixed
Charge Coverage Ratio as of the last day of such Test Period shall be calculated on the basis of such average relevant
currency exchange rates.
(b)
Each provision of this Agreement shall be subject to such reasonable changes of construction as the Administrative Agent
may from time to time specify with the Lead Borrower’s consent to appropriately reflect a change in currency of any country
and any relevant market convention or practice relating to such change in currency.
Section 1.10
Cashless Rollovers. Notwithstanding anything to the contrary contained in this Agreement or in any other Loan Document,
to the extent that any Lender extends the maturity date of, or replaces, renews or refinances, any of its then-existing
Revolving Loans with Incremental Revolving Loans or loans incurred under a new credit facility, in each case, to the extent such
extension, replacement, renewal or refinancing is effected by means of a “cashless roll” by such Lender, such extension,
replacement, renewal or refinancing shall be deemed to comply with any requirement hereunder or any other Loan Document that such
payment be made “in Dollars”, “in Canadian Dollars”, “in immediately available funds”, “in
Cash” or any other similar requirement.
Section 1.11
Certain Conditions, Calculations and Tests.
(a) Notwithstanding
anything to the contrary herein, with respect to any intended acquisition, Investment (other than Investments in a Borrower
or any Restricted Subsidiary), Restricted Payment and/or Restricted Debt Payment (each, taken together with any related
actions and transactions (including, in the case of any Indebtedness (including any Incremental Revolving Facilities), the
incurrence, repayment and other intended uses of proceeds), a “Limited Condition Transaction”), to the
extent that the terms of this Agreement require satisfaction of, or compliance with, any condition, test or requirement
(including satisfaction of, or compliance with, the Payment Conditions, subject to the limitations set forth in the first
proviso below), in order to effect, incur or consummate such Limited Condition Transaction (including (w) compliance with any
financial ratio or test (including, without limitation, Section 2.22 any First Lien Leverage Ratio, any Fixed Charge
Coverage Ratio test, the amount of Consolidated Adjusted EBITDA or Consolidated Total Assets (including any component
definitions of the foregoing) 30-Day Average Availability and/or Availability), (x) the making or accuracy of any
representations and warranties, (y) the absence of a Default or Event of Default (or any type of Default or Event of Default,
including any Specified Default) and/or (z) any other condition, test or requirement), at the election of the Lead Borrower
(a “LCT Election”), the date of determination of whether any relevant conditions, tests and requirements
are satisfied or complied with shall be made on, and shall be deemed to be, the date (the “LCT Test Date”)
that the definitive agreements for such Limited Condition Transaction are entered into (or, if applicable, delivery of notice
of redemption, prepayment, declaration of dividend or similar event), giving pro forma effect to such Limited Condition
Transaction (including any related actions and transactions) pursuant to this Section 1.11, provided, that with
respect to determining the satisfaction of, or compliance with, the Payment Conditions (1) an LCT Election may be made with
respect to 30-Day Average Availability and/or Availability solely in connection with Permitted Acquisitions (or similar
Investments) and any related actions and transactions, including Indebtedness (including Liens securing such Indebtedness) to
be incurred or assumed in connection with Permitted Acquisitions (or similar Investments), but not in connection with
Restricted Payments and/or Restricted Debt Payments, (2) if the Lead Borrower has made an LCT Election with respect to any
Permitted Acquisition (or similar Investment) that is anticipated to be funded in whole or in part with Revolving Loans
hereunder (the Revolving Loans anticipated to be funded in connection therewith, the “Subject Loans”),
then the Subject Loans shall be deemed to be outstanding for all purposes of this Agreement (other than the calculation of
“Applicable Rate” and “Commitment Fee Rate” and for calculation of interest owing hereunder),
including for purposes of determining Availability in connection with any request for a Credit Extension, evaluating whether
a Covenant Trigger Period or a Cash Dominion Period has occurred and is continuing and/or determining satisfaction of, or
compliance with, the Payment Conditions on a Pro Forma Basis with respect to any unrelated transactions or actions expressly
subject to satisfaction of, or compliance with, the Payment Conditions on a Pro Forma Basis on or following the applicable
LCT Test Date and prior to the earlier of the date on which such Permitted Acquisition (or similar Investment) is consummated
or the definitive agreement (or, if applicable, notice, declaration or similar event) for such Permitted Acquisition (or
similar Investment) is terminated or expires without consummation of such Permitted Acquisition (or similar Investment) (such
earlier date, the “LCT Termination Date”); provided that the Borrower shall be entitled to elect to deem
the Subject Loans to not be outstanding as set forth above to the extent that the Lead Borrower notifies the Administrative
Agent of such election, in which case the related Permitted Acquisition (or similar Investment), and any related incurrence
of Indebtedness and Liens, shall be deemed to not be a Limited Condition Transaction for purposes of testing the Payment
Conditions thereafter and (3) in no event shall the satisfaction of the conditions to the incurrence of a Credit Extension
set forth in Section 4.02 be subject to an LCT Election under this Section 1.11(a). If the Lead Borrower has made an LCT
Election for any Limited Condition Transaction and such Limited Condition Transaction (including any related actions and
transactions) would be permitted on the LCT Test Date, (i) each such condition, test and requirement shall be deemed
satisfied and complied with for all purposes of such Limited Condition Transaction and (ii) any change in status of any such
condition, test and requirement between the LCT Test Date and the taking of the relevant actions or consummation of the
relevant transactions such that any applicable financial ratios or tests, baskets, conditions, requirements or provisions
would be exceeded, breached or otherwise no longer complied with or satisfied for any reason (including due to fluctuations
in Consolidated Adjusted EBITDA or Consolidated Total Assets or the Person subject to such Limited Condition Transaction)
shall be disregarded such that all financial ratios or tests, baskets, conditions, requirements or provisions shall continue
to be deemed complied with and satisfied for all purposes of such Limited Condition Transaction, all applicable transactions
and actions will permitted and no Default or Event of Default shall be deemed to exist or to have occurred or resulted from
such change in status or Limited Condition Transaction; provided, that (A) if financial statements for one or more
subsequent fiscal quarters shall have become available subsequent to the LCT Test Date, the Lead Borrower may elect, in its
sole discretion, to re-determine all financial ratios or tests, baskets, conditions, requirements or provisions on the basis
of such financial statements, in which case, such date of redetermination shall thereafter be deemed to be the applicable LCT
Test Date for purposes of such ratios, tests or baskets, and (B) except as contemplated in the foregoing clause (A),
compliance with such financial ratios or tests, baskets, conditions, requirements or provisions shall not be determined or
tested at any time for purposes of such Limited Condition Transaction after the applicable LCT Test Date. If the Lead
Borrower has made an LCT Election, then in connection with any subsequent calculation of any financial ratios or tests
(including any Incurrence-Based Baskets), thresholds and availability (including under any Fixed Basket) under this Agreement
with respect to any unrelated transactions or actions on or following the applicable LCT Test Date and prior to the earlier
of the date on which such Limited Condition Transaction is consummated or the definitive agreement (or, if applicable,
notice, declaration or similar event) for such Limited Condition Transaction is terminated or expires without consummation of
such Limited Condition Transaction, any financial ratios or tests, thresholds and availability shall be determined assuming
such Limited Condition Transaction (including any related actions and transactions) had been consummated.
(b)
For purposes of determining the permissibility of any action, change, transaction or event or compliance with any term that
requires a calculation of any financial ratio or test (including, without limitation, Sections 2.22, 2.23, 6.15,
any First Lien Leverage Ratio, any Fixed Charge Coverage Ratio and/or the amount or percentage of Consolidated Adjusted EBITDA
or Consolidated Total Assets (including any component definitions of the foregoing and for the avoidance of doubt, notwithstanding
clause (k) of the definition of “Consolidated Net Income”, which shall be disregarded)), (i) Specified Transactions
that have been made during the applicable Test Period (or, except as provided in Section 1.11(c), subsequent to such Test
Period and prior to or simultaneously with the event for which the calculation of any such ratio is made) and any Limited Condition
Transaction (including any related actions and transactions) shall be calculated on a Pro Forma Basis and be given pro forma
effect assuming that all such Specified Transactions and Limited Condition Transactions had occurred on the first day of the
applicable Test Period (or, in the case of Consolidated Total Assets and Consolidated Total Debt, on the last date of the applicable
Test Period) in good faith by a Responsible Officer of the Lead Borrower and include, for the avoidance of doubt, the amount of
“run-rate” cost savings (including sourcing), operating expense reductions, operating improvements and synergies projected
by the Borrowers in good faith in a manner consistent with, and without duplication of, clause (b)(xi) of the definition
of “Consolidated Adjusted EBITDA” (calculated on a Pro Forma Basis and given pro forma effect as though such
cost savings (including sourcing), operating expense reductions, operating improvements and synergies had been realized on the
first day of such period for the entirety of such period), and any such adjustments shall be included in the initial pro forma
calculations of such financial ratios or tests and during any subsequent Test Period in a manner consistent with, and without duplication
of, clause (b)(xi) of the definition of “Consolidated Adjusted EBITDA”, whether through a pro forma adjustment
or otherwise, and (ii) any borrowings under any revolving credit facilities incurred substantially concurrently with the applicable
Specified Transaction shall be disregarded and excluded from such pro forma calculation (other than determinations with
respect to the Borrowing Base and Availability).
(c)
The calculation of any financial ratio or test (including, without limitation, Sections 2.22 and 2.23, any
First Lien Leverage Ratio, any Fixed Charge Coverage Ratio and/or the amount or percentage of Consolidated Adjusted EBITDA or Consolidated
Total Assets (including any component definitions of the foregoing and for the avoidance of doubt, notwithstanding clause (k)
of the definition of “Consolidated Net Income”, which shall be disregarded), but excluding actual compliance with Section
6.15) shall be based on the most recently ended Test Period for which internal financial statements are available (as determined
in good faith by the Lead Borrower).
(d) The
principal amount of any non-interest bearing Indebtedness or other discount security constituting Indebtedness at any date
shall be the principal amount thereof that would be shown on a balance sheet of the Lead Borrower dated such date prepared in
accordance with GAAP. If any Indebtedness bears a floating rate of interest and is being calculated on a Pro Forma Basis or
being given pro forma effect, the interest on such Indebtedness attributable to any period subsequent to such Test
Period and prior to or simultaneously with the event for which the calculation of any such ratio is made shall be calculated
for as if the rate in effect on the date of the event for which the calculation is made had been the applicable rate for the
entire period (taking into account any hedging obligations applicable to such Indebtedness). Interest on a Capital Lease
obligation shall be deemed to accrue at an interest rate reasonably determined by a Responsible Officer of the Lead Borrower
to be the rate of interest implicit in such Capital Lease obligation in accordance with GAAP. Any calculation of the Fixed
Charge Coverage Ratio on a Pro Forma Basis will be calculated using an assumed interest rate in determining Consolidated
Interest Expense based on the indicative interest margin contained in any financing commitment documentation with respect to
such Indebtedness or, if no such indicative interest margin exists, as reasonably determined by the Lead Borrower in good
faith.
(e)
The increase in amounts secured by Liens by virtue of accrual of interest, the accretion of accreted value, the payment
of interest or dividends in the form of additional Indebtedness, amortization of original issue discount and increases in the amount
of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies will not be deemed to be an incurrence
of Liens for purposes of Section 6.02.
(f)
For purposes of determining compliance at any time with the provisions of this Agreement, in the event that any Indebtedness
(including any Incremental Revolving Facility), Lien, Restricted Payment, Restricted Debt Payment, Investment, Disposition or Affiliate
transaction or other transaction, as applicable, meets the criteria of more than one category of exceptions, thresholds, baskets,
or other provisions of transactions or items permitted pursuant to any clause of Article VI, any component in the definition
of “Incremental Cap” or any other provision of this Agreement, the Lead Borrower, in its sole discretion, may, at any
time, classify or reclassify (on one or more occasions) and/or divide or re-divide (on one or more occasions) such transaction
or item (or portion thereof) among one or more such categories of exceptions, thresholds, baskets or provisions, as elected by
the Lead Borrower in its sole discretion (other than the Initial Revolving Loans, First Lien Loans and Second Lien Loans outstanding
on the Closing Date and any refinancing indebtedness in respect thereof which may not be reclassified). It is understood and agreed
that any Indebtedness (including any Incremental Revolving Facility), Lien, Restricted Payment, Restricted Debt Payment, Investment,
Disposition or Affiliate transaction or other transaction need not be permitted solely by reference to one category of exceptions,
thresholds, baskets or provisions permitting such Indebtedness, Lien, Restricted Payment, Restricted Debt Payment, Investment,
Disposition and/or Affiliate transaction under Article VI (other than Section 6.01(a), (x) and (y)),
any component in the definition of “Incremental Cap” or any other provision of this Agreement, but may instead be permitted
in part under any combination thereof. Upon delivery of financial statements following any initial classification and division
(or any subsequent reclassification and re-division), if any applicable financial ratios for any Incurrence-Based Baskets would
then be satisfied for the incurrence of such Indebtedness (including any Incremental Revolving Facility), Lien, Restricted Debt
Payment, Investment, Disposition or Affiliate transaction, any amount thereof under any Fixed Basket shall automatically be deemed
reclassified and re-divided as incurred under any available Incurrence-Based Baskets to the extent not previously elected by the
Lead Borrower and will be deemed to have been incurred, issued, made or taken first, to the extent available, pursuant to any available
Incurrence-Based Baskets as set forth above without utilization of any Fixed Basket. This Section 1.11(f) shall not apply
to the use of the Payment Conditions as an Incurrence Based Basket.
(g) With
respect to any amounts incurred or transactions entered into or consummated (including any Indebtedness (including any
Incremental Revolving Facility), Lien, Restricted Payment, Restricted Debt Payment, Investment, Disposition or Affiliate
transaction or other transaction), in reliance on a combination of Fixed Baskets and Incurrence-Based Baskets, it is
understood and agreed that (i) the Incurrence-Based Baskets shall first be calculated without giving effect to any Fixed
Baskets being relied upon for any portion of such incurrence or transactions (i.e., Fixed Baskets shall be disregarded
in the calculation of the financial ratio applicable to the Incurrence-Based Baskets, but full pro forma effect shall
be given thereto and to all other applicable and related transactions (including, in the case of Indebtedness, the intended
use of the aggregate proceeds of Indebtedness being incurred in reliance on a combination of Fixed Baskets and
Incurrence-Based Baskets, but without “netting” the Cash proceeds of such Indebtedness) and all other permitted pro
forma adjustments (except that the incurrence of any borrowings under any Additional Revolving Facility incurred
substantially concurrently with the applicable transaction shall be disregarded) and (ii) thereafter, the incurrence of the
portion of such amounts or other applicable transaction to be entered into in reliance on any Fixed Baskets shall be
calculated (and may subsequently be reclassified into Incurrence-Based Baskets in accordance with Section 1.11(f)).
For example, in calculating the maximum amount of Indebtedness permitted to be incurred under Fixed Baskets and
Incurrence-Based Baskets in Section 6.01 in connection with an acquisition, only the portion of such Indebtedness
intended to be incurred under Incurrence-Based Baskets shall be included in the calculation of financial ratios (and the
portion of such Indebtedness intended to be incurred under Fixed Baskets shall be deemed to not have been incurred in
calculating such financial ratios), but pro forma effect shall be given to the use of proceeds from the entire amount
of Indebtedness intended to be incurred under both the Fixed Baskets and Incurrence-Based Baskets, the consummation of the
acquisitions and any related repayments of Indebtedness.
Section 1.12
Rounding. Any financial ratios required to be maintained by the Borrower pursuant to this Agreement (or required
to be satisfied in order for a specific action to be permitted under this Agreement) shall be calculated by dividing the appropriate
component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed
herein and rounding the result up or down to the nearest number (with a rounding-up for five).
Section 1.13
Alternate Currencies.
(a)
The Lead Borrower may from time to time request that Revolving Loans and/or Letters of Credit be issued (i) in respect of
the US Borrower, in a currency other than Dollars and (ii) in respect of the Canadian Borrower, in a currency other than Canadian
Dollars or Dollars; provided that (i) the requested currency is a lawful currency (other than Dollars) that is readily available
and freely transferable and convertible into Dollars and (ii) any Existing Letter of Credit may be denominated in Canadian Dollars.
In the case of any such request with respect to the making of Revolving Loans, such request shall be subject to the approval of
the Administrative Agent and the Lenders, and, in the case of any such request with respect to the issuance of Letters of Credit,
such request shall be subject to the approval of the Administrative Agent, the Lenders and the applicable Issuing Bank. The approval
of any Alternate Currency may be accompanied by changes to the timing of the delivery of Borrowing Requests, Interest Election
Requests and Letter of Credit Request in respect to credit extensions in such Alternate Currency.
(b)
Any such request shall be made to the Administrative Agent not later than 1:00 p.m. 10 Business Days prior to the date of
the desired Credit Extension (or such other time or date as may be agreed by the Administrative Agent and, in the case of any such
request pertaining to Letters of Credit, the relevant Issuing Bank in its sole discretion). In the case of any such request pertaining
to Revolving Loans, the Administrative Agent shall promptly notify each Lender thereof and in the case of any such request pertaining
to Letters of Credit, the Administrative Agent shall promptly notify the relevant Issuing Bank. Each such Lender (in the case of
any such request pertaining to Revolving Loans) or the relevant Issuing Bank (in the case of a request pertaining to Letters of
Credit) shall notify the Administrative Agent, not later than 1:00 p.m., five Business Days after receipt of such request whether
it consents, in its sole discretion, to the making of Revolving Loans or the issuance of Letters of Credit in the requested currency.
(c) Any
failure by any Lender or the relevant Issuing Bank, as the case may be, to respond to such request within the time period
specified in the preceding clause (b) shall be deemed to be a refusal by such Lender or Issuing Bank, as the case may
be, to permit Revolving Loans to be made or Letters of Credit to be issued in the requested currency. If the Administrative
Agent and each Lender that would be obligated to make Credit Extensions denominated in the requested currency consent to
making Revolving Loans in the requested currency, the Administrative Agent shall so notify the Lead Borrower and such
currency shall thereupon be deemed for all purposes to be an Alternate Currency hereunder for purposes of any Borrowing of
Revolving Loans; and if the Administrative Agent and the relevant Issuing Bank consent to the issuance of Letters of Credit
in the requested currency, the Administrative Agent shall so notify the Lead Borrower and such currency shall thereupon be
deemed for all purposes to be an Alternate Currency hereunder for purposes of the issuance of any Letter of Credit. If the
Administrative Agent fails to obtain the requisite consent to any request for an additional currency under this Section
1.13, the Administrative Agent shall promptly so notify the Lead Borrower. Notwithstanding anything to the contrary
herein, to the extent that the LIBO Rate, the CDOR Rate and/or the Alternate Base Rate is not applicable to or available with
respect to a Revolving Loan to be denominated in an Alternate Currency, the interest rate components applicable to such
Alternate Currency shall be separately agreed by the Lead Borrower and the Administrative Agent.
ARTICLE
2
THE CREDITS
Section 2.01
Commitments.
(a)
Subject to the terms and conditions set forth herein, each Lender with an Initial US Commitment severally, and not jointly,
agrees to make loans in Dollars and/or any other Alternate Currency to the US Borrower at any time and from time to time on and
after the Closing Date, and until the earlier of the Initial Revolving Credit Maturity Date and the termination of the Initial
US Commitment of such Lender in accordance with the terms hereof, in an aggregate principal amount at any time outstanding that
will not result in (i) the Initial US Revolving Credit Exposure exceeding the lesser of (A) the Initial US Commitments and (B)
the US Borrowing Base, or (ii) such Lender’s Initial US Revolving Credit Exposure exceeding such Lender’s Initial US
Commitment.
(b)
Subject to the terms and conditions set forth herein, each Lender with an Initial Canadian Commitment severally, and not
jointly, agrees to make loans in Canadian Dollars, Dollars and/or any other Alternate Currency to the Canadian Borrower at any
time and from time to time on and after the Closing Date, and until the earlier of the Initial Revolving Credit Maturity Date and
the termination of the Initial Canadian Commitment of such Lender in accordance with the terms hereof, in an aggregate principal
amount at any time outstanding that will not result in (i) the Initial Canadian Revolving Credit Exposure exceeding the lesser
of (A) the Initial Canadian Commitments and (B) the Canadian Borrowing Base, or (ii) such Lender’s Initial Canadian Revolving
Credit Exposure exceeding such Lender’s Initial Canadian Commitment.
(c)
Subject to the terms and conditions of this Agreement and any applicable Extension Amendment or Incremental Revolving Facility
Amendment, each Lender and each Additional Revolving Lender with any Additional Revolving Commitment for a given Class severally,
and not jointly, agrees to make Additional Revolving Loans of such Class to the Borrowers, which Revolving Loans shall not exceed
for any such Lender or Additional Revolving Lender at the time of any incurrence thereof, the Additional Revolving Commitment of
each Class of Lender.
Section 2.02
Loans and Borrowings.
(a)
Each Revolving Loan (other than a Swingline Loan) shall be made as part of a Borrowing consisting of Revolving Loans of
the same Class and Type made by the relevant Lenders ratably in accordance with their respective Commitments of the applicable
Class. Each Swingline Loan shall be made in accordance with the terms and procedures set forth in Section 2.24.
(b) Subject
to Section 2.01 and Section 2.14, each Borrowing shall be comprised entirely of (i) in the case of Revolving
Loans denominated in Dollars, ABR Revolving Loans, Canadian Base Rate Revolving Loans or LIBO Rate Revolving Loans, (ii) in
the case of Revolving Loans denominated in Canadian Dollars, Canadian Prime Rate Revolving Loans or CDOR Revolving Loans and
(iii) in the case of Revolving Loans denominated in any other currency as the applicable Borrower may request in accordance
herewith, provided that, each Swingline Loan shall be an ABR Revolving Loan. Each Lender at its option may make any
LIBO Rate Revolving Loan or CDOR Revolving Loan by causing any domestic or foreign branch or Affiliate of such Lender to make
such Revolving Loan; provided that (i) any exercise of such option shall not affect the obligation of the applicable
Borrower to repay such Revolving Loan in accordance with the terms of this Agreement, (ii) such LIBO Rate Revolving Loan or
CDOR Revolving Loan shall be deemed to have been made and held by such Lender, and the obligation of the applicable Borrower
to repay such LIBO Rate Loan or CDOR Revolving Loan shall nevertheless be to such Lender for the account of such domestic or
foreign branch or Affiliate of such Lender and (iii) in exercising such option, such Lender shall use reasonable efforts to
minimize increased costs to the applicable Borrower resulting therefrom (which obligation of such Lender shall not require it
to take, or refrain from taking, actions that it determines would result in increased costs for which it will not be
compensated hereunder or that it otherwise determines would be disadvantageous to it and in the event of such request for
costs for which compensation is provided under this Agreement, the provisions of Section 2.15 shall apply); provided
further that any such domestic or foreign branch or Affiliate of such Lender shall not be entitled to any greater
indemnification under Section 2.17 with respect to such LIBO Rate Loan or CDOR Revolving Loan than that to which the
applicable Lender was entitled on the date on which such Revolving Loan was made (except in connection with any
indemnification entitlement arising as a result of a Change in Law after the date on which such Revolving Loan was made).
(c)
At the commencement of each Interest Period for any Borrowing of LIBO Rate Revolving Loans, such Borrowing shall comprise
an aggregate principal amount that is an integral multiple of $100,000 and not less than $1,000,000 (or, in the case of any Adjusted
LIBO Rate Borrowing denominated in any Alternate Currency, the equivalent of $1,000,000 denominated in such currency). Each ABR
Revolving Loan and Canadian Base Rate Revolving Loan when made shall be in a minimum principal amount of $100,000; provided
that an ABR Revolving Loan or Canadian Base Rate Revolving Loan may be made in a lesser aggregate amount that is (x) equal to the
entire aggregate unused Commitments of the relevant Class or (y) required to finance the reimbursement of an LC Disbursement as
contemplated by Section 2.05(e). At the commencement of each Interest Period for any Borrowing of CDOR Revolving Loans,
such CDOR Revolving Loan shall comprise an aggregate principal amount that is an integral multiple of C$100,000 and not less than
C$500,000. Each Canadian Prime Rate Revolving Loan when made shall be in a minimum principal amount of C$100,000; provided
that a Canadian Prime Rate Revolving Loan may be made in a lesser aggregate amount that is (x) equal to the entire aggregate unused
balance of the relevant Commitment or (y) required to finance the reimbursement of an LC Disbursement as contemplated by Section
2.05(e). Borrowings of more than one Type and Class may be outstanding at the same time; provided that there shall not
at any time be more than a total of ten (10) different Interest Periods in effect for LIBO Rate Borrowings and CDOR Revolving Loans,
respectively, at any time outstanding (or such greater number of different Interest Periods as the Administrative Agent may agree
from time to time).
(d)
Notwithstanding any other provision of this Agreement, no Borrower shall, nor shall it be entitled to, request, or to elect
to convert or continue, any Borrowing if the Interest Period requested with respect thereto would end after the Maturity Date applicable
to the relevant Revolving Loan.
Section 2.03 Requests
for Borrowings. Each Borrowing, each conversion from one Type to the other, and each continuation of LIBO Rate Revolving
Loans or CDOR Revolving Loans shall be made upon irrevocable notice by the applicable Borrower (or the Lead Borrower on
behalf of the relevant Borrower) to the Administrative Agent (provided that notices in respect of a Revolving Loan
Borrowing (x) to be made on the Closing Date may be conditioned on the closing of the Acquisition and (y) to be made in
connection with any permitted acquisition, investment or irrevocable repayment or redemption of Indebtedness may be
conditioned on the closing of such acquisition, investment or repayment or redemption of Indebtedness). Each such notice must
be in writing and must be received by the Administrative Agent (by hand delivery, fax or other electronic transmission
(including “.pdf” or “.tiff”)) not later than 2:00 p.m. (i) three (3) Business Days prior to the
requested day of any Borrowing, conversion or continuation of LIBO Rate Revolving Loans or CDOR Revolving Loans (or two
Business Days in the case of any Borrowing of LIBO Rate Loans denominated in Dollars to be made on the Closing Date), (ii)
four Business Days prior to the requested day of any Borrowing, conversion or continuation of LIBO Rate Revolving Loans
denominated in a currency other than Dollars (or one Business Day in the case of any Borrowing of LIBO Rate Loans denominated
in a currency other than Dollars to be made on the Closing Date) or (iii) by 12:00 p.m. (Noon) on the requested date of any
Borrowing of ABR Revolving Loans, Canadian Base Rate Revolving Loans or Canadian Prime Rate Revolving Loans (other than
Swingline Loans) (or, in each case, such later time as shall be acceptable to the Administrative Agent); provided, however,
that if the applicable Borrower wishes to request LIBO Rate Revolving Loans or CDOR Revolving Loans having an Interest Period
of other than one, two, three or six months in duration as provided in the definition of “Interest Period,” (A)
the applicable notice from the applicable Borrower (or the Lead Borrower on its behalf) must be received by the
Administrative Agent not later than 2:00 p.m. four (4) Business Days prior to the requested date of such Borrowing (or such
later time as shall be reasonably acceptable to the Administrative Agent), conversion or continuation, whereupon the
Administrative Agent shall give prompt notice to the appropriate Lenders of such request and determine whether the requested
Interest Period is acceptable to them and (B) not later than 12:00 p.m. (Noon) three (3) Business Days before the requested
date of such Borrowing, conversion or continuation, the Administrative Agent shall notify the applicable Borrower whether or
not the requested Interest Period is available to the appropriate Lenders. Each written notice with respect to a Borrowing by
the applicable Borrower pursuant to this Section 2.03 shall be delivered to the Administrative Agent in the form of a
written Borrowing Request or such other form as may be approved by the Administrative Agent (including any form on an
electronic platform or electronic transmission system as shall be approved by the Administrative Agent), appropriately
completed and signed by a Responsible Officer of such Borrower. Each such written Borrowing Request shall specify the
following information in compliance with Section 2.02:
(a)
the identity of the Borrower;
(b)
the Class of such Borrowing;
(c)
the aggregate amount of the requested Borrowing;
(d)
the currency of such Borrowing;
(e)
the date of such Borrowing, which shall be a Business Day;
(f)
whether such Borrowing is to be an ABR Borrowing, a LIBO Rate Borrowing, a Canadian Prime Rate Borrowing, a Canadian Base
Rate Borrowing or a CDOR Borrowing;
(g)
in the case of a LIBO Rate Borrowing or CDOR Borrowing, the initial Interest Period to be applicable thereto, which shall
be a period contemplated by the definition of the term “Interest Period”; and
(h)
the location and number of the applicable Borrower’s account or any other designated account(s) to which funds are
to be disbursed (the “Funding Account”).
If, with respect to Revolving Loans denominated
in Canadian Dollars, no election as to the Type of Borrowing is specified, then the requested Borrowing shall be a Canadian Prime
Rate Borrowing. If, with respect to Revolving Loans denominated in Dollars, no election as to the Type of Borrowing is specified,
then the requested Borrowing shall be an ABR Borrowing or Canadian Base Rate Borrowing, as applicable. Revolving Loans denominated
in any Alternate Currency shall be LIBO Rate Borrowings. If no Interest Period is specified with respect to any requested LIBO
Rate Borrowing or CDOR Borrowing, then the applicable Borrower shall be deemed to have selected an Interest Period of one month’s
duration. The Administrative Agent shall advise each Lender of the details thereof and of the amount of the Revolving Loan to be
made as part of the requested Borrowing (x) in the case of any ABR Borrowing, Canadian Base Rate Borrowing or Canadian Prime Rate
Borrowing, on the same Business Day of receipt of a Borrowing Request in accordance with this Section 2.03 or (y) in the
case of any LIBO Rate Borrowing or CDOR Borrowing, no later than one Business Day following receipt of a Borrowing Request in accordance
with this Section 2.03. No Revolving Loan may be converted into or continued as a Revolving Loan denominated in a different
currency, but instead must be prepaid in the currency in which such Revolving Loan was originally denominated and re-borrowed in
the relevant other currency.
Section 2.04
Overadvances.
(a)
Notwithstanding anything to the contrary in this Agreement, if the sum of the Initial US Revolving Credit Exposure to the
US Borrower exceeds the US Borrowing Base, at the request of the Lead Borrower, the Administrative Agent may in its sole discretion
(but without any obligation to do so), make Revolving Loans to the US Borrower, on behalf of the relevant Lenders (any such Revolving
Loan, a “US Overadvance”); provided that, no US Overadvance shall result in a Default or Event of Default
for as long as such US Overadvance remains outstanding in accordance with the terms of this paragraph. US Overadvances shall be
denominated in Dollars shall be ABR Borrowings. The authority of the Administrative Agent to make US Overadvances is limited to
an aggregate amount not to exceed, when taken together with any US Protective Advances 10% of the US Borrowing Base in effect at
such time; provided that, the US Required Lenders may at any time revoke the Administrative Agent’s authorization
to make US Overadvances. Any such revocation must be in writing and shall become effective prospectively upon the Administrative
Agent’s receipt thereof; provided that, the US Required Lenders may at any time restore the Administrative Agent’s
authorization to make US Overadvances by written notice to the Administrative Agent thereof. Each US Overadvance shall mature and
be due on the earliest of (i) the Initial Revolving Credit Maturity Date, (ii) written demand by the Administrative Agent and (iii)
30 days after the date on which such US Overadvance is made; it being understood and agreed that no US Overadvance shall cause
the Initial US Revolving Credit Exposure of any Initial US Revolving Lender to exceed such Initial US Revolving Lender’s
Initial US Commitment.
(b) Notwithstanding
anything to the contrary in this Agreement, if the sum of the Initial Canadian Revolving Credit Exposure to the Canadian
Borrower exceeds the Canadian Borrowing Base, at the request of the Lead Borrower, the Administrative Agent may in its sole
discretion (but without any obligation to do so), make Revolving Loans to the Canadian Borrower, on behalf of the relevant
Lenders (any such Revolving Loan, a “Canadian Overadvance”); provided that, no Canadian Overadvance
shall result in a Default or Event of Default for as long as such Canadian Overadvance remains outstanding in accordance with
the terms of this paragraph. Canadian Overadvances shall be denominated in Dollars or Canadian Dollars. Any Canadian
Overadvance denominated in Dollars shall be a Canadian Base Rate Borrowing. Any Canadian Overadvance denominated in Canadian
Dollars shall be a Canadian Prime Rate Borrowing. The authority of the Administrative Agent to make Canadian Overadvances is
limited to an aggregate amount not to exceed, when taken together with any Canadian Protective Advances 10% of the Canadian
Borrowing Base in effect at such time; provided that, the Canadian Required Lenders may at any time revoke the
Administrative Agent’s authorization to make Canadian Overadvances. Any such revocation must be in writing and shall
become effective prospectively upon the Administrative Agent’s receipt thereof; provided that, the Canadian
Required Lenders may at any time restore the Administrative Agent’s authorization to make Canadian Overadvances by
written notice to the Administrative Agent thereof.. Each Canadian Overadvance shall mature and be due on the earliest of (i)
the Initial Revolving Credit Maturity Date, (ii) written demand by the Administrative Agent and (iii) 30 days after the date
on which such Canadian Overadvance is made; it being understood and agreed that no Canadian Overadvance shall cause the
Initial Canadian Revolving Credit Exposure of any Initial Canadian Revolving Lender to exceed such Initial Canadian Revolving
Lender’s Initial Canadian Commitment.
(c)
Upon the making of any Overadvance, each relevant Lender shall be deemed, without further action by any party hereto, to
have unconditionally and irrevocably purchased from the Administrative Agent without recourse or warranty, an undivided interest
and participation in the relevant US Overadvance or Canadian Overadvance, as applicable, in proportion to its Applicable Percentage
and, upon demand by the Administrative Agent, shall fund such participation to the Administrative Agent.
(d)
Each US Overadvance shall be secured by the Lien on the US Collateral in favor of the Administrative Agent and shall constitute
a US Obligation hereunder. Each Canadian Overadvance shall be secured by the Lien on the Canadian Collateral in favor of
the Administrative Agent and shall constitute a Canadian Obligation. The making of an Overadvance on any one occasion shall not
obligate the Administrative Agent to make any Overadvance on any other occasion.
Section 2.05
Letters of Credit.
(a)
General. Subject to the terms and conditions set forth herein,
(i)
in each case in reliance upon the agreements of the other Lenders set forth in this Section 2.05,
(A)
each Issuing Bank with an Initial US Commitment from time to time on any Business Day during the period from the Closing
Date to the fifth Business Day prior to the Initial Revolving Credit Maturity Date, upon the request of the US Borrower agrees,
to issue letters of credit, including standby and documentary letters of credit, bank guarantees, bankers’ acceptances and
similar documents and instruments issued for the account of the US Borrower (or any Restricted Subsidiary; provided that,
other than with respect to the Existing Letters of Credit, the US Borrower will be the applicant) (the “US Letters of
Credit”), to amend or renew US Letters of Credit previously issued by it, in accordance with Section 2.05(b) and
to honor drafts under the US Letters of Credit,
(B)
each Issuing Bank with an Initial Canadian Commitment from time to time on any Business Day during the period from the Closing
Date to the fifth Business Day prior to the Initial Revolving Credit Maturity Date, upon the request of the Canadian Borrower agrees,
to issue letters of credit, including standby and documentary letters of credit, bank guarantees, bankers’ acceptances and
similar documents and instruments issued for the account of the Canadian Borrower (or any Restricted Subsidiary; provided
that the Canadian Borrower will be the applicant) (such Letters of Credit, the “Canadian Letters of Credit”),
to amend or renew Canadian Letters of Credit previously issued by it, in accordance with Section 2.05(b) and to honor drafts
under the Canadian Letters of Credit, and
(ii)
the Lenders severally agree to participate in the applicable Letters of Credit issued pursuant to Section 2.05(d).
On and after the Closing Date,
each Existing Letter of Credit shall be deemed to be a US Letter of Credit issued hereunder for all purposes under this Agreement
and the other Loan Documents.
(b)
Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions. To request the issuance of a Letter of Credit,
the applicable Borrower shall deliver to the applicable Issuing Bank and the Administrative Agent, at least three Business Days
in advance of the requested date of issuance (or such shorter period as is acceptable to the applicable Issuing Bank or, in the
case of any issuance to be made on the Closing Date, one Business Day prior to the Closing Date), a request to issue a Letter of
Credit, which shall specify that it is being issued under this Agreement, in the form of Exhibit B-2 attached hereto (the
“Letter of Credit Request”). To request an amendment, extension or renewal of an outstanding Letter of Credit,
(other than any automatic extension of a Letter of Credit permitted under Section 2.05(c)) the applicable Borrower shall
submit such a request to the applicable Issuing Bank (with a copy to the Administrative Agent) at least three Business Days in
advance of the requested date of amendment, extension or renewal (or such shorter period as is acceptable to the applicable Issuing
Bank), identifying the Letter of Credit to be amended, extended or renewed, and specifying the proposed date (which shall be a
Business Day) and other details of the amendment, extension or renewal. Requests for the issuance, amendment, extension or renewal
of any Letter of Credit must be accompanied by such other information as shall be reasonably requested by the applicable Issuing
Bank to issue, amend, extend or renew such Letter of Credit. If requested by the applicable Issuing Bank, the applicable Borrower
also shall submit a letter of credit application on such Issuing Bank’s standard form in connection with any request for
a Letter of Credit. In the event of any inconsistency between the terms and conditions of this Agreement and the terms and conditions
of any form of letter of credit application or other agreement submitted by any Borrower to, or entered into by any Borrower with,
the applicable Issuing Bank relating to any Letter of Credit, the terms and conditions of this Agreement shall control. No Letter
of Credit, letter of credit application or other document entered into by any Borrower with the applicable Issuing Bank relating
to any Letter of Credit shall contain any representations or warranties, covenants or events of default not set forth in this Agreement
(and to the extent inconsistent herewith shall be rendered null and void), and all representations and warranties, covenants and
events of default set forth therein shall contain standards, qualifications, thresholds and exceptions for materiality or otherwise
consistent with those set forth in this Agreement (and, to the extent inconsistent herewith, shall be deemed to automatically incorporate
the applicable standards, qualifications, thresholds and exceptions set forth herein without action by any Person). A Letter of
Credit may be issued, amended, extended or renewed only if (and on the issuance, amendment, extension or renewal of each Letter
of Credit the applicable Borrower shall be deemed to represent and warrant that), after giving effect to such issuance, amendment,
extension, or renewal, (i) in the case of a US Letter of Credit, the US LC Exposure does not exceed the US Letter of Credit Sublimit,
(ii) in the case of a Canadian Letter of Credit, the Canadian LC Exposure does not exceed the Canadian Letter of Credit Sublimit,
(iii) the sum of (x) the aggregate outstanding principal amount of all Revolving Loans plus (y) the aggregate
amount of all LC Obligations would not exceed the Aggregate Commitment, (iv) the sum of (x) the aggregate outstanding principal
amount of all Revolving Loans made to the US Borrower plus (y) the aggregate amount of all LC Obligations in respect
of US Letters of Credit would not exceed the US Borrowing Base and (v) the sum of (x) the aggregate outstanding principal
amount of all Revolving Loans made to the Canadian Borrower plus (y) the aggregate amount of all LC Obligations in
respect of Canadian Letters of Credit would not exceed the Canadian Borrowing Base. Promptly after the delivery of any Letter of
Credit or any amendment to a Letter of Credit to an advising bank with respect thereto or to the beneficiary thereof, the applicable
Issuing Bank will also deliver to the applicable Borrower and the Administrative Agent a true and complete copy of such Letter
of Credit or amendment.
(c)
Expiration Date. No Letter of Credit shall expire later than the earlier of (A) the date that is one year (or, in
the case of documentary Letters of Credit, one hundred eighty (180) days) after the date of the issuance of such Letter of Credit
and (B) the date that is five Business Days prior to the Initial Revolving Credit Maturity Date; provided that any Letter
of Credit may provide for the automatic extension thereof for any number of additional periods each of up to one year in duration
(none of which, in any event, shall extend beyond the date referred to in the preceding clause (B) unless 100% of the then-available
face amount thereof is Cash collateralized or backstopped on or before the date that such Letter of Credit is extended beyond the
date referred to in clause (B) above pursuant to arrangements reasonably satisfactory to the relevant Issuing Bank); provided,
further, that each Revolving Lender’s participation in any undrawn Letter of Credit that is outstanding on the Initial
Revolving Credit Maturity Date will terminate on the Initial Revolving Credit Maturity Date.
(d)
Participations. By the issuance of a Letter of Credit (or an amendment to a Letter of Credit increasing the amount
thereof) and without any further action on the part of the applicable Issuing Bank or the applicable Class of Lenders, the applicable
Issuing Bank hereby grants to each Lender of the applicable Class, and each such Lender hereby acquires from such Issuing Bank,
a participation in such Letter of Credit equal to such Lender’s Applicable Percentage of the aggregate amount available to
be drawn under such Letter of Credit. In consideration and in furtherance of the foregoing, each Lender hereby absolutely and unconditionally
agrees to pay to the Administrative Agent, for the account of the applicable Issuing Bank, such Lender’s Applicable Percentage
of each LC Disbursement made by such Issuing Bank and not reimbursed by the applicable Borrower on the date due as provided in
paragraph (e) of this Section 2.05, or of any reimbursement payment required to be refunded to the applicable Borrower
for any reason. Each Lender acknowledges and agrees that its obligation to acquire participations pursuant to this paragraph in
respect of Letters of Credit is absolute and unconditional and shall not be affected by any circumstance whatsoever, including
any amendment, renewal or extension of any Letter of Credit or the occurrence and continuance of a Default or Event of Default
or reduction or termination of the Commitments, and that each such payment shall be made without any offset, abatement, withholding
or reduction whatsoever.
(e)
Reimbursement.
(i) If
the applicable Issuing Bank makes any LC Disbursement in respect of a Letter of Credit, the applicable Borrower shall
reimburse such LC Disbursement by paying to the Administrative Agent an amount equal to such LC Disbursement not later than
1:00 p.m. on the Business Day immediately following the date on which the applicable Borrower receives notice under paragraph
(g) of this Section 2.05 of such LC Disbursement (or, if such notice is received less than two hours prior to the
deadline for requesting ABR Borrowings pursuant to Section 2.03, on the second Business Day immediately following the
date on which the applicable Borrower receives such notice); provided that the applicable Borrower may, without
satisfying the conditions to borrowing set forth herein, request in accordance with Section 2.03 or 2.24 that
such payment be financed with (x) in the case of any Letter of Credit denominated in Dollars, an ABR Borrowing or Canadian
Base Rate Borrowing, as applicable, (y) in the case of any Letter of Credit issued on account of the Canadian Borrower
denominated in Canadian Dollars, a Canadian Prime Rate Borrowing, (z) in the case of any Letter of Credit denominated in an
Alternate Currency, a LIBO Rate Borrowing (clauses (x), (y) and (z), an “LC Reimbursement
Loan”) in an equivalent amount and, to the extent so financed, the applicable Borrower’s obligation to make
such payment shall be discharged and replaced by the resulting Revolving Loan or Swingline Loan. If the applicable Borrower
fails to make such payment when due, the Administrative Agent shall notify each Lender in the relevant Class of the
applicable LC Disbursement, the payment then due from the applicable Borrower in respect thereof and such Lender’s
Applicable Percentage thereof. Promptly following receipt of such notice, each Lender in the relevant Class shall pay to the
Administrative Agent its Applicable Percentage of the payment then due from the applicable Borrower, in the same manner as
provided in Section 2.07 with respect to Revolving Loans made by such Lender (and Section 2.07 shall apply, mutatis
mutandis, to the payment obligations of the Lenders), and the Administrative Agent shall promptly pay to the applicable
Issuing Bank the amounts so received by it from the Lenders. Promptly following receipt by the Administrative Agent of any
payment from the applicable Borrower pursuant to this paragraph, the Administrative Agent shall distribute such payment to
the applicable Issuing Bank or, to the extent that Lenders in any relevant Class have made payments pursuant to this
paragraph to reimburse such Issuing Bank, then to such Lenders and such Issuing Bank as their interests may appear.
(ii)
If any Lender fails to make available to the Administrative Agent for the account of the applicable Issuing Bank any amount
required to be paid by such Lender pursuant to the foregoing provisions of this Section 2.05(e) by the time specified
therein, such Issuing Bank shall be entitled to recover from such Lender (acting through the Administrative Agent), on demand,
such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately
available to such Issuing Bank at a rate per annum equal to the greater of the Federal Funds Effective Rate (or (A) in the case
of any Letter of Credit denominated in Canadian Dollars, the Canadian Prime Rate, and (B) in the case of any Letter of Credit denominated
in any Alternate Currency, the Administrative Agent’s customary rate for interbank advances in the Alternate Currency in
which such Letter of Credit is denominated) from time to time in effect and a rate determined by the Administrative Agent in accordance
with banking industry rules on interbank compensation. A certificate of the applicable Issuing Bank submitted to any Lender (through
the Administrative Agent) with respect to any amounts owing under this clause (ii) shall be conclusive absent manifest error.
(f) Obligations
Absolute. The applicable Borrower’s obligation to reimburse LC Disbursements as provided in clause (e) of
this Section 2.05 shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with
the terms of this Agreement under any and all circumstances whatsoever and irrespective of (i) any lack of validity or
enforceability of any Letter of Credit or this Agreement, or any term or provision therein, (ii) any draft or other document
presented under any Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein
being untrue or inaccurate in any respect, (iii) payment by the applicable Issuing Bank under any Letter of Credit against
presentation of a draft or other document that does not comply with the terms of such Letter of Credit or (iv) any other
event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section
2.05, constitute a legal or equitable discharge of, or provide a right of setoff against, any Borrower’s
obligations hereunder. Neither the Administrative Agent, the Lenders nor any Issuing Bank, nor any of their Related Parties,
shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of
Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to in the
preceding sentence), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or
other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder),
any error in interpretation of technical terms or any consequence arising from causes beyond the control of such Issuing
Bank; provided that the foregoing shall not be construed to excuse such Issuing Bank from liability to the Borrowers
to the extent of any direct damages (as opposed to consequential damages, claims in respect of which are hereby waived by the
Borrowers to the extent permitted by applicable law) suffered by any Borrower that are caused by such Issuing Bank’s
failure to exercise care when determining whether drafts and other documents presented under a Letter of Credit comply with
the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence, bad faith or willful
misconduct on the part of applicable Issuing Bank (as finally determined by a court of competent jurisdiction), such Issuing
Bank shall be deemed to have exercised care in each such determination. In furtherance of the foregoing and without limiting
the generality thereof, the parties agree that, with respect to documents presented which appear on their face to be in
substantial compliance with the terms of a Letter of Credit, the applicable Issuing Bank may, in its sole discretion, either
accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict
compliance with the terms of such Letter of Credit.
(g)
Disbursement Procedures. The applicable Issuing Bank shall, promptly following its receipt thereof, examine all documents
purporting to represent a demand for payment under a Letter of Credit. Such Issuing Bank shall promptly notify the Administrative
Agent and the applicable Borrower in writing of such demand for payment and whether such Issuing Bank has made or will make an
LC Disbursement thereunder; provided that no failure to give or delay in giving such notice shall relieve the applicable
Borrower of its obligation to reimburse such Issuing Bank and the Lenders with respect to any such LC Disbursement.
(h)
Interim Interest. If any Issuing Bank makes any LC Disbursement, then, unless the applicable Borrower reimburses
such LC Disbursement in full on the date such LC Disbursement is made, the unpaid amount thereof shall bear interest, for each
day from and including the date such LC Disbursement is made to but excluding the date that the applicable Borrower reimburses
such LC Disbursement, at the rate per annum then applicable to (a) in the case of Letters of Credit denominated in Dollars, Revolving
Loans that are ABR Revolving Loans or Canadian Base Rate Borrowings of the applicable Class, (b) in the case of Letters of
Credit issued on account of the Canadian Borrower denominated in Canadian Dollars, Revolving Loans that are Canadian Prime Rate
Revolving Loans of the applicable Class and (c) in the case of Letters of Credit denominated in any Alternate Currency, Revolving
Loans denominated in such currency that are LIBO Rate Revolving Loans of the applicable Class; provided that if the applicable
Borrower fails to reimburse such LC Disbursement when due pursuant to paragraph (e) of this Section 2.05, then Section
2.13(e) shall apply. Interest accrued pursuant to this paragraph shall be for the account of the applicable Issuing Bank, except
that interest accrued on and after the date of payment by any Lender pursuant to paragraph (e) of this Section 2.05
to reimburse such Issuing Bank shall be for the account of such Lender to the extent of such payment and shall be payable on the
date on which the applicable Borrower is required to reimburse the applicable LC Disbursement in full (and, thereafter, on demand).
(i)
Replacement or Resignation of an Issuing Bank or Addition of New Issuing Banks.
(i) Any
Issuing Bank may be replaced with the consent of the Administrative Agent (not to be unreasonably withheld or delayed) at any
time by written agreement among the Borrowers, the Administrative Agent and the successor Issuing Bank. The Administrative
Agent shall notify the Lenders of any such replacement of an Issuing Bank. At the time any such replacement becomes
effective, the Borrowers shall pay all unpaid fees accrued for the account of the replaced Issuing Bank pursuant to Section
2.12(b)(ii). From and after the effective date of any such replacement, (i) the successor Issuing Bank shall have all the
rights and obligations of the replaced Issuing Bank under this Agreement with respect to Letters of Credit to be issued
thereafter and (ii) references herein to the term “Issuing Bank” shall be deemed to refer to such
successor or to any previous Issuing Bank, or to such successor and all previous Issuing Banks, as the context shall require.
After the replacement of any Issuing Bank hereunder, the replaced Issuing Bank shall remain a party hereto and shall continue
to have all the rights and obligations of an Issuing Bank under this Agreement with respect to Letters of Credit issued by it
prior to such replacement, but shall not be required to issue additional Letters of Credit. Any Borrower may, at any time and
from time to time with the consent of the Administrative Agent (which consent shall not be unreasonably withheld or delayed)
and the relevant Lender, designate one or more additional Lenders to act as an issuing bank under the terms of this
Agreement. Any Lender designated as an issuing bank pursuant to this paragraph (i) who agrees in writing to such
designation shall be deemed to be an “Issuing Bank” (in addition to being a Lender) in respect of Letters of
Credit issued or to be issued by such Lender, and, with respect to such Letters of Credit, such term shall thereafter apply
to the other Issuing Bank and such Lender.
(ii)
Notwithstanding anything to the contrary contained herein, each Issuing Bank may, upon ten days’ prior written notice
to the Lead Borrower, each other Issuing Bank and the Lenders, resign as Issuing Bank, which resignation shall be effective as
of the date referenced in such notice (but in no event less than ten days after the delivery of such written notice); it being
understood that in the event of any such resignation, any Letter of Credit then outstanding shall remain outstanding (irrespective
of whether any amounts have been drawn at such time). In the event of any such resignation as an Issuing Bank, the Lead Borrower
shall be entitled to appoint any Lender that accepts such appointment in writing as successor Issuing Bank. Upon the acceptance
of any appointment as Issuing Bank hereunder, the successor Issuing Bank shall thereupon succeed to and become vested with all
the rights, powers, privileges and duties of the retiring Issuing Bank, and the retiring Issuing Bank shall be discharged from
its duties and obligations in such capacity hereunder.
(j)
Cash Collateralization.
(i)
If any Event of Default exists, then on the Business Day that the Borrowers receive notice from the Administrative Agent
at the direction of the Required Lenders demanding the deposit of Cash collateral pursuant to this paragraph (j),
(A)
the US Borrower shall deposit, in an interest bearing account with the Administrative Agent, in the name of the Administrative
Agent and for the benefit of the Lenders of the applicable Class (the “US LC Collateral Account”), an amount
in Cash equal to 101% of the US LC Exposure as of such date (minus the amount then on deposit in the US LC Collateral Account),
and
(B)
the Canadian Borrower shall deposit, in an interest bearing account with the Administrative Agent, in the name of the Administrative
Agent and for the benefit of the Lenders of the applicable Class (the “Canadian LC Collateral Account”), an
amount in Cash equal to 101% of the Canadian LC Exposure as of such date (minus the amount then on deposit in the Canadian
LC Collateral Account),
provided that the obligation
to deposit such Cash collateral shall become effective immediately, and such deposit shall become immediately due and payable,
without demand or other notice of any kind, upon the occurrence of any Event of Default with respect to the applicable Borrower
described in Section 7.01(f) or (g).
(ii) Any
such deposit under clause (i) above shall be held by the Administrative Agent as collateral for the payment and
performance of the applicable Obligations of the relevant Borrower in accordance with the provisions of this paragraph
(j). The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal,
over such account, and the Borrowers hereby grant the Administrative Agent, for the benefit of the Secured Parties, a First
Priority security interest in the applicable LC Collateral Account. Interest or profits, if any, on such investments shall
accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the applicable
Issuing Bank for LC Disbursements for which it has not been reimbursed and, to the extent not so applied, shall be held for
the satisfaction of the reimbursement obligations of the Borrowers for the LC Exposure at such time or, if the maturity of
the Revolving Loans has been accelerated (but subject to the consent of the Required Lenders) be applied to satisfy other
Secured Obligations. If any Borrower is required to provide an amount of Cash collateral hereunder as a result of the
occurrence of an Event of Default, such amount (together with all interest and other earnings with respect thereto, to the
extent not applied as aforesaid) shall be returned to the applicable Borrower promptly but in no event later than three
Business Days after such Event of Default has been cured or waived.
Section 2.06
Protective Advances.
(a)
Subject to the limitations set forth below (and notwithstanding anything to the contrary in Section 4.02), the Administrative
Agent is authorized by each Borrower and each Lender from time to time in its sole discretion (but without any obligation
to do so) to make Initial US Revolving Loans (any such Initial US Revolving Loan made pursuant to this Section 2.06(a), a “US
Protective Advance”) and Initial Canadian Revolving Loans (any such Initial Canadian Revolving Loan made pursuant to
this Section 2.06(a), a “Canadian Protective Advance” and, together with any US Protective Advance together,
the “Protective Advances”) to any applicable Borrower on behalf of the Lenders of the relevant Class at any
time that any condition precedent set forth in Section 4.02 has not been satisfied or waived, which the Administrative Agent,
in its Permitted Discretion, deems necessary or desirable (i) to preserve or protect the relevant Collateral or any portion thereof,
(ii) to enhance the likelihood of, or maximize the amount of, repayment of the relevant Revolving Loans and other relevant Secured
Obligations or (iii) to pay any other amount chargeable to or required to be paid by the relevant Borrower or any other Loan Party
pursuant to the terms of this Agreement or any other Loan Document, including any payment of any reimbursable expense (including
any expense described in Section 9.03) and any other amount that, in each case is then due and payable under any Loan Document
and not the subject of a good faith dispute by the relevant Loan Party. All Protective Advances denominated in Dollars shall
be ABR Borrowings or Canadian Base Rate Borrowings, as applicable, and all Protective Advances denominated in Canadian Dollars
shall be Canadian Prime Rate Borrowings. No Protective Advance may be made if, after giving effect thereto, (i) the aggregate
amount of outstanding Protective Advances and Overadvances would exceed 10% of the Borrowing Base, (ii) the Total Revolving Credit
Exposure would exceed the Aggregate Commitment, (iii) in the case of a US Protective Advance, any Lender’s Initial US Revolving
Credit Exposure would exceed such Lender’s Initial US Commitment or (iv) in the case of a Canadian Protective Advance, any
Lender’s Initial Canadian Revolving Credit Exposure would exceed such Lender’s Initial Canadian Commitment.
(b)
Each US Protective Advance shall be secured by the Liens on the US Collateral in favor of the Administrative Agent and shall
constitute a US Obligation hereunder. Each Canadian Protective Advance shall be secured by the Liens on the Collateral in favor
of the Administrative Agent and shall constitute a Canadian Obligation. Each Protective Advance shall be repaid by the applicable
Borrower upon the earliest of (i) demand by the Administrative Agent, (ii) the next succeeding Maturity Date and (iii) the date
that is 30 days after such Protective Advance is made. The Administrative Agent’s authorization to make Protective
Advances may be revoked at any time by the Required Lenders. The making of a Protective Advance on any one occasion shall not obligate
the Administrative Agent to make any Protective Advance on any other occasion. At any time that the conditions precedent set forth
in Section 4.02 have been satisfied or waived, the Administrative Agent may request the Lenders to make an Initial US Revolving
Loan or an Initial Canadian Revolving Loan, as applicable, to repay any US Protective Advance or Canadian Protective Advance, respectively.
(c) Upon
the making of a Protective Advance by the Administrative Agent (whether before or after the occurrence of a Default or Event
of Default), each Lender of the relevant Class shall be deemed, without further action by any party hereto, unconditionally
and irrevocably to have purchased from the Administrative Agent without recourse or warranty, an undivided interest and
participation in such US Protective Advance or Canadian Protective Advance, as applicable, in proportion to its Applicable
Percentage, and, upon demand by the Administrative Agent, shall fund such participation to the Administrative Agent.
Section 2.07
Funding of Borrowings.
(a)
Each Lender shall make each Revolving Loan to be made by it hereunder on the proposed date thereof by wire transfer of immediately
available funds by (x) 2:00 p.m. New York City time for Revolving Loans denominated in Dollars, (y) 8:00 a.m. New York City time
for Revolving Loans denominated in an Alternate Currency or (z) 2:00 p.m. New York City time for Revolving Loans denominated in
Canadian Dollars, in each case, to the account of the Administrative Agent most recently designated by it for such purpose by notice
to the Lenders in an amount equal to such Lender’s respective Applicable Percentage (other than in respect of Swingline Loans);
provided that Swingline Loans shall be made as provided in Section 2.24. The Administrative Agent will make such
Revolving Loans available to the applicable Borrower by promptly crediting the amounts so received, in like funds, to the Funding
Account or as otherwise directed by the applicable Borrower; provided that any Revolving Loan made to finance the reimbursement
of any LC Disbursement as provided in Section 2.05(e) shall be remitted by the Administrative Agent to the applicable Issuing
Bank.
(b)
Unless the Administrative Agent has received notice from any Lender prior to the proposed date of any Borrowing that such
Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent
may assume that such Lender has made such share available on such date in accordance with paragraph (a) of this Section
2.07 and may, in reliance upon such assumption, make available to the applicable Borrower a corresponding amount. In such event,
if any Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable
Lender and the applicable Borrower severally agree to pay to the Administrative Agent forthwith on demand (without duplication)
such corresponding amount with interest thereon, for each day from and including the date such amount is made available to such
Borrower to but excluding the date of payment to the Administrative Agent, at (i) in the case of such Lender, the greater of the
Federal Funds Effective Rate (or, (x) with respect to any amount denominated in Canadian Dollars, the Canadian Prime Rate, or (y)
with respect to any amount denominated in an Alternate Currency, the rate of interest per annum at which overnight deposits in
Euros, on an amount approximately equal to the amount with respect to which such rate is being determined, would be offered for
such day by the Administrative Agent in the applicable offshore interbank market for such currency) and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank compensation or (ii) in the case of such Borrower,
the interest rate applicable to Revolving Loans comprising such Borrowing at such time. If such Lender pays such amount to the
Administrative Agent, then such amount shall constitute such Lender’s Revolving Loan included in such Borrowing and the applicable
Borrower’s obligation to repay the Administrative Agent such corresponding amount pursuant to this Section 2.07(b)
shall cease. If the applicable Borrower pays such amount to the Administrative Agent, the amount so paid shall constitute a repayment
of such Borrowing by such amount. Nothing herein shall be deemed to relieve any Lender from its obligation to fulfill its Commitment
or to prejudice any rights which the Administrative Agent or any Borrower or any other Loan Party may have against any Lender as
a result of any default by such Lender hereunder.
Section 2.08
Type; Interest Elections.
(a) Each
Borrowing initially shall be of the Type specified in the applicable Borrowing Request and, in the case of a LIBO Rate
Borrowing or CDOR Borrowing, shall have an initial Interest Period as specified in such Borrowing Request. Thereafter, the
applicable Borrower may elect to convert any Borrowing to a Borrowing of a different Type or to continue such Borrowing and,
in the case of a LIBO Rate Borrowing or CDOR Borrowing, may elect Interest Periods therefor, all as provided in this Section
2.08; provided that Revolving Loans denominated in any Alternate Currency shall be LIBO Rate Borrowings at all
times. The applicable Borrower may elect different options with respect to different portions of the affected Borrowing, in
which case each such portion shall be allocated ratably among the Lenders for the relevant Class based upon their Applicable
Percentages for such Class and the Revolving Loans of such Class comprising each such portion shall be considered a separate
Borrowing. This Section shall not apply to Swingline Loans, which may not be converted or continued.
(b)
To make an election pursuant to this Section 2.08, the applicable Borrower (or the Lead Borrower on its behalf) shall
notify the Administrative Agent of such election in writing (by hand delivery, fax or other electronic transmission (including
“.pdf” or “.tiff”)) by the time that a Borrowing Request would be required under Section 2.03
if the applicable Borrower (or the Lead Borrower on its behalf) were requesting a Borrowing of the Type resulting from such election
to be made on the effective date of such election.
(c)
Each Interest Election Request shall specify the following information in compliance with Section 2.02:
(i)
the Borrowing to which such Interest Election Request applies and, if different options are being elected with respect to
different portions thereof, the portions thereof to be allocated to each resulting Borrowing (in which case the information to
be specified pursuant to clauses (iii) and (iv) below shall be specified for each resulting Borrowing);
(ii)
the effective date of the election made pursuant to such Interest Election Request, which shall be a Business Day;
(iii)
whether the resulting Borrowing is to be an ABR Borrowing, a LIBO Rate Borrowing, a Canadian Prime Rate Borrowing, a Canadian
Base Rate Borrowing or a CDOR Borrowing; and
(iv)
if the resulting Borrowing is a LIBO Rate Borrowing or CDOR Borrowing, the Interest Period to be applicable thereto after
giving effect to such election, which shall be a period contemplated by the definition of the term “Interest Period”.
If any such Interest Election Request requests
a LIBO Rate Borrowing or CDOR Borrowing but does not specify an Interest Period, then the applicable Borrower shall be deemed to
have selected an Interest Period of one month’s duration.
(d)
Promptly following receipt of an Interest Election Request, the Administrative Agent shall advise each applicable Lender
of the details thereof and of such Lender’s portion of each resulting Borrowing.
(e) If
the applicable Borrower fails to deliver a timely Interest Election Request with respect to a LIBO Rate Borrowing or CDOR
Borrowing prior to the end of the Interest Period applicable thereto, then, unless such Borrowing is repaid as provided
herein, such Borrowing shall be converted at the end of such Interest Period to a LIBO Rate Borrowing or CDOR Borrowing, as
applicable, with an Interest Period of one month. Notwithstanding any contrary provision hereof, if an Event of Default
exists and the Administrative Agent, at the request of the Required Lenders, so notifies the Borrowers, then, so long as such
Event of Default exists (i) no outstanding Borrowing may be converted to or continued as a LIBO Rate Borrowing or CDOR
Borrowing and (ii) unless repaid, each LIBO Rate Borrowing and CDOR Borrowing shall be converted to an ABR Borrowing,
Canadian Base Rate Borrowing or Canadian Prime Rate Borrowing, as applicable, at the end of the then-current Interest Period
applicable thereto (except, in either case, that Revolving Loans denominated in any Alternate Currency shall be comprised of
LIBO Rate Revolving Loans).
Section 2.09
Termination and Reduction of Commitments.
(a)
Unless previously terminated, the Initial Revolving Commitments shall automatically terminate on the Initial Revolving Credit
Maturity Date.
(b)
Upon delivering the notice required by Section 2.09(d), the Lead Borrower may at any time terminate the Commitments
of any Class upon (i) the payment in full in Cash of all outstanding Revolving Loans of such Class, together with accrued and unpaid
interest thereon, (ii) the cancellation and return of all outstanding Letters of Credit of such Class (or alternatively, with respect
to each outstanding Letter of Credit, the furnishing to the Administrative Agent of a Cash deposit (or, if reasonably satisfactory
to the applicable Issuing Bank, a backup standby letter of credit) equal to 100% of the relevant LC Exposure (minus the
amount then on deposit in the US LC Collateral Account or Canadian LC Collateral Account, as applicable) as of such date) and (iii)
the payment in full of all accrued and unpaid fees and all reimbursable expenses and other non-contingent Obligations with respect
to the Revolving Facility of such Class then due, together with accrued and unpaid interest (if any) thereon.
(c)
Upon delivering the notice required by Section 2.09(d), the Lead Borrower may from time to time reduce the Commitments;
provided that (i) each reduction of the Commitments shall be in an amount that is an integral multiple of $1,000,000 and
not less than $1,000,000 and (ii) the Lead Borrower shall not reduce the Commitments if, after giving effect to any concurrent
prepayment of the Revolving Loans and Swingline Loans in accordance with Section 2.10 or Section 2.11, the aggregate
Revolving Credit Exposure would exceed the Aggregate Commitment.
(d)
The Lead Borrower shall notify the Administrative Agent of any election to terminate or reduce the Commitments under paragraph (b)
or (c) of this Section 2.09 in writing at least three Business Days prior to the effective date of such termination
or reduction (or such later date to which the Administrative Agent may agree), specifying such election and the effective date
thereof. Promptly following receipt of any notice, the Administrative Agent shall advise the Lenders of the applicable Class of
the contents thereof. Each notice delivered by the Lead Borrower pursuant to this Section 2.09 shall be irrevocable; provided
that a notice of termination of the Commitments delivered by the Lead Borrower may state that such notice is conditioned upon the
effectiveness of other transactions, in which case such notice may be revoked by the Lead Borrower (by notice to the Administrative
Agent on or prior to the specified effective date) if such condition is not satisfied. Any termination or reduction of the Commitments
pursuant to this Section 2.09 shall be permanent. Upon any reduction of the Commitments, the Commitment of each Lender shall
be reduced by such Lender’s Applicable Percentage of such reduction amount.
Section 2.10
Repayment of Revolving Loans; Evidence of Debt.
(a)
(i) (A) The US Borrower hereby unconditionally promises to pay in Dollars or the relevant Alternate Currency to the
Administrative Agent for the account of each Initial US Revolving Lender, the then-unpaid principal amount of each Initial US Revolving
Loan made by such Initial US Revolving Lender to the US Borrower on the Maturity Date applicable thereto.
(B) The
US Borrower hereby unconditionally promises to pay in Dollars or the relevant Alternate Currency to the Administrative Agent
for the account of each Additional Revolving Lender, the then unpaid principal amount of each Additional Revolving Loan made
by such Additional Revolving Lenders to the US Borrower on the Maturity Date applicable thereto.
(ii)
(A) The Canadian Borrower hereby unconditionally promises to pay in Canadian Dollars, Dollars or the relevant Alternate
Currency to the Administrative Agent for the account of each Initial Canadian Revolving Lender, the then-unpaid principal amount
of each Initial Canadian Revolving Loan made by such Initial Canadian Revolving Lender to such Canadian Borrower on the Maturity
Date applicable thereto.
(B)
The Canadian Borrower hereby unconditionally promises to pay in Canadian Dollars, Dollars or the relevant Alternate Currency
to the Administrative Agent for the account of each Additional Revolving Lender, the then unpaid principal amount of each Additional
Revolving Loan made by such Additional Revolving Lenders to the Canadian Borrower on the Maturity Date applicable thereto.
(iii)
The US Borrower hereby unconditionally promises to pay to the Swingline Lender, the then-unpaid principal amount of each
Swingline Loan on the Latest Maturity Date.
(iv)
Each Revolving Loan shall be repaid in the currency in which it was made.
(b)
Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the
Borrowers to such Lender resulting from each Revolving Loan made by such Lender, including the amounts of principal and interest
payable and paid to such Lender from time to time hereunder.
(c)
The Administrative Agent shall maintain accounts (which shall be part of the Register) in which it shall record (i) the
amount of each Revolving Loan made hereunder, the Class and Type thereof and the Interest Period (if any) applicable thereto, (ii)
the amount of any principal or interest due and payable or to become due and payable from the applicable Borrower to each Lender
hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder for the account of the Lenders or the
Issuing Banks and each Lender’s and Issuing Banks’ share thereof.
(d)
The entries made in the accounts maintained in the Register shall be prima facie evidence of the existence and amounts of
the obligations recorded therein (absent manifest error); provided that the failure of any Lender or the Administrative
Agent to maintain accounts pursuant to Sections 2.10(c) and 2.10(d) or any manifest error therein shall not in any
manner affect the obligation of the applicable Borrower to repay the Revolving Loans in accordance with the terms of this Agreement;
provided, further, that in the event of any inconsistency between the Register and any Lender’s records, the
Register shall govern.
(e)
Any Lender may request that Revolving Loans made by it be evidenced by a Promissory Note. In such event, the applicable
Borrower shall prepare, execute and deliver to such Lender a Promissory Note payable to such Lender and its registered assigns;
it being understood and agreed that such Lender (and/or its applicable assign) shall be required to return such Promissory Note
to such Borrower in accordance with Section 9.05(b)(iii) and upon the occurrence of the Termination Date (or as promptly
thereafter as practicable).
Section 2.11
Prepayment of Revolving Loans.
(a)
Optional Prepayments.
(i)
Upon prior notice in accordance with paragraph (a)(ii) of this Section 2.11, the Borrowers shall have the
right at any time and from time to time to prepay, in Dollars, Canadian Dollars or the relevant Alternate Currency, as applicable,
any Borrowing of Revolving Loans of any Class in whole or in part without premium or penalty (but subject to Section 2.16);
provided that after the establishment of any Additional Revolving Facility, any such prepayment of any Borrowing of Additional
Revolving Loans of any Class shall be subject to the provisions set forth in Section 2.22 and/or 2.23, as applicable.
Each such prepayment shall be paid to the Lenders in accordance with their respective Applicable Percentages of the relevant Class
of Revolving Loans being prepaid.
(ii)
The Lead Borrower shall notify the Administrative Agent in writing of any prepayment under this Section 2.11(a) (A)
in the case of a prepayment of a LIBO Rate Borrowing or CDOR Rate Borrowing, not later than 1:00 p.m. three Business Days before
the date of prepayment, or (B) in the case of a prepayment of an ABR Borrowing, Canadian Base Rate Borrowing or Canadian Prime
Rate Borrowing, not later than 12:00 p.m. (Noon) on the day of prepayment. Each such notice shall be irrevocable (except as set
forth in the proviso to this sentence) and shall specify the prepayment date and the principal amount of each Borrowing or portion
or each relevant Class to be prepaid; provided that a notice of prepayment delivered by the Lead Borrower may state that
such notice is conditioned upon the effectiveness of other transactions, in which case such notice may be revoked by the Lead Borrower
(by notice to the Administrative Agent on or prior to the specified effective date) if such condition is not satisfied. Promptly
following receipt of any such notice relating to any Borrowing, the Administrative Agent shall advise the relevant Lenders of the
contents thereof. Each partial prepayment of any Borrowing shall be in an amount at least equal to the amount that would be permitted
in the case of an advance of a Borrowing of the same Type and Class as provided in Section 2.02(c), or such lesser amount
that is then outstanding with respect to such Borrowing being repaid. Each prepayment of Revolving Loans made pursuant to this
Section 2.11(a) shall be applied to the Class of Revolving Loans specified in the applicable prepayment notice.
(iii)
Subject to Section 5.15(g), during the continuance of a Cash Dominion Period and following delivery by the Administrative
Agent of notice to the Lead Borrower, on each Business Day, at or before 1:00 p.m., New York City time, the Administrative Agent
shall apply all immediately available funds credited to the Administrative Agent Account or otherwise received by Administrative
Agent for application to the Secured Obligations (x) to the extent such funds constitute US Collateral, in accordance with Section
2.18(b)(i) (other than in respect of Secured Hedging Obligations and Secured Banking Services Obligations), and (y) to the
extent such funds constitute Canadian Collateral, in accordance with Section 2.18(b)(ii) (other than in respect of Secured
Hedging Obligations and Secured Banking Services Obligations).
(b)
Mandatory Prepayments.
(i) Except
for Protective Advances and Overadvances, on each day (including, on any Revaluation Date (after giving effect to the
determination of the Outstanding Amount of each Revolving Loan and the LC Exposure)) on which (A) the Initial US
Revolving Credit Exposure exceeds the US Line Cap, the US Borrower shall, within one Business Day following receipt of notice
from the Administrative Agent, prepay Initial US Revolving Loans (or, if there are no Initial US Revolving Loans outstanding
at the relevant time, Cash collateralize outstanding US Letters of Credit at 101% of the face amount thereof), in an
aggregate amount sufficient to reduce the Initial US Revolving Credit Exposure (calculated, for this purpose, as if any US LC
Exposure so Cash collateralized is not Initial US Revolving Credit Exposure) such that the Initial US Revolving Credit
Exposure does not exceed the US Line Cap, (B) the Initial Canadian Revolving Credit Exposure exceeds the Canadian Line
Cap, the Canadian Borrower shall, within one Business Day following receipt of notice from the Administrative Agent, prepay
Initial Canadian Revolving Loans (or, if there are no Initial Canadian Revolving Loans outstanding at such time, Cash
collateralize outstanding Canadian Letters of Credit at 101% of the face amount thereof), in an aggregate amount sufficient
to reduce the Initial Canadian Revolving Credit Exposure (calculated, for this purpose, as if any Canadian LC Exposure so
Cash collateralized is not Initial Canadian Revolving Credit Exposure) such that the Initial Canadian Revolving Credit
Exposure does not exceed the Canadian Line Cap, or (C) the Total Revolving Credit Exposure exceeds the Line Cap, the Lead
Borrower shall, within one Business Day following receipt of notice from the Administrative Agent, prepay Revolving Loans
(or, if there are no Revolving Loans outstanding at such time, Cash collateralize outstanding Letters of Credit at 101% of
the face amount thereof), in an aggregate amount sufficient to reduce the Total Revolving Credit Exposure such that the Total
Revolving Credit Exposure does not exceed the Line Cap.
(ii)
[Reserved].
(iii)
Prepayments shall be accompanied by accrued interest as required by Section 2.13. All prepayments of Borrowings under
this Section 2.11(b) shall be subject to Section 2.16, but shall otherwise be without premium or penalty.
(iv)
Notwithstanding anything in this Section 2.11 to the contrary, funds received from or held by any Canadian Loan Party
or from the proceeds of Canadian Collateral shall be applied only to the payment of Canadian Obligations and shall not be applied
to the payment of US Obligations.
Section 2.12
Fees.
(a)
The Borrowers agree to pay to the Administrative Agent for the account of each Initial Revolving Lender (other than any
Defaulting Lender) a commitment fee, which shall accrue at a rate equal to the Commitment Fee Rate per annum on the average daily
amount of the unused Initial Commitment of such Initial Revolving Lender during the period from and including the Closing Date
to the date on which such Initial Revolving Lender’s Initial Commitments terminate. Accrued commitment fees shall be payable
in arrears on the last Business Day of each March, June, September and December for the quarterly period then ended (commencing
on September 30, 2017) and on the date on which the Initial Commitments terminate. For purposes of calculating the commitment fee
only, the Commitment of any Class of any Revolving Lender shall be deemed to be used to the extent of Revolving Loans of such Class
of such Revolving Lender and the LC Exposure of such Revolving Lender attributable to its Revolving Credit Commitment of such Class,
and no portion of the Commitment of any Class shall be deemed used as a result of outstanding Swingline Loans.
(b) Subject
to Section 2.21, the US Borrower agrees to pay (i) to the Administrative Agent for the account of each Lender a
participation fee with respect to its participation in each US Letter of Credit, which shall accrue at the Applicable Rate
used to determine the interest rate applicable to LIBO Rate Revolving Loans on the daily face amount of such Lender’s
US LC Exposure in respect of such US Letter of Credit (excluding any portion thereof attributable to unreimbursed LC
Disbursements in respect of US Letters of Credit), during the period from and including the Closing Date to the later of the
date on which such Lender’s Initial US Commitment terminates and the date on which such Lender ceases to have any US LC
Exposure in respect of such US Letter of Credit and (ii) to each Issuing Bank, for its own account, a fronting fee, in
respect of each US Letter of Credit issued by such Issuing Bank for the period from the date of issuance of such US Letter of
Credit to the expiration date of such US Letter of Credit (or if terminated on an earlier date, to the termination date of
such US Letter of Credit), computed at a rate equal to the rate agreed by such Issuing Bank and the US Borrower (but in any
event not to exceed 0.125% per annum) of the daily face amount of such US Letter of Credit, as well as such Issuing
Bank’s standard fees with respect to the issuance, amendment, renewal or extension of any US Letter of Credit or
processing of drawings thereunder.
(c)
Subject to Section 2.21, the Canadian Borrower agrees to pay (i) to the Administrative Agent for the account of each
Lender a participation fee with respect to its participation in each Canadian Letter of Credit, which shall accrue at the Applicable
Rate used to determine the interest rate applicable to CDOR Revolving Loans on the daily face amount of such Lender’s Canadian
LC Exposure in respect of such Canadian Letter of Credit (excluding any portion thereof attributable to unreimbursed LC Disbursements
in respect of Canadian Letters of Credit), during the period from and including the Closing Date to the later of the date on which
such Lender’s Initial Canadian Commitment terminates and the date on which such Lender ceases to have any Canadian LC Exposure
in respect of such Canadian Letter of Credit and (ii) to each Issuing Bank, for its own account, a fronting fee, in respect of
each Canadian Letter of Credit issued by such Issuing Bank for the period from the date of issuance of such Canadian Letter of
Credit to the expiration date of such Canadian Letter of Credit (or if terminated on an earlier date, to the termination date of
such Canadian Letter of Credit), computed at a rate equal to the rate agreed by such Issuing Bank and the Canadian Borrower (but
in any event not to exceed 0.125% per annum) of the daily face amount of such Canadian Letter of Credit, as well as such Issuing
Bank’s standard fees with respect to the issuance, amendment, renewal or extension of any Canadian Letter of Credit or processing
of drawings thereunder.
(d)
Participation fees and fronting fees accrued to, but excluding, the last Business Day of each March, June, September and
December shall be payable in arrears for the quarterly period then ended on the last Business Day of such calendar quarter; provided
that all such fees shall be payable on the date on which the Initial Commitments terminate, and any such fees accruing after the
date on which the Initial Commitments terminate shall be payable on demand. Any other fees payable to any Issuing Bank pursuant
to this Section 2.12 shall be payable within 30 days after receipt of a written demand (accompanied by reasonable back-up
documentation) therefor.
(e)
The Borrowers agree to pay to the Administrative Agent, for its own account, the fees in the amounts and at the times separately
agreed upon by any Borrower and the Administrative Agent in writing.
(f)
All fees payable hereunder shall be paid on the dates due, in Dollars and in immediately available funds, to the Administrative
Agent for distribution, in the case of commitment fees and participation fees, to the Lenders. Fees paid shall not be refundable
under any circumstances except as otherwise provided in the Fee Letter. Fees payable hereunder shall accrue to, but excluding,
the applicable fee payment date.
(g)
Unless otherwise indicated herein, all computations of fees shall be made on the basis of a 360-day year and shall be payable
for the actual days elapsed (including the first day but excluding the last day). Each determination by the Administrative Agent
of a fee hereunder shall be conclusive and binding for all purposes, absent manifest error.
Section 2.13
Interest.
(a)
The Revolving Loans (including Swingline Loans) that are denominated in Dollars and comprise each ABR Borrowing shall bear
interest at the Alternate Base Rate plus the Applicable Rate.
(b)
The Revolving Loans that are denominated in Dollars or any Alternate Currency and comprise each LIBO Rate Borrowing shall
bear interest at the LIBO Rate for the Interest Period in effect for such Borrowing plus the Applicable Rate.
(c)
The Revolving Loans that are denominated in Canadian Dollars and comprise each Canadian Prime Rate Borrowing shall bear
interest at the Canadian Prime Rate plus the Applicable Rate.
(d)
The Revolving Loans that are denominated in Dollars and comprise each Canadian Base Rate Borrowing shall bear interest at
the Canadian Base Rate plus the Applicable Rate.
(e)
The Revolving Loans that are denominated in Canadian Dollars and comprise each CDOR Rate Borrowing shall bear interest at
the CDOR Rate for the Interest Period in effect for such Borrowing plus the Applicable Rate.
(f)
Notwithstanding the foregoing and subject to Section 2.21, if any principal of or interest on any Revolving Loan,
any LC Disbursement or any fee payable by any Borrower hereunder is not, in each case, paid or reimbursed when due, whether at
stated maturity, upon acceleration or otherwise, the relevant overdue amount shall bear interest, to the fullest extent permitted
by law, after as well as before judgment, at a rate per annum equal to (i) in the case of overdue principal or interest of any
Revolving Loan (including Swingline Loans) or unreimbursed LC Disbursement, 2.00% plus the rate otherwise applicable to
such Revolving Loan (including Swingline Loans) or LC Disbursement as provided in the preceding paragraphs of this Section 2.13,
Section 2.05(h) or in the amendment to this Agreement relating thereto or (ii) in the case of any other amount, 2.00% plus
the rate applicable to Revolving Loans that are ABR Revolving Loans as provided in paragraph (a) of this Section 2.13;
provided that no amount shall accrue pursuant to this Section 2.13(e) on any overdue amount, reimbursement obligation
in respect of any LC Disbursement or other amount payable to a Defaulting Lender so long as such Lender is a Defaulting Lender.
(g)
Accrued interest on each Revolving Loan (including Swingline Loan) shall be payable in arrears on each Interest Payment
Date for such Revolving Loan (including Swingline Loan) and on the Initial Revolving Credit Maturity Date or upon the termination
of the Commitments or any Additional Revolving Commitments, as applicable; provided that (i) interest accrued pursuant
to paragraph (e) of this Section 2.13 shall be payable on demand, (ii) in the event of any repayment or prepayment
of any Revolving Loan or Additional Revolving Loan (other than a prepayment of an ABR Revolving Loan, Canadian Prime Rate Revolving
Loan or Canadian Base Rate Revolving Loan prior to the termination of the relevant revolving Commitments), accrued interest on
the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment and (iii) in the event of any
conversion of any LIBO Rate Revolving Loan or CDOR Revolving Loan prior to the end of the current Interest Period therefor, accrued
interest on such Revolving Loan or Additional Revolving Loan shall be payable on the effective date of such conversion.
(h) All
interest hereunder shall be computed on the basis of a year of 360 days, except that interest computed for ABR Revolving
Loans shall be computed on the basis of a year of 365 days (or 366 days in a leap year) and interest computed for Canadian
Base Rate Revolving Loans, Canadian Prime Rate Revolving Loans and CDOR Revolving Loans shall be computed on the basis of a
year of 365 days, and in each case shall be payable for the actual number of days elapsed (including the first day but
excluding the last day). The applicable Alternate Base Rate, Canadian Prime Rate, Canadian Base Rate, CDOR Rate or LIBO Rate
shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error. Interest
shall accrue on each Revolving Loan for the day on which the Revolving Loan is made, and shall not accrue on a Revolving
Loan, or any portion thereof, for the day on which the Revolving Loan or such portion is paid; provided that any
Revolving Loan that is repaid on the same day on which it is made shall bear interest for one day. For the purposes of the
Interest Act (Canada), the yearly rate of interest to which any rate calculated on the basis of a period of time different
from the actual number of days in the year (360 days, for example) is equivalent is the stated rate multiplied by the actual
number of days in the year (365 or 366, as applicable) and divided by the number of days in the shorter period (360 days, in
the example), and the parties hereto acknowledge that there is a material distinction between the nominal and effective rates
of interest and that they are capable of making the calculations necessary to compare such rates and that the calculations
herein are to be made using the nominal rate method and not on any basis that gives effect to the principle of deemed
reinvestment of interest.
Section 2.14
Alternate Rate of Interest. If at least two Business Days prior to the commencement of any Interest Period for a
LIBO Rate Borrowing or for a CDOR Rate Borrowing:
(a)
the Administrative Agent determines (which determination shall be conclusive absent manifest error) that adequate and reasonable
means do not exist for ascertaining the LIBO Rate or CDOR Rate, as applicable, for such Interest Period; or
(b)
the Administrative Agent is advised by the Required Lenders that the LIBO Rate or CDOR Loan Rate for such Interest Period,
as applicable, will not adequately and fairly reflect the cost to such Lenders of making or maintaining their Revolving Loans included
in such Borrowing for such Interest Period;
then the Administrative Agent shall promptly
give notice thereof to the Lead Borrower and the Lenders by telephone or facsimile as promptly as practicable thereafter and, until
the Administrative Agent notifies the Lead Borrower and the Lenders that the circumstances giving rise to such notice no longer
exist, which the Administrative Agent agrees promptly to do, (i) any Interest Election Request that requests the conversion of
any Borrowing to, or continuation of any Borrowing as, a LIBO Rate Borrowing or CDOR Rate Borrowing shall be ineffective and such
Borrowing shall be converted to an ABR Borrowing, Canadian Base Rate Borrowing or Canadian Prime Rate Borrowing, as applicable
(or, in the case of a pending request for a Borrowing denominated in any Alternate Currency, the Lead Borrower and the Lenders
shall establish a mutually acceptable alternative rate) on the last day of the Interest Period applicable thereto, and (ii) if
any Borrowing Request requests a LIBO Rate Borrowing or CDOR Rate Borrowing, such Borrowing shall be made as an ABR Borrowing,
Canadian Base Rate Borrowing or Canadian Rate Borrowing, as applicable (or, in the case of a pending request for a Borrowing denominated
in any Alternate Currency, the Lead Borrower and the Lenders shall establish a mutually acceptable alternative rate).
Section 2.15
Increased Costs.
(a)
If any Change in Law:
(i)
imposes, modifies or deems applicable any reserve, special deposit or similar requirement against assets of, deposits with
or for the account of, or credit extended by, any Lender (except any such reserve requirement reflected in the LIBO Rate) or Issuing
Bank,
(ii)
subjects any Lender or Issuing Bank to any Taxes (other than Indemnified Taxes, Other Taxes and Excluded Taxes) on its loans,
letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto,
or
(iii) imposes
on any Lender or the Issuing Bank or the London or Canadian interbank market any other condition (other than Taxes) affecting
this Agreement, CDOR Revolving Loans or LIBO Rate Revolving Loans made by any Lender or any Letter of Credit or participation
therein,
and the result of any of the foregoing
is to increase the cost to the relevant Lender of making or maintaining any CDOR Revolving Loan or LIBO Rate Revolving Loan (or
of maintaining its obligation to make any such Revolving Loan) or to reduce the amount of any sum received or receivable by such
Lender or Issuing Bank hereunder (whether of principal, interest or otherwise) in respect of any CDOR Revolving Loan or LIBO Rate
Revolving Loan or Letter of Credit in an amount deemed by such Lender or Issuing Bank to be material, then, within 30 days after
the Lead Borrower’s receipt of the certificate contemplated by paragraph (c) of this Section 2.15, the Lead
Borrower will pay to such Lender or Issuing Bank, as applicable, such additional amount or amounts as will compensate such Lender
or Issuing Bank, as applicable, for such additional costs incurred or reduction suffered; provided that the applicable Borrower
shall not be liable for such compensation if (x) the relevant Change in Law occurs on a date prior to the date such Lender becomes
a party hereto, (y) such Lender invokes Section 2.20 or (z) in the case of requests for reimbursement under clause (iii)
of Section 2.15 (a) above resulting from a market disruption, (A) the relevant circumstances are not generally affecting
the banking market or (B) the applicable request has not been made by Lenders constituting Required Lenders.
(b)
If any Lender or Issuing Bank determines that any Change in Law regarding liquidity or capital requirements has or would
have the effect of reducing the rate of return on such Lender’s or Issuing Bank’s capital or on the capital of such
Lender’s or Issuing Bank’s holding company, if any, as a consequence of this Agreement or the Revolving Loans made
by, or participations in Letters of Credit, held by such Lender, or the Letters of Credit issued by such Issuing Bank, to a level
below that which such Lender or such Issuing Bank or such Lender’s or Issuing Bank’s holding company could have achieved
but for such Change in Law (other than due to Taxes which, except to the extent described in Section 2.15(a)(ii), shall
be dealt with exclusively pursuant to Section 2.17) (taking into consideration such Lender’s policies and the policies
of such Lender’s or Issuing Bank’s holding company with respect to capital adequacy), then within 30 days of receipt
by the Lead Borrower of the certificate contemplated by paragraph (c) of this Section 2.15 the Lead Borrower will
pay to such Lender or Issuing Bank, as applicable, such additional amount or amounts as will compensate such Lender or Issuing
Bank or such Lender’s or Issuing Bank’s holding company for any such reduction suffered.
(c)
A certificate of a Lender or Issuing Bank setting forth the amount or amounts necessary to compensate such Lender or Issuing
Bank or its holding company, as applicable, as specified in paragraph (a) or (b) of this Section 2.15 and
setting forth in reasonable detail the manner in which such amount or amounts were determined and certifying that such Lender is
generally charging such amounts to similarly situated borrowers shall be delivered to the Lead Borrower and shall be conclusive
absent manifest error.
(d)
Failure or delay on the part of any Lender or Issuing Bank to demand compensation pursuant to this Section 2.15 shall
not constitute a waiver of such Lender’s or Issuing Bank’s right to demand such compensation; provided that
the Borrowers shall not be required to compensate a Lender or Issuing Bank pursuant to this Section 2.15 for any increased
costs or reductions incurred more than 180 days prior to the date that such Lender or Issuing Bank notifies the Lead Borrower of
the Change in Law giving rise to such increased costs or reductions and of such Lender’s or Issuing Bank’s intention
to claim compensation therefor; provided further that if the Change in Law giving rise to such increased costs or reductions
is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof.
Section 2.16 Break
Funding Payments. In the event of (a) the conversion or prepayment of any principal of any LIBO Rate Revolving Loan or
CDOR Revolving Loan other than on the last day of an Interest Period applicable thereto (whether voluntary, mandatory,
automatic, by reason of acceleration or otherwise), (b) the failure to borrow, convert, continue or prepay any LIBO Rate
Revolving Loan or CDOR Revolving Loan on the date or in the amount specified in any notice delivered pursuant hereto or (c)
the assignment of any LIBO Rate Revolving Loan or CDOR Revolving Loan of any Lender other than on the last day of the
Interest Period applicable thereto as a result of a request by the Lead Borrower pursuant to Section 2.19, then, in
any such event, the Lead Borrower shall compensate each Lender for the loss, cost and expense incurred by such Lender that is
attributable to such event (other than loss of profit). In the case of a LIBO Rate Revolving Loan or CDOR Revolving
Loan, the loss, cost or expense of any Lender shall be the amount reasonably determined by such Lender to be the excess, if
any, of (i) the amount of interest which would have accrued on the principal amount of such Revolving Loan had such event not
occurred, at the LIBO Rate or CDOR Revolving Loan, as applicable, that would have been applicable to such Revolving Loan, for
the period from the date of such event to the last day of the then current Interest Period therefor (or, in the case of a
failure to borrow, convert or continue, for the period that would have been the Interest Period for such Revolving Loan),
over (ii) the amount of interest which would accrue on such principal amount for such period at the interest rate which such
Lender would bid were it to bid, at the commencement of such period, for deposits in the applicable currency of a comparable
amount and period from other banks in the Eurodollar market or the Canadian market for bankers’ acceptances, as
applicable; it being understood that such loss, cost or expense shall in any case exclude any interest rate floor and all
administrative, processing or similar fees. A certificate of any Lender (i) setting forth any amount or amounts that
such Lender is entitled to receive pursuant to this Section 2.16, the basis therefor and, in reasonable detail, the
manner in which such amount or amounts were determined and (ii) certifying that such Lender is generally charging the
relevant amounts to similarly situated borrowers shall be delivered to the Lead Borrower and shall be conclusive absent
manifest error. The Lead Borrower shall pay such Lender the amount shown as due on any such certificate within 30 days
after receipt thereof.
Section 2.17
Taxes.
(a)
Any and all payments by or on account of any obligation of any Loan Party under any Loan Document shall be made free and
clear of and without deduction for any Taxes, except as required by applicable Requirements of Law. If any applicable Requirements
of Law require the deduction or withholding of any Tax from any such payment, then (i) if such Tax is an Indemnified Tax and/or
Other Tax, the amount payable by the applicable Loan Party shall be increased as necessary so that after all required deductions
and withholdings have been made (including deductions and withholdings applicable to additional sums payable under this Section
2.17), each Lender or, in the case of any payment made to the Administrative Agent for its own account, the Administrative
Agent, receives an amount equal to the sum it would have received had no such deductions or withholdings been made, (ii) the applicable
withholding agent shall make such deductions and (iii) the applicable withholding agent shall timely pay the full amount deducted
to the relevant Governmental Authority in accordance with applicable Requirements of Law.
(b)
In addition, and without duplication of other amounts payable by a Loan Party under this Section 2.17 the Loan Parties
shall pay any Other Taxes to the relevant Governmental Authority in accordance with applicable Requirements of Law.
(c) Each
Loan Party shall jointly and severally indemnify the Administrative Agent and each Lender within 30 days after receipt of the
certificate described in the succeeding sentence, for the full amount of any Indemnified Taxes or Other Taxes payable or paid
by the Administrative Agent or such Lender, as applicable (including Indemnified Taxes or Other Taxes imposed or asserted on
or attributable to amounts payable under this Section 2.17) (other than any penalties attributable to the gross
negligence, bad faith or willful misconduct of the Administrative Agent or such Lender), and, in each case, any reasonable
expenses arising therefrom or with respect thereto; provided that if such Loan Party reasonably believes that such Taxes were
not correctly or legally asserted, the Administrative Agent or such Lender, as applicable, will use reasonable efforts to
cooperate with such Loan Party to obtain a refund of such Taxes (which shall be repaid to such Loan Party in accordance with Section
2.17(h)) so long as such efforts would not, in the sole determination of the Administrative Agent or such Lender, result
in any additional out-of-pocket costs or expenses not reimbursed by such Loan Party or be otherwise materially
disadvantageous to the Administrative Agent or such Lender, as applicable. In connection with any request for reimbursement
under this Section 2.17(c), the relevant Lender or the Administrative Agent, as applicable, shall deliver a
certificate to the Lead Borrower (i) setting forth, in reasonable detail, the basis and calculation of the amount of the
relevant payment or liability and (ii) certifying that it is generally charging the relevant amounts to similarly situated
borrowers, which certificate shall be conclusive absent manifest error. Notwithstanding anything to the contrary contained in
this Section 2.17(c), the Loan Parties shall not be required to indemnify the Administrative Agent or any Lender
pursuant to this Section 2.17 for any Indemnified Taxes or Other Taxes, to the extent the Administrative Agent or such
Lender fails to notify the Lead Borrower of such possible indemnification claim within 180 days after the event; provided
further that, if the event is a 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.
(d)
Each Lender shall severally indemnify the Administrative Agent, within 30 days after demand therefor, for (i) any Indemnified
Taxes or Other Taxes imposed on or with respect to any payment under any Loan Document that is attributable to such Lender (but
only to the extent that no Loan Party has already indemnified the Administrative Agent for such Indemnified Taxes or Other Taxes
and without limiting the obligation of the Loan Parties to do so), (ii) any Taxes attributable to such Lender’s failure to
comply with the provisions of Section 9.05(c) relating to the maintenance of a Participant Register and (iii) any Excluded
Taxes attributable to such Lender that are payable or paid by the Administrative Agent in connection with any Loan Document and
any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed
or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any
Lender by the Administrative Agent shall be conclusive absent manifest error. Each Lender hereby authorizes the Administrative
Agent to set off and apply any and all amounts at any time owing to such Lender under any Loan Document or otherwise payable by
the Administrative Agent to any Lender under any Loan Document or otherwise payable by the Administrative Agent to any Lender from
any other source against any amount due to the Administrative Agent under this clause (d).
(e)
As soon as practicable after any payment of Indemnified Taxes or Other Taxes by any Loan Party to a Governmental Authority,
such Loan Party shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental
Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment that is reasonably
satisfactory to the Administrative Agent.
(f)
Status of Lenders.
(i) Any
Lender that is entitled to an exemption from or reduction of any withholding Tax with respect to any payments made under any
Loan Document shall deliver to the Lead Borrower and the Administrative Agent, at the time or times reasonably requested by
the Lead Borrower or the Administrative Agent, such properly completed and executed documentation as the Lead Borrower or the
Administrative Agent may reasonably request to permit such payments to be made without withholding or at a reduced rate of
withholding. In addition, any Lender, if reasonably requested by the Lead Borrower or the Administrative Agent, shall deliver
such other documentation prescribed by applicable Requirements of Law or reasonably requested by the Lead Borrower or the
Administrative Agent as will enable the Lead Borrower or the Administrative Agent to determine whether or not such Lender is
subject to backup withholding or information reporting requirements. Each Lender hereby authorizes the Administrative Agent
to deliver to the Lead Borrower and to any successor Administrative Agent any documentation provided to the Administrative
Agent pursuant to this Section 2.17(f).
(ii)
Without limiting the generality of the foregoing:
(A)
each Lender that is not a Foreign Lender shall deliver to the Lead Borrower and the Administrative Agent on or prior to
the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request
of the Lead Borrower or the Administrative Agent), two executed copies of IRS Form W-9 certifying that such Lender is exempt from
U.S. federal backup withholding tax;
(B)
each Foreign Lender, to the extent it is legally entitled to do so, shall deliver to the Lead Borrower and the Administrative
Agent on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter
upon the reasonable request of the Lead Borrower or the Administrative Agent), whichever of the following is applicable:
(1)
in the case of any Foreign Lender claiming the benefits of an income tax treaty to which the U.S. is a party, two executed
copies of IRS Form W-8BEN or IRS Form W-8BEN-E establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant
to such tax treaty;
(2)
two executed copies of IRS Form W-8ECI;
(3)
in the case of any Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 871(h) or
881(c) of the Code, (x) a certificate substantially in the form of Exhibit K-1 to the effect that such Foreign Lender is
not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of the
Lead Borrower within the meaning of Section 871(h)(3)(B) of the Code, or a “controlled foreign corporation” described
in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and (y) executed copies of IRS Form
W-8BEN or IRS Form W-8BEN-E; or
(4)
to the extent any Foreign Lender is not the beneficial owner, two executed copies of IRS Form W-8IMY, accompanied by IRS
Form W-8ECI, IRS Form W-8BEN, IRS Form W-8BEN-E, a U.S. Tax Compliance Certificate substantially in the form of Exhibit K-2
or Exhibit K-3, IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided
that if such Foreign Lender is a partnership and one or more partners of such Foreign Lender are claiming the portfolio interest
exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate substantially in the form of Exhibit K-4 on
behalf of each such partner;
(C) each
Foreign Lender that is not described in clause (B) above shall deliver to the Lead Borrower and the Administrative
Agent on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the reasonable request of the Lead Borrower or the Administrative Agent), two executed copies of an
applicable IRS Form W-8 certifying that it is not a U.S. person for U.S. federal income tax purposes (or two executed copies
of IRS Form W-9, if applicable);
(D)
each Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Lead Borrower and the Administrative
Agent on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter
upon the reasonable request of the Lead Borrower or the Administrative Agent), two executed copies of any other form prescribed
by applicable Requirements of Law as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax, duly completed,
together with such supplementary documentation as may be prescribed by applicable Requirements of Law to permit the Lead Borrower
or the Administrative Agent to determine the withholding or deduction required to be made; and
(E)
if a payment made to any Lender under any Loan Document would be subject to Tax imposed by FATCA if such Lender were to
fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of
the Code, as applicable), such Lender shall deliver to the Lead Borrower and the Administrative Agent at the time or times prescribed
by applicable Requirements of Law and at such time or times reasonably requested by the Lead Borrower or the Administrative Agent
such documentation as is prescribed by applicable Requirements of Law (including as prescribed by Section 1471(b)(3)(C)(i) of the
Code) and may be necessary for the Lead Borrower and the Administrative Agent to comply with their obligations under FATCA, to
determine whether such Lender has complied with such Lender’s obligations under FATCA, or to determine the amount, if any,
to deduct and withhold from such payment. Solely for purposes of this clause (E), “FATCA” shall include any
amendments made to FATCA after the date of this Agreement.
Each Lender agrees that if any form or
certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification,
provide such successor form, or promptly notify the Lead Borrower and the Administrative Agent in writing of its legal inability
to do so. Notwithstanding anything to the contrary in this Section 2.17(f), no Lender shall be required to provide any documentation
that such Lender is not legally eligible to deliver.
(g)
On or prior to the date on which the Administrative Agent becomes the Administrative Agent under this Agreement (and from
time to time thereafter upon the reasonable request of the Lead Borrower or if any form or certification it previously delivered
expires or becomes obsolete), the Administrative Agent will deliver to the Lead Borrower either (i) an executed copy of IRS Form
W-9, or (ii) (x) with respect to any amounts received on its own account, an executed copy of an applicable IRS Form W-8, and (y)
with respect to any amounts received for or on account of any Lender, an executed copy of IRS Form W-8 IMY certifying on Part I,
Part II and Part VI thereof that it is a U.S. branch that has agreed to be treated as a U.S. person for U.S. federal tax purposes
with respect to payments received by it from the Lead Borrower in its capacity as Administrative Agent, as applicable. The Administrative
Agent shall promptly notify the Lead Borrower at any time it determines that it is no longer in a position to provide the certification
described in the prior sentence.
(h) If
the Administrative Agent or any Lender determines, in its sole discretion exercised in good faith, that it has received a
refund of any Indemnified Taxes or Other Taxes as to which it has been indemnified by any Loan Party or with respect to which
such Loan Party has paid additional amounts pursuant to this Section 2.17, it shall pay over such refund to such Loan
Party (but only to the extent of indemnity payments made, or additional amounts paid, by such Loan Party under this Section
2.17 with respect to the Indemnified Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses
of the Administrative Agent or such Lender (including any Taxes imposed with respect to such refund), and without interest
(other than any interest paid by the relevant Governmental Authority with respect to such refund); provided that such
Loan Party, upon the request of the Administrative Agent or such Lender agrees to repay the amount paid over to such Loan
Party (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the
Administrative Agent or such Lender in the event the Administrative Agent or such Lender is required to repay such refund to
such Governmental Authority. Notwithstanding anything to the contrary in this paragraph (h), in no event shall the
Administrative Agent or any Lender be required to pay any amount to a Loan Party pursuant to this paragraph (h) to the extent
that the payment thereof would place the Administrative Agent or such Lender in a less favorable net after-Tax position than
the position that the Administrative Agent or such Lender would have been in if the Tax subject to indemnification had not
been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts giving rise to such
refund had never been paid. This Section 2.17 shall not be construed to require the Administrative Agent or any Lender
to make available its Tax returns (or any other information relating to its Taxes which it deems confidential) to the
relevant Loan Party or any other Person.
(i)
Survival. Each party’s obligations under this Section 2.17 shall survive the resignation or replacement
of the Administrative Agent or any assignment of rights by, or the replacement of, any Lender, the termination of the Commitments
and the repayment, satisfaction or discharge of all obligations under any Loan Document.
(j)
For purposes of this Section 2.17, the term “Lender” includes any Issuing Bank and any Swingline Lender.
Section 2.18
Payments Generally; Allocation of Proceeds; Sharing of Payments.
(a) Unless
otherwise specified, each Borrower shall make each payment required to be made by it hereunder (whether of principal,
interest, fees or reimbursement of LC Disbursements or of amounts payable under Section 2.15, 2.16 or 2.17,
or otherwise) prior to the time expressed hereunder or under such Loan Document (or, if no time is expressly required, by
2:00 p.m.) on the date when due, in immediately available funds, without set-off (except as otherwise provided in Section
2.17) or counterclaim. Any amounts received after such time on any date may, in the discretion of the Administrative
Agent, be deemed to have been received on the next succeeding Business Day and any applicable interest or fee shall continue
to accrue until deemed received. If any payment to be made by any Borrower shall come due on a day other than a Business Day,
payment shall be made on the next following Business Day, and such extension of time shall be reflected in computing interest
or fees, as the case may be. All such payments shall be made to the Administrative Agent to the applicable account designated
to the Lead Borrower by the Administrative Agent, except that payments to be made directly to the applicable Issuing Bank or
the Swingline Lender as expressly provided herein and except payments made pursuant to Sections 2.12(b)(ii) and 2.12(c)(ii), 2.15, 2.16 or 2.17
and 9.03 shall be made directly to the Persons entitled thereto. The Administrative Agent shall distribute any such
payments received by it for the account of any other Person to the appropriate recipient promptly following receipt thereof.
Each Lender agrees that in computing such Lender’s portion of any Borrowing to be made hereunder, the Administrative
Agent may, in its discretion, round such Lender’s percentage of such Borrowing to the next higher or lower whole dollar
amount. Unless other specified herein all payments (including accrued interest) hereunder shall be made in (x) Dollars, to
the extent the Revolving Loan or LC Disbursement with respect thereto was denominated in Dollars, (y) Canadian Dollars, to
the extent the Revolving Loan or LC Disbursement with respect thereto was denominated in Canadian Dollars, and (z) the
applicable Alternate Currency, to the extent the Revolving Loan or LC Disbursement with respect thereto was denominated in
such Alternate Currency. Any payment required to be made by the Administrative Agent hereunder shall be deemed to have been
made by the time required if the Administrative Agent shall, at or before such time, have taken the necessary steps to make
such payment in accordance with the regulations or operating procedures of the clearing or settlement system used by the
Administrative Agent to make such payment.
(b)
Application of Proceeds.
(i)
Subject in all respects to the provisions of the ABL Intercreditor Agreement, all proceeds of US Collateral received by
the Administrative Agent at any time when an Event of Default exists and all or any portion of the US Revolving Loans have been
accelerated hereunder pursuant to Section 7.01 or otherwise received in connection with any foreclosure on or other exercise of
remedies with respect to the US Collateral pursuant to the US Collateral Documents, shall, upon election by the Administrative
Agent or at the direction of the Required Lenders, be applied first, to the payment of all costs and expenses then due incurred
by the Administrative Agent in connection with any collection, sale or realization on US Collateral or otherwise in connection
with this Agreement, any other Loan Document or any of the US Secured Obligations, including all court costs and the fees and expenses
of agents and legal counsel, the repayment of all advances made by the Administrative Agent hereunder or under any other Loan Document
on behalf of any Loan Party and any other costs or expenses incurred in connection with the exercise of any right or remedy hereunder
or under any other Loan Document, second, on a pro rata basis, to pay any fees, indemnities or expense reimbursements then due
to the Administrative Agent (other than those covered in clause first above) or any Issuing Bank from the Borrowers constituting
US Secured Obligations, third, on a pro rata basis in accordance with the amounts of such US Secured Obligations owed to the Secured
Parties on the date of any such distribution, toward the payment of US Protective Advances and US Overadvances then due from the
Borrowers constituting US Secured Obligations, fourth, on a pro rata basis in accordance with the amounts of the US Secured Obligations
(other than any Secured Obligations incurred after the date hereof that are either junior in right of payment or are secured by
a Lien that is junior to the Liens securing the US Secured Obligations) (other than contingent indemnification obligations for
which no claim has yet been made) owed to the Secured Parties on the date of any such distribution, to the payment in full of (x)
the US Secured Obligations (other than US Secured Hedging Obligations and US Secured Banking Services Obligations) (including,
with respect to US LC Exposure, an amount to be paid to the Administrative Agent equal to 100% of the US LC Exposure (minus the
amount then on deposit in the US LC Collateral Account) on such date, to be held in the US LC Collateral Account as Cash collateral
for such Obligations), (y) Designated Hedging Obligations constituting US Secured Obligations in an amount not to exceed the US
Hedge Product Amount in an amount not to exceed the applicable Hedge Product Reserve and (z) US Secured Banking Services Obligations
in an amount not to exceed to the applicable Banking Services Reserve; provided that if any US Letter of Credit expires undrawn,
then any Cash collateral held to secure the related US LC Exposure shall be applied in accordance with this Section 2.18(b), beginning
with clause first above, fifth, on a pro rata basis, to the payment in full of Secured Hedging Obligations and Secured Banking
Services Obligations, in each case, constituting US Secured Obligations (other than those covered in clause fourth above), sixth,
in accordance with Section 2.18(b)(ii) below as if such proceeds of US Collateral were proceeds of Canadian Collateral thereunder,
and seventh, to, or at the direction of, the Lead Borrower or as a court of competent jurisdiction may otherwise direct.
(ii) Subject
in all respects to the provisions of the ABL Intercreditor Agreement (and any Applicable Intercreditor Agreement), if
applicable, all proceeds of Canadian Collateral received by the Administrative Agent at any time when an Event of Default
exists and all or any portion of the Canadian Revolving Loans have been accelerated hereunder pursuant to Section 7.01
or otherwise received in connection with any foreclosure on or other exercise of remedies with respect to the Canadian
Collateral pursuant to the Canadian Security Agreement, shall, upon election by the Administrative Agent or at the direction
of the Required Lenders, be applied first, to the payment of all costs and expenses then due incurred by the
Administrative Agent in connection with any collection, sale or realization on Canadian Collateral or otherwise in connection
with this Agreement, any other Loan Document or any of the Canadian Secured Obligations, including all court costs and the
fees and expenses of agents and legal counsel, the repayment of all advances made by the Administrative Agent hereunder or
under any other Loan Document on behalf of any Loan Party and any other costs or expenses incurred in connection with the
exercise of any right or remedy hereunder or under any other Loan Document, second, on a pro rata basis, to pay
any fees, indemnities or expense reimbursements then due to the Administrative Agent (other than those covered in clause
first above) or any Issuing Bank from the Borrowers constituting Canadian Secured Obligations, third, on a pro rata
basis in accordance with the amounts of such Canadian Secured Obligations owed to the Secured Parties on the date of any
such distribution, toward the payment of Canadian Protective Advances and Canadian Overadvances then due from the Borrowers
constituting Canadian Secured Obligations; fourth, on a pro rata basis in accordance with the amounts of the
Canadian Secured Obligations (other than contingent indemnification obligations for which no claim has yet been made) owed to
the Secured Parties on the date of any such distribution, to the payment in full of (x) the Canadian Secured Obligations
(other than Canadian Secured Hedging Obligations and Canadian Secured Banking Services Obligations) (including, with respect
to Canadian LC Exposure, an amount to be paid to the Administrative Agent equal to 100% of the Canadian LC Exposure (minus
the amount then on deposit in the Canadian LC Collateral Account) on such date, to be held in the Canadian LC Collateral
Account as Cash collateral for such Obligations), (y) Designated Hedging Obligations constituting Canadian Secured
Obligations in an amount not to exceed the applicable Hedge Product Reserve and (z) Canadian Secured Banking Services
Obligations in an amount not to exceed the applicable Banking Services Reserve; provided that if any Canadian Letter of
Credit expires undrawn, then any Cash collateral held to secure the related Canadian LC Exposure shall be applied in
accordance with this Section 2.18(b), beginning with clause first above, fifth, on a pro rata basis, to
the payment in full of Secured Hedging Obligations and Secured Banking Services Obligations, in each case, constituting
Canadian Secured Obligations (other than those covered in clause fourth above) and sixth, to, or at the direction of,
the Lead Borrower or as a court of competent jurisdiction may otherwise direct.
(c) If
any Lender obtains payment (whether voluntary, involuntary, through the exercise of any right of set-off or otherwise) in
respect of any principal of or interest on any of its Revolving Loans or participations in LC Disbursements of any Class
resulting in such Lender receiving payment of a greater proportion of the aggregate amount of its Revolving Loans or
participations in LC Disbursements of such Class and accrued interest thereon than the proportion received by any other
Lender with Revolving Loans or participations in LC Disbursements of such Class, then the Lender receiving such greater
proportion shall purchase (for Cash at face value) participations in the Revolving Loans or participations in LC
Disbursements of such Class at such time outstanding to the extent necessary so that the benefit of all such payments shall
be shared by the Lenders of such Class ratably in accordance with the aggregate amount of principal of and accrued interest
on their respective Revolving Loans or participations in LC Disbursements of such Class; provided that (i) if any such
participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations
shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and (ii) the provisions
of this paragraph shall not apply to (x) any payment made by any Borrower pursuant to and in accordance with the express
terms of this Agreement or (y) any payment obtained by any Lender as consideration for the assignment of or sale of a
participation in any of its Revolving Loans to any permitted assignee or participant, including any payment made or deemed
made in connection with Sections 2.22 or 2.23. If any Lender obtains payment (whether voluntary,
involuntary, through exercise of any right of set-off or otherwise) in respect of any principal of or interest on any of its
Revolving Loans or participation in LC Disbursements of any Class that is junior in right of payment to any other Class of
Revolving Loans or participation in LC Disbursements that has not been repaid in full, such Lender shall promptly remit such
payment to the Administrative Agent for application is accordance with clause (b). Each Borrower consents to the
foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation
pursuant to the foregoing arrangements may exercise against such Borrower rights of set-off and counterclaim with respect to
such participation as fully as if such Lender were a direct creditor of such Borrower in the amount of such participation.
The Administrative Agent will keep records (which shall be conclusive and binding in the absence of manifest error) of
participations purchased under this Section 2.18(c) and will, in each case, notify the Lenders following any such
purchases or repayments. Each Lender that purchases a participation pursuant to this Section 2.18(c) shall from and
after such purchase have the right to give all notices, requests, demands, directions and other communications under this
Agreement with respect to the portion of the Obligations purchased to the same extent as though the purchasing Lender were
the original owner of the Obligations purchased.
(d)
Unless the Administrative Agent has received notice from any Borrower prior to the date on which any payment is due to the
Administrative Agent for the account of any Lender or any Issuing Bank hereunder that such Borrower will not make such payment,
the Administrative Agent may assume that such Borrower has made such payment on such date in accordance herewith and may, in reliance
upon such assumption, distribute to the applicable Lender or Issuing Bank the amount due. In such event, if the applicable Borrower
has not in fact made such payment, then each Lender or the applicable Issuing Bank severally agrees to repay to the Administrative
Agent forthwith on demand the amount so distributed to such Lender or such Issuing Bank with interest thereon, for each day from
and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the
greater of the Federal Funds Effective Rate (or (A) in the case of any Letter of Credit issued on account of the Canadian Borrower
denominated in Canadian Dollars, the Canadian Prime Rate, and (B) in the case of any Letter of Credit denominated in any Alternate
Currency, the Administrative Agent’s customary rate for interbank advances in the Alternate Currency in which such Letter
of Credit is denominated) and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank
compensation.
(e)
If any Lender fails to make any payment required to be made by it pursuant to Section 2.07(b) or Section 2.18(d),
then the Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof), apply any amounts thereafter
received by the Administrative Agent for the account of such Lender to satisfy such Lender’s obligations under such Sections
until all such unsatisfied obligations are fully paid.
Section 2.19
Mitigation Obligations; Replacement of Lenders.
(a)
If any Lender requests compensation under Section 2.15 or such Lender determines it can no longer make or maintain
LIBO Rate Revolving Loans or CDOR Revolving Loans pursuant to Section 2.20, or any Borrower is required to pay any additional
amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.17, then such Lender
shall use reasonable efforts to designate a different lending office for funding or booking its Revolving Loans hereunder or its
participations in any Letter of Credit affected by such event, or to assign its rights and obligations hereunder to another of
its offices, branches or affiliates, if, in the reasonable judgment of such Lender, such designation or assignment (i) would eliminate
or reduce amounts payable pursuant to Section 2.15 or 2.17, as applicable, in the future or mitigate the impact of
Section 2.20, as the case may be, and (ii) would not subject such Lender to any material unreimbursed out-of-pocket
cost or expense and would not otherwise be disadvantageous to such Lender in any material respect. The applicable Borrower hereby
agrees to pay all reasonable out-of-pocket costs and expenses incurred by any Lender in connection with any such designation or
assignment.
(b)
If (i) any Lender requests compensation under Section 2.15 or such Lender determines it can no longer make or maintain
LIBO Rate Revolving Loans or CDOR Revolving Loans pursuant to Section 2.20, (ii) any Borrower is required to pay any additional
amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.17, (iii) any Lender
is a Defaulting Lender or (iv) in connection with any proposed amendment, waiver or consent requiring the consent of “each
Lender” or “each Lender directly affected thereby” (or any other Class or group of Lenders other than the Required
Lenders) with respect to which Required Lender consent (or the consent of Lenders holding loans or commitments of such Class or
lesser group representing more than 50% of the sum of the total loans and unused commitments of such Class or lesser group at such
time) has been obtained, as applicable, any Lender is a non-consenting Lender (each such Lender described in this clause (iv),
a “Non-Consenting Lender”), then the Lead Borrower may, at its sole expense and effort, upon notice to such
Lender and the Administrative Agent, (x) terminate the applicable Commitments and/or Additional Revolving Commitments of such
Lender, and repay all Obligations of the Borrowers owing to such Lender relating to the applicable Revolving Loans and participations
held by such Lender as of such termination date or (y) replace such Lender by requiring such Lender to assign and delegate (and
such Lender shall be obligated to assign and delegate), without recourse (in accordance with and subject to the restrictions contained
in Section 9.05), all of its interests, rights and obligations under this Agreement to an Eligible Assignee that shall
assume such obligations (which Eligible Assignee may be another Lender, if any Lender accepts such assignment); provided
that (A) such Lender shall have received payment of an amount equal to the outstanding principal amount of its Revolving Loans
and, if applicable, participations in LC Disbursements, in each case of such Class of Revolving Loans, Commitments and/or Additional
Revolving Commitments, accrued interest thereon, accrued fees and all other amounts payable to it under any Loan Document with
respect to such Class of Revolving Loans, Commitments and/or Additional Revolving Commitments, (B) in the case of any assignment
resulting from a claim for compensation under Section 2.15 or payments required to be made pursuant to Section 2.17,
such assignment will result in a reduction in such compensation or payments and (C) such assignment does not conflict with applicable
law. No Lender (other than a Defaulting Lender) shall be required to make any such assignment and delegation, and the Borrowers
may not repay the Obligations of such Lender or terminate its Commitments or Additional Revolving Commitments, if, prior thereto,
as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrowers to require such assignment and delegation
cease to apply. Each Lender agrees that if it is replaced pursuant to this Section 2.19, it shall execute and deliver to
the Administrative Agent an Assignment and Assumption to evidence such sale and purchase and shall deliver to the Administrative
Agent any Promissory Note (if the assigning Lender’s Revolving Loans are evidenced by one or more Promissory Notes) subject
to such Assignment and Assumption (provided that the failure of any Lender replaced pursuant to this Section 2.19
to execute an Assignment and Assumption or deliver any such Promissory Note shall not render such sale and purchase (and the corresponding
assignment) invalid), such assignment shall be recorded in the Register, any such Promissory Note shall be deemed cancelled. Each
Lender hereby irrevocably appoints the Administrative Agent (such appointment being coupled with an interest) as such Lender’s
attorney-in-fact, with full authority in the place and stead of such Lender and in the name of such Lender, from time to time in
the Administrative Agent’s discretion, with prior written notice to such Lender, to take any action and to execute any such
Assignment and Assumption or other instrument that the Administrative Agent may deem reasonably necessary to carry out the provisions
of this clause (b).
Section 2.20 Illegality.
If any Lender reasonably determines that any Change in Law has made it unlawful, or that any Governmental Authority has
asserted after the Closing Date that it is unlawful, for such Lender or its applicable lending office to make, maintain or
fund Revolving Loans whose interest is determined by reference to the Published LIBO Rate or the CDOR Rate, or to determine
or charge interest rates based upon the Published LIBO Rate or the CDOR Rate, or any Governmental Authority has imposed
material restrictions on the Canadian market for bankers’ acceptances or on the authority of such Lender to purchase or
sell, or to take deposits of Dollars in the applicable interbank market, then, on notice thereof by such Lender to the Lead
Borrower through the Administrative Agent, (i) any obligation of such Lender to make or continue LIBO Rate Revolving Loans in
Dollars or any Alternate Currency or to convert ABR Revolving Loans or Canadian Base Rate Revolving Loans to LIBO Rate
Revolving Loans shall be suspended, (ii) any obligation of such Lender to make or continue CDOR Revolving Loans in Canadian
Dollars or to convert Canadian Prime Rate Revolving Loans to CDOR Revolving Loans shall be suspended, (iii) if such notice
asserts the illegality of such Lender making or maintaining ABR Revolving Loans or Canadian Base Rate Revolving Loans the
interest rate on which is determined by reference to the Published LIBO Rate component of the Alternate Base Rate or the
Canadian Base Rate, the interest rate on which ABR Revolving Loans or Canadian Base Rate Revolving Loans of such Lender,
shall, if necessary to avoid such illegality, be determined by the Administrative Agent without reference to the Published
LIBO Rate component of the Alternate Base Rate or the Canadian Base Rate, in each case until such Lender notifies the
Administrative Agent and the Lead Borrower that the circumstances giving rise to such determination no longer exist (which
notice such Lender agrees to give promptly) and (iv) if such notice asserts the illegality of such Lender making or
maintaining Canadian Prime Rate Revolving Loans the interest rate on which is determined by reference to the CDOR Rate
component of the Canadian Prime Rate, the interest rate on such Lender’s Canadian Prime Rate Revolving Loans, shall, if
necessary to avoid such illegality, be determined by the Administrative Agent without reference to the CDOR Rate component of
the Canadian Prime Rate, in each case until such Lender notifies the Administrative Agent and the Lead Borrower that the
circumstances giving rise to such determination no longer exist (which notice such Lender agrees to give promptly).
Upon receipt of such notice, (x) the Lead Borrower shall, upon demand from such Lender (with a copy to the Administrative
Agent), (1) if applicable and such Revolving Loans are denominated in Dollars, prepay or convert all of such Lender’s
LIBO Rate Revolving Loans to ABR Revolving Loans or Canadian Base Rate Revolving Loans, as applicable (the interest rate on
which ABR Revolving Loans or Canadian Base Rate Revolving Loans of such Lender shall, if necessary to avoid such illegality,
be determined by the Administrative Agent without reference to the Published LIBO Rate component of the Alternate Base Rate
or Canadian Base Rate, as applicable), (2) if applicable and the relevant Revolving Loans are denominated in Canadian
Dollars, convert all of such Lender’s CDOR Revolving Loans to Canadian Prime Rate Revolving Loans (the interest rate on
which Canadian Prime Rate Revolving Loans of such Lender shall, if necessary to avoid such illegality, be determined by the
Administrative Agent without reference to the CDOR Rate component of the Canadian Prime Rate) or (3) if applicable and such
Revolving Loans are denominated in any Alternate Currency, convert such Revolving Loans to Revolving Loans bearing interest
at an alternative rate mutually acceptable to the Lead Borrower and such Lender, in each case, either on the last day of the
Interest Period therefor, if such Lender may lawfully continue to maintain such LIBO Rate Revolving Loans to such day, or
immediately, if such Lender may not lawfully continue to maintain such LIBO Rate Revolving Loans (in which case the
applicable Borrower shall not be required to make payments pursuant to Section 2.16 in connection with such payment)
and (y) if such notice asserts the illegality of such Lender determining or charging interest rates based upon the
Published LIBO Rate or the CDOR Rate, the Administrative Agent shall during the period of such suspension compute the
Alternate Base Rate, the Canadian Base Rate and the Canadian Prime Rate applicable to such Lender without reference to the
Published LIBO Rate or CDOR Rate component thereof until the Administrative Agent is advised in writing by such Lender that
it is no longer illegal for such Lender to determine or charge interest rates based upon the Published LIBO Rate or CDOR
Rate. Upon any such prepayment or conversion, the applicable Borrower shall also pay accrued interest on the amount so
prepaid or converted. Each Lender agrees to designate a different lending office if such designation will avoid the
need for such notice and will not, in the determination of such Lender, otherwise be materially disadvantageous to such
Lender.
Section 2.21
Defaulting Lenders. Notwithstanding any provision of this Agreement to the contrary, if any Lender becomes a Defaulting
Lender, then the following provisions shall apply for so long as such Lender is a Defaulting Lender:
(a)
Fees shall cease to accrue on the unfunded portion of any Commitment of such Defaulting Lender pursuant to Section 2.12(a)
and, subject to clause (d)(iv) below, on the participation of such Defaulting Lender in Letters of Credit pursuant to Section
2.12(b), or 2.12(c) and pursuant to any other provisions of this Agreement or other Loan Document.
(b)
The Commitments and the Revolving Credit Exposure of such Defaulting Lender shall not be included in determining whether
all Lenders, each affected Lender, the Required Lenders, or such other number of Lenders as may be required hereby or under any
other Loan Document have taken or may take any action hereunder (including any consent to any waiver, amendment or modification
pursuant to Section 9.02); provided that any waiver, amendment or modification requiring the consent of all Lenders
or each affected Lender which affects such Defaulting Lender disproportionately and adversely relative to other affected Lenders
shall require the consent of such Defaulting Lender.
(c)
Any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of any Defaulting
Lender (whether voluntary or mandatory, at maturity, pursuant to Section 2.11, Section 2.15, Section 2.16,
Section 2.17, Section 2.18, Article 7, Section 9.05 or otherwise, and including any amounts made
available to the Administrative Agent by such Defaulting Lender pursuant to Section 9.09), shall be applied at such time
or times as may be determined by the Administrative Agent and, where relevant, the Lead Borrower as follows: first, to the
payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder; second, to the payment on
a pro rata basis of any amounts owing by such Defaulting Lender to any applicable Issuing Bank or Swingline Lender hereunder;
third, if so reasonably determined by the Administrative Agent or reasonably requested by the applicable Issuing Bank, to
be held as Cash collateral for future funding obligations of such Defaulting Lender in respect of any participation in any Letter
of Credit; fourth, so long as no Default or Event of Default exists as the Lead Borrower may request, to the funding of
any Revolving Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement;
fifth, as the Administrative Agent or the Lead Borrower may elect, to be held in a deposit account and released in order
to satisfy obligations of such Defaulting Lender to fund Revolving Loans that such Defaulting Lender has committed to fund (if
any) under this Agreement; sixth, to the payment of any amounts owing to the non-Defaulting Lenders, Issuing Banks or Swingline
Lenders as a result of any judgment of a court of competent jurisdiction obtained by any non-Defaulting Lender, any Issuing Bank
against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; seventh,
to the payment of any amounts owing to the Lead Borrower as a result of any judgment of a court of competent jurisdiction obtained
by the Lead Borrower against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under
this Agreement; and eighth, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided
that if (x) such payment is a payment of the principal amount of any Revolving Loan or LC Exposure in respect of which such Defaulting
Lender has not fully funded its appropriate share and (y) such Revolving Loan or LC Exposure was made or created, as applicable,
at a time when the conditions set forth in Section 4.02 were satisfied or waived, such payment shall be applied solely
to pay the Revolving Loans of, and LC Exposure owed to, all non-Defaulting Lenders on a pro rata basis prior to being applied
to the payment of any Revolving Loans of, or LC Exposure owed to, such Defaulting Lender. Any payments, prepayments or other amounts
paid or payable to any Defaulting Lender that are applied (or held) to pay amounts owed by any Defaulting Lender or to post Cash
collateral pursuant to this Section 2.21(c) shall be deemed paid to and redirected by such Defaulting Lender, and each Lender
irrevocably consents hereto.
(d)
If any LC Exposure or Swingline Exposure exists at the time any Lender becomes a Defaulting Lender then:
(i)
all or any part of the LC Exposure or the Swingline Exposure of such Defaulting Lender shall be reallocated among the non-Defaulting
Lenders of the applicable class in accordance with their respective Applicable Percentages of such class but only to the extent
(A) the sum of all non-Defaulting Lenders’ Revolving Credit Exposures of any Class does not exceed the total of all non-Defaulting
Lenders’ Commitments in respect of such Class and (B) the Revolving Credit Exposure of any non-Defaulting Lender with respect
to any Class does not exceed such non-Defaulting Lender’s Commitment in respect of such Class;
(ii)
if the reallocation described in clause (i) above cannot, or can only partially, be effected, the Lead Borrower shall,
without prejudice to any other right or remedy available to it hereunder or under law, within two Business Days following notice
by the Administrative Agent, (x) first, prepay such Swingline Loans and (y) second, Cash collateralize 100% of such
Defaulting Lender’s LC Exposure (after giving effect to any partial reallocation pursuant to paragraph (i) above and
any Cash collateral provided by such Defaulting Lender or pursuant to Section 2.21(c) above) or make other arrangements
reasonably satisfactory to the Administrative Agent and to the applicable Issuing Bank with respect to such LC Exposure and obligations
to fund participations. Cash collateral (or the appropriate portion thereof) provided to reduce LC Exposure or other obligations
shall be released promptly following (A) the elimination of the applicable LC Exposure or other obligations giving rise thereto
(including by the termination of the Defaulting Lender status of the applicable Lender (or, as appropriate, its assignee following
compliance with Section 2.19)) or (B) the Administrative Agent’s good faith determination that there exists excess
Cash collateral (including as a result of any subsequent reallocation of LC Exposure among non-Defaulting Lenders described in
clause (i) above);
(iii)
(A) if the LC Exposure of the non-Defaulting Lenders of any Class is reallocated pursuant to this Section 2.21(d),
then the fees payable to the Lenders of such Class pursuant to Sections 2.12(a) and (b), as the case may be, shall
be adjusted to give effect to such reallocation and (B) if the LC Exposure of any Defaulting Lender of any Class is Cash collateralized
pursuant to this Section 2.21(d), then, without prejudice to any rights or remedies of the applicable Issuing Bank, any
Lender in respect of such Class or any Borrower hereunder, no letter of credit fee shall be payable under Section 2.12(b)
with respect to such Defaulting Lender’s LC Exposure in respect of such Class; and
(iv)
if any Defaulting Lender’s LC Exposure in respect of any Class is not Cash collateralized, prepaid or reallocated
pursuant to this Section 2.21(d), then, without prejudice to any rights or remedies of the applicable Issuing Bank or any
Lender hereunder, all letter of credit fees payable under Section 2.12(b) with respect to such Defaulting Lender’s
LC Exposure of such Class shall be payable to the applicable Issuing Bank until such Defaulting Lender’s LC Exposure in respect
of such Class is Cash collateralized or reallocated.
(e)
So long as any Lender of any Class is a Defaulting Lender, no Issuing Bank shall be required to issue, extend, create, incur,
amend or increase any Letter of Credit unless it is reasonably satisfied that the related exposure will be 100% covered by the
Commitments of the non-Defaulting Lenders of such Class, Cash collateral provided pursuant to Section 2.21(c) and/or Cash
collateral provided by the applicable Borrower in accordance with Section 2.21(d), and participating interests in any such
or newly issued, extended or created Letter of Credit shall be allocated among non-Defaulting Lenders of the relevant Class in
a manner consistent with Section 2.21(d)(i) (it being understood that Defaulting Lenders shall not participate therein).
(f) In
the event that the Administrative Agent, the Lead Borrower, the Issuing Bank and Swingline Lender agree that any Defaulting
Lender has adequately remedied all matters that caused such Lender to be a Defaulting Lender, then the Applicable Percentage
of LC Exposure and Swingline Exposure of the Lenders of the relevant Class shall be readjusted to reflect the inclusion of
such Lender’s Commitment, and on such date such Lender shall purchase at par such of the Revolving Loans of the other
Lenders or participations in Revolving Loans of such Class as the Administrative Agent shall determine as are necessary in
order for such Lender to hold such Revolving Loans or participations in accordance with its Applicable Percentage.
Notwithstanding the fact that any Defaulting Lender has adequately remedied all matters that caused such Lender to be a
Defaulting Lender, (x) no adjustments will be made retroactively with respect to fees accrued or payments made by or on
behalf of the applicable Borrower while such Lender was a Defaulting Lender and (y) except to the extent otherwise
expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or
release of any claim of any party hereunder arising from such Lender’s having been a Defaulting Lender.
Section 2.22
Incremental Credit Extensions.
(a)
The Lead Borrower may, at any time, on one or more occasions deliver a written request to the Administrative Agent (whereupon
the Administrative Agent shall promptly deliver a copy of such request to each of the Lenders) pursuant to an Incremental Revolving
Facility Amendment to increase the aggregate amount of Commitments of any existing Class of Commitments (any such increase, an
“Incremental Revolving Facility” and the loans thereunder, “Incremental Revolving Loans”)
in an aggregate principal amount not to exceed the Incremental Cap; provided that:
(i)
no Incremental Revolving Commitment may be less than $5,000,000,
(ii)
except as separately agreed from time to time between the Lead Borrower and any Lender, no Lender shall be obligated to
provide any Incremental Revolving Commitment, and the determination to provide such commitments shall be within the sole and absolute
discretion of such Lender;
(iii)
no Incremental Revolving Facility or Incremental Revolving Loan (or the creation, provision or implementation thereof) shall
require the approval of any existing Lender (other than in its capacity, if any, as a Lender providing all or part of any Incremental
Revolving Commitment or Incremental Revolving Loan), the Administrative Agent (unless its rights and interests are adversely affected
in any material respect) or any other agent or arranger;
(iv)
the terms of each Incremental Revolving Facility will be substantially identical to those applicable to the Revolving Facility
(other than with respect to any upfront fees, original issue discount or similar fees);
(v)
except as otherwise agreed by the lenders providing the relevant Incremental Revolving Facility in connection with any acquisition,
investments and repayments, repurchases and redemptions of indebtedness not prohibited by the terms of this Agreement, (A) no Event
of Default shall exist immediately prior to or after giving effect to such Incremental Revolving Facility and (B) the representations
and warranties of the Loan Parties set forth in this Agreement and the other Loan Documents shall be true and correct in all material
respects on and as of the date of the initial Borrowing under such Incremental Revolving Facility with the same effect as though
such representations and warranties had been made on and as of such date; provided that to the extent that any representation
and warranty specifically refers to a given date or period, it shall be true and correct in all material respects as of such date
or for such period; provided, further, that any representation or warranty that is qualified as to “materiality,”
“Material Adverse Effect” or similar language shall be true and correct (after giving effect to any qualification therein)
in all respects on such respective dates;
(vi)
the proceeds of any Incremental Revolving Facility may be used for working capital, general corporate purposes and any
other purpose not prohibited by this Agreement; and
(vii)
at no time shall there be more than three separate Maturity Dates in effect with respect to Incremental Revolving Facilities
and any other Additional Revolving Facility at any time.
(b)
Incremental Revolving Commitments may be provided by any existing Lender, or by any other lender (other than any Disqualified
Institution) who would be permitted to become a Lender (including any required consents) under Section 9.05(b) (any such
other lender being called an “Additional Revolving Lender”); provided that the Administrative Agent and
any Issuing Bank shall have consented (such consent not to be unreasonably withheld or delayed) to the relevant Additional Revolving
Lender’s provision of Incremental Revolving Commitments if such consent would be required under Section 9.05(b) for
an assignment of Revolving Loans to such Additional Revolving Lender.
(c)
Each Lender or Additional Revolving Lender providing a portion of any Incremental Revolving Commitment shall execute and
deliver to the Administrative Agent and the Lead Borrower all such documentation (including the relevant Incremental Revolving
Facility Amendment or an amendment to any other Loan Document) as may be reasonably required by the Administrative Agent to evidence
and effectuate such Incremental Revolving Commitment. On the effective date of such Incremental Revolving Commitment, each Additional
Revolving Lender shall become a Lender for all purposes in connection with this Agreement.
(d)
As a condition precedent to the effectiveness of any Incremental Revolving Facility or the making of any Incremental Revolving
Loans, (i) upon its reasonable request, the Administrative Agent shall have received customary written opinions of counsel,
as well as such reaffirmation agreements, supplements and/or amendments as it shall reasonably require, (ii) the Administrative
Agent shall have received, from each Additional Revolving Lender, an administrative questionnaire, provided to such Additional
Revolving Lender by the Administrative Agent (the “Administrative Questionnaire”) and such other documents as
it shall reasonably and customarily require from such Additional Revolving Lender, (iii) the Administrative Agent and Lenders
shall have received all fees required to be paid in respect of such Incremental Revolving Facility or Incremental Revolving Loans
and (iv) the Administrative Agent shall have received a certificate of the applicable Borrower signed by a Responsible Officer
thereof:
(A)
certifying and attaching a copy of the resolutions adopted by the governing body of the applicable Borrower approving or
consenting to such Incremental Revolving Facility or Incremental Revolving Loans, and
(B)
to the extent applicable, certifying that the condition set forth in clause (a)(v) above has been satisfied.
(e) (i)
Each Lender of the applicable Class immediately prior to such increase will automatically and without further act be deemed
to have assigned to each relevant Incremental Revolving Lender, and each relevant Incremental Revolving Lender will
automatically and without further act be deemed to have assumed a portion of such Lender’s participations hereunder in
outstanding US Letters of Credit and/or Canadian Letters of Credit and Swingline Loans, as applicable, such that, after
giving effect to each deemed assignment and assumption of participations, all of the Lenders’ (including each
Incremental Revolving Lender) participations hereunder in US Letters of Credit and/or Canadian Letters of Credit and
Swingline Loans, as applicable, shall be held on a pro rata basis on the basis of their respective Commitments of the
applicable class (after giving effect to any increase in the Commitment pursuant to Section 2.22) and (ii) the
existing Lenders of the applicable Class shall assign Revolving Loans to certain other Lenders of such Class (including the
Lenders providing the relevant Incremental Revolving Facility), and such other Lenders (including the Lenders providing the
relevant Incremental Revolving Facility) shall purchase such Revolving Loans, in each case to the extent necessary so that
all of the Lenders of such Class participate in each outstanding borrowing of Revolving Loans pro rata on the basis of
their respective Commitments of such Class (after giving effect to any increase in the Commitment pursuant to this Section
2.22); it being understood and agreed that the minimum borrowing, pro rata borrowing and pro rata payment
requirements contained elsewhere in this Agreement shall not apply to the transactions effected pursuant to this clause (e).
(f)
The Lenders hereby irrevocably authorize such amendments to this Agreement and the other Loan Documents as may be necessary
in order to establish new tranches or sub-tranches or to maintain a single tranche in respect of Revolving Loans or commitments
increased or extended pursuant to this Section 2.22 and authorize the Administrative Agent and the Lead Borrower to enter
into such technical amendments as may be necessary or appropriate in the reasonable opinion of the Administrative Agent and the
Lead Borrower in connection with the establishment of such new tranches or sub-tranches or the maintaining of such single tranche,
in each case on terms consistent with this Section 2.22.
(g)
Notwithstanding anything to the contrary in this Section 2.22 or in any other provision of any Loan Document, if
the proceeds on the date of effectiveness of any Incremental Revolving Facility are intended to be applied to finance an acquisition
and the Lenders or Additional Revolving Lenders providing such Incremental Revolving Facility so agree, the availability thereof
shall be subject to customary “SunGard” or “certain funds” conditionality.
(h)
This Section 2.22 shall supersede any provision in Section 2.18 or 9.02 to the contrary and shall,
to extent applicable, be subject in all respects to Section 1.11.
Section 2.23
Extensions of Revolving Loans and Additional Revolving Commitments.
(a)
Notwithstanding anything to the contrary in this Agreement, pursuant to one or more offers (each, an “Extension
Offer”) made from time to time by the applicable Borrower or Borrowers to all Lenders holding Revolving Loans or Commitments
of any Class or Classes (as determined by the Lead Borrower), in each case on a pro rata basis (based on the aggregate outstanding
principal amount of the respective Revolving Loans or Commitments with respect to each such Class) and on the same terms to each
such Lender, the Borrowers are hereby permitted from time to time to consummate transactions with any individual Lender who accepts
the terms contained in any such Extension Offer to extend the Maturity Date of such Lender’s Revolving Loans and/or commitments
and otherwise modify the terms of such Revolving Loans and/or commitments pursuant to the terms of the relevant Extension Offer
(including by increasing the interest rate or fees payable in respect of such Revolving Loans and/or commitments (and related outstandings)
and/or modifying the amortization schedule in respect of such Revolving Loans) (each, an “Extension”, and each
group of Revolving Loans or commitments, as applicable, in each case as so extended, as well as the original Revolving Loans and
the original commitments (in each case not so extended), being a “tranche”; any Extended Revolving Credit Commitments
shall constitute a separate tranche of revolving commitments from the tranche of revolving commitments from which they were converted),
so long as the following terms are satisfied:
(i) except
as to (x) interest rates, fees and final maturity (which shall be determined by the applicable Borrower and any Lender
who agrees to an Extension and set forth in the relevant Extension Offer), (y) terms applicable to such Extended
Revolving Credit Commitments or Extended Revolving Loans (each as defined below) that are more favorable to the lenders or
the agent of such Extended Revolving Credit Commitments or Extended Revolving Loans than those contained in the Loan
Documents and are then conformed (or added) to the Loan Documents for the benefit of the Revolving Lenders or, as applicable,
the Administrative Agent (i.e. by conforming or adding a term to the then outstanding Revolving Loans pursuant to the
applicable Extension Amendment) and (z) any covenants or other provisions applicable only to periods after the Latest
Maturity Date (in each case, as of the date of such Extension), the commitment of any Lender that agrees to an Extension (an
“Extended Revolving Credit Commitment”; and the Revolving Loans thereunder, “Extended Revolving
Loans”; and each Class of Extended Revolving Credit Commitments, an “Extended Revolving
Facility”), and the related outstandings, shall be a revolving commitment (or related outstandings, as the case may
be) with the same terms (or terms not less favorable to existing Lenders) as the original revolving commitments (and related
outstandings) provided hereunder; provided that (x) to the extent any non-extended portion of any Additional
Revolving Facility then exists, (1) the borrowing and repayment (except for (A) payments of interest and fees at
different rates on such revolving facilities (and related outstandings), (B) repayments required upon the Maturity Date
of such revolving facilities and (C) repayments made in connection with any permanent repayment and termination of
commitments (subject to clause (3) below)) of Extended Revolving Loans after the effective date of such Extended
Revolving Credit Commitments shall be made on a pro rata basis with such portion of the relevant Additional Revolving
Facility, (2) all swingline loans and letters of credit made or issued, as applicable, under any Extended Revolving Credit
Commitment shall be participated on a pro rata basis by all Lenders and (3) the permanent repayment of Revolving Loans
with respect to, and termination of commitments under, any such Extended Revolving Credit Commitment after the effective date
of such Extended Revolving Credit Commitments shall be made on a pro rata basis with such portion of any Additional
Revolving Facility, except that the applicable Borrower shall be permitted to permanently repay and terminate commitments of
any such revolving facility on a greater than pro rata basis as compared with any other revolving facility with a
later Maturity Date than such revolving facility and (y) at no time shall there be more than three separate Classes of
revolving commitments hereunder (including Incremental Revolving Commitments and Extended Revolving Credit Commitments);
(ii)
no Extended Revolving Credit Commitments or Extended Revolving Loans shall have a final maturity date earlier than (or require
commitment reductions prior to) the then applicable Latest Maturity Date;
(iii)
if the aggregate principal amount of Revolving Loans or commitments, as the case may be, in respect of which Lenders shall
have accepted the relevant Extension Offer exceeds the maximum aggregate principal amount of Revolving Loans or commitments, as
the case may be, offered to be extended by the applicable Borrower pursuant to such Extension Offer, then the Revolving Loans or
commitments, as the case may be, of such Lenders shall be extended ratably up to such maximum amount based on the respective principal
amounts (but not to exceed actual holdings of record) with respect to which such Lenders have accepted such Extension Offer;
(iv)
each Extension shall be in a minimum amount of $5,000,000;
(v)
any applicable Minimum Extension Condition shall be satisfied or waived by the applicable Borrower;
(vi)
all documentation in respect of such Extension shall be consistent with the foregoing; and
(vii)
no Extension of any Revolving Facility shall be effective as to the obligations of any Swingline Lender to make any Swingline
Loans or any Issuing Bank with respect to Letters of Credit without the consent of such Swingline Lender or such Issuing Bank (such
consents not to be unreasonably withheld or delayed).
(b)
With respect to any Extension consummated pursuant to this Section 2.23, (i) no such Extension shall constitute
a voluntary or mandatory prepayment for purposes of Section 2.11, and (ii) except as set forth in clause (a)(iv)
above, no Extension Offer is required to be in any minimum amount or any minimum increment; provided that the applicable
Borrower may, at its election, specify as a condition (a “Minimum Extension Condition”) to consummating such
Extension that a minimum amount (to be determined and specified in the relevant Extension Offer in the applicable Borrower’s
sole discretion and which may be waived by the applicable Borrower) of Revolving Loans or commitments (as applicable) of any or
all applicable Classes be tendered. The Administrative Agent and the Lenders hereby consent to the transactions contemplated by
this Section 2.23 (including, for the avoidance of doubt, any payment of any interest, fees or premium in respect of
any Class of Extended Revolving Credit Commitments on such terms as may be set forth in the relevant Extension Offer) and hereby
waive the requirements of any provision of this Agreement (including Section 2.10, 2.11 or 2.18) or any
other Loan Document that may otherwise prohibit any Extension or any other transaction contemplated by this Section 2.23.
(c)
No consent of any Lender or the Administrative Agent shall be required to effectuate any Extension, other than (A) the consent
of each Lender agreeing to such Extension with respect to one or more of its Revolving Loans and/or commitments under any Class
(or a portion thereof) and (B) the consent of each applicable Issuing Bank to the extent the commitment to provide Letters of Credit
is to be extended. All Extended Revolving Credit Commitments and all obligations in respect thereof shall constitute Secured Obligations
under this Agreement and the other Loan Documents that are secured by the applicable Collateral and guaranteed on a pari passu
basis with all other applicable Secured Obligations under this Agreement and the other Loan Documents. The Lenders hereby irrevocably
authorize the Administrative Agent to enter into any Extension Amendments and any such amendments to the other Loan Documents with
the Lead Borrower as may be necessary in order to establish new Classes or sub-Classes in respect of Revolving Loans or commitments
so extended and such technical amendments as may be necessary or appropriate in the reasonable opinion of the Administrative Agent
and the Lead Borrower in connection with the establishment of such new tranches or sub-tranches, in each case on terms consistent
with this Section 2.23.
(d)
In connection with any Extension, the applicable Borrower or Borrowers shall provide the Administrative Agent at least ten
Business Days’ (or such shorter period as may be agreed by the Administrative Agent) prior written notice thereof, and shall
agree to such procedures (including regarding timing, rounding and other adjustments and to ensure reasonable administrative management
of the credit facilities hereunder after such Extension), if any, as may be established by, or acceptable to, the Administrative
Agent, in each case acting reasonably to accomplish the purposes of this Section 2.23.
Section 2.24
Swingline Loans.
(a) Swingline
Loans. Subject to the terms and conditions set forth herein, the Swingline Lender in reliance upon the agreements of the
other Lenders set forth in this Section 2.24, agrees to make Swingline Loans in Dollars to the US Borrower from time
to time on and after the Closing Date and until the Latest Maturity Date, in an aggregate principal amount at any time
outstanding not to exceed the Swingline Commitment, provided that, (w) the Swingline Lender shall not be required to
make any Swingline Loan to refinance any outstanding Swingline Loan, (x) after giving effect to any Swingline Loan, the
aggregate Outstanding Amount of all Revolving Loans, Swingline Loans and LC Obligations shall not exceed the Aggregate
Commitments, (y) the Initial US Revolving Credit Exposure shall not exceed the lesser of (A) the aggregate Initial US
Commitment and (B) the US Borrowing Base, and (z) the Swingline Lender shall not be under any obligation to make any
Swingline Loan if it has, or by such Credit Extension will have, Fronting Exposure. Each Swingline Loan shall be in a minimum
principal amount of not less than $50,000 or such lesser amount as may be agreed by the Swingline Lender; provided
that, notwithstanding the foregoing, any Swingline Loan may be in an aggregate amount that is (x) required to finance the
reimbursement of an LC Disbursement as contemplated by Section 2.05(e) or (y) equal to the entire unused balance of
the aggregate unused Revolving Credit Commitments, in each case so long as the aggregate principal amount of outstanding
Swingline Loans would not exceed the Swingline Commitment after giving effect to such Swingline Loan. Within the foregoing
limits and subject to the terms and conditions set forth herein, Swingline Loans may be borrowed, prepaid and reborrowed.
Each Swingline Loan shall bear interest only at a rate based on the Alternate Base Rate. Immediately upon the making of a
Swingline Loan, each Revolving Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from
the Swingline Lender a risk participation in such Swingline Loan in an amount equal to the product of such Revolving
Lender’s Applicable Percentage of the Revolving Credit Commitments times the amount of such Swingline Loan. Each
Swingline Loan shall be secured by the Lien on the US Collateral in favor of the Administrative Agent and shall constitute a
US Obligation hereunder.
(b)
Borrowing Procedures. To request a Swingline Loan, the US Borrower shall notify the Swingline Lender (with a copy
to the Administrative Agent) of such request by a Swingline Loan Request. Each such notice must be received by the Swingline Lender
and the Administrative Agent not later than 3:00 p.m. on the day of a proposed Swingline Loan and shall specify (i) the amount
to be borrowed, which shall be a minimum of $50,000, and (ii) the requested borrowing date, which shall be a Business Day. Unless
the Swingline Lender has received written notice from the Administrative Agent (at the request of the Required Revolving Lenders)
prior to 3:00 p.m. on the date of the proposed Swingline Loan Borrowing (A) directing the Swingline Lender not to make such Swingline
Loan as a result of the limitations set forth in the first proviso to the first sentence of Section 2.24(a), or (B) that
one or more of the applicable conditions specified in Section 4.02 is not then satisfied, then, subject to the terms and
conditions hereof, the Swingline Lender will, not later than 4:00 p.m. on the borrowing date specified in such Swingline Loan Request,
make the amount of its Swingline Loan available to the US Borrower. The Swingline Lender shall make each applicable Swingline Loan
available to the US Borrower by means of a credit to the account designated in the related Swingline Loan Request or otherwise
in accordance with the instructions of the US Borrower (including, in the case of a Swingline Loan made to finance the reimbursement
of any LC Disbursement as provided in Section 2.05(e), by remittance to the applicable Issuing Bank).
(c) Refinancing
of Swingline Loans. The Swingline Lender may at any time in its sole and absolute discretion may request, and shall
request no later than five Business Days following the making of a Swingline Loan, on behalf of the US Borrower (which hereby
authorizes the Swingline Lender to so request on its behalf until the Termination Date), that each Revolving Lender with an
Initial US Commitment make an ABR Revolving Loan in an amount equal to such Lender’s Applicable Percentage of the
amount of Swingline Loans then outstanding. Such request shall be made in writing (which written request shall be deemed to
be a Borrowing Request for purposes hereof) and in accordance with the requirements of Section 2.03, without regard to
the minimum and multiples specified therein for the principal amount of ABR Revolving Loans, but subject to the unutilized
portion of the Revolving Facility. The Swingline Lender shall furnish the US Borrower with a copy of the applicable Borrowing
Request promptly (and in any case, within 5 Business Days) after delivering such notice to the Administrative Agent. Each
Revolving Lender with an Initial US Commitment shall make an amount equal to its Applicable Percentage of the amount
specified in such Borrowing Request available to the Administrative Agent in immediately available funds (and the
Administrative Agent may apply Cash collateral available with respect to the applicable Swingline Loan) for the account of
the Swingline Lender at the Administrative Agent’s Office not later than 1:00 p.m. on the day specified in such
Borrowing Request, whereupon, subject to Section 2.24(c)(ii), each Revolving Lender that so makes funds available
shall be deemed to have made an ABR Revolving Loan to the US Borrower in such amount. The Administrative Agent shall remit
the funds so received to the Swingline Lender.
(i)
If for any reason any Swingline Loan cannot be refinanced by such a Revolving Loan Borrowing in accordance with Section
2.24(c), the request for ABR Revolving Loans submitted by the Swingline Lender as set forth herein shall be deemed to be a
request by the Swingline Lender that each of the Revolving Lenders with an Initial US Commitment fund its risk participation in
the relevant Swingline Loan and each Revolving Lender’s payment to the Administrative Agent for the account of the Swingline
Lender pursuant to this Section 2.24(c)(i) shall be deemed payment in respect of such participation.
(ii)
If any Revolving Lender fails to make available to the Administrative Agent for the account of the Swingline Lender any
amount required to be paid by such Revolving Lender pursuant to the foregoing provisions of this Section 2.24 by the time
specified in Section 2.24(c), the Swingline Lender shall be entitled to recover from such Revolving Lender (acting through
the Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to
the date on which such payment is immediately available to the Swingline Lender at a rate per annum equal to the greater of the
Federal Funds Effective Rate from time to time in effect and a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation, plus any administrative, processing or similar fees customarily charged by the
Swingline Lender in connection with the foregoing. If such Lender pays such amount (with interest and fees as aforesaid), the amount
so paid shall constitute such Lender’s committed Revolving Loan included in the relevant committed Borrowing or funded participation
in the relevant Swingline Loan, as the case may be. A certificate of the Swingline Lender submitted to any Revolving Lender (through
the Administrative Agent) with respect to any amounts owing under this Section 2.24(c)(ii) shall be conclusive absent manifest
error.
(iii)
Each Revolving Lender acknowledges and agrees that its obligation to make Revolving Loans or to purchase and fund risk participations
in Swingline Loans pursuant to this Section 2.24 is absolute and unconditional and shall not be affected by any circumstance
whatsoever, including (A) the occurrence and continuance of a Default, (B) any reduction or termination of the Revolving Credit
Commitments, (C) any setoff, counterclaim, recoupment, defense or other right which such Lender may have against the Swingline
Lender, the US Borrower or any other Person for any reason whatsoever, or (D) any other occurrence, event or condition, whether
or not similar to any of the foregoing. No such funding of risk participations shall relieve or otherwise impair the obligation
of the US Borrower to repay Swingline Loans, together with interest as provided herein.
(d) Repayment
of Participations. At any time after any Revolving Lender has purchased and funded a risk participation in a Swingline
Loan, if the Swingline Lender receives any payment on account of such Swingline Loan, the Swingline Lender will distribute to
such Revolving Lender its Applicable Percentage thereof in the same funds as those received by the Swingline Lender. If any
payment received by the Swingline Lender in respect of principal or interest on any Swingline Loan is required to be returned
by the Swingline Lender under any of the circumstances described in Section 9.03 (including pursuant to any settlement
entered into by the Swingline Lender in its discretion), each Revolving Lender shall pay to the Swingline Lender its
Applicable Percentage thereof on demand of the Administrative Agent, plus interest thereon from the date of such
demand to the date such amount is returned, at a rate per annum equal to the Federal Funds Effective Rate. The Administrative
Agent will make such demand upon the request of the Swingline Lender. The obligations of the Lenders under this clause shall
survive the payment in full of the Secured Obligations and the termination of this Agreement.
(e)
Interest for Account of Swingline Lender. The Swingline Lender shall be responsible for invoicing the US Borrower
for interest on the Swingline Loans. Until each Revolving Lender funds its ABR Revolving Loan or risk participation pursuant to
this Section 2.24 to refinance such Revolving Lender's Applicable Percentage of any Swingline Loan, interest in respect
of such Applicable Percentage shall be solely for the account of the Swingline Lender.
(f)
Payments Directly to Swingline Lender. The US Borrower shall make all payments of principal and interest in respect
of the Swingline Loans directly to the Swingline Lender.
Section 2.25
Reallocation Mechanism.
(a)
Subject to the terms and conditions of this Section 2.25, the Lead Borrower may request that the Lenders change the
then current allocation of their respective undrawn Initial Commitments in order to effect an increase or decrease of such respective
undrawn Commitments, with any such increase or decrease in their undrawn Initial Canadian Commitments to the Canadian Borrower
to be accompanied by a concurrent and equal decrease or increase, as applicable, in their undrawn Initial US Commitment to the
US Borrower (each, a “Reallocation”). Any such Reallocation shall be subject to the following conditions: (i)
the Lead Borrower shall have provided to the Administrative Agent a written notice (in reasonable detail) at least ten (10) Business
Days prior to the requested effective date (which effective date shall be the first day of the subsequent Fiscal Quarter) of such
Reallocation (the “Reallocation Date”) setting forth the proposed Reallocation Date and the amounts of the proposed
undrawn Initial Commitments reallocation to be effected, (ii) any such Reallocation shall increase or decrease the applicable undrawn
Initial Commitments in integral multiples of $1,000,000 and not less than $5,000,000, and all such Reallocations shall not result
in the increase of either the Initial Canadian Commitment or the Initial US Commitment as of the Closing Date by an aggregate amount
in excess of $20,000,000, (iii) after giving effect to the Reallocation, each Lender shall hold the same proportionate share of
all of the Initial Commitments to the Borrowers, (iv) no Default or Event of Default shall have occurred and be continuing either
as of the date of such request or on the Reallocation Date (both immediately before and after giving effect to such Reallocation),
(v) no more than one Reallocation may be requested in any calendar quarter, (vi) any increase or decrease in an Initial Commitment
of a Lender in its respective Initial Canadian Commitment or Initial US Commitment shall result in a concurrent decrease or increase
in its respective Initial Canadian Commitment or Initial US Commitment such that the sum of all the Initial Commitments of such
Lender after giving effect to such Reallocation shall equal the aggregate amount of the Initial Commitments of such Lender in effect
immediately prior to such Reallocation, (vii) after giving effect to such Reallocation of Initial Commitments, no Overadvance would
exist or would result therefrom, (viii) at least three (3) Business Days prior to the proposed Reallocation Date, a Responsible
Officer of the Lead Borrower shall have delivered to the Administrative Agent a certificate certifying as to compliance with preceding
clauses (i) through (vii) and demonstrating (in reasonable detail) the calculations required in connection therewith,
and (ix) the Administrative Agent consents to such Reallocation in its Permitted Discretion.
(b)
The Administrative Agent shall promptly notify such Lenders of the Reallocation Date and the amount of the affected Initial
Commitment of such Lenders as a result thereof. The respective proportionate shares of Lenders shall thereafter, to the extent
applicable, be determined based on such reallocated amounts (subject to any subsequent changes thereto).
ARTICLE
3
REPRESENTATIONS AND WARRANTIES
On the dates and to the
extent required pursuant to Section 4.01 or 4.02, as applicable, each of (i) in the case of Holdings, solely
with respect to Sections 3.01, 3.02, 3.03, 3.07, 3.08, 3.09, 3.13, 3.14,
3.16 and 3.17, and (ii) each of the Borrowers hereby represent and warrant to the Lenders that:
Section 3.01
Organization; Powers. Each of the Loan Parties and each of its Restricted Subsidiaries (a) is (i) duly organized
and validly existing and (ii) in good standing (to the extent such concept exists in the relevant jurisdiction) under the laws
of its jurisdiction of organization, (b) has all requisite organizational power and authority to own its property and assets
and to carry on its business as now conducted and (c) is qualified to do business in, and is in good standing (to the extent
such concept exists in the relevant jurisdiction) in, every jurisdiction where its ownership, lease or operation of properties
or conduct of its business requires such qualification; except, in each case referred to in this Section 3.01 (other
than clause (a)(i) with respect to any Borrower and clause (b) with respect to the Loan Parties) where the failure
to do so, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect.
Section 3.02
Authorization; Enforceability. The execution, delivery and performance of each of the Loan Documents are within each
applicable Loan Party’s corporate or other organizational power and have been duly authorized by all necessary corporate
or other organizational action of such Loan Party. Each Loan Document to which any Loan Party is a party has been duly executed
and delivered by such Loan Party and is a legal, valid and binding obligation of such Loan Party, enforceable in accordance with
its terms, subject to the Legal Reservations.
Section 3.03
Governmental Approvals; No Conflicts. The execution and delivery of the Loan Documents by each Loan Party party thereto
and the performance by such Loan Party thereof (a) do not require any consent or approval of, registration or filing with,
or any other action by, any Governmental Authority, except (i) such as have been obtained or made and are in full force and
effect, (ii) in connection with the Perfection Requirements and (iii) such consents, approvals, registrations, filings,
or other actions the failure to obtain or make which would not be reasonably expected to have a Material Adverse Effect, (b) will
not violate any (i) of such Loan Party’s Organizational Documents or (ii) Requirements of Law applicable to such
Loan Party which violation, in the case of this clause (b)(ii), would reasonably be expected to have a Material Adverse
Effect and (c) will not violate or result in a default under (i) the First Lien Credit Agreement, (ii) the Second Lien Credit
Agreement or (iii) any other material Contractual Obligation to which such Loan Party is a party which violation, in the case
of this clause (c), would reasonably be expected to result in a Material Adverse Effect.
Section 3.04
Financial Condition; No Material Adverse Effect.
(a)
The financial statements most recently provided pursuant to Section 5.01(a) or (b), as applicable, present
fairly, in all material respects, the financial position and results of operations and cash flows of the Lead Borrower on a consolidated
basis as of such dates and for such periods in accordance with GAAP, (x) except as otherwise expressly noted therein, (y) subject,
in the case of financial statements provided pursuant to Section 5.01(a), to the absence of footnotes and normal year-end
adjustments and (z) except as may be necessary to reflect any differing entities and organizational structure prior to giving effect
to the Transactions.
(b)
Since the Closing Date, there have been no events, developments or circumstances that have had, or could reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.
Section 3.05
Properties.
(a)
As of the Closing Date, Schedule 3.05 sets forth the address of each Real Estate Asset (or each set of such
assets that collectively comprise one operating property) that is owned in fee simple by any Loan Party.
(b)
The Borrowers and each of their Restricted Subsidiaries have good and valid fee simple title to or rights to purchase, or
valid leasehold interests in, or easements or other limited property interests in, all of their respective Real Estate Assets and
have good title to their personal property and assets, in each case, except (i) for defects in title that do not materially
interfere with their ability to conduct their business as currently conducted or to utilize such properties and assets for their
intended purposes or (ii) where the failure to have such title would not reasonably be expected to have a Material Adverse
Effect. All such properties and assets are free and clear of Liens, other than Permitted Liens.
(c)
The Borrowers and each of their Restricted Subsidiaries own or otherwise have a license or right to use all rights in Patents,
Trademarks, Copyrights and other rights in works of authorship (including all copyrights embodied in software) and all other intellectual
property rights (“IP Rights”) used to conduct the businesses of the Borrowers and their Restricted Subsidiaries
as presently conducted without, to the knowledge of any Borrower, any infringement, dilution, or misappropriation or other violation
of the IP Rights of third parties, except to the extent such failure to own or license or have rights to use would not, or where
such infringement, misappropriation or violation would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.
Section 3.06
Litigation and Environmental Matters.
(a)
There are no actions, suits or proceedings by or before any arbitrator or Governmental Authority pending against or, to
the knowledge of the Lead Borrower, threatened in writing against or affecting the Loan Parties or any of their Restricted Subsidiaries
which would reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect.
(b)
Except for any matters that, individually or in the aggregate, would not reasonably be expected to result in a Material
Adverse Effect, (i) no Loan Party nor any of its Restricted Subsidiaries is subject to or has received notice of any Environmental
Claim or any Environmental Liability and knows of no basis for such Environmental Claim or Environmental Liability and (ii) no
Loan Party nor any of its Restricted Subsidiaries has failed to comply with any Environmental Law or to obtain, maintain or comply
with any permit, license or other approval required under any Environmental Law.
(c)
Neither any Loan Party nor any of its Restricted Subsidiaries has treated, stored, transported or Released any Hazardous
Materials on, at or from any currently or formerly operated real estate or facility and no Hazardous Materials are otherwise present
at any currently owned or operated real estate facility, in either case, in a manner that would reasonably be expected to have
a Material Adverse Effect.
Section 3.07 Compliance
with Laws. Each of Holdings, the Borrowers and their Restricted Subsidiaries is in compliance with all Requirements of
Law applicable to it or its property, except, in each case where the failure to do so, individually or in the aggregate,
would not reasonably be expected to result in a Material Adverse Effect, it being understood and agreed that this Section
3.07 shall not apply to the Requirements of Law covered by Section 3.17.
Section 3.08
Investment Company Status. No Loan Party is an “investment company” as defined in, or is required to
be registered under, the Investment Company Act of 1940.
Section 3.09
Taxes. Each of Holdings, the Borrowers and each of their Restricted Subsidiaries has timely filed or caused to be
filed all Tax returns and reports required to have been filed and has paid or caused to be paid all Taxes required to have been
paid by it that are due and payable, including in its capacity as a withholding agent, except (a) Taxes (or any requirement to
file Tax returns with respect thereto) that are being contested in good faith by appropriate proceedings and for which Holdings,
such Borrower or such Restricted Subsidiary, as applicable, has set aside on its books adequate reserves in accordance with GAAP
or (b) to the extent that the failure to file or pay, individually or in the aggregate, would not reasonably be expected to result
in a Material Adverse Effect.
Section 3.10
ERISA.
(a)
Each Plan is in compliance in form and operation with its terms and with ERISA and the Code and all other applicable laws
and regulations, except where any failure to comply would not reasonably be expected to result in a Material Adverse Effect.
(b)
No ERISA Event has occurred and is continuing or is reasonably expected to occur that, when taken together with all other
such ERISA Events for which liability is reasonably expected to occur, would reasonably be expected to result in a Material Adverse
Effect.
(c)
All obligations regarding the Canadian Pension Plans and the Canadian Employee Plans (including current service contributions)
have been satisfied, there are no outstanding defaults or violations by any party to any Canadian Pension Plan and any Canadian
Employee Plan and no taxes, penalties or fees are owing or exigible under any of the Canadian Employee Plans, except, in each case,
which could not reasonably be expected to have a Material Adverse Effect. No Loan Party maintains, contributes or has any liability
with respect to a Canadian Pension Plan that provides benefits on a defined benefit basis. No Lien has arisen, choate or inchoate,
in respect of any Loan Party or its property in connection with any Canadian Pension Plan (save for contribution amounts not yet
due).
Section 3.11
Disclosure.
(a)
As of the Closing Date, and with respect to information relating to the Company and its subsidiaries, to the knowledge of
the Initial US Borrower, all written information (other than the Projections, other forward-looking information and information
of a general economic or industry-specific nature) concerning Holdings, the Borrowers and their Restricted Subsidiaries and the
Transactions and that was prepared by or on behalf of Holdings or its subsidiaries or their respective representatives and made
available to any Lender or the Administrative Agent in connection with the Transactions on or before the Closing Date (the “Information”),
when taken as a whole, did not, when furnished, contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements contained therein not materially misleading in light of the circumstances under which
such statements are made (after giving effect to all supplements and updates thereto from time to time).
(b) The
Projections have been prepared in good faith based upon assumptions believed by the Lead Borrower to be reasonable at the
time furnished (it being recognized that such Projections are not to be viewed as facts and are subject to significant
uncertainties and contingencies many of which are beyond the Lead Borrower’s control, that no assurance can be given
that any particular financial projections (including the Projections) will be realized, that actual results may differ from
projected results and that such differences may be material).
Section 3.12
Solvency. As of the Closing Date, immediately after the consummation of the Transactions to occur on the Closing
Date and the incurrence of Indebtedness and obligations on the Closing Date in connection with this Agreement, the First Lien Credit
Agreement and the Second Lien Credit Agreement, (i) the sum of the debt (including contingent liabilities) of the Lead Borrower
and its Restricted Subsidiaries, taken as a whole, does not exceed the fair value of the assets of the Lead Borrower and its Restricted
Subsidiaries, taken as a whole; (ii) the present fair saleable value of the assets of the Lead Borrower and its Restricted Subsidiaries,
taken as a whole, is not less than the amount that will be required to pay the probable liabilities of the Lead Borrower and its
Restricted Subsidiaries, taken as a whole, on their debts as they become absolute and matured; (iii) the capital of the Lead Borrower
and its Restricted Subsidiaries, taken as a whole, is not unreasonably small in relation to the business of the Lead Borrower and
its Restricted Subsidiaries, taken as a whole, contemplated as of the Closing Date; and (iv) the Lead Borrower and its Restricted
Subsidiaries, taken as a whole, do not intend to incur, or believe that they will incur, debts (including current obligations and
contingent liabilities) beyond their ability to pay such debts as they mature in the ordinary course of business. For the purposes
hereof, 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 liability meets the criteria for accrual under Statement of Financial Accounting Standards
No. 5).
Section 3.13
Capitalization and Subsidiaries. Schedule 3.13 sets forth, in each case as of the Closing Date, (a) a
correct and complete list of the name of each subsidiary of Holdings and the ownership interest therein held by Holdings or its
applicable subsidiary and (b) the type of entity of each Loan Party and each subsidiary of Holdings with respect to which a portion
of such subsidiary’s equity is pledged by a Loan Party as Collateral.
Section 3.14
Security Interest in Collateral. Subject to the terms of the last paragraph of Section 4.01 and any limitations
and exceptions set forth in any Loan Document, the Legal Reservations, the Perfection Requirements, the provisions of this Agreement
and the other relevant Loan Documents (including the ABL Intercreditor Agreement) and/or any Additional Agreement, the Collateral
Documents create legal, valid and enforceable Liens on all of the Collateral in favor of the Administrative Agent, for the benefit
of itself and the other Secured Parties, and upon the satisfaction of the Perfection Requirements, such Liens constitute perfected
Liens (with the priority that such Liens are expressed to have under the relevant Collateral Documents, unless otherwise permitted
hereunder or under any Collateral Document) on the Collateral (to the extent such Liens are required to be perfected under the
terms of the Loan Documents) securing the Secured Obligations, in each case as and to the extent set forth therein.
Section 3.15
Labor Disputes. Except as individually or in the aggregate would not reasonably be expected to have a Material Adverse
Effect or to the extent otherwise disclosed on Schedule 3.15 hereto: (a) there are no strikes, lockouts or slowdowns
against the Lead Borrower or any of its Restricted Subsidiaries pending or, to the knowledge of the Lead Borrower or any of its
Restricted Subsidiaries, threatened by any union or labor organization purporting to act as exclusive bargaining representative
and (b) the hours worked by and payments made to employees of the Lead Borrower and its Restricted Subsidiaries have not been
in violation of the Fair Labor Standards Act or any other applicable Federal, state, local or foreign law dealing with such matters.
Section 3.16
Federal Reserve Regulations. No part of the proceeds of any Revolving Loan will be used, whether directly or indirectly,
and whether immediately, incidentally or ultimately, for any purpose that results in a violation of the provisions of Regulation
T, U or X.
Section 3.17
Economic and Trade Sanctions and Anti-Corruption Laws.
(a)
(i) None of Holdings, the Lead Borrower nor any of its Restricted Subsidiaries nor, to the knowledge of the Lead Borrower,
any director, officer, agent, employee or Affiliate of any of the foregoing is (A) a person on the list of “Specially Designated
Nationals and Blocked Persons” or (B) currently the subject of any U.S. sanctions administered by the Office of Foreign
Assets Control of the U.S. Treasury Department (“OFAC”) or the U.S. State Department or Canadian sanctions imposed
by the Government of Canada (collectively, “Sanctions”); and (ii) no Borrower will directly or, to any
Borrower’s knowledge, indirectly, use the proceeds of the Revolving Loans or otherwise make available such proceeds to any
Person or request any Letter of Credit, for the purpose of financing activities of or with any Person or in any country or territory
that, at the time of such financing, is the subject of Sanctions, except to the extent permissible for a Person required to comply
with Sanctions.
(b)
To the extent applicable, each Loan Party is in compliance in all material respects with (i) each of the foreign assets
control regulations of the U.S. Treasury Department (31 CFR, Subtitle B, Chapter V), and any other enabling legislation
or executive order relating thereto, (ii) the USA PATRIOT Act, and, to its knowledge, other anti-terrorism and anti-money laundering
laws, (iii) the U.S. Foreign Corrupt Practices Act of 1977 (the “FCPA”) and the Corruption of Foreign Public
Officials Act (Canada), and (iv) the Canadian AML Laws.
(c)
No part of the proceeds of any Revolving Loan will be used and no Letter of Credit will be requested, in each case directly
or, to the knowledge of any Borrower, indirectly, for any payments to any governmental official or employee, political party, official
of a political party, candidate for political office, or anyone else acting in an official capacity, in order to improperly obtain,
retain or direct business or obtain any improper advantage, in violation of the FCPA or the Corruption of Foreign Public Officials
Act (Canada).
Section 3.18
Borrowing Base Certificates. The information set forth in each Borrowing Base Certificate is true and correct in
all material respects and has been prepared in all material respects in the accordance with the requirements of this Agreement.
The Accounts that are identified by the applicable Borrower as Eligible Accounts and the Inventory that is identified by the applicable
Borrower as Eligible Inventory, in each Borrowing Base Certificate submitted to the Administrative Agent, at the time of submission,
comply in all material respects with the criteria (other than any criteria subject to the discretion of the Administrative Agent)
set forth in the definitions of “Eligible Accounts” and “Eligible Inventory”, respectively.
Section 3.19
Deposit Accounts and Securities Accounts. Attached hereto as Schedule 3.19 is a schedule of all deposit
accounts and securities accounts maintained by the Loan Parties as of the Closing Date in which the applicable Loan Party customarily
maintains amounts in excess of $25,000, which schedule identifies those deposit accounts and securities accounts that are Excluded
Accounts.
ARTICLE
4
CONDITIONS
Section 4.01
Closing Date. The obligations of any Lender to make Revolving Loans and each Issuing Bank to issue Letters of
Credit shall not become effective until the date on which each of the following conditions is satisfied (or waived in accordance
with Section 9.02), subject in all respects to the last paragraph of this Section 4.01:
(a)
Credit Agreement and Loan Documents. The Administrative Agent (or its counsel) shall have received from each Loan
Party party thereto on the Closing Date (i) a counterpart signed by each such Loan Party (or written evidence reasonably satisfactory
to the Administrative Agent (which may include a copy transmitted by facsimile or other electronic method) that such party has
signed a counterpart and, in the case of any Subsidiary Guarantors, may be delivered in escrow pending the consummation of the
Acquisition) of (A) this Agreement, (B) the US Security Agreement and, to the extent the Canadian Borrower intends to become a
party to the Loan Documents on the Closing Date, the Canadian Security Agreement, (C) any Intellectual Property Security Agreement
required pursuant to the Collateral and Guarantee Requirement, (D) the US Loan Guaranty and, to the extent the Canadian Borrower
intends to become a party to the Loan Documents on the Closing Date, the Canadian Loan Guaranty, (E) the ABL Intercreditor Agreement,
and (F) any Promissory Note requested by a Lender at least three Business Days prior to the Closing Date and (ii) if applicable,
a Borrowing Request pursuant to Section 2.03.
(b)
Legal Opinions. The Administrative Agent (or its counsel) shall have received (i) a favorable customary written opinion
of (i) Ropes & Gray LLP, in its capacity as special counsel for Holdings (ii) Lowenstein Sandler LLP, as local New Jersey counsel
for the Loan Parties organized under the laws of New Jersey and (iii) to the extent the Canadian Borrower intends to become a party
to the Loan Documents on the Closing Date, McCarthy Tétrault LLP, as local Canadian counsel for the Loan Parties, in each
case, dated the Closing Date, addressed to the Administrative Agent and the Lenders.
(c)
Financial Statements and Pro Forma Financial Statements. The Administrative Agent shall have received (i) (A) the
audited consolidated balance sheets of the Company and its subsidiaries and the related audited consolidated statements of income
and retained earnings, shareholders’ equity and cash flows of the Company as of, and for each of the fiscal years ended,
December 31, 2014, December 31, 2015 and December 31, 2016 and (B) the unaudited consolidated quarterly balance sheets of the Company
and its subsidiaries and the related unaudited consolidated statements of income and retained earnings of the Company for each
Fiscal Quarter ended at least 60 days prior to the Closing Date and (ii) the unaudited pro forma consolidated balance sheet of
the Company as of and for the most recently ended fiscal period pursuant to clause (i)(A) or (i)(B) above, which
need not be prepared in compliance with Regulation S-X of the Securities Act of 1933, as amended, or include adjustments for purchase
accounting.
(d) Closing
Certificates; Certified Charters; Good Standing Certificates. The Administrative Agent (or its counsel) shall have
received (i) a certificate of each Loan Party, dated the Closing Date and executed by a secretary, assistant secretary or
other Responsible Officer (as the case may be) thereof, which shall (A) certify that attached thereto is a true and complete
copy of the resolutions or written consents of its shareholders, board of directors, board of managers, members or other
governing body authorizing the execution, delivery and performance of the Loan Documents to which it is a party and, in the
case of the Borrowers, the borrowings hereunder, and that such resolutions or written consents have not been modified,
rescinded or amended (other than as attached thereto) and are in full force and effect, (B) identify by name and title and
bear the signatures of the officers, managers, directors or authorized signatories of such Loan Party authorized to sign the
Loan Documents to which it is a party on the Closing Date and (C) certify (x) that attached thereto is a true and complete
copy of the certificate or articles of incorporation or organization (or memorandum of association or other equivalent
thereof) of such Loan Party certified by the relevant authority of the jurisdiction of organization of such Loan Party and a
true and correct copy of its by-laws or operating, management, partnership or similar agreement and (y) that such documents
or agreements have not been amended (except as otherwise attached to such certificate and certified therein as being the only
amendments thereto as of such date) and (ii) a good standing (or equivalent) certificate as of a recent date for such Loan
Party from its jurisdiction of organization, to the extent available; provided, that the foregoing shall only be
required with respect to the Canadian Loan Parties to the extent the Canadian Borrower intends to become a party to the Loan
Documents on the Closing Date.
(e)
Representations and Warranties. The (i) Specified Merger Agreement Representations shall be true and correct solely
to the extent required by the terms of the definition thereof and (ii) the Specified Representations shall be true and correct
in all material respects on and as of the Closing Date; provided that (A) in the case of any Specified Representation which
expressly relates to a specific date or period, such representation and warranty shall be true and correct in all material respects
as of the respective date or for the respective period, as the case may be and (B) if any Specified Representation is qualified
by or subject to a “material adverse effect”, “material adverse change” or similar term or qualification,
the definition thereof shall be the definition of “Closing Date Material Adverse Effect” for purposes of the making
or deemed making of such Specified Representation on, or as of, the Closing Date (or any date prior thereto).
(f)
Fees. Prior to or substantially concurrently with the funding of the Initial Revolving Loans hereunder (if any),
the Administrative Agent shall have received (i) all fees required to be paid by the Lead Borrower on the Closing Date pursuant
to the Fee Letter and (ii) all expenses required to be paid by the Lead Borrower for which invoices have been presented at least
three Business Days prior to the Closing Date or such later date to which the Lead Borrower may agree (including the reasonable
fees and expenses of legal counsel), in each case on or before the Closing Date, which amounts may be offset against the proceeds
of the Initial Revolving Loans.
(g)
Equity Contribution. Prior to or substantially concurrently with the initial funding of the Revolving Loans hereunder,
the Lead Borrower shall have received the Equity Contribution (to the extent not otherwise applied to the Transactions).
(h)
Solvency. The Administrative Agent (or its counsel) shall have received a certificate dated as of the Closing Date
in substantially the form of Exhibit L from the chief financial officer (or other officer with reasonably equivalent
responsibilities) of the Lead Borrower certifying as to the matters set forth therein.
(i)
Perfection Certificate. The Administrative Agent (or its counsel) shall have received a completed Perfection Certificate
dated the Closing Date and signed by a Responsible Officer of each Loan Party, together with all attachments contemplated thereby.
(j)
Pledged Stock; Stock Powers; Pledged Notes. Subject to the terms of the ABL Intercreditor Agreement, the Administrative
Agent (or the First Lien Agent, as its bailee and agent, or their respective counsels) shall have received (i) the certificates
representing the Capital Stock required to be pledged pursuant to the US Security Agreement, together with an undated stock or
similar power for each such certificate executed in blank by a duly authorized officer of the pledgor thereof, and (ii) each Material
Debt Instrument (if any) endorsed (without recourse) in blank (or accompanied by an executed transfer form in blank) by the pledgor
thereof.
(k)
Filings Registrations and Recordings. Each document (including any UCC or PPSA (or similar) financing statement)
required by any Collateral Document or under law to be filed, registered or recorded in order to create in favor of the Administrative
Agent, for the benefit of the Secured Parties, a perfected Lien on the Collateral required to be delivered pursuant to such Collateral
Document, prior and superior in right of security to any other Person (subject to the terms of the Intercreditor Agreements and
other than with respect to Permitted Liens), shall have been received by the Administrative Agent and be in proper form for filing,
registration or recordation.
(l) Transactions. Substantially concurrently with the initial funding of the Revolving Loans hereunder, the Acquisition
shall be consummated in accordance with the terms of the Merger Agreement, but without giving effect to any amendments, waivers
or consents by Holdings or the Lead Borrower that are materially adverse to the interests of the Initial Revolving Lenders on
the Closing Date without the consent of the Arrangers, such consent not to be unreasonably withheld, delayed or conditioned.
(m)
Closing Date Material Adverse Effect. Since April 1, 2017, there shall not have been any Closing Date Material Adverse
Effect.
(n) USA
PATRIOT Act. No later than three (3) Business Days in advance of the Closing Date, the Administrative Agent shall have received
all documentation and other information required pursuant to applicable “know your customer” and anti-money laundering
rules and regulations, including the USA PATRIOT Act and Canadian AML Laws with respect to any Loan Party to the extent reasonably
requested by any Initial Revolving Lender in writing at least ten (10) Business Days in advance of the Closing Date.
(o) Officer’s
Certificate. The Administrative Agent shall have received a certificate signed by a Responsible Officer of the Lead Borrower
certifying as of the Closing Date to the matters set forth in Section 4.01(e) and Section 4.01(m).
(p) Refinancing.
Prior to or substantially concurrently with the initial funding of the Revolving Loans hereunder, all Indebtedness for borrowed
money of the Company and its subsidiaries under that certain Second Amended and Restated Credit Agreement, dated as of November
9, 2012, among the Company, certain subsidiaries of the Company, the lenders party thereto and Bank of America, N.A., as administrative
agent, will be repaid, redeemed, defeased, discharged, refinanced or terminated, and all related commitments, guaranties and security
interests will be terminated and released or arrangements therefor to the reasonable satisfaction of the Administrative Agent
shall have been made (the actions described in this Section 4.01(p), the “Refinancing”).
(q) Borrowing
Base Certificates. The Administrative Agent shall have received a US Borrowing Base Certificate and, to the extent the Canadian
Borrower intends to borrow a Revolving Loan on the Closing Date (it being understood that if not provided on the Closing Date,
the Canadian Borrower shall not be allowed to borrow a Credit Extension until the same is provided after the Closing Date), a
Canadian Borrowing Base Certificate, in each case at least one (1) Business Day prior to the Closing Date.
For purposes of determining
whether the conditions specified in this Section 4.01 have been satisfied on the Closing Date, by funding the Revolving
Loans hereunder, the Administrative Agent and each Lender that has executed this Agreement (or an Assignment and Assumption on
the Closing Date) shall be deemed to have consented to, approved or accepted, or to be satisfied with, each document or other matter
required hereunder to be consented to or approved by or acceptable or satisfactory to the Administrative Agent or such Lender,
as the case may be.
Notwithstanding the
foregoing, to the extent the Lien on any Collateral (including the granting or perfection of any security interest) or
Guarantee is not or cannot be provided on the Closing Date (other than (i) a pledge of the Capital Stock of the Lead Borrower
to the extent such pledge may be perfected on the Closing Date by the delivery to the First Lien Agent as bailee and agent
for the Administrative Agent of a stock or equivalent certificate representing such Capital Stock (together with a stock
power or similar instrument endorsed in blank for the relevant certificate), (ii) the granting of liens in the Collateral
owned by (A) Holdings, the Lead Borrower and each US Subsidiary Guarantor pursuant to a New York law security agreement (and
the perfection thereof solely to the extent such liens may be perfected by the filing of a UCC-1 financing statement) and (B)
to the extent that the Canadian Borrower borrows Revolving Loans on the Closing Date, the Canadian Loan Parties pursuant to a
security agreement pursuant to applicable law in Canada (and the perfection thereof solely to the extent such Liens may be
perfected by the filing of a PPSA financing statement) (iii) a pledge of the Capital Stock of each Subsidiary Guarantor to
the extent such pledge may be perfected on the Closing Date by the delivery to the First Lien Agent as bailee and agent for
the Administrative Agent of a stock or equivalent certificate representing such Capital Stock (together with a stock power or
similar instrument endorsed in blank for the relevant certificate), but solely to the extent such stock or equivalent
certificates have been delivered to the Initial US Borrower prior to or substantially concurrently with the consummation of
the Transactions on the Closing Date after use of commercially reasonable efforts by the Initial US Borrower to procure
delivery thereof without undue burden or expense, and (iv) the Guarantee by Holdings and each Subsidiary Guarantor that is a
material Domestic Subsidiary (or, to the extent the Canadian Borrower intends to become a party to the Loan Documents on the
Closing Date (it being understood that if not provided on the Closing Date, the Canadian Borrower shall not be allowed to
borrow a Credit Extension until the same is provided after the Closing Date), each Canadian Loan Party)), then the provision
(and/or perfection) of such Collateral and/or Guarantee shall not constitute a condition precedent to the availability of the
Initial Revolving Facility on the Closing Date but may instead be provided (and/or perfected) within ninety (90) days after
the Closing Date or such later date as the Administrative Agent may reasonably agree.
Section 4.02
Each Credit Extension. After the Closing Date, the obligation of each Lender to make any Credit Extension (other
than any LC Reimbursement Loan) is subject to the satisfaction of the following conditions:
(a)
(i) In the case of any Borrowing, the Administrative Agent shall have received a Borrowing Request as required by Section
2.03, or (ii) in the case of the issuance of any Letter of Credit, the applicable Issuing Bank and the Administrative Agent
shall have received a Letter of Credit Request as required by Section 2.05(b).
(b)
The representations and warranties of the Loan Parties set forth in this Agreement and the other Loan Documents shall be
true and correct in all material respects on and as of the date of any such Credit Extension with the same effect as though such
representations and warranties had been made on and as of the date of such Credit Extension; provided that to the extent that any
representation and warranty specifically refers to a given date or period, it shall be true and correct in all material respects
as of such date or for such period; provided, further, that any representation or warranty that is qualified as to “materiality,”
“Material Adverse Effect” or similar language shall be true and correct (after giving effect to any qualification therein)
in all respects on such respective dates.
(c)
At the time of and immediately after giving effect to such Credit Extension, no Default or Event of Default has occurred
and is continuing.
(d)
After giving effect to the Credit Extension, (i) the Borrowing Base is no less than the Total Revolving Credit Exposure,
(ii) the US Borrowing Base is no less than the Initial US Revolving Credit Exposure and (iii) the Canadian Borrowing Base is no
less than the Initial Canadian Revolving Credit Exposure.
(e)
After giving effect to the such Credit Extension, (i) the Total Revolving Credit Exposure does not exceed the Borrowing
Base, (ii) in the case of any US Revolving Loan or US Letter of Credit, the Initial US Revolving Credit Exposure does not exceed
the US Borrowing Base and (iii) in the case of any Canadian Revolving Loan or Canadian Letter of Credit, the Initial Canadian Revolving
Credit Exposure does not exceed the Canadian Borrowing Base.
Each Credit Extension
shall be deemed to constitute a representation and warranty by the applicable Borrower on the date thereof as to the matters specified
in paragraphs (b) and (c) of this Section.
ARTICLE
5
AFFIRMATIVE COVENANTS
From the Closing Date
until the Termination Date, (i) in the case of Holdings, solely with respect to Sections 5.01, 5.02, 5.03,
5.08 and 5.12, and (ii) the Borrowers hereby covenant and agree with the Lenders that:
Section 5.01
Financial Statements and Other Reports. The Lead Borrower will deliver to the Administrative Agent for delivery to
each Lender:
(a)
Quarterly Financial Statements. Within 45 days (or 60 days in the case of the Fiscal Quarters ending on or around
June 30, 2017, September 30, 2017, March 31, 2018 and June 30, 2018) after the end of each of the first three Fiscal Quarters of
each Fiscal Year, commencing with the Fiscal Quarter ending June 30, 2017, the consolidated balance sheet of the Lead Borrower
as at the end of such Fiscal Quarter and the related consolidated statements of income and cash flows of the Lead Borrower for
such Fiscal Quarter and for the period from the beginning of the then current Fiscal Year to the end of such Fiscal Quarter, and
setting forth (commencing with the Fiscal Quarter ending on or around March 31, 2019), in reasonable detail, in comparative form
the corresponding figures for the corresponding periods of the previous Fiscal Year, all in reasonable detail, together with a
Responsible Officer Certification (which may be included in the applicable Compliance Certificate) with respect thereto and, at
the option of the Lead Borrower, either (i) a Narrative Report with respect thereto or (ii) a conference call with the Lenders,
hosted by the Administrative Agent, which call shall be held after delivery of the applicable financial statements, during normal
business hours and otherwise at a time mutually agreed between the Lead Borrower and the Administrative Agent for the applicable
Fiscal Quarter (it being agreed that at least one such conference call with the Lenders shall be held in each calendar year, commencing
with 2018);
(b) Annual
Financial Statements. Within 120 days after the end of the first Fiscal Year following the Closing Date and within 90
days after the end of each Fiscal Year thereafter, (i) the consolidated balance sheet of the Lead Borrower as at the end of
such Fiscal Year and the related consolidated statements of income, shareholders’ equity and cash flows of the Lead
Borrower for such Fiscal Year and setting forth (commencing with the Fiscal Year ending on or around December 31, 2018), in
reasonable detail, in comparative form the corresponding figures for the previous Fiscal Year (which, for comparison against
the figures for the Fiscal Year ending on or around December 31, 2017, may be based on figures derived from a combined or
other pro forma presentation of any predecessor and successor periods as reasonably determined by the Lead Borrower)
and (ii) with respect to such consolidated financial statements, (A) a report thereon from the Company’s certified
public accountant commencing with the Fiscal Year ending on or around December 31, 2017, or any nationally recognized
independent certified public accountant of recognized national standing (which report shall be unqualified as to “going
concern” (other than resulting from the impending maturity of any Indebtedness or any actual or prospective breach of
any financial covenant) and scope of audit, and shall state that such consolidated financial statements fairly present, in
all material respects, the consolidated financial position of the Lead Borrower as at the dates indicated and its income and
cash flows for the periods indicated in conformity with GAAP and (B) at the option of the Lead Borrower, either (i) a
Narrative Report with respect to such Fiscal Year, or (ii) a conference call with the Lenders, hosted by the Administrative
Agent, which call shall be held after delivery of the applicable financial statements, during normal business hours and
otherwise at a time mutually agreed between the Lead Borrower and the Administrative Agent for the applicable Fiscal Year (it
being agreed that at least one such conference call with the Lenders shall be held in each calendar year, commencing with
2018);
(c)
Compliance Certificate. Together with each delivery of financial statements of the Lead Borrower pursuant to Sections 5.01(a)
and 5.01(b), (i) a duly executed and completed Compliance Certificate certifying that no Default or Event of Default exists
(or if a Default or Event of Default exists, describing in reasonable detail such Default or Event of Default and the steps being
taken to cure, remedy or waive the same) and setting forth the calculation of the Fixed Charge Coverage Ratio as of the last day
of the relevant Test Period (whether or not then required to be tested pursuant to Section 6.15(a)), (ii) (A) a
summary of pro forma or consolidating adjustments necessary to eliminate the accounts of Unrestricted Subsidiaries (if any)
from such financial statements and (B) a list identifying each subsidiary of the Lead Borrower as a Restricted Subsidiary
or an Unrestricted Subsidiary as of the date of delivery of such Compliance Certificate or confirming that there is no change in
such information since the later of the Closing Date and the date of the last such list, and (iii) a Perfection Certificate Supplement;
(d)
[Reserved];
(e)
Notice of Default. Promptly upon, and in any event within five (5) Business Days after, any Responsible Officer of
the Lead Borrower obtaining knowledge of (i) the occurrence of any Default or Event of Default or (ii) the occurrence of any event
or change that has caused or evidences or would reasonably be expected to cause or evidence, either individually or in the aggregate,
a Material Adverse Effect, a reasonably-detailed notice specifying the nature and period of existence of such condition, event
or change and what action the Lead Borrower has taken, is taking and proposes to take with respect thereto;
(f)
Notice of Litigation. Promptly upon, and in any event within five (5) Business Days after, any Responsible Officer
of the Lead Borrower obtaining knowledge of (i) the institution of, or threat of, any Adverse Proceeding not previously disclosed
in writing by the Lead Borrower to the Administrative Agent, or (ii) any material development in any Adverse Proceeding that, in
the case of either of clause (i) or (ii), would reasonably be expected to have a Material Adverse Effect, written
notice thereof from the Lead Borrower together with such other non-privileged information as may be reasonably available to the
Loan Parties to enable the Lenders to evaluate such matters;
(g)
ERISA. Promptly upon, and in any event within five (5) Business Days after, any Responsible Officer of the Lead Borrower
becoming aware of the occurrence of any ERISA Event that could reasonably be expected to have a Material Adverse Effect, a written
notice specifying the nature thereof;
(h)
Financial Plan. As soon as available and in any event no later than 45 days after the beginning of each Fiscal Year,
commencing in respect of the Fiscal Year ending December 31, 2017, a consolidated plan and financial forecast for each Fiscal Quarter
of such Fiscal Year, including a forecasted consolidated statement of the Lead Borrower’s financial position and forecasted
consolidated statements of income and cash flows of the Lead Borrower for such Fiscal Year, prepared in reasonable detail setting
forth, with appropriate discussion, the principal assumptions on which the financial plan is based;
(i) Information
Regarding Collateral. Prompt (and in any event, within (A) with respect to any Canadian Loan Party, 15 days of the
relevant change or such other period with the written consent of the Administrative Agent and (B) with respect to any US Loan
Party, 30 days of the relevant change or such other period with the written consent of the Administrative Agent) written
notice of any change (i) in any Loan Party’s legal name, (ii) in any Loan Party’s type of organization, (iii) in
any Loan Party’s jurisdiction of organization, (iv) in any Loan Party’s organizational identification number (if
any), or (v) in any Canadian Loan Party’s registered or head office or chief executive office (or the jurisdiction of
the locations where it maintains Collateral exceeding $5,000,000 in value), in each case to the extent such information is
necessary to enable the Administrative Agent to perfect or maintain the perfection and priority of its security interest in
the Collateral of the relevant Loan Party, together with a certified copy of the applicable Organizational Document
reflecting the relevant change;
(j)
Environmental Matters. Prompt (and in any event within five (5) Business Days after any Responsible Officer of the
Lead Borrower obtaining knowledge thereof) written notice of any Release or other Hazardous Material Activity that would reasonably
be expected to have a Material Adverse Effect;
(k)
Certain Reports. Promptly upon their becoming available and without duplication of any obligations with respect to
any such information that is otherwise required to be delivered under the provisions of any Loan Document, copies of (i) following
an initial public offering, all financial statements, reports, notices and proxy statements sent or made available generally by
Holdings or its applicable Parent Company to its security holders acting in such capacity and (ii) all regular and periodic reports
and all registration statements (other than on Form S-8 or a similar form) and prospectuses, if any, filed by Holdings or its applicable
Parent Company with any securities exchange or with the SEC or any analogous governmental or private regulatory authority with
jurisdiction over matters relating to securities; and
(l) Borrowing
Base Certificates. The US Borrower and the Canadian Borrower, respectively (or the Lead Borrower on their behalf), shall
deliver to the Administrative Agent (and the Administrative Agent shall promptly deliver the same to the Lenders) each
Borrowing Base Certificate and related Supporting Information prepared as of the close of business on the last Business Day
of the applicable previous month commencing with the month ending August 31, 2017, no later than (x) the 30th day after the
last day of each month ending August 31, 2017, September 30, 2017, October 31, 2017 and November 30, 2017 and (y) thereafter,
the 20th day of such month; provided that, (i) during the continuance of a Cash Dominion Period, the relevant Borrower
(or the Lead Borrower on their behalf) shall deliver to the Administrative Agent Borrowing Base Certificates and Supporting
Information more frequently (as reasonably determined by the Administrative Agent) (but not more frequently than weekly, with
delivery required within 4 Business Days after the end of the applicable previous week prepared as of the close of business
on Friday of the previous week, which Borrowing Base Certificates and Supporting Information shall be in standard form unless
otherwise reasonably agreed to by the Administrative Agent; it being understood that (a) Inventory amounts shown in the
Borrowing Base Certificates and Supporting Information delivered on a weekly basis will be based on the Inventory amount (x)
set forth in the most recent weekly report, where possible, and (y) for the most recently ended month for which such
information is available with regard to locations where it is impracticable to report Inventory more frequently (unless the
Administrative Agent agrees otherwise), and (b) the amount of Eligible Accounts shown in such Borrowing Base Certificate and
Supporting Information will be based on the amount of the gross Accounts set forth in the most recent weekly report, less the
amount of ineligible Accounts reported for the most recently ended month) (or, when available, ineligible Accounts set forth
in the most recent weekly report), (ii) in the event that any Loan Party consummates a Specified Transaction, the Lead
Borrower may deliver an updated version of the relevant Borrowing Base Certificate or Borrowing Base Certificates and
Supporting Information giving pro forma effect to such Specified Transaction, which shall be effective as of the date
of consummation of such Specified Transaction, subject to the limitations set forth in the definitions of “Canadian
Borrowing Base” and “US Borrowing Base”, (iii) in the event (x) any Loan Party consummates a Disposition
(other than Dispositions in the ordinary course of business) to any Person (other than a Loan Party) that results in the
Disposition of ABL Priority Collateral with a value (as reasonable determined by the Lead Borrower) in excess of $10,000,000
or (y) the Lead Borrower designates (or redesignates) any subsidiary with a value (as reasonably determined by the Lead
Borrower) in excess of $10,000,000 as an Unrestricted Subsidiary, the Lead Borrower shall deliver updated Borrowing Base
Certificates and Supporting Information at the time of or prior to the consummation of such Disposition, and (iv) the
Borrowers may elect to deliver the Borrowing Base Certificates and Supporting Information more frequently than the time
period specified in Section 5.01(l) (but in any case not more frequently than weekly), provided that (x) if the
Borrowers elect to deliver the Borrowing Base Certificates and Supporting Information on a weekly basis, they shall be
required to continue to deliver the Borrowing Base Certificate on a weekly basis for at least 45 days following the date of
the first such weekly delivery, and (y) if the Borrowers elect to deliver the Borrowing Base Certificates and Supporting
Information on a less frequent than weekly basis, they shall be required to continue to deliver the Borrowing Base
Certificate and Supporting Information on such basis for at least 60 days following the date of the first such delivery.
(m)
Other Information. Such other certificates, reports and information (financial or otherwise) as the Administrative
Agent may reasonably request from time to time in connection with the financial condition or business of Holdings and its Restricted
Subsidiaries, provided, however, that none of Holdings, any Borrower nor any Restricted Subsidiary shall be required
to disclose or provide any information (i) that constitutes non-financial trade secrets or non-financial proprietary information
of Holdings, any Borrower and/or any of their respective subsidiaries, customers and/or suppliers, (ii) in respect of which disclosure
to the Administrative Agent or any Lender (or any of their respective representatives or contractors) is prohibited by applicable
Requirements of Law, (iii) that is subject to attorney-client or similar privilege or constitutes attorney work product or (iv)
in respect of which Holdings, any Borrower or any Restricted Subsidiary owes confidentiality obligations to any third party; provided
that, with respect to this clause (iv), the Lead Borrower shall (A) make the Administrative Agent aware of such confidentiality
obligations (to the extent permitted under the applicable confidentiality obligation) and (B) use commercially reasonable efforts
to communicate the relevant information in a way that does not violate such confidentiality obligations.
Documents required to
be delivered pursuant to this Section 5.01 may be delivered electronically and if so delivered, shall be deemed to
have been delivered on the date (i) on which the Lead Borrower (or a representative thereof) (x) posts such documents or (y) provides
a link thereto on the website of the Lead Borrower on the Internet at the website address listed on Schedule 9.01;
provided that, other than with respect to items required to be delivered pursuant to Section 5.01(k), the Lead Borrower
shall promptly notify (which may be by facsimile or electronic mail) the Administrative Agent of the posting of any such documents
on the website of the Lead Borrower (or its applicable subsidiary) and provide to the Administrative Agent by electronic mail electronic
versions (i.e., soft copies) of such documents; (ii) on which such documents are delivered by the Lead Borrower to the Administrative
Agent for posting on behalf of the Lead Borrower on SyndTrak or another relevant website, if any, to which each Lender and the
Administrative Agent have access (whether a commercial, third-party website or whether sponsored by the Administrative Agent);
(iii) on which executed certificates or other documents are faxed to the Administrative Agent (or electronically mailed to an address
provided by the Administrative Agent); or (iv) in respect of the items required to be delivered pursuant to Section 5.01(k)
in respect of information filed by Holdings or its applicable Parent Company with any securities exchange or with the SEC or any
analogous governmental or private regulatory authority with jurisdiction over matters relating to securities (other than Form 10-Q
reports and Form 10-K reports described in Sections 5.01(a) and (b), respectively), on which such items have
been made available on the SEC website or the website of the relevant analogous governmental or private regulatory authority or
securities exchange.
Notwithstanding the
foregoing, the obligations in paragraphs (a), (b) and (h) of this Section 5.01 may be satisfied
with respect to any financial statements of the Lead Borrower by furnishing (A) the applicable financial statements of
Holdings (or any other Parent Company) or (B) Holdings’ (or any other Parent Company’s), as applicable, Form 10-K
or 10-Q, as applicable, filed with the SEC or any securities exchange, in each case, within the time periods specified in
such paragraphs; provided that, with respect to each of clauses (A) and (B), (i) to the extent such
financial statements relate to any Parent Company, such financial statements shall be accompanied by consolidating
information that summarizes in reasonable detail the differences between the information relating to such Parent Company, on
the one hand, and the information relating to the Lead Borrower and its consolidated subsidiaries on a standalone basis, on
the other hand, which consolidating information shall be certified by a Responsible Officer of the Lead Borrower as having
been fairly presented in all material respects and (ii) to the extent such statements are in lieu of statements required to
be provided under Section 5.01(b), such statements shall be accompanied by a report and opinion of an independent
registered public accounting firm of nationally recognized standing, which report and opinion shall satisfy the applicable
requirements set forth in Section 5.01(b).
Any financial statement
required to be delivered pursuant to Section 5.01(a) or (b) shall not be required to include acquisition accounting
adjustments relating to the Transactions or any Permitted Acquisition to the extent it is not practicable to include any such adjustments
in such financial statement.
Section 5.02
Existence. Except as otherwise permitted under Section 6.07, Holdings and each Borrower will, and the
Lead Borrower will cause each of its Restricted Subsidiaries to, at all times preserve and keep in full force and effect its existence
and all rights, franchises, licenses and permits material to its business except, other than with respect to the preservation of
the existence of any Borrower, to the extent that the failure to do so could not reasonably be expected to result in a Material
Adverse Effect; provided that neither Holdings nor any Borrower nor any of the Lead Borrower’s Restricted Subsidiaries
shall be required to preserve any such existence (other than with respect to the preservation of existence of any Borrower), right,
franchise, license or permit if a Responsible Officer of such Person or such Person’s board of directors (or similar governing
body) determines that the preservation thereof is no longer desirable in the conduct of the business of such Person, and that the
loss thereof is not disadvantageous in any material respect to such Person or to the Lenders.
Section 5.03
Payment of Taxes. Holdings and the Borrowers will, and the Lead Borrower will cause each of its Restricted Subsidiaries
to, pay all Taxes imposed upon it or any of its properties or assets or in respect of any of its income or businesses or franchises
before any penalty or fine accrues thereon; provided that no such Tax need be paid if (a) it is being contested in good
faith by appropriate proceedings promptly instituted and diligently conducted, so long as (i) adequate reserves or other appropriate
provisions, as are required in conformity with GAAP, have been made therefor, and (ii) in the case of a Tax which has or may become
a Lien against any of the Collateral, such contest proceedings conclusively operate to stay the sale of any portion of the Collateral
to satisfy such Tax or (b) failure to pay or discharge the same could not reasonably be expected to result in a Material Adverse
Effect.
Section 5.04
Maintenance of Properties. The Borrowers will, and the Lead Borrower will cause each of its Restricted Subsidiaries
to, maintain or cause to be maintained in good repair, working order and condition, ordinary wear and tear and casualty and condemnation
excepted, all property reasonably necessary to the normal conduct of business of the Lead Borrower and its Restricted Subsidiaries
and from time to time will make or cause to be made all needed and appropriate repairs, renewals and replacements thereof except
as expressly permitted by this Agreement or where the failure to maintain such properties or make such repairs, renewals or replacements
could not reasonably be expected to have a Material Adverse Effect.
Section 5.05 Insurance.
Except where the failure to do so would not reasonably be expected to have a Material Adverse Effect, the Lead Borrower will
maintain or cause to be maintained, with financially sound and reputable insurers, such insurance coverage with respect to
liabilities, losses or damage in respect of the assets, properties and businesses of the Lead Borrower and its Restricted
Subsidiaries as may customarily be carried or maintained under similar circumstances by Persons of established reputation
engaged in similar businesses, in each case in such amounts (giving effect to self-insurance), with such deductibles,
covering such risks and otherwise on such terms and conditions as shall be customary for such Persons. Each such policy of
insurance shall (i) name the Administrative Agent on behalf of the Lenders as an additional insured thereunder as its
interests may appear and (ii) to the extent available from the relevant insurance carrier, in the case of each casualty
insurance policy (excluding any business interruption insurance policy), contain a loss payable clause or endorsement that
names the Administrative Agent, on behalf of the Lenders as the loss payee thereunder and, to the extent available, provide
for at least 30 days’ prior written notice to the Administrative Agent of any modification or cancellation of such
policy (or 10 days’ prior written notice in the case of the failure to pay any premiums thereunder).
Section 5.06
Inspections.
(a)
The Borrowers will, and the Lead Borrower will cause each of its Restricted Subsidiaries to, permit any authorized representative
designated by the Administrative Agent to visit and inspect any of the properties of any Borrower and any of their Restricted Subsidiaries
at which the principal financial records and executive officers of the applicable Person are located, to inspect, copy and take
extracts from its and their respective financial and accounting records, and to discuss its and their respective affairs, finances
and accounts with its and their Responsible Officers and independent public accountants (provided that any Borrower (or
any of its subsidiaries) may, if it so chooses, be present at or participate in any such discussion), all upon reasonable notice
and at reasonable times during normal business hours; provided that, (x) only the Administrative Agent (or a representative
designated by the Administrative Agent) on behalf of the Lenders may exercise the rights of the Administrative Agent and the Lenders
under this Section 5.06, (y) subject to the immediately succeeding proviso, the Administrative Agent shall not
exercise such rights more often than one time during any calendar year and (z) subject to the immediately succeeding proviso,
only one such time per calendar year shall be at the expense of the Borrowers; provided further that when an Event of Default
exists, the Administrative Agent (or any of its representatives or independent contractors) may do any of the foregoing at the
expense of the Borrowers at any time during normal business hours and upon reasonable advance notice; provided further that,
notwithstanding anything to the contrary herein, neither the Borrowers nor any Restricted Subsidiary shall be required to disclose,
permit the inspection, examination or making of copies of or taking abstracts from, or discuss any document, information, or other
matter (i) that constitutes non-financial trade secrets or non-financial proprietary information of the Borrowers and their subsidiaries
and/or any of its customers and/or suppliers, (ii) in respect of which disclosure to the Administrative Agent or any Lender (or
any of their respective representatives or contractors) is prohibited by applicable law, (iii) that is subject to attorney-client
or similar privilege or constitutes attorney work product or (iv) in respect of which Holdings, the Lead Borrower or any Restricted
Subsidiary owes confidentiality obligations to any third party; provided that, with respect to this clause (iv),
the Lead Borrower shall (A) make the Administrative Agent aware of such confidentiality obligations (to the extent permitted under
the applicable confidentiality obligation) and (B) use commercially reasonable efforts to communicate the relevant information
in a way that does not violate such confidentiality obligations.
(b) At
reasonable times during normal business hours, with reasonable coordination and upon reasonable prior notice that the
Administrative Agent requests, each Loan Party will grant access to the Administrative Agent (including employees of
Administrative Agent or any consultants, accountants, lawyers and appraisers retained by the Administrative Agent) to its
books, records, Accounts and Inventory so that the Administrative Agent or an Approved Appraiser may conduct such inventory
appraisals, field examinations, verifications and evaluations as the Administrative Agent may deem necessary or appropriate
and the reasonable and documented expenses incurred in respect thereof shall be payable by the Borrowers subject to the
limitations in this Section 5.06(b); provided that (i) unless an Event of Default exists, the Administrative
Agent shall not conduct more than (A) one field examination and one inventory appraisal with respect to the Collateral in
each twelve month period and (B) one additional field examination and one additional inventory appraisal with respect to the
Collateral in any twelve month period after the date of this Agreement if, at any time during such twelve month period, (1)
Availability is less than the greater of (x) $30,000,000 and (y) 15% of the Line Cap for five (5) consecutive Business Days,
(2) until the date Availability is equal to or greater than the greater of (x) $30,000,000 and (y) 15% of the Line Cap for at
least thirty (30) consecutive calendar days, (ii) when an Event of Default exists, the Administrative Agent may conduct field
examinations and inventory appraisals of the type described in this clause (b) at any time, (iii) the Administrative
Agent may conduct one additional field examination and one additional inventory appraisal during any twelve month period at
the expense of the Lenders and (iv) the Administrative Agent may conduct additional field exams or appraisals requested or
consented to by Lead Borrower from time to time in its sole discretion.
Section 5.07
Maintenance of Books and Records. The Borrowers will, and will cause their Restricted Subsidiaries to, maintain proper
books of record and account containing entries of all material financial transactions and matters involving the assets and business
of the Lead Borrower and its Restricted Subsidiaries that are full, true and correct in all material respects and permit the preparation
of consolidated financial statements in accordance with GAAP.
Section 5.08
Compliance with Laws.
(a)
Holdings and the Lead Borrower will, and will cause each of its Restricted Subsidiaries to, (i) materially comply with the
applicable requirements of Sanctions, the FCPA and the Corruption of Foreign Public Officials Act (Canada) and (ii) comply with
the requirements of all other applicable laws, rules, regulations and orders of any Governmental Authority (including ERISA, laws
relating to the Canadian Pension Plans, the USA PATRIOT Act and, to its knowledge, anti-money laundering and anti-terrorism laws,
including the Canadian AML Laws), except, in the case of clause (ii), to the extent the failure to so comply would not reasonably
be expected to have a Material Adverse Effect.
(b)
No Borrower will directly nor, to its knowledge, indirectly, use the proceeds of the Revolving Loans or otherwise make available
such proceeds to any Person, (i) for the purpose of financing the activities of any Person or in any country or territory that,
at the time of such financing, is the subject of Sanctions, except to the extent permissible for a Person required to comply with
Sanctions; or (ii) in a manner that violates any applicable requirements under the FCPA or the Corruption of Foreign Public Officials
Act (Canada).
Section 5.09
Compliance with Environmental Laws. Except, in each case, to the extent that the failure to do so would not reasonably
be expected to have, individually or in the aggregate, a Material Adverse Effect, (a) comply, and take all commercially reasonable
actions to cause any lessees and other Persons operating or occupying its properties to comply, with all applicable Environmental
Laws and environmental permits (including any investigation, notification, cleanup, removal or remedial obligations with respect
to or arising out of any Hazardous Materials Activity), (b) obtain and renew all environmental permits required to conduct its
operations or in connection with its properties and (c) respond timely to any Environmental Claim against the Lead Borrower or
any of its Restricted Subsidiaries and discharge or duly contest any obligations it may have to any Person thereunder.
Section 5.10 Designation
of Subsidiaries. The board of directors (or equivalent governing body) of the Lead Borrower may at any time after the
Closing Date designate (or redesignate) any subsidiary (other than the Canadian Borrower) as an Unrestricted Subsidiary or
any Unrestricted Subsidiary as a Restricted Subsidiary; provided that (i) immediately before and after such
designation or redesignation, no Default or Event of Default exists (including after giving effect to the reclassification of
Investments in, Indebtedness of and Liens on the assets of, the applicable Restricted Subsidiary or Unrestricted Subsidiary),
(ii) in the case of designating a Restricted Subsidiary to be an Unrestricted Subsidiary or redesignating an
Unrestricted Subsidiary to be a Restricted Subsidiary, the applicable Investment is permitted under one or more clauses in Section
6.06 (as selected by the Lead Borrower in its sole discretion), (iii) no subsidiary may be designated as an Unrestricted
Subsidiary if it is a “Restricted Subsidiary” for purposes of the First Lien Credit Agreement or the Second Lien
Credit Agreement unless also being designated as an Unrestricted Subsidiary thereunder, and (iv) as of the date of the
designation or redesignation thereof, no Unrestricted Subsidiary shall own any Capital Stock in any Restricted Subsidiary of
the Lead Borrower (unless such Restricted Subsidiary is also designated as an Unrestricted Subsidiary) or hold any
Indebtedness of or any Lien on any property of the Lead Borrower or its Restricted Subsidiaries (unless the Lead Borrower or
such Restricted Subsidiary is permitted to incur such Indebtedness or Liens in favor of such Unrestricted Subsidiary pursuant
to Sections 6.01 and 6.02). The designation of any subsidiary as an Unrestricted Subsidiary shall constitute an
Investment by the Lead Borrower (or its applicable Restricted Subsidiary) therein at the date of designation in an amount
equal to the portion of the Fair Market Value of the net assets of such Restricted Subsidiary attributable to the Lead
Borrower’s (or its applicable Restricted Subsidiary’s) equity interest therein as reasonably estimated by the
Lead Borrower (and such designation shall only be permitted to the extent such Investment is permitted under Section 6.06).
The designation of any Unrestricted Subsidiary as a Restricted Subsidiary shall constitute the incurrence or making, as
applicable, at the time of designation of any then-existing Investment, Indebtedness or Lien of such Restricted Subsidiary,
as applicable; provided that upon a redesignation of any Unrestricted Subsidiary as a Restricted Subsidiary, the Lead
Borrower shall be deemed to continue to have an Investment in the resulting Restricted Subsidiary in an amount (if positive)
equal to (a) the Lead Borrower’s “Investment” in such Restricted Subsidiary at the time of such
redesignation, less (b) the portion of the Fair Market Value of the net assets of such Restricted Subsidiary
attributable to the Lead Borrower’s equity therein at the time of such redesignation. As of the Closing Date, the
subsidiaries listed on Schedule 5.10 have been designated as Unrestricted Subsidiaries.
Section 5.11
Use of Proceeds. Each Borrower shall use the proceeds of the Initial Revolving Loans: (a) on the Closing Date, (i)
to finance a portion of the Transactions, purchase price adjustments and the payment of Transaction Costs, (ii) to finance working
capital and similar adjustments under the Acquisition Agreement and (iii) to finance the working capital needs and other general
corporate purposes of the Lead Borrower and its subsidiaries; provided that, the amounts utilized for purposes of clauses
(i), and (iii) above shall not exceed $5,000,000 in the aggregate and (b) after the Closing Date, to finance working
capital needs, general corporate purposes and any other purposes not prohibited hereunder. No part of the proceeds of any Revolving
Loan will be used, whether directly or indirectly, for any purpose that would violate Regulation T, U or X.
Section 5.12 Covenant
to Guarantee Obligations and Give Security. Upon (i) the formation or acquisition after the Closing Date of any
Restricted Subsidiary that is a Domestic Subsidiary, (ii) the formation or acquisition after the Closing Date of any
Restricted Subsidiary that is a Canadian Subsidiary of an existing Canadian Loan Party, (iii) the designation of any
Unrestricted Subsidiary as a Restricted Subsidiary (with respect to US Secured Obligations, to apply only to the designation
of an Unrestricted Subsidiary that is a Domestic Subsidiary), (iv) any Restricted Subsidiary ceasing to be an Immaterial
Subsidiary (with respect to US Secured Obligations, to apply only to a Restricted Subsidiary that is a Domestic Subsidiary)
or (v) any Restricted Subsidiary that is an Excluded Subsidiary ceasing to be an Excluded Subsidiary, on or before the date
that is 60 days after the end of such Fiscal Quarter in which such transaction or designation occurred (or such longer period
as the Administrative Agent may reasonably agree), the Lead Borrower shall (A) cause such Restricted Subsidiary (other than
any Excluded Subsidiary) to comply with the requirements set forth in the definition of “Collateral and Guarantee
Requirement” and (B) upon the reasonable request of the Administrative Agent, cause the relevant Restricted Subsidiary
to deliver to the Administrative Agent a signed copy of a customary opinion of counsel for such Restricted Subsidiary,
addressed to the Administrative Agent and the other relevant Secured Parties.
Notwithstanding anything
to the contrary herein or in any other Loan Document, (i) the Administrative Agent may grant extensions of time or any period in
this Agreement or in any other Loan Document (at any time, including, in each case, after the expiration of any relevant time or
period, which will be retroactive) for the creation and perfection of security interests in, or obtaining of title insurance, legal
opinions, surveys or other deliverables with respect to, particular assets or the provision of any Loan Guaranty by any Restricted
Subsidiary (in connection with assets acquired, or Restricted Subsidiaries formed or acquired, after the Closing Date) where it
reasonably determines, in consultation with the Lead Borrower, that such action cannot be accomplished without undue effort or
expense by the time or times at which it would otherwise be required to be accomplished by this Agreement or the Collateral Documents,
and each Lender hereby consents to any such extension of time; (ii) any Lien required to be granted from time to time pursuant
to the Collateral and Guarantee Requirement shall be subject to the exceptions and limitations set forth therein and in the Collateral
Documents; (iii) except as otherwise required by Section 5.15, perfection by control shall not be required with respect
to assets requiring perfection through control agreements or other control arrangements, including deposit accounts, securities
accounts and commodities accounts (other than control of pledged Capital Stock and/or Material Debt Instruments); (iv) no Loan
Party shall be required to seek any landlord lien waiver, bailee letter, estoppel, warehouseman waiver or other collateral access
or similar letter or agreement; (v) no Loan Party will be required to take any action that is limited or restricted by the Collateral
and Guarantee Requirement and any other Loan Document; (vi) in no event will the Collateral include any Excluded Assets; (vii) no
action shall be required to perfect a Lien in any asset in respect of which the perfection of a security interest therein would
(1) violate the terms of any contract relating to such asset that is permitted or otherwise not prohibited by the terms of this
Agreement and is binding on such asset on the Closing Date or at the time of its acquisition and not incurred in contemplation
thereof (other than in the case of capital leases, purchase money and similar financings), in each case, after giving effect to
the applicable anti-assignment provisions of the UCC, PPSA or other applicable law or (2) trigger termination of any contract relating
to such asset that is permitted or otherwise not prohibited by the terms of this Agreement and is binding on such asset on the
Closing Date or at the time of its acquisition and not incurred in contemplation thereof (other than in the case of capital leases,
purchase money and similar financings) pursuant to any “change of control” or similar provision; it being understood
that the Collateral shall include any proceeds and/or receivables arising out of any contract described in this clause to the extent
the assignment of such proceeds or receivables is expressly deemed effective under the UCC, PPSA or other applicable law notwithstanding
the relevant prohibition, violation or termination right, and (viii) any joinder or supplement to any Loan Guaranty, any Collateral
Document and/or any other Loan Document executed by any Restricted Subsidiary that is required to become a Loan Party pursuant
to Section 5.12 above may, with the consent of the Administrative Agent, include such schedules (or updates to schedules)
as may be necessary to qualify any representation or warranty set forth in any Loan Document to the extent necessary to ensure
that such representation or warranty is true and correct to the extent required thereby or by the terms of any other Loan Document.
No Canadian Loan Party shall be deemed to have provided a Loan Guaranty in respect of any US Obligation (it being understood
that the US Loan Parties shall guarantee the Canadian Obligations).
For the avoidance
of doubt, it is understood, agreed and intended by the parties hereto that, notwithstanding anything to the contrary herein
or in any other Loan Document, with respect to US Loan Parties, any US Obligations or any US Secured Obligations (including
any Credit Extension, Overadvance or Protective Advance made to the US Borrower), (i) under no circumstance shall the
Administrative Agent, any Lender or any Participant have recourse to the Capital Stock of any Foreign Subsidiary or any
Foreign Subsidiary Holdco, other than 65% of the issued and outstanding Capital Stock of any Restricted Subsidiary that is a
direct, first-tier Restricted Subsidiary of the US Borrower or a Subsidiary Guarantor of the US Obligations (it being
understood with respect to any Credit Extension, Overadvance or Protective Advance made to the US Borrower, a Subsidiary
Guarantor will at no time include a Foreign Subsidiary, a Foreign Subsidiary Holdco or any direct or indirect subsidiary of a
Foreign Subsidiary or a Foreign Subsidiary Holdco) and (ii) under no circumstance shall any Foreign Subsidiary or Foreign
Subsidiary Holdco or any direct or indirect subsidiary of a Foreign Subsidiary or Foreign Subsidiary Holdco be a Guarantor
hereunder or under any Loan Document with respect to the US Obligations or in any other way be required to comply with the
requirements set forth in clause (a) of the definition of “Collateral and Guarantee Requirement” with
respect to the US Obligations.
Section 5.13
[Reserved].
Section 5.14
Further Assurances. Promptly upon request of the Administrative Agent and subject to the limitations described in
Section 5.12:
(a)
Holdings and the Lead Borrower will, and will cause each other Loan Party to, execute any and all further documents, financing
statements, agreements, instruments, certificates, notices and acknowledgments and take all such further actions (including the
filing and recordation of financing statements and/or amendments thereto and other documents), that may be required under any applicable
law and which the Administrative Agent may reasonably request to ensure the creation, perfection and priority of the Liens created
or intended to be created under the Collateral Documents, all at the expense of the relevant Loan Parties.
(b)
Holdings and the Lead Borrower will, and will cause each other Loan Party to, (i) correct any material defect or error that
may be discovered in the execution, acknowledgment, filing or recordation of any Collateral Document or other document or instrument
relating to any Collateral and (ii) do, execute, acknowledge, deliver, record, re-record, file, re-file, register and re-register
any and all such further acts (including notices to third parties), deeds, certificates, assurances and other instruments as the
Administrative Agent may reasonably request from time to time in order to carry out more effectively the purposes of the Collateral
Documents.
Section 5.15
Cash Management.
(a) Each
Loan Party shall, within (x) 90 days in respect of any Concentration Account, and (y) 120 days in respect of any other
account, in each case, after the Closing Date (or such longer period as the Administrative Agent may agree in its reasonable
discretion (such consent not to be unreasonably withheld, delayed or conditioned)), (i) in the case of any US Loan Party,
require that all cash payments in respect of Accounts owed to such US Loan Party be remitted to a lockbox maintained by any
US Loan Party (the “US Lockbox”) or a Material Account of any US Loan Party, (ii) in the case of any
Canadian Loan Party, require that all cash payments of Accounts owed to any Canadian Loan Party be remitted to a lockbox
maintained by any Canadian Loan Party (the “Canadian Lockbox” and, together with the US Lockbox, the
“Lockboxes”) or a Material Account of any Canadian Loan Party, (iii) except as provided in Section
5.15(b), instruct the financial institution that maintains any US Lockbox to cause all amounts on deposit and available
at the close of each Business Day in such Lockbox (net of any Required Minimum Balance), to be swept to one or more
concentration deposit accounts maintained by any US Loan Party (each, a “US Concentration Account”) not
less frequently than on a daily basis, (iv) except as provided in Section 5.15(b), instruct the financial institution
that maintains such Canadian Lockbox to cause all amounts on deposit and available at the close of each Business Day in such
Lockbox (net of any Required Minimum Balance), to be swept to one or more concentration deposit accounts maintained by any
Canadian Loan Party (each, a “Canadian Concentration Account” and, together with the US Concentration
Account, the “Concentration Accounts”) not less frequently than on a daily basis; (v) enter into a blocked
account agreement (each, a “Blocked Account Agreement”), in form reasonably satisfactory to the
Administrative Agent, with the applicable Loan Party, the Administrative Agent and any financial institution with which such
Loan Party maintains a Concentration Account or Material Account (collectively, the “Blocked Accounts”)
and (vi) deposit (or cause to be deposited) promptly (and in any event no later than the first Business Day after receipt
thereof) all collections on Accounts (including those sent directly by an Account Debtor) into a Blocked Account covered by a
Blocked Account Agreement. From and after such 90th and the 120th day, respectively, after the Closing Date (or such longer
period as the Administrative Agent may agree in its reasonable discretion (such consent not to be unreasonably withheld,
delayed or conditioned)), each Loan Party shall ensure that this Section 5.15(a) is satisfied at all times.
(b)
Each Blocked Account Agreement relating to any Blocked Account shall require, after the delivery of notice of a Cash Dominion
Period by the Administrative Agent to the Lead Borrower and the other parties to such instrument or agreement (which the Administrative
Agent may, or upon the request of the Required Lenders shall, provide upon its becoming aware of such a Cash Dominion Period),
by ACH or wire transfer no less frequently than once per Business Day (unless the Termination Date has occurred), of all available
Cash balances, Cash receipts and Cash Equivalents, including the ledger balance of each Concentration Account and each other Blocked
Account (net of such minimum balance, not to exceed $500,000 per account or $5,000,000 in the aggregate for all such accounts as
may be required to be maintained in the subject Blocked Account by the bank at which such Blocked Account is maintained (the “Required
Minimum Balances”)), to an account maintained under the sole dominion and control of the Administrative Agent (the “Administrative
Agent Account”). All amounts received in the Administrative Agent Account shall be applied (and allocated) by the Administrative
Agent in accordance with Section 2.11(a)(iii)); provided that if the circumstances described in Section 2.18(b)
or (c) are applicable, such amounts shall be applied in accordance with such Section 2.18(b) or (c),
as applicable. In such event, each Loan Party agrees that it will not otherwise direct the proceeds of any Blocked Account.
(c)
Provided that no Cash Dominion Period then exists, the Loan Parties may close any then-existing Deposit Account or Securities
Account. The Loan Parties may open any new Deposit Account or Securities Account, subject, unless such Deposit Account or Securities
Account constitutes an Excluded Account or otherwise constitutes an Excluded Asset (provided that upon such Deposit Account or
Securities Account ceasing to constitute an Excluded Account and an Excluded Asset, such Deposit Account or Securities Account
shall be subject to this Section 5.15), to the execution and delivery to the Administrative Agent of a Blocked Account Agreement
in respect of such newly opened Deposit Account or Securities Account consistent with the provisions of this Section 5.15
and otherwise reasonably satisfactory to the Administrative Agent within 90 days of the opening thereof (or such longer period
as the Administrative Agent may reasonably agree); it being understood and agreed that, (x) notwithstanding the foregoing, in the
event such newly opened Deposit Account or Securities Account constitutes a Concentration Account such Concentration Account shall
be subject to a Blocked Account Agreement consistent with the provisions of this Section 5.15 and otherwise reasonably satisfactory
to the Administrative Agent from and after the date of opening thereof (or such longer period as the Administrative Agent may reasonably
agree) and (y) in the event that any Loan Party acquires any Deposit Account or Securities Account in connection with any Specified
Transaction, such Loan Party shall be required to enter into a Blocked Account Agreement with respect to such acquired Deposit
Account or Securities Account within 120 days following the date of such Specified Transaction (or such longer period as the Administrative
Agent may reasonably agree) unless such Loan Party has closed such Deposit Account or Securities Account (or such Deposit Account
or Securities Account constitutes an Excluded Account or otherwise constitutes an Excluded Asset) prior to such time.
(d) The
Administrative Agent Account shall at all times be under the sole dominion and control of the Administrative Agent. Each Loan
Party hereby acknowledges and agrees that (i) such Loan Party has no right of withdrawal from the Administrative Agent
Account, (ii) the funds on deposit in the Administrative Agent Account shall at all times continue to be collateral security
for all of the applicable Secured Obligations, and (iii) the funds on deposit in the Administrative Agent Account shall be
applied as provided in Sections 2.11(a)(iii), 2.18(b) or 2.18(c), as applicable, and, to the extent
such funds constitute US Collateral, the ABL Intercreditor Agreement. In the event that, notwithstanding the provisions of
this Section 5.15, any Loan Party receives or otherwise has dominion and/or control of any amount required to be
transferred to the Administrative Agent Account pursuant to Section 5.15(b), such amount shall be held in trust by
such Loan Party for the Administrative Agent, and shall promptly be deposited into the Administrative Agent Account or
otherwise transferred in such manner as the Administrative Agent may request.
(e)
Upon the commencement of a Cash Dominion Period and for so long as the same is continuing, upon delivery of notice by the
Administrative Agent to the Lead Borrower (which the Administrative Agent may, or upon the request of the Required Lenders shall,
provide upon its becoming aware of such a Cash Dominion Period), the Administrative Agent may direct that all amounts in the Blocked
Accounts be paid directly to the Administrative Agent Account. So long as no Cash Dominion Period is continuing in respect of which
the Administrative Agent has delivered the notice contemplated by this Section 5.15, each relevant Loan Party may direct,
and shall have sole control over, the disposition of funds in the Blocked Accounts and Concentration Accounts.
(f)
Any amount held or received in the Administrative Agent Account (including all interest and other earnings with respect
thereto, if any) at any time (i) when the Termination Date has occurred or (ii) all Events of Default have been cured and no Cash
Dominion Period exists, shall (subject, in the case of clause (i), to the provisions of any applicable ABL Intercreditor Agreement)
be remitted to an account of the applicable Loan Party (or if requested by any Loan Party, to the Lead Borrower on its behalf).
(g)
Following the commencement of any Cash Dominion Period (other than by reason of an Event of Default pursuant to Section
7.01(a), 7.01(f) or 7.01(g), except to the extent necessary for one or more officers or directors of Holdings,
the Lead Borrower or any of its subsidiaries to avoid personal or criminal liability under applicable Requirements of Law), in
the event that any Blocked Account or the Administrative Agent Account contains identifiable Tax and Trust Funds, the Lead Borrower
(acting in good faith) may, within 30 days after such Tax and Trust Funds are received in such Blocked Account or Administrative
Agent Account, deliver to the Administrative Agent a Trust Fund Certificate. Notwithstanding anything to the contrary herein or
in any other Loan Document, within five Business Days following receipt of a Trust Fund Certificate, the Administrative Agent shall
remit from such Blocked Account or Administrative Agent Account (in each case excluding amounts previously deposited to cash collateralize
Letters of Credit hereunder), as applicable, the lesser of (a) the amount of Tax and Trust Funds specified in the Trust Fund Certificate,
(b) the Availability on the date of such remittance and (c) the amount on deposit in such Blocked Account or Administrative Agent
Account on the date of delivery of such Trust Fund Certificate, at the option of the Administrative Agent, (x) to the applicable
Loan Party or (y) on behalf of the applicable Loan Party directly to the Person entitled to such Tax and Trust Funds; provided
that in no event shall the Administrative Agent be required to remit any amount pursuant to this Section 5.15(g) to the
extent that such amount was previously distributed in accordance with Section 2.11(a)(iii) (or otherwise applied in accordance
with Section 2.18(b) or (c) as applicable). If any such amount is remitted to any Loan Party, such Loan Party shall
apply such amount solely for the purpose set forth in the applicable Trust Fund Certificate on or prior to the date due; it being
understood that the Administrative Agent shall not apply any amount consisting of identifiable Tax and Trust Funds pursuant to
Section 2.11(a)(iii) (or otherwise in accordance with Section 2.18(b) or (c) as applicable) following its
receipt of a Trust Fund Certificate.
ARTICLE
6
NEGATIVE COVENANTS
From the Closing Date
until the Termination Date, (i) in the case of Holdings, solely with respect to Sections 6.04(b) and 6.14 and (ii)
the Borrowers covenant and agree with the Lenders that:
Section 6.01
Indebtedness. The Lead Borrower shall not, nor shall it permit any of its Restricted Subsidiaries to, directly or
indirectly, create, incur, assume or otherwise become or remain liable with respect to any Indebtedness, except:
(a)
the Secured Obligations (including any Additional Revolving Loans and/or Additional Revolving Commitments);
(b)
Indebtedness of the Lead Borrower to any Restricted Subsidiary and/or of any Restricted Subsidiary to the Lead Borrower
or any other Restricted Subsidiary; provided that in the case of any Indebtedness of any Restricted Subsidiary that is not
a Loan Party owing to a Loan Party, such Indebtedness shall be permitted as an Investment by Section 6.06; provided further
that any Indebtedness of any Loan Party to any Restricted Subsidiary that is not a Loan Party must be expressly subordinated to
the Obligations of such Loan Party;
(c)
[Reserved];
(d)
(i) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations
(including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted
hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and (ii) Indebtedness arising
from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance
of the Lead Borrower or any such Restricted Subsidiary pursuant to any such agreement;
(e)
Indebtedness of the Lead Borrower and/or any Restricted Subsidiary (i) pursuant to tenders, statutory obligations, bids,
leases, governmental contracts, trade contracts, surety, stay, customs, appeal, performance and/or return of money bonds or other
similar obligations incurred in the ordinary course of business, (ii) in respect of letters of credit, bank guaranties, surety
bonds, performance bonds or similar instruments to support any of the foregoing items and (iii) in respect of commercial and trade
letters of credit;
(f)
Indebtedness of the Lead Borrower and/or any Restricted Subsidiary in respect of commercial credit cards, stored value cards,
purchasing cards, treasury management services, netting services, overdraft protections, check drawing services, automated payment
services (including depository, overdraft, controlled disbursement, ACH transactions, return items and interstate depository network
services), employee credit card programs, cash pooling services and any arrangements or services similar to any of the foregoing
and/or otherwise in connection with Cash management and Deposit Accounts, including Banking Services Obligations and dealer incentive,
supplier finance or similar programs;
(g) (i)
guaranties by the Lead Borrower and/or any Restricted Subsidiary of the obligations of suppliers, customers and licensees in
the ordinary course of business, (ii) Indebtedness incurred in the ordinary course of business in respect of obligations of
the Lead Borrower and/or any Restricted Subsidiary to pay the deferred purchase price of goods or services or progress
payments in connection with such goods and services and (iii) Indebtedness in respect of letters of credit, bankers’
acceptances, bank guaranties or similar instruments supporting trade payables, warehouse receipts or similar facilities
entered into in the ordinary course of business;
(h) Guarantees
by the Lead Borrower and/or any Restricted Subsidiary of Indebtedness or other obligations of the Lead Borrower and/or any Restricted
Subsidiary with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 or other
obligations not prohibited by this Agreement; provided that in the case of any Guarantee by any Loan Party of the obligations
of any Person that is not a Loan Party, the related Investment is permitted under Section 6.06;
(i) Indebtedness of the Lead Borrower and/or any Restricted Subsidiary existing, or pursuant to commitments existing, on the
Closing Date and described on Schedule 6.01;
(j) Indebtedness
of Restricted Subsidiaries that are not Loan Parties in an aggregate outstanding principal amount of such Indebtedness not to
exceed the greater of $75,000,000 and 45.0% of Consolidated Adjusted EBITDA, provided that the outstanding principal amount
of Indebtedness incurred by Canadian Restricted Subsidiaries that are not Loan Parties shall not exceed the greater of $50,000,000
and 30.0% of Consolidated Adjusted EBITDA;
(k) Indebtedness
of the Lead Borrower and/or any Restricted Subsidiary consisting of obligations owing under incentive, supply, license or similar
agreements entered into in the ordinary course of business;
(l) Indebtedness
of the Lead Borrower and/or any Restricted Subsidiary consisting of (i) the financing of insurance premiums, (ii) take-or-pay
obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to
reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of business;
(m)
Indebtedness of the Lead Borrower and/or any Restricted Subsidiary with respect to Capital Leases and purchase money Indebtedness
incurred prior to or within 270 days of the acquisition, lease, completion of construction, repair of, replacement, improvement
to or installation of assets in an aggregate outstanding principal amount not to exceed the greater of $50,000,000 and 30.0% of
Consolidated Adjusted EBITDA;
(n)
Indebtedness of any Person that becomes a Restricted Subsidiary or Indebtedness assumed in connection with an acquisition
permitted hereunder after the Closing Date; provided that (i) such Indebtedness (A) existed at the time such Person
became a Restricted Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred
in anticipation thereof, (ii) no Event of Default exists or would result after giving pro forma effect to such acquisition,
and (iii) after giving effect to such acquisition on a Pro Forma Basis the Lead Borrower is in compliance with the Payment Conditions
applicable to Indebtedness;
(o)
Indebtedness consisting of promissory notes issued by the Lead Borrower or any Restricted Subsidiary to any stockholder
of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any
Parent Company, the Lead Borrower or any subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption
of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) the
Lead Borrower and its Restricted Subsidiaries may become and remain liable for any Indebtedness refinancing, refunding or
replacing any Indebtedness permitted under clauses (i), (j), (m), (n), (r), (u), (w), (x),
(y), (z) and (jj) and this clause (p) of this Section 6.01 (in any case, including any
refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent
Refinancing Indebtedness in respect of existing Refinancing Indebtedness under this clause (p); provided,
that:
(i)
the principal amount of such Indebtedness does not exceed the principal amount of the Indebtedness being refinanced, refunded
or replaced, except by (A) an amount equal to unpaid accrued interest, penalties and premiums (including tender premiums)
thereon plus commitment, underwriting, arrangement and similar fees, other reasonable and customary fees, commissions and
expenses (including upfront fees, original issue discount or initial yield payments) incurred in connection with the relevant refinancing,
refunding or replacement, (B) an amount equal to any existing commitments unutilized thereunder and (C) additional amounts
permitted to be incurred pursuant to this Section 6.01 (provided that (1) any additional Indebtedness referenced
in this clause (C) satisfies the other applicable requirements of this Section 6.01 (with additional amounts
incurred in reliance on this clause (C) constituting a utilization of the relevant basket or exception pursuant to
which such additional amount is permitted) and (2) if such additional Indebtedness is secured, the Lien securing such Indebtedness
satisfies the applicable requirements of Section 6.02);
(ii)
other than in the case of Refinancing Indebtedness with respect to clauses (i), (m), (n) and (z)
of this Section 6.01 (and other than customary bridge loans with a maturity date of not longer than one year which
are converted into, exchanged for, extended to or otherwise refinanced with Indebtedness subject to the requirements of this clause
(ii)), (A) such Indebtedness has a final maturity on or later than (and, in the case of revolving Indebtedness, does not
require mandatory commitment reductions, if any, prior to) the final maturity of the Indebtedness being refinanced, refunded or
replaced and (B) other than with respect to revolving Indebtedness, a Weighted Average Life to Maturity equal to or greater than
the Weighted Average Life to Maturity of the Indebtedness being refinanced, refunded or replaced;
(iii)
in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (j), (m)
and (u) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding
in reliance on the relevant clause and after the incurrence thereof, shall constitute amounts outstanding under such clause;
(iv)
(A) Holdings may not be the primary obligor of the applicable Refinancing Indebtedness if Holdings was not the primary obligor
on the relevant refinanced Indebtedness, (B) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such
refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness),
(B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced,
except to the extent otherwise permitted pursuant to Section 6.01, and (C) if the Indebtedness being refinanced, refunded
or replaced was originally contractually subordinated to the Obligations in right of payment (or the Liens securing such Indebtedness
were originally contractually subordinated to the Liens on the ABL Priority Collateral securing the Secured Obligations), such
Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment (or the Refinancing Liens securing
such Indebtedness are subordinated to the Liens on the ABL Priority Collateral securing the Secured Obligations, subject to an
ABL Intercreditor Agreement), except to the extent the refinancing, refunding or replacement thereof constitutes a Restricted Debt
Payment permitted under Section 6.04(b) (other than Section 6.04(b)(i)) or does not constitute a Restricted Debt
Payment; and
(v)
no Event of Default exists or would result therefrom.
(q) [Reserved];
(r) Indebtedness
of the Lead Borrower and/or any Restricted Subsidiary in an aggregate outstanding principal amount not to exceed 100% of the amount
of Net Proceeds received by the Lead Borrower (“Contribution Indebtedness”) from (i) the issuance or sale of
Qualified Capital Stock or (ii) any cash contribution to its Capital Stock, in each case, (A) other than any Net Proceeds received
from the sale of Capital Stock to, or contributions from, the Lead Borrower or any of its Restricted Subsidiaries, (B) to the
extent the relevant Net Proceeds have not otherwise been applied to make Investments, Restricted Payments or Restricted Debt Payments
hereunder and (C) other than Cure Amounts;
(s) Indebtedness
of the Lead Borrower and/or any Restricted Subsidiary under any Derivative Transaction not entered into for speculative purposes;
(t) [Reserved];
(u) Indebtedness of the Lead Borrower and/or any Subsidiary Guarantor in an aggregate outstanding principal amount not to exceed
the sum of (i) the greater of $75,000,000 and 45.0% of Consolidated Adjusted EBITDA and (ii) any amounts reallocated to this Section
6.01(u) from Section 6.04(a)(xi);
(v) [Reserved];
(w) Indebtedness
of the Lead Borrower and/or any Restricted Subsidiary so long as (i) such Indebtedness (other than purchase money Indebtedness,
Capital Leases and other Indebtedness incurred to acquire, improve, repair or replace assets) does not mature prior to the date
which is 91 days after the Latest Maturity Date as of the date of incurrence thereof and (ii) the Payment Conditions have been
satisfied, on a Pro Forma Basis;
(x) Indebtedness
of the Lead Borrower under the Second Lien Facility (including any “Incremental Loans”, “Incremental Equivalent
Debt” and “Refinancing Indebtedness” (each as defined in the Second Lien Credit Agreement or any equivalent
term under the documentation governing the Second Lien Facility) in an aggregate principal amount that does not exceed at any
time the sum of (A) $285,000,000 plus (B) the aggregate outstanding principal amount of “Incremental Loans”
and “Incremental Equivalent Debt” (each as defined in the Second Lien Credit Agreement or any equivalent term under
the documentation governing the Second Lien Facility) permitted under the Second Lien Credit Agreement as in effect on the Closing
Date (as amended, restated, modified, replaced or substituted after the Closing Date to conform to any amendment, restatement,
modification, replacement or substitution of the First Lien Credit Agreement relating to the “Incremental Cap” thereunder);
(y) Indebtedness
of the Lead Borrower under (i) the First Lien Facility (including any “Incremental Loans”, Indebtedness constituting
“Incremental Equivalent Debt” and “Refinancing Indebtedness” (each as defined in the First Lien Credit
Agreement or any equivalent term under the documentation governing the First Lien Facility) in an aggregate principal amount not
to exceed the sum of (A) $850,000,000 plus (B) the aggregate outstanding principal amount of “Incremental Loans” and
“Incremental Equivalent Debt” (each as defined in the First Lien Credit Agreement or any equivalent term under the
documentation governing the First Lien Facility) permitted under the First Lien Credit Agreement as in effect on the Closing Date
(as amended, restated, modified, replaced or substituted after the Closing Date to conform to any amendment, restatement, modification,
replacement or substitution of the First Lien Credit Agreement relating to the “Incremental Cap” thereunder) and (ii)
any “Secured Banking Services Obligations” and “Secured Hedging Obligations”, as such terms are defined
in the First Lien Credit Agreement or any equivalent term in any documentation governing the First Lien Facility;
(z) Indebtedness
of the Lead Borrower and/or any Restricted Subsidiary comprised of Capital Lease obligations or rental payments in respect of
any property Disposed of pursuant to any Sale and Lease-Back Transactions permitted pursuant to Section 6.08;
(aa) [Reserved.]
(bb) Indebtedness
(including obligations in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments
with respect to such Indebtedness) incurred by the Lead Borrower and/or any Restricted Subsidiary in respect of workers compensation
claims, unemployment insurance (including premiums related thereto), other types of social security, pension obligations, vacation
pay, health, disability or other employee benefits;
(cc) Indebtedness
of the Lead Borrower and/or any Restricted Subsidiary representing (i) deferred compensation to directors, officers, employees,
members of management, managers, and consultants of any Parent Company, the Lead Borrower and/or any Restricted Subsidiary in
the ordinary course of business and (ii) deferred compensation or other similar arrangements in connection with the Transactions,
any Permitted Acquisition or any other Investment permitted hereby;
(dd) Indebtedness
of the Lead Borrower and/or any Restricted Subsidiary in respect of any letter of credit or bank guarantee issued in favor of
any Issuing Bank to support any Defaulting Lender’s participation in Letters of Credit;
(ee) Indebtedness
of the Lead Borrower and/or any Restricted Subsidiary supported by any letter of credit otherwise permitted to be incurred hereunder;
(ff) unfunded
pension fund and other employee benefit plan obligations and liabilities incurred by the Lead Borrower and/or any Restricted Subsidiary
in the ordinary course of business to the extent that the unfunded amounts would not otherwise cause an Event of Default to exist
under Section 7.01(i);
(gg) without
duplication of any other Indebtedness, all premiums (if any), interest (including post-petition interest and payment in kind interest),
accretion or amortization of original issue discount, fees, expenses and charges with respect to Indebtedness of the Lead Borrower
and/or any Restricted Subsidiary hereunder;
(hh) to
the extent constituting Indebtedness, obligations under the Merger Agreement;
(ii) customer
deposits and advance payments received in the ordinary course of business from customers for goods and services purchased in the
ordinary course of business; and
(jj) Indebtedness
of the Lead Borrower and/or any Restricted Subsidiary relating to any factoring or similar arrangements entered into in the ordinary
course of business so long as any assets subject to any such arrangement are excluded from the Borrowing Base.
Section 6.02
Liens. The Lead Borrower shall not, nor shall it permit any of its Restricted Subsidiaries to, create, incur, assume
or permit or suffer to exist any Lien on or with respect to any property of any kind owned by it, whether now owned or hereafter
acquired, or any income or profits therefrom, except:
(a) Liens securing the Secured Obligations created pursuant to the Loan Documents;
(b) Liens
for Taxes which are (i) for amounts not yet overdue by more than 30 days or (ii) which are not required to be paid pursuant to
Section 5.03;
(c) statutory
Liens (and rights of set-off) of landlords, banks, carriers, warehousemen, mechanics, repairmen, workmen and materialmen, and
other Liens imposed by law, in each case incurred in the ordinary course of business (i) for amounts not yet overdue by more
than 30 days or (ii) for amounts that are overdue by more than 30 days and that are being contested in good faith by appropriate
proceedings, so long as adequate reserves or other appropriate provisions required by GAAP shall have been made for any such contested
amounts;
(d) Liens
incurred (i) in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other
types of social security laws and regulations, (ii) in the ordinary course of business to secure the performance of tenders, statutory
obligations, surety, stay, customs and appeal bonds, bids, leases, government contracts, trade contracts, performance and return-of-money
bonds and other similar obligations (exclusive of obligations for the payment of borrowed money), (iii) pursuant to pledges and
deposits of Cash or Cash Equivalents in the ordinary course of business securing (x) any liability for reimbursement or indemnification
obligations of insurance carriers providing property, casualty, liability or other insurance to Holdings and its subsidiaries
or (y) leases or licenses of property otherwise permitted by this Agreement and (iv) to secure obligations in respect of letters
of credit, bank guaranties, surety bonds, performance bonds or similar instruments posted with respect to the items described
in clauses (i) through (iii) above;
(e) Liens
consisting of easements, rights-of-way, restrictions, encroachments, protrusions and other similar encumbrances and other minor
defects or irregularities in title affecting any Real Estate Assets, in each case which do not, in the aggregate, materially interfere
with the ordinary conduct of the business of the Lead Borrower and/or its Restricted Subsidiaries, taken as a whole, or the use
of the affected property for its intended purpose;
(f) Liens
consisting of any (i) interest or title of a lessor or sub-lessor under any lease of real estate not prohibited hereunder, (ii)
landlord lien permitted by the terms of any lease, (iii) restriction or encumbrance to which the interest or title of such lessor
or sub-lessor may be subject or (iv) subordination of the interest of the lessee or sub-lessee under such lease to any restriction
or encumbrance referred to in the preceding clause (iii);
(g) Liens
(i) solely on any Cash earnest money deposits made by the Lead Borrower and/or any of its Restricted Subsidiaries in connection
with any letter of intent or purchase agreement with respect to any Investment permitted hereunder or (ii) consisting of an agreement
to Dispose or any property in a Disposition permitted under Section 6.07;
(h) purported
Liens evidenced by the filing of PPSA or precautionary UCC financing statements relating solely to operating leases or consignment
or bailee arrangements entered into in the ordinary course of business;
(i) 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;
(j) Liens
in connection with any zoning, building or similar law or right reserved to or vested in any Governmental Authority to control
or regulate the use of any or dimensions of real property or the structure thereon including Liens in connection with any condemnation
or eminent domain proceeding or compulsory purchase order;
(k)
Liens securing Refinancing Indebtedness permitted pursuant to Section 6.01(p), subject, to the extent required thereby,
to an ABL Intercreditor Agreement or another Applicable Intercreditor Agreement in each case providing that any Liens on ABL Priority
Collateral securing any Indebtedness incurred pursuant to this clause (k) are junior to the Liens on the ABL Priority Collateral
securing the Secured Obligations; provided that no such Lien extends to any asset not covered by the Lien securing the Indebtedness
that is being refinanced (unless (except in the case of Sections 6.01(x) and (y) which shall be limited to the Collateral),
such Lien is a Permitted Lien, except as otherwise provided in Section 6.01(p));
(l)
Liens existing on the Closing Date securing obligations not exceeding $2,500,000 in the aggregate and Liens described on
Schedule 6.02 and, in each case, together with any modification, replacement, refinancing, renewal or extension thereof;
provided that (i) no such Lien extends to any additional property other than (A) after-acquired property that is affixed
or incorporated into the property covered by such Lien or financed by Indebtedness permitted under Section 6.01, and
(B) proceeds and products thereof, accessions, replacements or additions thereto and improvements thereon (it being understood
that individual financings of the type permitted under Section 6.01(m) provided by any lender may be cross-collateralized
to other financings of such type provided by such lender or its affiliates), and (ii) such modification, replacement, refinancing,
renewal or extension of the obligations secured or benefited by such Liens, if constituting Indebtedness, is permitted by Section 6.01;
(m)
Liens arising out of Sale and Lease-Back Transactions permitted under Section 6.08 and securing Indebtedness
permitted pursuant to Section 6.01(z);
(n)
Liens securing Indebtedness permitted pursuant to Section 6.01(m); provided that any such Lien shall encumber
only the asset acquired with the proceeds of such Indebtedness and proceeds and products thereof, accessions, replacements or additions
thereto and improvements thereon (it being understood that individual financings of the type permitted under Section 6.01(m)
provided by any lender may be cross-collateralized to other financings of such type provided by such lender or its affiliates);
(o)
Liens securing Indebtedness permitted pursuant to Section 6.01(n) on the relevant acquired assets or on the
Capital Stock and assets of the relevant newly acquired Restricted Subsidiary; provided that (A) no such Lien (x) extends
to or covers any other assets (other than the proceeds or products thereof, accessions, replacements or additions thereto and improvements
thereon) or (y) was created in contemplation of the applicable acquisition of assets or Capital Stock and (B) any Liens on ABL
Priority Collateral securing any Indebtedness pursuant to this clause (o) are junior to the Liens on the ABL Priority Collateral
securing the Secured Obligations, and the agent or other representative for the lenders or holders of such Indebtedness has become
a party to the ABL Intercreditor Agreement or another Acceptable Intercreditor Agreement;
(p) (i)
Liens that are contractual rights of set-off or netting relating to (A) the establishment of depositary relations with banks
not granted in connection with the issuance of Indebtedness, (B) pooled deposit or sweep accounts of the Lead Borrower and/or
any Restricted Subsidiary to permit satisfaction of overdraft or similar obligations incurred in the ordinary course of
business of the Lead Borrower and/or any Restricted Subsidiary, (C) purchase orders and other agreements entered into with
customers of the Lead Borrower and/or any Restricted Subsidiary in the ordinary course of business and (D) commodity
trading or other brokerage accounts incurred in the ordinary course of business, (ii) Liens encumbering reasonable customary
initial deposits and margin deposits, (iii) bankers Liens and rights and remedies as to Deposit Accounts, (iv) Liens of a
collection bank arising under Section 4-208 of the UCC on items in the ordinary course of business, (v) Liens in favor of
banking or other financial institutions arising as a matter of Law or under customary general terms and conditions
encumbering deposits or other funds maintained with a financial institution and that are within the general parameters
customary in the banking industry or arising pursuant to such banking institution’s general terms and conditions,
(vi) Liens on the proceeds of any Indebtedness incurred in connection with any transaction permitted hereunder, which
proceeds have been deposited into an escrow account on customary terms to secure such Indebtedness pending the application of
such proceeds to finance such transaction and (vii) Liens of the type described in the foregoing clauses (i), (ii), (iii), (iv)
and (v) securing obligations under Sections 6.01(f) and/or 6.01(s);
(q) Liens on assets and Capital Stock of Restricted Subsidiaries that are not Loan Parties (including Capital Stock owned by
such Persons but excluding any Capital Stock that is required to be pledged as Collateral) securing Indebtedness of Restricted
Subsidiaries that are not Loan Parties permitted pursuant to Section 6.01;
(r) Liens
securing obligations (other than obligations representing Indebtedness for borrowed money) under operating, reciprocal easement
or similar agreements entered into in the ordinary course of business of the Lead Borrower and/or its Restricted Subsidiaries;
(s) Liens
securing Indebtedness (and related obligations) incurred pursuant to Section 6.01(y); provided that any Liens on
ABL Priority Collateral securing any Indebtedness pursuant to this clause (s) are junior to the Liens on the ABL Priority
Collateral securing the Secured Obligations, and the agent or other representative for the lenders or holders of such Indebtedness
has become a party to an ABL Intercreditor Agreement or another Applicable Intercreditor Agreement;
(t) Liens securing Indebtedness (and related obligations) incurred pursuant to Section 6.01(x); provided that
any Liens on ABL Priority Collateral securing any Indebtedness pursuant to this clause (t) are junior to the Liens on the
ABL Priority Collateral securing the Secured Obligations, and the agent or other representative for the lenders or holders of such
Indebtedness has become a party to an ABL Intercreditor Agreement or another Applicable Intercreditor Agreement;
(u) Liens on assets securing Indebtedness or other obligations in an aggregate principal amount at any time outstanding not
to exceed the sum of (i) the greater of $75,000,000 and 45.0% of Consolidated Adjusted EBITDA and (ii) to the extent any amounts
are reallocated from Section 6.04(a)(xi) to Section 6.01(u), an amount equal to such reallocated amount; provided
that any Liens on ABL Priority Collateral securing any Indebtedness pursuant to this clause (u) are junior to the Liens
on ABL Priority Collateral securing the Secured Obligations, and the agent or other representative for the lenders or holders of
such Indebtedness has become a party to the ABL Intercreditor Agreement;
(v) Liens
on assets securing judgments, awards, attachments and/or decrees and notices of lis pendens and associated rights relating
to litigation being contested in good faith not constituting an Event of Default under Section 7.01(h);
(w)
leases, licenses, subleases or sublicenses granted to others in the ordinary course of business which do not (i) interfere
in any material respect with the business of the Lead Borrower and its Restricted Subsidiaries (other than any Immaterial Subsidiary)
or (ii) secure any Indebtedness;
(x)
Liens on Securities that are the subject of repurchase agreements constituting Investments permitted under Section 6.06
arising out of such repurchase transaction;
(y) Liens securing obligations in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar
instruments permitted under Sections 6.01(d), (e), (g), (bb) and (dd);
(z) Liens
arising (i) out of conditional sale, title retention, consignment or similar arrangements for the sale of any assets or property
in the ordinary course of business and permitted by this Agreement or (ii) by operation of law under Article 2 of the UCC (or
similar law of any jurisdiction);
(aa) Liens
(i) in favor of any Loan Party and/or (ii) granted by any non-Loan Party in favor of any Restricted Subsidiary that is not a Loan
Party, in the case of each of clauses (i) and (ii), securing intercompany Indebtedness permitted under Section 6.01;
(bb) Liens
on insurance policies and the proceeds thereof securing the financing of the premiums with respect thereto;
(cc) Liens
on specific items of inventory or other goods and the proceeds thereof securing the relevant Person’s obligations in respect
of documentary letters of credit or banker’s acceptances issued or created for the account of such Person to facilitate
the purchase, shipment or storage of such inventory or goods;
(dd) Liens
securing (i) obligations under Hedge Agreements in connection with any Derivative Transaction of the type described in Section
6.01(s) and/or (ii) obligations of the type described in Section 6.01(f);
(ee) (i)
Liens on Capital Stock of joint ventures or Unrestricted Subsidiaries securing capital contributions to, or obligations of, such
Persons and (ii) customary rights of first refusal and tag, drag and similar rights in joint venture agreements and agreements
with respect to non-Wholly-Owned Subsidiaries;
(ff) Liens
on cash or Cash Equivalents arising in connection with the defeasance, discharge or redemption of Indebtedness;
(gg) Liens
evidenced by the filing of PPSA or UCC financing statements relating to factoring or similar arrangements entered into in the
ordinary course of business;
(hh) Liens
securing Indebtedness incurred pursuant to Section 6.01(w), so long as (i) the Payment Conditions have been satisfied,
on a Pro Forma Basis, at the time of incurrence of such Liens and (ii) any Liens on ABL Priority Collateral securing any Indebtedness
pursuant to this clause (hh) are junior to the Liens on the ABL Priority Collateral securing the Secured Obligations, and
the agent or other representative for the lenders or holders of such Indebtedness has become a party to an ABL Intercreditor Agreement
or another Applicable Intercreditor Agreement; and
(ii) Liens
on assets of Restricted Subsidiaries that are not Loan Parties securing commercial and trade letters of credit permitted under
Section 6.01(e)(iii).
Section 6.03
No Further Negative Pledges. The Lead Borrower shall not, nor shall it permit any of its Restricted Subsidiaries
to, enter into any agreement prohibiting the creation or assumption of any Lien upon any Collateral, whether now owned or hereafter
acquired, for the benefit of the Secured Parties with respect to the Obligations, except with respect to:
(a) specific
property to be sold pursuant to any Disposition permitted by Section 6.07;
(b)
restrictions contained in any agreement with respect to Indebtedness permitted by Section 6.01 that is secured by
a Permitted Lien, but only if such restrictions apply only to the Person or Persons obligated under such Indebtedness and its or
their Restricted Subsidiaries or the property or assets securing such Indebtedness;
(c)
restrictions contained in any First Lien Facility, any Second Lien Facility and the documentation governing Indebtedness
permitted by clauses (j), (m), (p), (u), (w), (x) and/or (y) of Section
6.01, in each case, to the extent such restriction does not restrict the Secured Obligations from being secured by assets that
constitute Collateral;
(d)
restrictions by reason of customary provisions restricting assignments, subletting or other transfers (including the granting
of any Lien) contained in leases, subleases, licenses, sublicenses and other agreements entered into in the ordinary course of
business (provided that such restrictions are limited to the relevant leases, subleases, licenses, sublicenses or other
agreements and/or the property or assets secured by such Liens or the property or assets subject to such leases, subleases, licenses,
sublicenses or other agreements, as the case may be);
(e)
Permitted Liens and restrictions in the agreements relating thereto that limit the right of the Lead Borrower or any of
its Restricted Subsidiaries to Dispose of, or encumber the assets subject to such Liens;
(f)
provisions limiting the Disposition or distribution of assets or property in joint venture agreements, sale-leaseback agreements,
stock sale agreements and other similar agreements, which limitation is applicable only to the assets that are the subject of such
agreements (or the Persons the Capital Stock of which is the subject of such agreement);
(g)
any encumbrance or restriction assumed in connection with an acquisition of the property or Capital Stock of any Person,
so long as such encumbrance or restriction relates solely to the property so acquired (or to the Person or Persons (and its or
their subsidiaries) bound thereby) and was not created in connection with or in anticipation of such acquisition;
(h)
restrictions imposed by customary provisions in partnership agreements, limited liability company organizational governance
documents, joint venture agreements and other similar agreements that restrict the transfer of the assets of, or ownership interests
in, the relevant partnership, limited liability company, joint venture or any similar Person;
(i)
restrictions on Cash or other deposits imposed by Persons under contracts entered into in the ordinary course of business
or for whose benefit such Cash or other deposits exist;
(j)
restrictions set forth in documents which exist on the Closing Date;
(k)
restrictions set forth in any Loan Document, any Hedge Agreement and/or any agreement relating to any Banking Services Obligation;
(l)
restrictions contained in documents governing Indebtedness permitted hereunder of any Restricted Subsidiary that is not
a Loan Party;
(m)
restrictions on any asset (or all of the assets) of and/or the Capital Stock of the Lead Borrower and/or any Restricted
Subsidiary which is imposed pursuant to an agreement entered into in connection with any Disposition of such asset (or assets)
and/or all or a portion of the Capital Stock of the relevant Person that is permitted or not restricted by this Agreement;
(n)
restrictions set forth in any agreement relating to any Permitted Lien that limits the right of the Lead Borrower or any
Restricted Subsidiary to Dispose of or encumber the assets subject thereto; and
(o) other
restrictions or encumbrances imposed by any amendment, modification, restatement, renewal, increase, supplement, refunding, replacement
or refinancing of the contracts, instruments or obligations referred to in clauses (a) through (n) above; provided
that no such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing is,
in the good faith judgment of the Lead Borrower, more restrictive with respect to such encumbrances and other restrictions, taken
as a whole, than those in effect prior to the relevant amendment, modification, restatement, renewal, increase, supplement, refunding,
replacement or refinancing.
Section 6.04
Restricted Payments; Certain Payments of Indebtedness.
(a)
The Lead Borrower shall not pay or make, directly or indirectly, any Restricted Payment, except that:
(i)
the Lead Borrower may make Restricted Payments to the extent necessary to permit any Parent Company:
(A)
to pay general administrative costs and expenses (including corporate overhead, legal or similar expenses and customary
salary, bonus and other benefits payable to directors, officers, employees, members of management, managers and/or consultants
of any Parent Company) and franchise fees and Taxes and similar fees, Taxes and expenses required to enable such Parent Company
to maintain its organizational existence or qualification to do business, in each case, which are reasonable and customary and
incurred in the ordinary course of business, plus any reasonable and customary indemnification claims made by directors,
officers, members of management, managers, employees or consultants of any Parent Company, in each case, to the extent attributable
to the ownership or operations of any Parent Company and its subsidiaries (but excluding the portion of such amount that is attributable
to the ownership or operations of any subsidiary of any Parent Company other than the Borrower and its subsidiaries);
(B)
to pay scheduled and overdue interest and payments as part of an AHYDO catch-up payment, in each case, in respect of any
Indebtedness of any Parent Company to the extent the Net Proceeds thereof were contributed to the Lead Borrower;
(C)
to pay audit and other accounting and reporting expenses of such Parent Company to the extent attributable to any Parent
Company (but excluding, for the avoidance of doubt, the portion of any such expenses, if any, attributable to the ownership or
operations of any subsidiary of any Parent Company other than the Lead Borrower and/or its subsidiaries), the Lead Borrower and
its subsidiaries;
(D) for
the payment of insurance premiums to the extent attributable to any Parent Company (but excluding, for the avoidance of doubt,
the portion of any such premiums, if any, attributable to the ownership or operations of any subsidiary of any Parent Company
other than the Lead Borrower and/or its subsidiaries), the Lead Borrower and its subsidiaries;
(E)
pay (x) fees and expenses related to debt or equity offerings by any Parent Company, investments or acquisitions permitted
or not restricted by this Agreement (whether or not consummated) and (y) Public Company Costs;
(F)
to finance any Investment permitted under Section 6.06 (provided that (x) any Restricted Payment under this
clause (a)(i)(F) shall be made substantially concurrently with the closing of such Investment and (y) the relevant Parent
Company shall, promptly following the closing thereof, cause (I) all property acquired to be contributed to the Lead Borrower or
one or more of its Restricted Subsidiaries, or (II) the merger, consolidation or amalgamation of the Person formed or acquired
into the Lead Borrower or one or more of its Restricted Subsidiaries, in order to consummate such Investment in compliance with
the applicable requirements of Section 6.06 as if undertaken as a direct Investment by the Lead Borrower or the relevant
Restricted Subsidiary); and
(G)
to pay customary salary, bonus, severance and other benefits payable to current or former directors, officers, members of
management, managers, employees or consultants of any Parent Company (or any Immediate Family Member of any of the foregoing) to
the extent such salary, bonuses and other benefits are attributable and reasonably allocated to the operations of the Lead Borrower
and/or its subsidiaries, in each case, so long as such Parent Company applies the amount of any such Restricted Payment for such
purpose;
(ii)
the Lead Borrower may pay (or make Restricted Payments to allow any Parent Company to pay) for the repurchase, redemption,
retirement or other acquisition or retirement for value of Capital Stock of any Parent Company or any subsidiary held by any future,
present or former employee, director, member of management, officer, manager or consultant (or any Affiliate or Immediate Family
Member thereof) of any Parent Company, the Lead Borrower or any subsidiary:
(A)
in accordance with the terms of promissory notes issued pursuant to Section 6.01(o), so long as the aggregate
amount of all Cash payments made in respect of such promissory notes, together with the aggregate amount of Restricted Payments
made pursuant to sub-clause (D) of this clause (ii) below, does not exceed in any Fiscal Year the greater of $20,000,000
and 12.0% of Consolidated Adjusted EBITDA, which, if not used in any Fiscal Year, may be carried forward to subsequent Fiscal Years;
(B)
with the proceeds of any sale or issuance of the Capital Stock of the Lead Borrower or any Parent Company (to the extent
such proceeds are contributed in respect of Qualified Capital Stock to the Lead Borrower or any Restricted Subsidiary);
(C)
with the net proceeds of any key-man life insurance policies; or
(D)
with Cash and Cash Equivalents in an amount not to exceed in any Fiscal Year, together with the aggregate amount of all
cash payments made pursuant to sub-clause (A) of this clause (ii) in respect of promissory notes issued pursuant
to Section 6.01(o), the greater of $20,000,000 and 12.0% of Consolidated Adjusted EBITDA, which, if not used in any Fiscal
Year, may be carried forward to subsequent Fiscal Years;
(iii)
the Lead Borrower may make Restricted Payments in an amount not to exceed the portion, if any, of the Available Excluded
Contribution Amount on such date that the Lead Borrower elects to apply to this clause (iii);
(iv)
the Lead Borrower may make Restricted Payments (i) to any Parent Company to enable such Parent Company to make Cash payments
in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible
into or exchangeable for Capital Stock of such Parent Company and (ii) consisting of (A) payments made or expected to be made in
respect of withholding or similar Taxes payable by any future, present or former officers, directors, employees, members of management,
managers or consultants of the Lead Borrower, any Restricted Subsidiary or any Parent Company or any of their respective Immediate
Family Members and/or (B) repurchases of Capital Stock in consideration of the payments described in sub-clause (A) above,
including demand repurchases in connection with the exercise of stock options;
(v)
the Lead Borrower may repurchase (or make Restricted Payments to any Parent Company to enable it to repurchase) Capital
Stock upon the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock if such Capital
Stock represents all or a portion of the exercise price of, or tax withholdings with respect to, such warrants, options or other
securities convertible into or exchangeable for Capital Stock as part of a “cashless” exercise;
(vi)
for any taxable period (or portion thereof) that a Parent Company is treated as a corporation for U.S. federal income tax
purposes and for which the Lead Borrower and/or any of its subsidiaries are members (or are pass-through entities of such members)
of a consolidated, combined, unitary or similar income Tax group for U.S. federal, state, local or foreign income Tax purposes
for which such Parent Company is the common parent, the Borrower may make Restricted Payments to such Parent Company to pay the
portion of any U.S. federal, state, local or foreign income Taxes (as applicable) of such Parent Company for such taxable period
that are attributable to the income of the Lead Borrower and/or its applicable subsidiaries; provided that, the aggregate
amount of such distributions shall not exceed the aggregate Taxes the Lead Borrower and/or its subsidiaries, as applicable, would
be required to pay in respect of such U.S. federal, state, local and foreign Taxes on a stand-alone basis for such taxable period;
provided further that the amount of such distributions with respect to any Unrestricted Subsidiary for any taxable period
shall be limited to the amount actually paid by such Unrestricted Subsidiary for such purpose;
(vii)
the Lead Borrower may make Restricted Payments to consummate the Transactions on the Closing Date and to the extent not
paid on the Closing Date, thereafter to pay working capital and purchase price adjustments and other payment obligations under
the Merger Agreement and Transaction Costs;
(viii) so long as no Event of Default exists at the time of declaration of such Restricted Payment, following the consummation
of the first Qualifying IPO, the Lead Borrower may (or may make Restricted Payments to any Parent Company to enable it to) make
Restricted Payments with respect to any Capital Stock in an amount of 6% per annum of the net Cash proceeds received by or contributed
to the Lead Borrower from any Qualifying IPO;
(ix) the
Lead Borrower may make Restricted Payments to (i) redeem, repurchase, retire or otherwise acquire any (A) Capital Stock
(“Treasury Capital Stock”) of the Lead Borrower and/or any Restricted Subsidiary or (B) Capital Stock of
any Parent Company, in the case of each of subclauses (A) and (B), in exchange for, or out of the proceeds of
the substantially concurrent sale (other than to the Lead Borrower and/or any Restricted Subsidiary) of, Qualified Capital
Stock of the Lead Borrower or any Parent Company to the extent any such proceeds are contributed to the capital of the Lead
Borrower and/or any Restricted Subsidiary in respect of Qualified Capital Stock (“Refunding Capital
Stock”) and (ii) declare and pay dividends on any Treasury Capital Stock out of the proceeds of the substantially
concurrent sale (other than to the Lead Borrower or a Restricted Subsidiary) of any Refunding Capital Stock;
(x) to
the extent constituting a Restricted Payment, the Lead Borrower may consummate any transaction permitted by Section 6.06
(other than Sections 6.06(j) and (t)), Section 6.07 (other than Section 6.07(g)) and Section 6.09
(other than Section 6.09(d));
(xi) the
Lead Borrower may make Restricted Payments in an aggregate amount not to exceed the greater of $40,000,000 and 25.0% of Consolidated
Adjusted EBITDA minus the sum of (i) any amounts under this Section 6.04(a)(xi) reallocated to make Restricted Debt
Payments pursuant to Section 6.04(b)(iv)(B), (ii) any amounts under this Section 6.04(a)(xi) reallocated to
make Investments pursuant to Section 6.06(q), and (iii) any amounts under this Section 6.04(a)(xi) reallocated
to incur Indebtedness pursuant to Section 6.01(u);
(xii) the
Lead Borrower may pay any dividend or consummate any redemption within 60 days after the date of the declaration thereof or the
provision of a redemption notice with respect thereto, as the case may be, if at the date of such declaration or notice, the dividend
or redemption notice would have complied with the provisions hereof;
(xiii) the Lead Borrower may make Restricted Payments so long as the Payment Conditions applicable to Restricted Payments have
been satisfied, on a Pro Forma Basis;
(xiv) the
Lead Borrower may make Restricted Payments to enable any Parent Company to make Restricted Payments solely in the Qualified Capital
Stock of such Parent Company; and
(xv) the
Lead Borrower may make Restricted Payments to pay amounts permitted under Section 6.09 (f) and (g).
(b)
Holdings and the Lead Borrower shall not, nor shall they permit any Restricted Subsidiary to, make any payment (whether
in Cash, securities or other property) on or in respect of principal of or interest on (x) any Junior Lien Indebtedness, (y) any
Subordinated Indebtedness or (z) solely to the extent proceeds of Revolving Loans are being used to make such payment, unsecured
Indebtedness, in each cases of clauses (x), (y) and (z), with an individual outstanding principal amount in
excess of the Threshold Amount (such Indebtedness under clauses (x), (y) and (z), in each case, with
an individual outstanding principal amount in excess of the Threshold Amount, the “Restricted Debt”), including
any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination
of any Restricted Debt prior to its scheduled maturity (collectively, “Restricted Debt Payments”), except:
(i)
any purchase, defeasance, redemption, repurchase, repayment or other acquisition or retirement of any Restricted Debt made
by exchange for, or out of the proceeds of, Refinancing Indebtedness permitted by Section 6.01 (except to the extent subject
to clause (iv)(C) of the proviso to Section 6.01(p);
(ii)
payments as part of an AHYDO catch-up payment;
(iii) payments
of regularly scheduled interest as and when due in respect of any Restricted Debt, except for any payments with respect to any
such Subordinated Indebtedness that are prohibited by the subordination provisions thereof;
(iv)
so long as, at the time of delivery of irrevocable notice with respect thereto, no Event of Default exists or would result
therefrom, Restricted Debt Payments in an aggregate amount not to exceed (i) the sum of (A) the greater of $40,000,000 and 25.0%
of Consolidated Adjusted EBITDA and (B) any amounts reallocated to this Section 6.04(b)(iv) from Section 6.04(a)(xi)
and Section 6.06(q), minus (ii) any amounts reallocated from Section 6.04(b)(iv)(A) to make Investments pursuant
to Section 6.06(q);
(v)
(A) Restricted Debt Payments in exchange for, or with proceeds of any issuance of, Qualified Capital Stock of the Lead Borrower
and/or any Restricted Subsidiary and/or any capital contribution in respect of Qualified Capital Stock of the Lead Borrower or
any Restricted Subsidiary, in each case, other than any amounts constituting a Cure Amount, (B) Restricted Debt Payments as a result
of the conversion of all or any portion of any Restricted Debt into Qualified Capital Stock of the Lead Borrower and/or any Restricted
Subsidiary and (C) to the extent constituting a Restricted Debt Payment, payment-in-kind interest with respect to any Restricted
Debt that is permitted under Section 6.01;
(vi)
Restricted Debt Payments in an amount not to exceed the portion, if any, of the Available Excluded Contribution Amount on
such date that the Lead Borrower elects to apply to this clause (vi);
(vii)
Restricted Debt Payments; provided that the Payment Conditions applicable to Restricted Debt Prepayments have been
satisfied on a Pro Forma Basis; and
(viii) mandatory prepayments of Restricted Debt (and related payments of interest) made with “Declined Proceeds” (as
defined in the First Lien Credit Agreement and the Second Lien Credit Agreement, respectively).
Section 6.05
Restrictions on Subsidiary Distributions. Except as provided herein or in any other Loan Document, the First Lien
Facility Documentation, the Second Lien Facility Documentation, any document with respect to any “Incremental Equivalent
Debt” (as defined in the First Lien Credit Agreement and the Second Lien Credit Agreement, respectively, or any equivalent
term under the First Lien Facility and the Second Lien Facility, respectively) and/or in agreements with respect to refinancings,
renewals or replacements of such Indebtedness that are permitted by Section 6.01, the Lead Borrower shall not, nor shall
it permit any of its Restricted Subsidiaries to, enter into or cause to exist any agreement restricting the ability of (i) any
subsidiary of the Lead Borrower to pay dividends or other distributions to the Lead Borrower or any Subsidiary Guarantor or (ii)
any Restricted Subsidiary to make cash loans or advances to the Lead Borrower or any Subsidiary Guarantor, except:
(a)
in any agreement evidencing (i) Indebtedness of a Restricted Subsidiary that is not a Loan Party permitted by Section 6.01,
(ii) Indebtedness permitted by Section 6.01 that is secured by a Permitted Lien if the relevant restriction applies
only to the Person obligated under such Indebtedness and its Restricted Subsidiaries or the property or assets intended to secure
such Indebtedness and (iii) Indebtedness permitted pursuant to clauses (j), (m), (p), (u), (w),
(x) and/or (y) of Section 6.01;
(b)
by reason of customary provisions restricting assignments, subletting or other transfers (including the granting of any
Lien) contained in leases, subleases, licenses, sublicenses, joint venture agreements and similar agreements entered into in the
ordinary course of business;
(c)
that are or were created by virtue of any Lien granted upon, transfer of, agreement to transfer or grant of, any option
or right with respect to any property, assets or Capital Stock not otherwise prohibited under this Agreement;
(d)
assumed in connection with any acquisition of property or the Capital Stock of any Person, so long as the relevant encumbrance
or restriction relates solely to the Person and its subsidiaries (including the Capital Stock of the relevant Person or Persons)
and/or property so acquired (or to the Person or Persons (and its or their subsidiaries) bound thereby) and was not created in
connection with or in anticipation of such acquisition;
(e)
in any agreement for any Disposition of any Restricted Subsidiary (or all or substantially all of the property and/or assets
thereof) that restricts the payment of dividends or other distributions or the making of cash loans or advances by such Restricted
Subsidiary pending such Disposition;
(f)
in provisions in agreements or instruments which prohibit the payment of dividends or the making of other distributions
with respect to any class of Capital Stock of a Person other than on a pro rata basis;
(g)
imposed by customary provisions in partnership agreements, limited liability company organizational governance documents,
joint venture agreements, sale-leaseback agreements, stock sale agreements and other similar agreements;
(h)
on Cash, other deposits or net worth or similar restrictions imposed by any Person under any contract entered into in the
ordinary course of business or for whose benefit such Cash, other deposits or net worth or similar restrictions exist;
(i)
set forth in documents which exist on the Closing Date and not created in contemplation thereof;
(j)
those arising pursuant to an agreement or instrument relating to any Indebtedness permitted to be incurred after the Closing
Date if the relevant restrictions, taken as a whole, are not materially less favorable to the Lenders than the restrictions contained
in this Agreement, taken as a whole (as determined in good faith by the Lead Borrower);
(k)
those arising under or as a result of applicable law, rule, regulation or order or the terms of any license, authorization,
concession or permit;
(l)
those arising in any Loan Document and/or any Loan Document (each as defined in the First Lien Credit Agreement and the
Second Lien Credit Agreement, respectively), any Hedge Agreement and/or any agreement relating to any Banking Services Obligation;
(m) any Indebtedness permitted under Section 6.01; provided that no such restrictions are, in the good faith judgment
of the Lead Borrower, more restrictive with respect to such restrictions, taken as a whole, than those in any Indebtedness existing
on the Closing Date (including under this Agreement, the First Lien Credit Agreement and the Second Lien Credit Agreement); and/or
(n)
those imposed by any amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing
of any contract, instrument or obligation referred to in clauses (a) through (m) above; provided that no such
amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing is, in the good faith
judgment of the Borrower, more restrictive with respect to such restrictions, taken as a whole, than those in existence prior to
such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing.
Section 6.06 Investments. The Lead Borrower shall not, nor shall it permit any of its Restricted Subsidiaries to, make or own any Investment
in any other Person except:
(a)
Cash or Investments that were Cash Equivalents at the time made;
(b)
(i) Investments existing on the Closing Date in any subsidiary, (ii) Investments made after the Closing Date among
the Lead Borrower and/or one or more Restricted Subsidiaries that are Loan Parties (other than Holdings), (iii) Investments made
after the Closing Date by any Loan Party in any Restricted Subsidiary that is not a Loan Party in an aggregate outstanding amount
not to exceed the sum of (A) the greater of $60,000,000 and 35.0% of Consolidated Adjusted EBITDA and (B) any amounts reallocated
to this Section 6.06(b) from Section 6.06(d), (iv) Investments made by Holdings, the Lead Borrower and/or any Restricted
Subsidiary in the form of any contribution or Disposition of the Capital Stock of any Person that is not a Loan Party, and (v) Investments
made by any Restricted Subsidiary that is not a Loan Party in any Loan Party (other than Holdings) or any other Restricted Subsidiary
of the Lead Borrower;
(c)
Investments (i) constituting deposits, prepayments and/or other credits to suppliers, (ii) made in connection with obtaining,
maintaining or renewing client and customer contracts and/or (iii) in the form of advances made to distributors, suppliers, licensors
and licensees, in each case, in the ordinary course of business or, in the case of clause (iii), to the extent necessary
to maintain the ordinary course of supplies to the Lead Borrower or any Restricted Subsidiary;
(d)
Investments in Unrestricted Subsidiaries or in joint ventures (including in connection with the creation, formation and/or
acquisition of any joint venture, or in any Restricted Subsidiary to enable such Restricted Subsidiary to make an Investment in
joint ventures, including to create, form and/or acquire any joint venture) in an aggregate outstanding amount not to exceed (i)
the greater of $50,000,000 and 30.0% of Consolidated Adjusted EBITDA minus (ii) any amounts reallocated from this Section
6.06(d) to Section 6.06(b)(iii);
(e)
(i) Permitted Acquisitions and (ii) Investments in Restricted Subsidiaries that are not Loan Parties in amounts required
to permit such Restricted Subsidiaries to consummate Permitted Acquisitions (subject to any applicable limitations in clause
(b) of the first proviso in the definition of “Permitted Acquisition”;
(f)
Investments (i) existing on, or contractually committed to or contemplated as of, the Closing Date and described on Schedule 6.06
and (ii) any modification, replacement, renewal or extension of any Investment described in clause (i) above so long as
no such modification, renewal or extension thereof increases the amount of such Investment except by the terms thereof or as otherwise
permitted by this Section 6.06);
(g)
Investments received in lieu of Cash in connection with any Disposition permitted by Section 6.07 or any other
disposition of assets not constituting a Disposition;
(h)
loans or advances to present or former employees, directors, members of management, officers, managers or consultants or
independent contractors (or their respective Immediate Family Members) of any Parent Company, the Lead Borrower and its subsidiaries
and/or any joint venture to the extent permitted by Requirements of Law, in connection with such Person’s purchase of Capital
Stock of any Parent Company, either (i) in an aggregate principal amount not to exceed $7,500,000 at any one time outstanding or
(ii) so long as the proceeds of such loan or advance are substantially contemporaneously contributed to the Lead Borrower for the
purchase of such Capital Stock;
(i)
Investments consisting of extensions of credit in the nature of accounts receivable or notes receivable arising from the
grant of trade credit in the ordinary course of business;
(j)
Investments consisting of Indebtedness permitted under Section 6.01 (other than Indebtedness permitted under
Sections 6.01(b) and (h)), Permitted Liens, Restricted Payments permitted under Section 6.04 (other
than Section 6.04(a)(x)), Restricted Debt Payments permitted by Section 6.04 and mergers, consolidations, amalgamations,
liquidations, windings up, dissolutions or Dispositions permitted by Section 6.07 (other than Section 6.07(a)
(if made in reliance on subclause (ii)(y) of the proviso thereto), Section 6.07(c)(ii) (if made in reliance
on clause (B) therein) and Section 6.07(g)) and affiliate transactions permitted by Section 6.09 (other
than Section 6.09(d));
(k)
Investments in the ordinary course of business consisting of endorsements for collection or deposit and customary trade
arrangements with customers;
(l)
Investments (including debt obligations and Capital Stock) received (i) in connection with the bankruptcy or reorganization
of any Person, (ii) in settlement of delinquent obligations of, or other disputes with, customers, suppliers and other account
debtors arising in the ordinary course of business, (iii) upon foreclosure with respect to any secured Investment or other
transfer of title with respect to any secured Investment and/or (iv) as a result of the settlement, compromise, resolution of litigation,
arbitration or other disputes;
(m)
loans and advances of payroll payments or other compensation to present or former employees, directors, members of management,
officers, managers or consultants of any Parent Company (to the extent such payments or other compensation relate to services provided
to such Parent Company (but excluding, for the avoidance of doubt, the portion of any such amount, if any, attributable to the
ownership or operations of any subsidiary of any Parent Company other than the Lead Borrower and/or its subsidiaries)), the Lead
Borrower and/or any subsidiary in the ordinary course of business;
(n)
Investments to the extent that payment therefor is made solely with Capital Stock of any Parent Company or Capital Stock
(other than Disqualified Capital Stock) of the Lead Borrower or any Restricted Subsidiary, in each case, to the extent not resulting
in a Change of Control;
(o)
(i) Investments of any Restricted Subsidiary acquired after the Closing Date, or of any Person acquired by, or merged into
or consolidated or amalgamated with, the Lead Borrower or any Restricted Subsidiary after the Closing Date, in each case as part
of an Investment otherwise permitted by this Section 6.06 to the extent that such Investments were not made in contemplation
of or in connection with such acquisition, merger, amalgamation or consolidation and were in existence on the date of the relevant
acquisition, merger, amalgamation or consolidation and (ii) any modification, replacement, renewal or extension of any Investment
permitted under clause (i) of this Section 6.06(o) so long as no such modification, replacement, renewal or
extension thereof increases the amount of such Investment except as otherwise permitted by this Section 6.06;
(p)
Investments made in connection with the Transactions;
(q) Investments
made after the Closing Date by the Lead Borrower and/or any of its Restricted Subsidiaries in an aggregate amount not to
exceed at any time outstanding an amount equal to (i) the sum of (A) the greater of $75,000,000 and 45.0% of Consolidated
Adjusted EBITDA, (B) any amounts reallocated to this Section 6.06(q) from Section 6.04(a)(xi) or Section
6.04(b)(iv), and (C) with respect to any Person that becomes a Restricted Subsidiary of the Lead Borrower if the Lead
Borrower or any of its Restricted Subsidiaries made an Investment in such Person after the Closing Date prior to such Person
becoming a Restricted Subsidiary, the Fair Market Value of such Investments as of the date on which such Person becomes a
Restricted Subsidiary, minus (ii) any amounts reallocated from this this Section 6.06(q) to make Restricted
Debt Payments pursuant to Section 6.04(b)(iv);
(r)
Investments made after the Closing Date by the Lead Borrower and/or any of its Restricted Subsidiaries in an amount not
to exceed the portion, if any, of the Available Excluded Contribution Amount on such date that the Lead Borrower elects to apply
to this clause (r);
(s)
(i) Guarantees of leases (other than Capital Leases) or of other obligations not constituting Indebtedness and (ii) Guarantees
of the lease obligations of suppliers, customers, franchisees and licensees of the Lead Borrower and/or its Restricted Subsidiaries,
in each case, in the ordinary course of business;
(t)
Investments in any Parent Company in amounts and for purposes for which Restricted Payments to such Parent Company are permitted
under Section 6.04(a); provided that any Investment made as provided above in lieu of any such Restricted Payment
shall reduce availability under the applicable Restricted Payment basket under Section 6.04(a);
(u)
Investments made by any Restricted Subsidiary that is not a Loan Party with the proceeds received by such Restricted Subsidiary
from an Investment made by any Loan Party in such Restricted Subsidiary pursuant to this Section 6.06 (other than Investments
made pursuant to clause (ii) of Section 6.06(e));
(v)
Investments in subsidiaries and joint ventures in connection with reorganizations and related activities related to tax
planning; provided that, after giving effect to any such reorganization and/or related activity, the security interest of
the Administrative Agent in the Collateral, taken as a whole, is not materially impaired;
(w)
Investments under any Derivative Transaction of the type permitted under Section 6.01(s);
(x) [Reserved];
(y)
Investments made in joint ventures as required by, or made pursuant to, buy/sell arrangements between the joint venture
parties set forth in joint venture agreements and similar binding arrangements in effect on the Closing Date (other than any modification,
replacement, renewal or extension of such Investments so long as no such modification, renewal or extension thereof increased the
amount of any such Investment except by the terms thereof or as otherwise permitted by this Section 6.06);
(z)
unfunded pension fund and other employee benefit plan obligations and liabilities to the extent that they are permitted
to remain unfunded under applicable law;
(aa)
Investments in the Lead Borrower, any subsidiary and/or any joint venture in connection with intercompany cash management
arrangements and related activities in the ordinary course of business;
(bb)
Investments so long as, after giving effect thereto on a Pro Forma Basis, the Payment Conditions with respect to Investments
have been satisfied;
(cc) Investments
consisting of the licensing or contribution of IP Rights pursuant to joint marketing arrangements with other Persons; and
(dd) Investments
in similar businesses in an aggregate outstanding principal amount not to exceed the greater of $60,000,000 and 35.0% of Consolidated
Adjusted EBITDA.
Section 6.07 Fundamental Changes; Disposition of Assets. The Lead Borrower shall not, nor shall it permit any of its Restricted
Subsidiaries to, enter into any transaction of merger, consolidation or amalgamation, or liquidate, wind up or dissolve themselves
(or suffer any liquidation or dissolution), or make any Disposition of any assets in a single transaction or in a series of related
transactions, except:
(a) any Restricted Subsidiary may be merged, consolidated or amalgamated with or into the Lead Borrower or any other Restricted
Subsidiary; provided that (i) in the case of any such merger, consolidation or amalgamation with or into the US Borrower,
(A) the US Borrower shall be the continuing or surviving Person or (B) if the Person formed by or surviving any such merger, consolidation
or amalgamation is not the US Borrower (any such Person, the “US Successor Borrower”), (x) the US Successor
Borrower shall be an entity organized or existing under the law of the U.S., any state thereof or the District of Columbia, (y)
the US Successor Borrower shall expressly assume the Obligations of the US Borrower in a manner reasonably satisfactory to the
Administrative Agent and concurrently with the consummation of such merger, consolidation or amalgamation, 100% of the Capital
Stock of the US Successor Borrower shall be pledged to the Administrative Agent for the benefit of the Secured Parties and (z)(1)
except as the Administrative Agent may otherwise agree, each applicable Guarantor, unless it is the other party to such merger,
consolidation or amalgamation, shall have executed and delivered a reaffirmation agreement with respect to its obligations under
the Loan Guaranty and the other Loan Documents and (2) upon its reasonable request, the Administrative Agent shall have received
customary legal opinions; it being understood and agreed that if the foregoing conditions under clauses (x) through (z)
are satisfied, the US Successor Borrower will succeed to, and be substituted for, the US Borrower under this Agreement and the
other Loan Documents, (ii) in the case of any such merger, consolidation or amalgamation with or into the Canadian Borrower, (A)
the Canadian Borrower shall be the continuing or surviving Person or (B) if the Person formed by or surviving any such merger,
consolidation or amalgamation is not the applicable Canadian Borrower (any such Person, a “Canadian Successor Borrower”),
(x) the Canadian Successor Borrower shall be a Canadian Person, (y) the Canadian Successor Borrower shall expressly assume the
Obligations of the Canadian Borrower in a manner reasonably satisfactory to the Administrative Agent and concurrently with the
consummation of such merger, consolidation or amalgamation, (i) 65% of the Capital Stock of the Canadian Successor Borrower shall
be pledged to the Administrative Agent to secure the US Secured Obligations and (ii) 100% of the Capital Stock of the Canadian
Successor Borrower shall be pledged to the Administrative Agent to secure the Canadian Secured Obligations and (z)(1) except as
the Administrative Agent may otherwise agree, each applicable Guarantor, unless it is the other party to such merger, consolidation
or amalgamation, shall have executed and delivered a reaffirmation agreement with respect to its obligations under the Loan Guaranty
and the other Loan Documents and (2) upon its reasonable request, the Administrative Agent shall have received customary legal
opinions; it being understood and agreed that if the foregoing conditions under clauses (x) through (z) are satisfied,
the Canadian Successor Borrower will succeed to, and be substituted for, the applicable Canadian Borrower under this Agreement
and the other Loan Documents, and (iii) in the case of any such merger, consolidation or amalgamation with or into any Subsidiary
Guarantor, either (x) such Subsidiary Guarantor shall be the continuing or surviving Person or the continuing or surviving Person
shall expressly assume the guarantee obligations of the Subsidiary Guarantor in a manner reasonably satisfactory to the Administrative
Agent or (y) the relevant transaction shall be treated as an Investment and shall comply with Section 6.06;
(b) Dispositions
(including of Capital Stock) among the Lead Borrower and/or any Restricted Subsidiary (upon voluntary liquidation or
otherwise); provided that any such Disposition by any Loan Party to any Person that is not a Loan Party shall be (i)
for Fair Market Value with at least 75% of the consideration for such Disposition consisting of Cash or Cash Equivalents at
the time of such Disposition or (ii) treated as an Investment and otherwise made in compliance with Section 6.06
(other than in reliance on clause (j) thereof); provided, further, that the Lead Borrower shall deliver
an updated Borrowing Base Certificate at any time the amount of assets Disposed of pursuant to this clause (b) reduces
the Borrowing Bases by more than $10,000,000;
(c) (i) the liquidation or dissolution of any Restricted Subsidiary (other than the Canadian Borrower) if the Lead Borrower
determines in good faith that such liquidation or dissolution is in the best interests of the Lead Borrower, is not materially
disadvantageous to the Lenders and the Lead Borrower or any Restricted Subsidiary receives any assets of the relevant dissolved
or liquidated Restricted Subsidiary; provided that in the case of any liquidation or dissolution of any Loan Party that
results in a distribution of assets to any Restricted Subsidiary that is not a Loan Party, such distribution shall be treated as
an Investment and shall comply with Section 6.06 (other than in reliance on clause (j) thereof); (ii) any merger,
amalgamation, dissolution, liquidation or consolidation, the purpose of which is to effect (A) any Disposition otherwise permitted
under this Section 6.07 (other than clause (a), clause (b) or this clause (c)) or (B) any Investment
permitted under Section 6.06; and (iii) the Lead Borrower or any Restricted Subsidiary may be converted into another form
of entity, in each case, so long as such conversion does not adversely affect the value of the Loan Guaranty or Collateral, if
any;
(d) (x) Dispositions of inventory or equipment in the ordinary course of business (including on an intercompany basis)
and (y) the leasing or subleasing of real property in the ordinary course of business;
(e) Dispositions of surplus, obsolete, used or worn out property or other property that, in the reasonable judgment of the Lead
Borrower, is (A) no longer useful in its business (or in the business of any Restricted Subsidiary of the Lead Borrower) or (B)
otherwise economically impracticable to maintain;
(f) Dispositions of Cash Equivalents or other assets that were Cash Equivalents when the relevant original Investment was made;
(g) Dispositions, mergers, amalgamations, consolidations or conveyances that constitute Investments permitted pursuant to Section 6.06
(other than Section 6.06(j)), Permitted Liens, Restricted Payments permitted by Section 6.04(a) (other than Section 6.04(a)(ix))
and Sale and Lease-back Transactions permitted by Section 6.08;
(h) Dispositions
for Fair Market Value; provided that with respect to any such Disposition with a purchase price in excess of the
greater of $65,000,000 and 40.0% of Consolidated Adjusted EBITDA, at least 75% of the consideration for such Disposition
shall consist of Cash or Cash Equivalents; provided, that for purposes of the 75% Cash consideration requirement, (w)
the amount of any Indebtedness or other liabilities (other than Indebtedness or other liabilities that are subordinated to
the Obligations or that are owed to the Lead Borrower or any Restricted Subsidiary) of the Lead Borrower or any Restricted
Subsidiary (as shown on such Person’s most recent balance sheet or statement of financial position (or in the notes
thereto)) that are assumed by the transferee of any such assets and for which the Lead Borrower and/or its applicable
Restricted Subsidiary have been validly released by all relevant creditors in writing, (x) the amount of any trade-in value
applied to the purchase price of any replacement assets acquired in connection with such Disposition, (y) any Securities
received by the Lead Borrower or any Restricted Subsidiary from such transferee that are converted by such Person into Cash
or Cash Equivalents (to the extent of the Cash or Cash Equivalents received) within 180 days following the closing of the
applicable Disposition and (z) any Designated Non-Cash Consideration received in respect of such Disposition having an
aggregate fair market value, taken together with all other Designated Non-Cash Consideration received pursuant to this clause
(z) and Section 6.08(B)(1)(z) that is at that time outstanding, not in excess of the greater of $50,000,000 and
30.0% of Consolidated Adjusted EBITDA, in each case, shall be deemed to be Cash; provided, further, that (x) on
the date on which the agreement governing such Disposition is executed, no Event of Default shall exist and (y) an updated
Borrowing Base Certificate shall be delivered to the Administrative Agent to the extent such Disposition causes the Borrowing
Base to be reduced by greater than $10,000,000;
(i) to the extent that (i) the relevant property is exchanged for credit against the purchase price of similar replacement property
or (ii) the proceeds of the relevant Disposition are promptly applied to the purchase price of such replacement property;
(j) Dispositions of Investments in joint ventures to the extent required by, or made pursuant to, buy/sell arrangements between
joint venture or similar parties set forth in the relevant joint venture arrangements and/or similar binding arrangements;
(k) Dispositions of accounts receivable in the ordinary course of business (including any discount and/or forgiveness thereof)
and any factoring or similar arrangement or in connection with the collection or compromise of any of the foregoing;
(l) Dispositions and/or terminations of leases, subleases, licenses or sublicenses (including the provision of software under
any open source license), which (i) do not materially interfere with the business of the Lead Borrower and its Restricted Subsidiaries
or (ii) relate to closed facilities or the discontinuation of any product line;
(m) (i) any termination of any lease in the ordinary course of business, (ii) any expiration of any option agreement
in respect of real or personal property and (iii) any surrender or waiver of contractual rights or the settlement, release
or surrender of contractual rights or litigation claims (including in tort) in the ordinary course of business;
(n) Dispositions of property subject to foreclosure, casualty, eminent domain or condemnation proceedings (including in lieu
thereof or any similar proceeding);
(o) Dispositions or consignments of equipment, inventory or other assets (including leasehold interests in real property) with
respect to facilities that are temporarily not in use, held for sale or closed;
(p) Dispositions in connection with the Transactions;
(q) Dispositions of non-core assets acquired in connection with any acquisition permitted hereunder and sales of Real Estate
Assets acquired in any acquisition permitted hereunder; provided that no Event of Default exists on the date on which the
definitive agreement governing the relevant Disposition is executed;
(r) exchanges or swaps, including transactions covered by Section 1031 of the Code (or any comparable provision of any
foreign jurisdiction), of property or assets so long as any such exchange or swap is made for fair value (as reasonably determined
by the Lead Borrower) for like property or assets; provided that upon the consummation of any such exchange or swap by any
Loan Party, to the extent the property received does not constitute an Excluded Asset, the Administrative Agent has a perfected
Lien with the same priority as the Lien held on the Real Estate Assets so exchanged or swapped;
(s) Dispositions set forth on Schedule 6.07(s);
(t) (i)
licensing and cross-licensing arrangements involving any technology, intellectual property or IP Rights of the Lead Borrower or
any Restricted Subsidiary in the ordinary course of business and (ii) Dispositions, abandonments, cancellations or lapses
of IP Rights, or issuances or registrations, or applications for issuances or registrations, of IP Rights, which, in the reasonable
good faith determination of the Lead Borrower, are not material to the conduct of the business of the Lead Borrower or its Restricted
Subsidiaries, or are no longer economical to maintain in light of its use;
(u) terminations or unwinds of Derivative Transactions;
(v) Dispositions of Capital Stock of, or sales of Indebtedness or other Securities of, Unrestricted Subsidiaries;
(w) Dispositions of Real Estate Assets and related assets in the ordinary course of business in connection with relocation activities
for directors, officers, employees, members of management, managers or consultants of any Parent Company, the Lead Borrower and/or
any Restricted Subsidiary;
(x) Dispositions made to comply with any order of any agency of the U.S. Federal government, any state, authority or other regulatory
body or any applicable Requirement of Law;
(y) any merger, amalgamation, consolidation, Disposition or conveyance the sole purpose of which is to reincorporate or reorganize
(i) any Domestic Subsidiary in another jurisdiction in the U.S., (ii) any Canadian Loan Party in the U.S. and/or (iii) any Foreign
Subsidiary in the U.S. or any other jurisdiction;
(z) any sale of motor vehicles and information technology equipment purchased at the end of an operating lease and resold thereafter;
and
(aa) Dispositions involving assets having a Fair Market Value in the aggregate since the Closing Date of not more than the greater
of $60,000,000 and 35.0% of Consolidated Adjusted EBITDA.
To the extent that any Collateral is Disposed
of as expressly permitted by this Section 6.07 to any Person other than a Loan Party, such Collateral shall be sold free
and clear of the Liens created by the Loan Documents, which Liens shall be automatically released upon the consummation of such
Disposition; it being understood and agreed that the Administrative Agent shall be authorized to take, and shall take, any actions
deemed appropriate in order to effect the foregoing in accordance with Article 8.
Section 6.08 Sale
and Lease-Back Transactions. The Lead Borrower shall not, nor shall it permit any of its Restricted Subsidiaries to,
directly or indirectly, become or remain liable as lessee or as a guarantor or other surety with respect to any lease of any
property (whether real, personal or mixed), whether now owned or hereafter acquired, which the Lead Borrower or the relevant
Restricted Subsidiary (a) has sold or transferred or is to sell or to transfer to any other Person (other than the Lead
Borrower or any of its Restricted Subsidiaries) and (b) intends to use for substantially the same purpose as the property
which has been or is to be sold or transferred by the Lead Borrower or such Restricted Subsidiary to any Person (other than
the Lead Borrower or any of its Restricted Subsidiaries) in connection with such lease (such a transaction described herein,
a “Sale and Lease-Back Transaction”); provided, that any Sale and Lease-Back Transaction shall be
permitted so long as such Sale and Lease-Back Transaction is (A) permitted by Section 6.01(m), and/or (B) (1) made in
exchange for not less than 75% cash consideration (provided, that for purposes of the foregoing 75% Cash consideration
requirement, (w) the amount of any Indebtedness or other liabilities (other than Indebtedness or other liabilities that are
subordinated to the Obligations or that are owed to the Lead Borrower or any Restricted Subsidiary) of the Lead Borrower or
any Restricted Subsidiary (as shown on such Person’s most recent balance sheet or statement of financial position (or
in the notes thereto) that are assumed by the transferee of any such assets and for which the Lead Borrower and/or its
applicable Restricted Subsidiary have been validly released by all relevant creditors in writing, (x) the amount of any
trade-in value applied to the purchase price of any replacement assets acquired in connection with such Sale and Lease-Back
Transaction, (y) any Securities received by the Lead Borrower or any Restricted Subsidiary from such transferee that are
converted by such Person into Cash or Cash Equivalents (to the extent of the Cash or Cash Equivalents received) within 180
days following the closing of the applicable Sale and Lease-Back Transaction and (z) any Designated Non-Cash Consideration
received in respect of the relevant Sale and Lease-Back Transaction having an aggregate fair market value, taken together
with all other Designated Non-Cash Consideration received pursuant to this clause (z) and Section 6.07(h)(z) that
is at that time outstanding, not in excess of the greater of $50,000,000 and 30.0% of Consolidated Adjusted EBITDA), (2) the
Lead Borrower or its applicable Restricted Subsidiary would otherwise be permitted to enter into, and remain liable under,
the applicable underlying lease and (3) the aggregate Fair Market Value of the assets sold subject to all Sale and Lease-Back
Transactions under this clause (B) shall not exceed the greater of $60,000,000 and 35.0% of Consolidated Adjusted
EBITDA as of the last day of the most recently ended Test Period.
Section 6.09 Transactions with Affiliates. The Lead Borrower shall not, nor shall it permit any of its Restricted Subsidiaries
to, enter into any transaction (including the purchase, sale, lease or exchange of any property or the rendering of any service)
involving payment in excess of $10,000,000 with any of their respective Affiliates on terms that are less favorable to the Lead
Borrower or such Restricted Subsidiary, as the case may be (as reasonably determined by the Lead Borrower), than those that might
be obtained at the time in a comparable arm’s-length transaction from a Person who is not an Affiliate; provided that
the foregoing restriction shall not apply to:
(a) any transaction between or among the Lead Borrower and/or one or more Restricted Subsidiaries (or any entity that becomes
a Restricted Subsidiary as a result of such transaction) to the extent not prohibited by this Agreement;
(b) any issuance, sale or grant of securities or other payments, awards or grants in cash, securities or otherwise pursuant
to, or the funding of employment arrangements, stock options and stock ownership plans approved by the board of directors (or equivalent
governing body) of any Parent Company or of the Lead Borrower or any Restricted Subsidiary;
(c) (i) any collective bargaining, employment or severance agreement or compensatory (including profit sharing) arrangement
entered into by the Lead Borrower or any of its Restricted Subsidiaries with their respective current or former officers, directors,
members of management, managers, employees, consultants or independent contractors or those of any Parent Company, (ii) any subscription
agreement or similar agreement pertaining to the repurchase of Capital Stock pursuant to put/call rights or similar rights with
current or former officers, directors, members of management, managers, employees, consultants or independent contractors and (iii)
transactions pursuant to any employee compensation, benefit plan, stock option plan or arrangement, any health, disability or similar
insurance plan which covers current or former officers, directors, members of management, managers, employees, consultants or independent
contractors or any employment contract or arrangement;
(d) (i) transactions permitted by Sections 6.01(b), (d), (h), (o), (cc), (dd), (ff)
and (hh), 6.02 (to the extent securing Indebtedness under any of preceding clauses of Section 6.01),
6.04, 6.06 and 6.07(a), (g), (j) and (y), and (ii) issuances of Capital Stock and Indebtedness
not restricted by this Agreement;
(e) transactions
in existence on the Closing Date or pursuant to any agreements or arrangements in effect on the Closing Date and any amendment,
modification or extension thereof to the extent such amendment, modification or extension, taken as a whole, is not (i) materially
adverse to the Lenders or (ii) more disadvantageous to the Lenders than the relevant transaction in existence on the Closing Date;
(f) (i) the payment of management, monitoring, consulting, advisory, Transaction and similar fees to any Investor pursuant to
any management agreement entered into by the Lead Borrower (and/or any Parent Company) on the Closing Date (without giving effect
to any amendment materially increasing such fees) and (ii) the payment or reimbursement of all indemnification obligations and
expenses owed to any Investor and any of their respective directors, officers, members of management, managers, employees and consultants
pursuant to such management agreement or similar agreement, in each case of clauses (i) and (ii) whether currently
due or paid in respect of accruals from prior periods; provided that, so long as an Event of Default exists under Section 7.01(a)
(solely with respect to principal, interest and fees), (f) or (g) (with respect to the Lead Borrower), the payment
of such management, monitoring, consulting, advisory and similar fees in clause (i) may be restricted, in which case, such
fees shall continue to accrue and be payable upon the waiver, termination or cure of the relevant Event of Default;
(g) the Transactions, including the payment of Transaction Costs and payments required under the Merger Agreement (as in effect
on the Closing Date);
(h) customary compensation to Affiliates in connection with financial advisory, financing, underwriting or placement services
or in respect of other investment banking activities and other transaction fees, which payments are approved by the majority of
the members of the board of directors (or similar governing body) or a majority of the disinterested members of the board of directors
(or similar governing body) of the Lead Borrower in good faith;
(i) transactions and payments required under the definitive agreement for any acquisition or Investment permitted under this
Agreement (to the extent any seller, employee, officer or director of the acquired entities becomes an Affiliate in connection
with such transaction);
(j) transactions among the Loan Parties to the extent permitted under this Article 6;
(k) the payment of customary fees and reasonable out-of-pocket costs to, and indemnities provided on behalf of, members of the
board of directors (or similar governing body), officers, employees, members of management, managers, consultants and independent
contractors of the Lead Borrower and/or any of its Restricted Subsidiaries in the ordinary course of business and, in the case
of payments to such Person in such capacity on behalf of any Parent Company, to the extent attributable to the operations of the
Lead Borrower or its Restricted Subsidiaries;
(l) transactions with customers, clients, suppliers, joint ventures, purchasers or sellers of goods or services or providers
of employees or other labor entered into in the ordinary course of business, which are (i) fair to the Lead Borrower and/or its
applicable Restricted Subsidiary in the good faith determination of the board of directors (or similar governing body) of the Lead
Borrower or the senior management thereof or (ii) on terms at least as favorable as might reasonably be obtained from a Person
other than an Affiliate;
(m) the payment of reasonable out-of-pocket costs and expenses related to registration rights and customary indemnities provided
to shareholders under any shareholder agreement;
(n) (i)
any purchase by Holdings of the Capital Stock of (or contribution to the equity capital of) the Lead Borrower and (ii) any intercompany
loans made by Holdings to the Lead Borrower or any Restricted Subsidiary; and
(o) any transaction in respect of which the Lead Borrower delivers to the Administrative Agent a letter addressed to the board
of directors (or equivalent governing body) of the Lead Borrower from an accounting, appraisal or investment banking firm of nationally
recognized standing stating that such transaction is on terms that are no less favorable to the Lead Borrower or the applicable
Restricted Subsidiary than might be obtained at the time in a comparable arm’s length transaction from a Person who is not
an Affiliate.
Section 6.10 Conduct of Business. From and after the Closing Date, the Lead Borrower shall not, nor shall it permit any of its
Restricted Subsidiaries to, engage in any material line of business other than (a) the businesses engaged in by the Lead Borrower
or any Restricted Subsidiary on the Closing Date and similar, complementary, ancillary or related businesses and (b) such other
lines of business to which the Administrative Agent may consent.
Section 6.11 [Reserved].
Section 6.12 Amendments of or Waivers with Respect to Restricted Debt. The Lead Borrower shall not, nor shall it permit any of
its Restricted Subsidiaries to, amend or otherwise modify the terms of any Restricted Debt (or the documentation governing any
Restricted Debt) if the effect of such amendment or modification, together with all other amendments or modifications made, is
in the reasonable judgment of the Lead Borrower materially adverse to the interests of the Lenders (in their capacities as such);
provided that, (a) for purposes of clarity, it is understood and agreed that the foregoing limitation shall not otherwise
prohibit any Refinancing Indebtedness or any other replacement, refinancing, amendment, supplement, modification, extension, renewal,
restatement or refunding of any Restricted Debt, in each case, that is permitted under this Agreement in respect thereof, and (b)
at the request of the Lead Borrower, the form of any documentation governing any Restricted Debt shall be deemed acceptable to
the Lenders if posted to the Lenders and not objected to by the Required Lenders within five (5) Business Days thereafter.
Section 6.13 Fiscal Year. The Lead Borrower shall not change its Fiscal Year-end to a date other than December 31 in each calendar
year; provided, that, the Lead Borrower may, upon written notice to the Administrative Agent, change the Fiscal Year-end
of the Lead Borrower to another date, in which case the Lead Borrower and the Administrative Agent will, and are hereby authorized
to, make any adjustments to this Agreement that are necessary to reflect such change in Fiscal Year.
Section 6.14 Permitted Activities of Holdings. Holdings shall not:
(a) incur any Indebtedness for borrowed money other than (i) Indebtedness in connection with the Transactions, (ii) Indebtedness
of the type permitted under Sections 6.01(a), (o), (x), (y) and (z) and any Refinancing Indebtedness
in respect thereof (including any Guarantees thereof) and (iii) Indebtedness that is not guaranteed by the Lead Borrower or any
Restricted Subsidiary that are otherwise permitted hereunder;
(b) create or suffer to exist any Lien on any property or asset now owned or hereafter acquired other than the Liens securing
Indebtedness of the type permitted under Sections 6.01(a), (o), (x), (y) and (z) and any Refinancing
Indebtedness in respect thereof (including any Guarantees thereof), subject, if applicable, to an ABL Intercreditor Agreement;
(c) engage
in any business activity or own any material assets other than (i) holding the Capital Stock of the Lead Borrower, as applicable,
and, indirectly, any other subsidiary of the Lead Borrower, (ii) performing its obligations under the Loan Documents, any First
Lien Facility, any Second Lien Facility and other Indebtedness, Liens (including the granting of Liens) and Guarantees permitted
to be incurred, granted or made, as applicable, by it hereunder; (iii) issuing its own Capital Stock (including, for the avoidance
of doubt, the making of any dividend or distribution on account of, or any redemption, retirement, sinking fund or similar payment,
purchase or other acquisition for value of, any shares of any class of Capital Stock); (iv) filing Tax reports and paying Taxes
and other customary obligations in the ordinary course (and contesting any Taxes); (v) preparing reports to Governmental Authorities
and to its shareholders; (vi) holding director and shareholder meetings, preparing organizational records and other organizational
activities required to maintain its separate organizational structure or to comply with applicable Requirements of Law; (vii)
effecting any initial public offering of its Capital Stock; (viii) holding (A) Cash, Cash Equivalents and other assets received
in connection with permitted distributions or dividends received from, or permitted Investments or permitted Dispositions made
by, any of its subsidiaries or permitted contributions to the capital of, or proceeds from the issuance of Capital Stock of, Holdings
pending the application thereof and (B) the proceeds of Indebtedness permitted by to be incurred by it hereunder; (ix) providing
indemnification for its officers, directors, members of management, employees and advisors or consultants; (x) participating in
tax, accounting and other administrative matters; (xi) making payments of the type permitted under Section 6.09(f)
and the performance of its obligations under any document, agreement and/or Investment contemplated by the Transactions or otherwise
not prohibited under this Agreement; (xii) complying with applicable Requirements of Law (including with respect to the maintenance
of its existence); (xiii) making and holding intercompany loans to the Lead Borrower and/or the Restricted Subsidiaries of the
Lead Borrower, as applicable; (xiv) making and holding Investments of the type permitted under Section 6.06(h); (xv)
making Investments in the Lead Borrower (and other Investment contemplated by Section 6.04(a) and making any Restricted
Payment (assuming for such purpose that the definition thereof applies to the Capital Stock of Holdings), and (xvi) activities
incidental to any of the foregoing; or
(d) consolidate
or amalgamate with, or merge with or into, or convey, sell or otherwise transfer all or substantially all of its assets to,
any Person; provided that, so long as no Default or Event of Default exists or would result therefrom, (A) Holdings
may consolidate or amalgamate with, or merge with or into, any other Person (other than the Lead Borrower and any of its
subsidiaries) so long as (i) Holdings is the continuing or surviving Person or (ii) if the Person formed by or surviving any
such consolidation, amalgamation or merger is not Holdings, (x) the successor Person expressly assumes all obligations of
Holdings under this Agreement and the other Loan Documents to which Holdings is a party pursuant to a supplement hereto
and/or thereto in a form reasonably satisfactory to the Administrative Agent and (y) the Lead Borrower delivers a
certificate of a Responsible Officer with respect to the satisfaction of the conditions set forth in clause (x) of
this clause (A) and (z) upon its reasonable request, the Administrative Agent shall have received a customary legal
opinion, (B) Holdings may convey, sell or otherwise transfer all or substantially all of its assets (including the Capital
Stock of the Lead Borrower) to any other Person so long as (w) no Change of Control results therefrom, (x)(1) the Person
acquiring such assets expressly assumes all of the obligations of Holdings under this Agreement and the other Loan Documents
to which Holdings is a party pursuant to a supplement hereto and/or thereto in a form reasonably satisfactory to the
Administrative Agent and (2) concurrently with the consummation of such transfer, causes 100% of the Capital Stock of the
Lead Borrower to be pledged to the Administrative Agent for the benefit of the Secured Parties and (y) the Lead Borrower
delivers a certificate of a Responsible Officer with respect to the satisfaction of the conditions under clause (w)
set forth in this clause (B) and (z) upon its reasonable request, the Administrative Agent shall have received a
customary legal opinion; provided, further, that if the conditions set forth in the preceding proviso are
satisfied, the successor to Holdings will succeed to, and be substituted for, Holdings under this Agreement and Holdings
shall be released from all obligations under the Loan Documents, and (C) Holdings may convert into another form of entity so
long as such conversion does not adversely affect the value of the Loan Guaranty or the pledge of the Capital Stock in the
Lead Borrower.
Section 6.15
Financial Covenant.
(a) Fixed Charge Coverage Ratio. During any Covenant Trigger Period, the Lead Borrower will not permit the Fixed Charge
Coverage Ratio (calculated on a Pro Forma Basis as of the last day of the most recently ended Test Period) to be less than 1.00:1.00.
(b) Financial
Cure. Notwithstanding anything to the contrary in this Agreement (including Article 7), in the event the Lead
Borrower has failed to comply with Section 6.15(a) above for any Fiscal Quarter, the Lead Borrower shall have the
right (the “Cure Right”) (at any time during such Fiscal Quarter or thereafter until the date that is 15
Business Days after the later of (x) the date on which the financial statements for such Fiscal Quarter are required to be
delivered pursuant to Section 5.01(a) or (b), as applicable) and (y) the first date following the end of such
Fiscal Quarter a Covenant Trigger Period is triggered, to issue Qualified Capital Stock or other equity (such other equity to
be on terms reasonably acceptable to the Administrative Agent) for Cash or otherwise receive Cash contributions in respect of
Qualified Capital Stock (the “Cure Amount”), and thereupon the Lead Borrower’s compliance with Section
6.15(a) shall be recalculated giving effect to a pro forma increase in the amount of Consolidated Adjusted EBITDA by an
amount equal to the Cure Amount (notwithstanding the absence of a related addback in the definition of “Consolidated
Adjusted EBITDA”) solely for the purpose of determining compliance with Section 6.15(a) as of the end of such
Fiscal Quarter and for applicable subsequent periods that include such Fiscal Quarter. If, after giving effect to the
foregoing recalculation (but not, for the avoidance of doubt, taking into account any immediate repayment of Indebtedness in
connection therewith), the requirements of Section 6.15(a) would be satisfied, then the requirements of Section 6.15(a)
shall be deemed satisfied as of the end of the relevant Fiscal Quarter with the same effect as though there had been no
failure to comply therewith at such date, and the applicable breach or default of Section 6.15(a) that had occurred
(or would have occurred) shall be deemed cured for the purposes of this Agreement. Notwithstanding anything herein to the
contrary, (i) in each four consecutive Fiscal Quarter period there shall be no more than two Fiscal Quarters (which may, but
are not required to be, consecutive) in which the Cure Right is exercised, (ii) during the term of this Agreement, the Cure
Right shall not be exercised more than five times, (iii) the Cure Amount shall be no greater than the amount required for the
purpose of complying with Section 6.15(a), (iv) upon the Administrative Agent’s receipt of a written notice from
the Lead Borrower that the Lead Borrower intends to exercise the Cure Right (a “Notice of Intent to
Cure”), until the 15th Business Day following the later of (x) the date on which financial statements for the
Fiscal Quarter to which such Notice of Intent to Cure relates are required to be delivered pursuant to Section 5.01(a) or (b),
as applicable, and (y) the first date following the end of such Fiscal Quarter on which a Covenant Trigger Period is
triggered, neither the Administrative Agent (nor any sub-agent therefor) nor any Lender shall exercise any right to
accelerate the Revolving Loans or terminate the Commitments or any Additional Revolving Commitments, and none of the
Administrative Agent (nor any sub-agent therefor) nor any Lender or Secured Party shall exercise any right to foreclose on or
take possession of the Collateral or any other right or remedy under the Loan Documents solely on the basis of the relevant
Event of Default under Section 6.15(a), (v) during any Test Period in which any Cure Amount is included in the
calculation of Consolidated Adjusted EBITDA as a result of any exercise of the Cure Right, such Cure Amount shall be (A)
counted solely as an increase to Consolidated Adjusted EBITDA (and not as a reduction of Indebtedness) for the purpose of
determining compliance with Section 6.15(a) for the Fiscal Quarter in respect of which the Cure Right was
exercised (other than, with respect to any future period, to the extent of any portion of such Cure Amount that is actually
applied to repay Indebtedness) and (B) disregarded for all other purposes, including the purpose of determining basket levels
set forth in Article 6 of this Agreement and (vi) no Lender or Issuing Bank shall be required to make any Revolving
Loan or issue any Letter of Credit from and after such time as the Administrative Agent has received the Notice of Intent to
Cure unless and until the Cure Amount is actually received.
ARTICLE
7
EVENTS OF DEFAULT
Section 7.01
Events of Default. If any of the following events (each, an “Event of Default”) shall occur:
(a) Failure To Make Payments When Due. Failure by the Lead Borrower to pay (i) any principal of any Revolving Loan
when due, whether at stated maturity, by acceleration, by notice of voluntary prepayment, by mandatory prepayment or otherwise;
or (ii) any interest on any Revolving Loan or any fee or any other amount due hereunder within five Business Days after the date
due; or
(b) Default in Other Agreements. (i) Failure by any Loan Party or any of its Restricted Subsidiaries to pay when due
any principal of or interest on or any other amount payable in respect of one or more items of Indebtedness (other than Indebtedness
referred to in clause (a) above) with an aggregate outstanding principal amount exceeding the Threshold Amount, in each
case beyond the grace period, if any, provided therefor; or (ii) breach or event of default by any Loan Party or any of its Restricted
Subsidiaries with respect to any other term of (A) one or more items of Indebtedness with an aggregate outstanding principal amount
exceeding the Threshold Amount or (B) any loan agreement, mortgage, indenture or other agreement relating to such item(s)
of Indebtedness (other than, for the avoidance of doubt, with respect to Indebtedness consisting of Hedging Obligations, termination
events or equivalent events pursuant to the terms of the relevant Hedge Agreement which are not the result of any default thereunder
by any Loan Party or any Restricted Subsidiary), in each case, beyond the grace or cure period, if any, provided therefor, but
solely to the extent the effect of such breach or event of default is to cause, or to permit the holder or holders of such Indebtedness
(or a trustee or agent on behalf of such holder or holders) to cause, such Indebtedness to become or be declared due and payable
(or mandatorily redeemable) prior to its stated maturity or the stated maturity of any underlying obligation, as the case may be;
provided that clause (ii) of this paragraph (b) shall not apply to secured Indebtedness that becomes due as
a result of the voluntary sale or transfer of the property securing such Indebtedness if such sale or transfer is permitted hereunder;
provided, further, that any failure described under clause (i) or (ii) above is unremedied and
is not waived by the holders of such Indebtedness prior to any termination of the Commitments or acceleration of the Revolving
Loans pursuant to this Article 7;
(c) Breach of Certain Covenants. Failure by any Loan Party, as required by the relevant provision, to perform or comply
with any term or condition contained in Section 5.01(e)(i), Section 5.02 (solely as it applies to the preservation
of the existence of the Lead Borrower), or Article 6; or
(d) Breach of Representations, Etc. Any representation, warranty or certification made or deemed made by any Loan Party
in any Loan Document or in any certificate required to be delivered in connection herewith or therewith (including, for the avoidance
of doubt, any Perfection Certificate and any Perfection Certificate Supplement) being untrue in any material respect as of the
date made or deemed made, it being understood and agreed that any breach of representation, warranty or certification resulting
from the failure of the Administrative Agent to file any Uniform Commercial Code continuation statement shall not result in an
Event of Default under this Section 7.01(d) or any other provision of any Loan Document; or
(e) Other
Defaults Under Loan Documents. Default by any Loan Party (i) in the performance of or compliance with Section 5.01(l)
which default has not been remedied or waived within five Business Days (or three Business Days when delivery of weekly Borrowing
Base Certificates is required) after receipt by the Lead Borrower of written notice thereof from the Administrative Agent, (ii)
in the performance of or compliance with Section 5.15 (after giving effect to any extensions) which default has not been
remedied or waived within ten days (or two Business Days during the continuance of a Cash Dominion Period) after receipt by the
Lead Borrower of written notice thereof from the Administrative Agent, or (iii) in the performance of or compliance with any term
contained herein or any of the other Loan Documents, other than any such term referred to in the foregoing clauses (i)
or (ii) or in any other Section of this Article 7, which default has not been remedied or waived within 30 days
after receipt by the Lead Borrower of written notice thereof from the Administrative Agent; or
(f) Involuntary Bankruptcy; Appointment of Receiver, Etc. (i) The entry by a court of competent jurisdiction of a decree
or order for relief in respect of Holdings, the Lead Borrower or any of its Restricted Subsidiaries (other than any Immaterial
Subsidiary) in an involuntary case under any Debtor Relief Law now or hereafter in effect, which decree or order is not stayed;
or any other similar relief shall be granted under any applicable federal, provincial, state or local law; or (ii) the commencement
of an involuntary case against Holdings, the Lead Borrower or any of its Restricted Subsidiaries (other than any Immaterial Subsidiary)
under any Debtor Relief Law; the entry by a court having jurisdiction in the premises of a decree or order for the appointment
of a receiver, interim receiver, receiver and manager, (preliminary) insolvency receiver, liquidator, sequestrator, trustee, monitor,
custodian or other officer having similar powers over Holdings, the Lead Borrower or any of its Restricted Subsidiaries (other
than any Immaterial Subsidiary), or over all or a substantial part of its property; or (iii) the involuntary appointment of an
interim receiver, trustee, monitor or other custodian of Holdings, the Lead Borrower or any of its Restricted Subsidiaries (other
than any Immaterial Subsidiary) for all or a substantial part of its property, which remains undismissed, unvacated, unbounded
or unstayed pending appeal for 60 consecutive days; or
(g) Voluntary Bankruptcy; Appointment of Receiver, Etc. (i) The entry against Holdings, the Lead Borrower or any of its
Restricted Subsidiaries (other than any Immaterial Subsidiary) of an order for relief, the commencement by Holdings, the Lead Borrower
or any of its Restricted Subsidiaries (other than any Immaterial Subsidiary) of a voluntary case or proceeding under any Debtor
Relief Law, or the consent by Holdings, the Lead Borrower or any of its Restricted Subsidiaries (other than any Immaterial Subsidiary)
to the entry of an order for relief in an involuntary case or proceeding or to the conversion of an involuntary case or proceeding
to a voluntary case or proceeding, under any Debtor Relief Law, or the consent by the Lead Borrower or any of its Restricted Subsidiaries
(other than any Immaterial Subsidiary) to the appointment of or taking possession by a receiver, interim receiver, receiver and
manager, trustee, monitor or other custodian for all or a substantial part of its property; (ii) the making by Holdings, the Lead
Borrower or any of its Restricted Subsidiaries (other than any Immaterial Subsidiary) of a general assignment for the benefit of
creditors; or (iii) the admission by Holdings, the Lead Borrower or any of its Restricted Subsidiaries (other than any Immaterial
Subsidiary) in writing of their inability to pay their respective debts as such debts become due; or
(h) Judgments
and Attachments. The entry or filing of one or more final money judgments, writs or warrants of attachment or similar
process against Holdings, the Lead Borrower or any of its Restricted Subsidiaries or any of their respective assets involving
in the aggregate at any time an amount in excess of the Threshold Amount (in either case to the extent not adequately covered
by indemnity from a third party as to which the relevant indemnitor has been notified and not denied coverage, self-insurance
(if applicable) or by insurance as to which the relevant third party insurance company has been notified and not denied
coverage), which judgment, writ, warrant or similar process remains unpaid, undischarged, unvacated, unbonded or unstayed
pending appeal for a period of 60 days; or
(i) Employee Benefit Plans. (i) The occurrence of one or more ERISA Events, which individually or in the aggregate result
in liability of Holdings, the Lead Borrower or any of its Restricted Subsidiaries in an aggregate amount which would reasonably
be expected to result in a Material Adverse Effect; or (ii) (A) the voluntary full or partial wind up of a Canadian Pension Plan
that provides benefits on a defined benefits basis; (B) the institution of proceedings by any Governmental Authority to terminate
in whole or in part or have a trustee appointed to administer a Canadian Pension Plan that provides benefits on a defined benefits
basis; or (C) any other event or condition which could reasonably be expected to constitute grounds for the termination of, winding
up of, partial termination or winding up of, or the appointment of a trustee to administer, any Canadian Pension Plan, in each
case in clauses (A), (B) and (C) which would reasonably be expected to result in a Material Adverse Effect; or
(j) Change of Control. The occurrence of a Change of Control; or
(k) Guaranties, Collateral Documents and Other Loan Documents. At any time after the execution and delivery thereof (i)
any material Loan Guaranty for any reason ceasing to be in full force and effect (other than in accordance with its terms or as
a result of the occurrence of the Termination Date) or being declared, by a court of competent jurisdiction, to be null and void
or the repudiation in writing by any Loan Party of its obligations thereunder (other than as a result of the discharge of such
Loan Party in accordance with the terms thereof and other than solely as a result of acts or omissions by the Administrative Agent
or any Lender), (ii) this Agreement or any material Collateral Document ceasing to be in full force and effect (other than solely
by reason of (x) the failure of the Administrative Agent to maintain possession of any Collateral actually delivered to it or the
failure of the Administrative Agent to file UCC or PPSA (or equivalent) continuation statements, (y) a release of Collateral in
accordance with the terms hereof or thereof or (z) the occurrence of the Termination Date or any other termination of such Collateral
Document in accordance with the terms thereof) or being declared null and void or (iii) the contesting by any Loan Party of the
validity or enforceability of any material provision of any Loan Document (or any Lien purported to be created by the Collateral
Documents or Loan Guaranty) in writing or denial by any Loan Party in writing that it has any further liability (other than by
reason of the occurrence of the Termination Date), including with respect to future advances by the Lenders, under any Loan Document
to which it is a party, it being understood and agreed that the failure of the Administrative Agent to maintain possession of any
Collateral actually delivered to it or file any UCC or PPSA (or equivalent) continuation statement shall not result in an Event
of Default under this clause (k) or any other provision of any Loan Document; or
(l) Subordination.
(i) With respect to any Liens on ABL Priority Collateral securing the Secured Obligations, such Liens cease to have senior
“first priority” status pursuant to an ABL Intercreditor Agreement with respect to Liens on such ABL Priority
Collateral securing Indebtedness outstanding under any First Lien Facility or any Junior Lien Indebtedness, in each case with
an aggregate principal amount outstanding in excess of the Threshold Amount and (ii) with respect to the provisions in any
ABL Intercreditor Agreement subordinating the Liens on the Collateral securing Indebtedness outstanding under any First Lien
Facility or any Junior Lien Indebtedness, in each case with an aggregate principal amount outstanding in excess of the
Threshold Amount, to the Liens on the Collateral securing the Secured Obligations, (A) any Loan Party contests in writing the
validity or enforceability thereof, (B) any court of competent jurisdiction in a final non-appealable order, determines such
subordination provisions to be invalid or unenforceable, or (C) such subordination provisions otherwise cease to be valid,
binding and enforceable obligations of the parties to such ABL Intercreditor Agreement;
then, and in every such event (other
than an event with respect to the Borrowers described in clause (f) or (g) of this Article) and at any time
thereafter during the continuance of such event, the Administrative Agent may, and at the request of the Required Lenders
shall, by notice to the Lead Borrower, take any of the following actions, at the same or different times: (i) terminate the
Commitments or any Additional Revolving Commitments, and thereupon such Commitments and/or Additional Revolving Commitments
shall terminate immediately, (ii) declare the Revolving Loans then outstanding to be due and payable in whole (or in part, in
which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), and
thereupon the principal of the Revolving Loans so declared to be due and payable, together with accrued interest thereon and
all fees and other obligations of the Borrowers accrued hereunder, shall become due and payable immediately, without
presentment, demand, protest or other notice of any kind, all of which are hereby waived by each Borrower and (iii) require
that the US Borrower deposits in the US LC Collateral Account and the Canadian Borrower deposits in the Canadian LC
Collateral Account, an additional amount in Cash as reasonably requested by the Issuing Banks (not to exceed 101% of the
relevant face amount) of the then outstanding US LC Exposure (minus the amount then on deposit in the US LC Collateral
Account) or Canadian LC Exposure (minus the amount then on deposit in the Canadian LC Collateral Account), as applicable; provided
that upon the occurrence of an event with respect to any Borrower described in clause (f) or (g) of this
Article, any such Commitments and/or Additional Revolving Commitments applicable to the US Borrower and to the extent such
event is applicable to the Canadian Borrower, the Canadian Borrower shall automatically terminate and the principal of the
Revolving Loans then outstanding, together with accrued interest thereon and all fees and other obligations of the Borrowers
accrued hereunder, shall automatically become due and payable, without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Borrowers. Upon the occurrence and during the continuance of an Event of Default,
the Administrative Agent may, and at the request of the Required Lenders shall, exercise any rights and remedies provided to
the Administrative Agent under the Loan Documents or at law or equity, including all remedies provided under the UCC or the
PPSA.
ARTICLE
8
THE ADMINISTRATIVE AGENT
Section 8.01
The Administrative Agent.
Each of the Lenders and
the Issuing Banks hereby irrevocably appoints Bank of America (or any successor appointed pursuant hereto) as Administrative Agent
hereunder and under the other Loan Documents and authorizes the Administrative Agent to take such actions on its behalf, including
execution of the other Loan Documents, and to exercise such powers as are delegated to the Administrative Agent by the terms of
the Loan Documents, together with such actions and powers as are reasonably incidental thereto.
Any Person serving
as Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and
may exercise the same as though it were not the Administrative Agent, and the term “Lender” or
“Lenders” shall, unless otherwise expressly indicated, unless the context otherwise requires or unless such
Person is in fact not a Lender, include each Person serving as Administrative Agent hereunder in its individual capacity.
Such Person and its Affiliates may accept deposits from, lend money to, own securities of, act as the financial advisor or in
any other advisory capacity for and generally engage in any kind of business with any Loan Party or any subsidiary of any
Loan Party or other Affiliate thereof as if it were not the Administrative Agent hereunder. The Lenders acknowledge that,
pursuant to such activities, the Administrative Agent or its Affiliates may receive information regarding any Loan Party or
any of its Affiliates (including information that may be subject to confidentiality obligations in favor of such Loan Party
or such Affiliate) and acknowledge that the Administrative Agent shall not be under any obligation to provide such
information to them.
The Administrative Agent
shall not have any duties or obligations except those expressly set forth in the Loan Documents and its duties hereunder shall
be administrative in nature. Without limiting the generality of the foregoing, (a) the Administrative Agent shall not be subject
to any fiduciary or other implied duties, regardless of whether a Default or Event of Default exists, and the use of the term “agent”
herein and in the other Loan Documents with reference to the Administrative Agent is not intended to connote any fiduciary or other
implied (or express) obligations arising under agency doctrine of any applicable law; it being understood that such term is used
merely as a matter of market custom, and is intended to create or reflect only an administrative relationship between independent
contracting parties, (b) the Administrative Agent shall not have any duty to take any discretionary action or exercise any discretionary
power, except discretionary rights and powers that are expressly contemplated by the Loan Documents and which the Administrative
Agent is required to exercise in writing as directed by the Required Lenders (or such other number or percentage of the Lenders
as shall be necessary under the relevant circumstances as provided in Section 9.02); provided that the Administrative
Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative
Agent to liability or that is contrary to any Loan Document or applicable laws including for the avoidance of doubt any action
that may be in violation of the automatic stay under any Debtor Relief Law or that may effect a forfeiture, modification or termination
of property of a Defaulting Lender in violation of any Debtor Relief Law, and (c) except as expressly set forth in the Loan Documents,
the Administrative Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information
relating to the Lead Borrower or any of its Restricted Subsidiaries that is communicated to or obtained by the Person serving as
Administrative Agent or any of its Affiliates in any capacity. The Administrative Agent shall not be liable to the Lenders or any
other Secured Party for any action taken or not taken by it with the consent or at the request of the Required Lenders (or such
other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall
be necessary, under the relevant circumstances as provided in Section 9.02) or in the absence of its own gross negligence
or willful misconduct, as determined by the final and non-appealable judgment of a court of competent jurisdiction, in connection
with its duties expressly set forth herein. The Administrative Agent shall not be deemed to have knowledge of the existence of
any Default or Event of Default unless and until written notice thereof is given to the Administrative Agent by the Lead Borrower
or any Lender, and the Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any
statement, warranty or representation made in or in connection with any Loan Document, (ii) the contents of any certificate, report
or other document delivered hereunder or in connection with any Loan Document, (iii) the performance or observance of any covenant,
agreement or other term or condition set forth in any Loan Document or the occurrence of any Default or Event of Default, (iv)
the validity, enforceability, effectiveness or genuineness of any Loan Document or any other agreement, instrument or document,
(v) the creation, perfection or priority of any Lien on the Collateral or the existence, value or sufficiency of the Collateral,
(vi) the satisfaction of any condition set forth in Article 4 or elsewhere in any Loan Document, other than to confirm receipt
of items expressly required to be delivered to the Administrative Agent or (vii) any property, book or record of any Loan Party
or any Affiliate thereof.
If any Lender
acquires knowledge of the existence of a Default or Event of Default, it shall promptly notify the Administrative Agent and
the other Lenders thereof in writing. Each Lender agrees that, except with the written consent of the Administrative Agent,
it will not take any enforcement action hereunder or under any other Loan Document, accelerate the Obligations under any Loan
Document, or exercise any right that it might otherwise have under applicable law or otherwise to credit bid at any
foreclosure sale, UCC or PPSA sale, any sale under Section 363 of the Bankruptcy Code or other similar Dispositions of
Collateral. Notwithstanding the foregoing, however, a Lender may take action to preserve or enforce its rights against a Loan
Party where a deadline or limitation period is applicable that would, absent such action, bar enforcement of the Obligations
held by such Lender, including the filing of a proof of claim in a case under the Bankruptcy Code.
Notwithstanding anything
to the contrary contained herein or in any of the other Loan Documents, the Borrowers, the Administrative Agent and each Secured
Party agree that (i) no Secured Party shall have any right individually to realize upon any of the Collateral or to enforce the
Loan Guaranty; it being understood and agreed that all powers, rights and remedies hereunder may be exercised solely by, the Administrative
Agent, on behalf of the Secured Parties in accordance with the terms hereof and all powers, rights and remedies under the other
Loan Documents may be exercised solely by, the Administrative Agent, and (ii) in the event of a foreclosure by the Administrative
Agent on any of the Collateral pursuant to a public or private sale or in the event of any other Disposition (including pursuant
to Section 363 of the Bankruptcy Code), (A) the Administrative Agent, as agent for and representative of the Secured Parties,
shall be entitled, for the purpose of bidding and making settlement or payment of the purchase price for all or any portion of
the Collateral sold at any such sale, to use and apply any of the Obligations as a credit on account of the purchase price for
any Collateral payable by the Administrative Agent at such Disposition and (B) the Administrative Agent or any Lender may
be the purchaser or licensor of any or all of such Collateral at any such Disposition.
No holder of any Secured
Hedging Obligation or Secured Banking Services Obligation in its respective capacity as such shall have any rights in connection
with the management or release of any Collateral or of the obligations of any Loan Party under this Agreement.
Each of the Lenders hereby
irrevocably authorizes (and by entering into a Hedge Agreement with respect to any Secured Hedging Obligation and/or by entering
into documentation in connection with any Banking Services Obligation, each of the other Secured Parties hereby authorizes and
shall be deemed to authorize) the Administrative Agent, on behalf of all Secured Parties to take any of the following actions upon
the instruction of the Required Lenders:
(a) consent to the Disposition of all or any portion of the Collateral free and clear of the Liens securing the Secured Obligations
in connection with any Disposition pursuant to the applicable provisions of the Bankruptcy Code, including Section 363 thereof;
(b) credit bid all or any portion of the Secured Obligations, or purchase all or any portion of the Collateral (in each case,
either directly or through one or more acquisition vehicles), in connection with any Disposition of all or any portion of the Collateral
pursuant to the applicable provisions of the Bankruptcy Code, including under Section 363 thereof;
(c) credit bid all or any portion of the Secured Obligations, or purchase all or any portion of the Collateral (in each case,
either directly or through one or more acquisition vehicles), in connection with any Disposition of all or any portion of the Collateral
pursuant to the applicable provisions of the UCC or PPSA, including pursuant to Sections 9-610 or 9-620 of the UCC;
(d) credit bid all or any portion of the Secured Obligations, or purchase all or any portion of the Collateral (in each case,
either directly or through one or more acquisition vehicles), in connection with any foreclosure or other Disposition conducted
in accordance with applicable law following the occurrence and continuation of an Event of Default, including by power of sale,
judicial action or otherwise; and/or
(e) estimate
the amount of any contingent or unliquidated Secured Obligations of such Lender or other Secured Party; it being understood
that no Lender shall be required to fund any amount in connection with any purchase of all or any portion of the Collateral
by the Administrative Agent pursuant to the foregoing clause (b), (c) or (d) without its prior
written consent.
Each Secured Party agrees
that the Administrative Agent is under no obligation to credit bid any part of the Secured Obligations or to purchase or retain
or acquire any portion of the Collateral; provided that, in connection with any credit bid or purchase described under clause (b),
(c) or (d) of the preceding paragraph, the Secured Obligations owed to all of the Secured Parties (other than with
respect to contingent or unliquidated liabilities as set forth in the next succeeding paragraph) may be, and shall be, credit bid
by the Administrative Agent on a ratable basis.
With respect to each
contingent or unliquidated claim that is a Secured Obligation, the Administrative Agent is hereby authorized, but is not required,
to estimate the amount thereof for purposes of any credit bid or purchase described in the second preceding paragraph so long as
the estimation of the amount or liquidation of such claim would not unduly delay the ability of the Administrative Agent to credit
bid the Secured Obligations or purchase the Collateral in the relevant Disposition. In the event that the Administrative Agent,
in its sole and absolute discretion, elects not to estimate any such contingent or unliquidated claim or any such claim cannot
be estimated without unduly delaying the ability of the Administrative Agent to consummate any credit bid or purchase in accordance
with the second preceding paragraph, then any contingent or unliquidated claims not so estimated shall be disregarded, shall not
be credit bid, and shall not be entitled to any interest in the portion or the entirety of the Collateral purchased by means of
such credit bid.
Each Secured Party whose
Secured Obligations are credit bid under clause (b), (c) or (d) of the third preceding paragraph shall
be entitled to receive interests in the Collateral or any other asset acquired in connection with such credit bid (or in the Capital
Stock of the acquisition vehicle or vehicles that are used to consummate such acquisition) on a ratable basis in accordance with
the percentage obtained by dividing (x) the amount of the Secured Obligations of such Secured Party that were credit bid in such
credit bid or other Disposition, by (y) the aggregate amount of all Secured Obligations that were credit bid in such credit bid
or other Disposition.
In addition, in case
of the pendency of any proceeding under any Debtor Relief Law or any other judicial proceeding relative to any Loan Party, each
Secured Party agrees that the Administrative Agent (irrespective of whether the principal of any Revolving Loan or LC exposure
is then due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent
shall have made any demand on the Borrowers) shall be entitled and empowered, by intervention in such proceeding or otherwise:
(i) to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Revolving
Loans or LC Exposure and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or
advisable in order to have the claims of the Lenders, the Issuing Banks and the Administrative Agent (including any claim for the
reasonable compensation, expenses, disbursements and advances of the Lenders and the Administrative Agent and their respective
agents and counsel and all other amounts to the extent due to the Lenders and the Administrative Agent under Sections 2.12
and 9.03) allowed in such judicial proceeding; and
(ii) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same.
Any custodian, receiver,
interim receiver, assignee, trustee, monitor, liquidator, sequestrator or other similar official in any such judicial proceeding
is hereby authorized by each Lender and Issuing Bank to make such payments to the Administrative Agent and, in the event that the
Administrative Agent consents to the making of such payments directly to the Lenders and the Issuing Banks, to pay to the Administrative
Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its
agents and counsel, and any other amount due to the Administrative Agent under Sections 2.12 and 9.03.
Nothing contained herein
shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender or
any Issuing Bank any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of
any Lender or any Issuing Bank or to authorize the Administrative Agent to vote in respect of the claim of any Lender or any Issuing
Bank in any such proceeding.
The Administrative Agent
shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other
distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. The Administrative
Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person,
and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of
a Revolving Loan, or the issuance of a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a Lender, the
Administrative Agent may presume that such condition is satisfactory to such Lender, or the applicable Issuing Bank, unless the
Administrative Agent has received notice to the contrary from such Lender or Issuing Bank prior to the making of such Revolving
Loan, or the issuance of a Letter of Credit. The Administrative Agent may consult with legal counsel (who may be counsel for the
Borrowers), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken
by it in accordance with the advice of any such counsel, accountants or experts.
The Administrative Agent
may perform any and all of its duties and exercise its rights and powers by or through any one or more sub-agents appointed by
it, provided, however, that any such sub-agent receiving payments from the US Loan Parties shall be a “U.S. person”
and a “financial institution” within the meaning of Treasury Regulations Section 1.1441-1 (or has validly agreed to
be treated as a “U.S. person” pursuant to Treasury Regulations Section 1.1441-1(b)(2)(iv)(A)). The Administrative Agent
and any such sub-agent may perform any and all of their respective duties and exercise their respective rights and powers through
their respective Related Parties. The exculpatory provisions of this Article shall apply to any such sub-agent and to the Related
Parties of the Administrative Agent and any such sub-agent and shall apply to their respective activities in connection with the
syndication of the credit facilities provided for herein as well as activities as the Administrative Agent.
The Administrative
Agent may resign at any time by giving thirty days’ prior written notice to the Lenders, the Issuing Bank and the Lead
Borrower or the Administrative Agent, as applicable. If the Administrative Agent becomes subject to an insolvency proceeding,
either the Required Lenders or the Lead Borrower may, upon thirty days’ notice, remove the Administrative Agent. Upon
receipt of any such notice of resignation or delivery of any such notice of removal, the Required Lenders shall have the
right, with the consent of the Lead Borrower (not to be unreasonably withheld or delayed), to appoint a successor
Administrative Agent which shall be a commercial bank or trust company with offices in the U.S. having combined capital and
surplus in excess of $1,000,000,000 and who shall be a “U.S. person” and a “financial institution”
within the meaning of Treasury Regulations Section 1.1441-1 (or has validly agreed to be treated as a “U.S.
person” pursuant to Treasury Regulations Section 1.1441-1(b)(2)(iv)(A)); provided that during the existence and
continuation of an Event of Default under Section 7.01(a) or, with respect to Holdings or the Borrowers, Section 7.01(f)
or (g), no consent of the Lead Borrower shall be required. If no successor shall have been appointed as provided above
and accepted such appointment within thirty days after the retiring Administrative Agent gives notice of its resignation or
the Administrative Agent receives notice of removal, then (a) in the case of a retirement, the retiring Administrative
Agent may (but shall not be obligated to), on behalf of the Lenders and the Issuing Banks, appoint a successor Administrative
Agent meeting the qualifications set forth above (including, for the avoidance of doubt, consent of the Lead Borrower) or (b)
in the case of a removal, the Lead Borrower may, after consulting with the Required Lenders, appoint a successor
Administrative Agent meeting the qualifications set forth above; provided that (x) in the case of a retirement,
if the Administrative Agent notifies the Lead Borrower, the Lenders and the Issuing Banks that no qualifying Person has
accepted such appointment or (y) in the case of a removal, the Lead Borrower notifies the Required Lenders that no qualifying
Person has accepted such appointment, then, in each case, such resignation or removal shall nonetheless become effective in
accordance with and on the 30th day following delivery of such notice and (i) the retiring or removed Administrative Agent
shall be discharged from its duties and obligations hereunder and under the other Loan Documents (except that in the case of
any collateral security held by the Administrative Agent in its capacity as collateral agent for the Secured Parties for
perfection purposes, the retiring Administrative Agent shall continue to hold such collateral security until such time as a
successor Administrative Agent is appointed) and (ii) all payments, communications and determinations required to be made by,
to or through the Administrative Agent shall instead be made by or to each Lender and each Issuing Bank directly (and each
Lender and each Issuing Bank will cooperate with the Lead Borrower to enable the Lead Borrower to take such actions), until
such time as the Required Lenders or the Lead Borrower, as applicable, appoint a successor Administrative Agent who shall be
a “U.S. person” and a “financial institution” within the meaning of Treasury Regulations Section
1.1441-1 (or has validly agreed to be treated as a “U.S. person” pursuant to Treasury Regulations Section
1.1441-1(b)(2)(iv)(A)), as provided for above in this Article 8. Upon the acceptance of its appointment as
Administrative Agent hereunder as a successor Administrative Agent, such successor Administrative Agent shall succeed to and
become vested with all the rights, powers, privileges and duties of the retiring or removed Administrative Agent (other than
any rights to indemnity payments owed to the retiring Administrative Agent), and the retiring or removed Administrative Agent
shall be discharged from its duties and obligations hereunder (other than its obligations under Section 9.13). The
fees payable by the Borrowers to a successor Administrative Agent shall be the same as those payable to its predecessor
unless otherwise agreed between the Lead Borrower and such successor Administrative Agent. After the Administrative
Agent’s resignation or removal hereunder, the provisions of this Article and Section 9.03 shall continue in
effect for the benefit of such retiring or removed Administrative Agent, its sub-agents and their respective Related Parties
in respect of any action taken or omitted to be taken by any of them while the relevant Person was acting as Administrative
Agent (including for this purpose holding any collateral security following the retirement or removal of the Administrative
Agent). Notwithstanding anything to the contrary herein, no Disqualified Institution (nor any Affiliate thereof) may be
appointed as a successor Administrative Agent.
Notwithstanding anything
to the contrary contained herein, each Issuing Bank may, upon ten days’ prior written notice to the Lead Borrower, each other
Issuing Bank and the Lenders, resign as Issuing Bank, which resignation shall be effective as of the date referenced in such notice
(but in no event less than ten days after the delivery of such written notice); it being understood that in the event of any such
resignation, any Letter of Credit then outstanding shall remain outstanding (irrespective of whether any amounts have been drawn
at such time). In the event of any such resignation as an Issuing Bank, the Lead Borrower shall, unless an Event of Default under
Section 7.01(a) or, with respect to Holdings or the Borrowers, Section 7.01(f) or (g) then exists, be entitled
to appoint any Revolving Lender that is willing to accept such appointment as successor Issuing Bank hereunder. Upon the acceptance
of any appointment as Issuing Bank hereunder by a successor Issuing Bank, such successor Issuing Bank thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the retiring Issuing Bank and the retiring Issuing Bank shall
be discharged from its duties and obligations in such capacity hereunder.
Each Lender and each
Issuing Bank acknowledges that it has, independently and without reliance upon the Administrative Agent of each or any other Lender
or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis
and decision to enter into this Agreement. Each Lender and each Issuing Bank also acknowledges that it will, independently and
without reliance upon the Administrative Agent of each or any other Lender or any of their respective Related Parties and based
on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking
or not taking action under or based upon this Agreement, any other Loan Document or related agreement or any document furnished
hereunder or thereunder. Except for notices, reports and other documents expressly required to be furnished to the Lenders and
the Issuing Banks by the Administrative Agent herein, the Administrative Agent shall not have any duty or responsibility to provide
any Lender or any Issuing Bank with any credit or other information concerning the business, prospects, operations, property, financial
and other condition or creditworthiness of any of the Loan Parties or any of their respective Affiliates which may come into the
possession of the Administrative Agent or any of its Related Parties.
Notwithstanding anything
to the contrary herein, the Arrangers shall not have any right, power, obligation, liability, responsibility or duty under this
Agreement, except in their respective capacities as the Administrative Agent, an Issuing Bank or a Lender hereunder, as applicable.
Each Secured Party irrevocably
authorizes and instructs the Administrative Agent to, and the Administrative Agent,
(a) shall release any Lien on any property granted to or held by Administrative Agent under any Loan Document (i) upon the occurrence
of the Termination Date, (ii) that is sold or to be sold or transferred as part of or in connection with any Disposition permitted
under the Loan Documents to a Person that is not a Loan Party, (iii) that does not constitute (or ceases to constitute) Collateral
(including as a result of being or becoming an Excluded Asset), (iv) if the property subject to such Lien is owned by a Subsidiary
Guarantor, upon the release of such Subsidiary Guarantor from its Loan Guaranty otherwise in accordance with the Loan Documents,
(v) as required under clause (d) below or (vi) if approved, authorized or ratified in writing by the Required Lenders in
accordance with Section 9.02;
(b) shall subject to Section 9.23, release any Subsidiary Guarantor from its obligations under the Loan Guaranty if such
Person ceases to be a Restricted Subsidiary (or becomes an Excluded Subsidiary as a result of a single transaction or series of
related transactions permitted hereunder), as certified by a Responsible Officer of the Lead Borrower;
(c) may subordinate any Lien on any property granted to or held by the Administrative Agent under any Loan Document to the holder
of any Lien on such property that is permitted by Sections 6.02(d), 6.02(e), 6.02(g), 6.02(m),
6.02(n), 6.02(o) (other than any Lien on the Capital Stock of any Subsidiary Guarantor), 6.02(q), 6.02(r),
6.02(x), 6.02(y), 6.02(z)(i), 6.02(bb), 6.02(cc), 6.02(ee), 6.02(ff) and 6.02(hh)
(and any Refinancing Indebtedness in respect of any thereof to the extent such Refinancing Indebtedness is permitted to be secured
under Section 6.02(k)); provided that the subordination of any Lien on any property granted to or held by the
Administrative Agent shall only be required with respect to any Lien on such property that is permitted by Sections 6.02(o),
6.02(q), 6.02(r) and/or 6.02(bb) to the extent that the Lien of the Administrative Agent with respect to such
property is required to be subordinated to the relevant Permitted Lien in accordance with applicable law or the documentation governing
the Indebtedness that is secured by such Permitted Lien; and
(d) shall
enter into subordination, intercreditor and/or similar agreements with respect to Indebtedness (including any ABL Intercreditor
Agreement) that is (i) required or permitted to be subordinated hereunder and/or (ii) secured by Liens (including on a pari passu
basis), and with respect to which Indebtedness, this Agreement contemplates an intercreditor, subordination or collateral trust
agreement; provided that, for the avoidance of doubt, the Administrative Agent shall not be required to subordinate any
Lien pursuant to this clause (d)(ii) other than to the extent contemplated by clause (c) of this paragraph.
Upon the request of the
Administrative Agent at any time, the Required Lenders will confirm in writing the Administrative Agent’s authority to release
or subordinate its interest in particular types or items of property, or to release any Loan Party from its obligations under the
Guarantee or its Lien on any Collateral pursuant to this Article 8. In each case as specified in this Article 8,
the Administrative Agent will (and each Lender, and Issuing Bank, hereby authorizes the Administrative Agent to), at the Borrowers’
expense, execute and deliver to the applicable Loan Party such documents as such Loan Party may reasonably request to evidence
the release of such item of Collateral from the assignment and security interest granted under the Collateral Documents or to subordinate
its interest therein, or to release such Loan Party from its obligations under the Loan Guaranty, in each case in accordance with
the terms of the Loan Documents and this Article 8; provided that upon the request of the Administrative Agent, the
Lead Borrower shall deliver a certificate of a Responsible Officer certifying that the relevant transaction has been consummated
in compliance with the terms of this Agreement.
The Administrative Agent
is authorized to enter into any ABL Intercreditor Agreement and any other intercreditor, subordination, collateral trust or similar
agreement contemplated hereby with respect to Indebtedness that is (i) required or permitted to be subordinated hereunder and/or
(ii) secured by Liens (including on a pari passu basis) and which Indebtedness contemplates an intercreditor, subordination
or collateral trust agreement (any such other intercreditor agreement, an “Additional Agreement”), and the parties
hereto acknowledge that each Applicable Intercreditor Agreement is binding upon them. Each Lender and Issuing Bank, (a) hereby
consents to the subordination of the Liens on the Collateral securing the Secured Obligations on the terms set forth in the Intercreditor
Agreements, (b) hereby agrees that it will be bound by, and will not take any action contrary to the provisions of any Applicable
Intercreditor Agreement and (c) hereby authorizes and instructs the Administrative Agent to enter into any Applicable Intercreditor
Agreement and to subject the Liens on the Collateral securing the Secured Obligations to the provisions thereof. The foregoing
provisions are intended as an inducement to the Secured Parties to extend credit to the Borrowers, and the Secured Parties are
intended third-party beneficiaries of such provisions and the provisions of any Applicable Intercreditor Agreement.
To the extent that the
Administrative Agent (or any Affiliate thereof) is not reimbursed and indemnified by the Borrowers, the Lenders will reimburse
and indemnify the Administrative Agent (and any Affiliate thereof) in proportion to their respective Applicable Percentages (determined
as if there were no Defaulting Lenders) for and against any and all liabilities, obligations, losses, damages, penalties, claims,
actions, judgments, costs, expenses or disbursements of whatsoever kind or nature which may be imposed on, asserted against or
incurred by the Administrative Agent (or any Affiliate thereof) in performing its duties hereunder or under any other Loan Document
or in any way relating to or arising out of this Agreement or any other Loan Document; provided that no Lender shall be
liable for any portion of such liabilities, obligations, losses, damages, penalties, claims, actions, judgments, suits, costs,
expenses or disbursements resulting from the Administrative Agent’s (or such affiliate’s) gross negligence or willful
misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision).
For greater
certainty, and without limiting the powers of the Administrative Agent, each of the Lenders and the Issuing Banks hereby
irrevocably appoints the Administrative Agent as “hypothecary representative” of the Secured Parties as
contemplated under Article 2692 of the Civil Code of Quebec in order to hold hypothecs and security granted by any
Loan Party on property pursuant to the laws of the Province of Quebec and to exercise such
powers and duties which are conferred upon the Secured Parties thereunder. The
execution by the Administrative Agent as “hypothecary representative” prior to this Agreement of any deeds of
hypothec or other security documents is hereby ratified and confirmed. The appointment of the Administrative Agent as
“hypothecary representative” shall be deemed to have been ratified and confirmed by each Person accepting an
assignment of, a participation in or an arrangement in respect of, all or any portion of any Secured Parties’ rights
and obligations under this Agreement by the execution of an assignment, including an Assignment and Assumption or a joinder
or other agreement pursuant to which it becomes such assignee or participant. In the event of the resignation or removal of
the Administrative Agent and appointment of a successor Administrative Agent, such successor Administrative Agent shall also
act as hypothecary representative without further formality, except the filing of a notice of replacement of hypothecary
representative pursuant to Article 2692 of the Civil Code of Quebec.
ARTICLE
9
MISCELLANEOUS
Section 9.01
Notices.
(a) Subject to paragraph (b) below, all notices and other communications provided for herein shall be in writing and
shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by facsimile or email,
as follows:
(i) if to any Loan
Party, to such Loan Party in the care of the Lead Borrower at:
(i) if to any Loan Party, to such Loan Party in the care of the Lead Borrower at:
620 Division Street
Elizabeth, New Jersey 07207
Attention: Co-Chairman of the Board
Facsimile: (908) 351-4492
Email: rdavis@hayward.com
with copy to (which shall not constitute notice to any
Loan Party):
CCMP Capital Advisors, LLC
277 Park Avenue, 37th Floor
New York, NY 10172
Attention: Richard Jansen, Esq.
Facsimile: (212) 599-3481
Email: richard.jansen@ccmpcapital.com
and
c/o MSD Partners, L.P.
645 Fifth Avenue, 21st
Floor
New York, New York 10022
Attention: Marcello Liguori
Fax No.: (212) 303-1772
Email:
mliguori@msdcapital.com
and
c/o Alberta Investment Management
Corporation
First Canadian Place
100 King Street West
Suite 5120, P.O. Box 51
Toronto, Ontario M5X 1B1, Canada
Attention: Jason Peters
and
c/o Alberta Investment Management
Corporation
1100 – 10830 Jasper Avenue
Edmonton, Alberta T5J 2B3, Canada
Attention: Christina Luison
and
Ropes & Gray LLP
1211 Avenue of the Americas
New York, NY 10036
Attention: Jay Kim
Telephone: (212) 497-3626
Facsimile: (646) 728-1667
Email: Jay.Kim@ropesgray.com
and
Dechert LLP
2929 Arch Street
Philadelphia, Pennsylvania 19104
Attention: Geraldine Sinatra and Eric Siegel
Facsimile: (215) 994-2222
Email: geraldine.sinatra@dechert.com
eric.siegel@dechert.com
and
Torys LLP
The Grace Building
1114 Avenue of the Americas
New York, New York 10036
Attention: Jared Fontaine
Facsimile: (212) 682-0200
Email: jfontaine@torys.com
(ii) if to the Administrative
Agent, at:
Bank of America, N.A.
Four Penn Center
1600 JFK Blvd.
Philadelphia, PA 19103
Attn: Christy Bowen
Facsimile: 267-675-0175
Email: Christy.kuklinski@baml.com
with a copy to:
Davis Polk & Wardwell LLP
Attention: John (JW) Perry
Telephone: (212) 450-4949
Facsimile: (212) 701-5949
Email: john.perry@davispolk.com
(iii) if to any Lender,
pursuant to its contact information set forth in its Administrative Questionnaire.
All such notices and other communications
(A) sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when
delivered in person or by courier service and signed for against receipt thereof or three Business Days after dispatch if sent
by certified or registered mail, in each case, delivered, sent or mailed (properly addressed) to the relevant party as provided
in this Section 9.01 or in accordance with the latest unrevoked direction from such party given in accordance with this
Section 9.01 or (B) sent by facsimile shall be deemed to have been given when sent and when receipt has been confirmed by
telephone; provided that received notices and other communications sent by telecopier shall be deemed to have been given
when sent (except that, if not given during normal business hours for the recipient, such notices or other communications shall
be deemed to have been given at the opening of business on the next Business Day for the recipient). Notices and other communications
delivered through electronic communications to the extent provided in clause (b) below shall be effective as provided in
such clause (b).
(b) Notices and other communications to the Lenders hereunder may be delivered or furnished by electronic communications (including
email, FpML messaging and Internet or Intranet websites) pursuant to procedures set forth herein or otherwise approved by the Administrative
Agent. The Administrative Agent or the Lead Borrower (on behalf of any Loan Party) may, in its discretion, agree to accept notices
and other communications to it hereunder by electronic communications pursuant to procedures set forth herein or otherwise approved
by it; provided that approval of such procedures may be limited to particular notices or communications. All such notices
and other communications (i) sent to an email address shall be deemed received upon the sender’s receipt of an acknowledgement
from the intended recipient (such as by the “return receipt requested” function, as available, return email or other
written acknowledgement); provided that if not given during the normal business hours of the recipient, such notice or communication
shall be deemed to have been given at the opening of business on the next Business Day for the recipient, and (ii) posted to an
Internet or Intranet website shall be deemed received upon the deemed receipt by the intended recipient at its email address as
described in the foregoing clause (b)(i) of notification that such notice or communication is available and identifying
the website address therefor.
(c) Any party hereto may change its address or facsimile number or other notice information hereunder by notice to the other
parties hereto.
(d)
(i) The Borrowers hereby acknowledge that (A) the Administrative Agent will make available to the Lenders materials and/or
information provided by or on behalf of the Borrowers hereunder (collectively, “Borrower Materials”) by posting
the Borrower Materials on IntraLinks or another similar electronic system (the “Platform”) and (B) certain of
the Lenders (each, a “Public Lender”) may have personnel who do not wish to receive material non-public information
and who may be engaged in investment and other market-related activities with respect to such Persons’ securities. The Borrowers
hereby agree that (x) by marking Borrower Materials “PUBLIC,” the Borrowers shall be deemed to have authorized the
Administrative Agent and the Lenders to treat such Borrower Materials as not containing any material non-public information (although
it may be sensitive and proprietary) subject to the confidentiality provisions of this Agreement (provided, however,
that to the extent such Borrower Materials constitute Confidential Information, they shall be treated as set forth in Section
9.13); (y) all Borrower Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform
designated “Public Side Information”; and (z) the Administrative Agent shall treat any Borrower Materials that are
not marked “PUBLIC” as being suitable only for posting on a portion of the Platform not designated “Public Side
Information”; provided that, for purposes of the foregoing, all information and materials provided pursuant to Section
5.01(a) or (b) shall be deemed to be suitable for posting to Public Lenders.
(ii) Each Public Lender
agrees to cause at least one individual at or on behalf of such Public Lender to at all times have selected the “Private
Side Information” or similar designation on the content declaration screen of the Platform in order to enable such Public
Lender or its delegate, in accordance with such Public Lender’s compliance procedures and applicable law, including United
States Federal and state securities laws, to make reference to communications that are not made available through the “Public
Side Information” portion of the Platform and that may contain material nonpublic information with respect to the Lead
Borrower or its securities for purposes of United States Federal or state securities laws.
(iii) THE PLATFORM
IS PROVIDED “AS IS” AND “AS AVAILABLE.” NEITHER THE ADMINISTRATIVE AGENT NOR ANY OF ITS
RELATED PARTIES WARRANTS THE ACCURACY OR COMPLETENESS OF THE COMMUNICATIONS OR THE ADEQUACY OF THE PLATFORM AND EACH
EXPRESSLY DISCLAIMS LIABILITY FOR ERRORS OR OMISSIONS IN THE COMMUNICATIONS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR
STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD-PARTY
RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS IS MADE BY THE ADMINISTRATIVE AGENT OR ANY OF ITS RELATED PARTIES IN
CONNECTION WITH THE COMMUNICATIONS OR THE PLATFORM. IN NO EVENT SHALL THE ADMINISTRATIVE AGENT OR ANY OF ITS RELATED PARTIES
HAVE ANY LIABILITY TO ANY LOAN PARTY, ANY LENDER OR ANY OTHER PERSON FOR DAMAGES OF ANY KIND, WHETHER OR NOT BASED ON STRICT
LIABILITY AND INCLUDING DIRECT OR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, LOSSES OR EXPENSES (WHETHER IN
TORT, CONTRACT OR OTHERWISE) ARISING OUT OF ANY LOAN PARTY’S OR THE ADMINISTRATIVE AGENT’S TRANSMISSION OF
COMMUNICATIONS THROUGH THE INTERNET, EXCEPT TO THE EXTENT THE LIABILITY OF ANY SUCH PERSON IS FOUND IN A FINAL RULING BY A
COURT OF COMPETENT JURISDICTION TO HAVE RESULTED FROM SUCH PERSON’S GROSS NEGLIGENCE, WILLFUL MISCONDUCT OR MATERIAL
BREACH OF ANY LOAN DOCUMENT.
(e) The
Administrative Agent and the Lenders shall be entitled to rely and act upon any notices (including telephonic communications
and Borrowing Requests) purportedly given by or on behalf of any Borrower even if (i) such notices were not made in a
manner specified herein, were incomplete or were not preceded or followed by any other form of notice specified herein, or
(ii) the terms thereof, as understood by the recipient, varied from any confirmation thereof. The Borrowers shall
indemnify the Administrative Agent, its Related Parties and each Lender from all losses, costs, expenses and liabilities
resulting from the reliance by such Person on each notice purportedly given by or on behalf of any Borrower in the absence of
gross negligence or willful misconduct as determined by a final and non-appealable judgment by a court of competent
jurisdiction. All telephonic communications with the Administrative Agent may be recorded by the Administrative Agent, and
each of the parties hereto hereby consents to such recording.
Section 9.02
Waivers; Amendments.
(a)
No failure or delay by the Administrative Agent, any Issuing Bank or any Lender in exercising any right or power hereunder
or under any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right
or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The rights and remedies of the Administrative Agent, the Issuing Banks and
the Lenders hereunder and under any other Loan Document are cumulative and are not exclusive of any rights or remedies that they
would otherwise have. No waiver of any provision of any Loan Document or consent to any departure by any Loan Party therefrom shall
in any event be effective unless the same is permitted by paragraph (b) of this Section 9.02, and then such waiver
or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality
of the foregoing, to the extent permitted by law, the making of a Revolving Loan or the issuance of any Letter of Credit shall
not be construed as a waiver of any existing Default or Event of Default, regardless of whether the Administrative Agent, any Lender
or any Issuing Bank may have had notice or knowledge of the existence of such Default or Event of Default at the time.
(b)
Subject to clauses (A), (B), (C) and (D) of this Section 9.02(b) and Section 9.02(d)
below, neither this Agreement nor any other Loan Document nor any provision hereof or thereof may be waived, amended or modified,
except (i) in the case of this Agreement, pursuant to an agreement or agreements in writing entered into by the Borrowers and the
Required Lenders (or the Administrative Agent with the consent of the Required Lenders) or (ii) in the case of any other Loan Document
(other than any waiver, amendment or modification to effectuate any modification thereto expressly contemplated by the terms of
such other Loan Documents), pursuant to an agreement or agreements in writing entered into by the Administrative Agent and each
Loan Party that is party thereto, with the consent of the Required Lenders; provided that, notwithstanding the foregoing:
(A)
except with the consent of each Lender directly and adversely affected thereby (but without the consent of the Required
Lenders or any other Lender, the Administrative Agent or agent (except to the extent that the rights and obligations of the Administrative
Agent would be adversely affected thereby)), no such waiver, amendment or modification shall:
(1)
increase the Commitment or Additional Revolving Commitment of such Lender (other than with respect to any Incremental Revolving
Facility pursuant to Section 2.22 in respect of which such Lender has agreed to be an Additional Revolving Lender); it being
understood that no amendment, modification or waiver of, or consent to departure from, any condition precedent, representation,
warranty, covenant, Default, Event of Default, mandatory prepayment or mandatory reduction of the Commitments or Additional Revolving
Commitments shall constitute an increase of any Commitment or Additional Revolving Commitment of such Lender;
(2)
reduce or forgive the principal amount of any Revolving Loan;
(3)
(x) extend the scheduled final maturity of any Revolving Loan or (y) postpone any Interest Payment Date or the date
of any scheduled payment of any fee payable hereunder (in each case, other than any extension for administrative reasons agreed
by the Administrative Agent);
(4)
reduce the rate of interest (other than to waive any existing Default or Event of Default or obligation of the Borrowers
to pay interest at the default rate of interest under Section 2.13(e), which shall only require the consent of the Required
Lenders) or the amount of any fee owed to such Lender; it being understood that no change in the definition of “Average Availability”,
“Average Usage” or any other ratio used in the calculation of the Applicable Rate, or in the calculation of any other
interest or fee due hereunder (including any component definition thereof) shall constitute a reduction in any rate of interest
or fee hereunder;
(5)
extend the expiry date of such Lender’s Commitment or Additional Revolving Commitment; it being understood that no
amendment, modification or waiver of, or consent to departure from, any condition precedent, representation, warranty, covenant,
Default, Event of Default, mandatory prepayment or mandatory reduction of the Commitments or Additional Revolving Commitments shall
constitute an extension of any Commitment or Additional Revolving Commitment of any Lender;
(6)
waive, amend or modify the provisions of Sections 2.11(a), 2.18(b) or 2.18(c) of this Agreement in
a manner that would by its terms alter the pro rata sharing of payments or order of application required thereby (except
as expressly permitted under Section 2.23 or as otherwise provided in this Section 9.02); and
(B)
no such waiver, amendment or modification shall:
(1)
change any of the provisions of Section 1.13, Section 9.02(a) or Section 9.02(b) or the definition
of “Canadian Required Lenders”, “US Required Lenders”, “Required Lenders”, “US Super
Majority Lenders” or “Canadian Super Majority Lenders” to reduce any voting percentage required to waive, amend
or modify any right thereunder or make any determination or grant any consent thereunder, without the prior written consent of
each Lender;
(2)
release all or substantially all of the Collateral from the Lien granted pursuant to the Loan Documents (except as otherwise
permitted herein or in the other Loan Documents, including contemplated or pursuant to Article 8 or Section 9.23),
without the prior written consent of each Lender directly and adversely affected thereby, and it being understood that only the
consent of the Lenders whose Loans are secured by the Collateral shall be required; or
(3) release
all or substantially all of the value of the Guarantees under the Loan Guaranty (except as otherwise permitted herein or in
the other Loan Documents, including pursuant to Section 9.23 hereof), without the prior written consent of each
Lender directly and adversely affected thereby;
(C)
no such agreement shall (i) change the definition of the term “US Borrowing Base” or any component definition
of any thereof (including the definitions of “Eligible Accounts” or “Eligible Inventory”), in each case
the effect of which change would increase amounts available to be borrowed, except with the consent of the US Super Majority Lenders
(but without the consent of the Required Lenders) and (ii) change the definition of the term “Canadian Borrowing Base”
or any component definition of any thereof (including the definitions of “Eligible Accounts” or “Eligible Inventory”),
in each case the effect of which change would increase amounts available to be borrowed, except with the consent of the Canadian
Super Majority Lenders (but without the consent of the Required Lenders);
(D)
solely with the consent of the relevant Issuing Bank and the Administrative Agent, any such agreement may waive, amend or
modify the definitions of “Letter of Credit Sublimit”, “US Letter of Credit Sublimit” or “Canadian
Letter of Credit Sublimit” or Section 2.05 (other than Section 2.05(d)); and
(E)
no such agreement shall amend or waive any condition precedent to the making of a Revolving Loan (i) to the US Borrower,
except with the consent of the US Required Lenders (but without the consent of the Required Lenders) or (ii) to the Canadian Borrower,
except with the consent of the Canadian Required Lenders consent (but without the consent of the Required Lenders).
provided, further,
that no agreement shall amend, modify or otherwise affect the rights or duties of the Administrative Agent or any Issuing Bank
hereunder without the prior written consent of the Administrative Agent or such Issuing Bank. The Administrative Agent may also
amend the Commitment Schedule to reflect assignments entered into pursuant to Section 9.05, incurrences of Additional
Revolving Commitments or Additional Revolving Loans pursuant to Section 2.22, 2.23 and reductions or terminations
of any such Additional Revolving Commitments or Additional Revolving Loans. Notwithstanding anything to the contrary herein, no
Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder, except (1) as permitted
by Section 2.21(b) and (2) that the Commitment and any Additional Revolving Commitment of any Defaulting Lender may not
be increased without the consent of such Defaulting Lender (it being understood that any Commitment, Additional Revolving Commitment
or Revolving Loan held or deemed held by any Defaulting Lender shall be excluded from any vote hereunder that requires the consent
of any Lender, except as expressly provided in Section 2.21(b)). Notwithstanding the foregoing, this Agreement may
be amended (or amended and restated) with the written consent of the Required Lenders, the Administrative Agent and the Lead Borrower
(i) to add one or more additional credit facilities permitted hereunder to this Agreement and to permit any extension of credit
from time to time outstanding thereunder and the accrued interest and fees in respect thereof to share ratably in the relevant
benefits of this Agreement and the other Loan Documents and (ii) to include appropriately the Lenders holding such credit facilities
in any determination of the Required Lenders on substantially the same basis as the Lenders prior to such inclusion.
(c)
[Reserved]:
(d) Notwithstanding
anything to the contrary contained in this Section 9.02 or any other provision of this Agreement or any provision
of any other Loan Document, (i) the Borrowers and the Administrative Agent may, without the input or consent of any Lender,
amend, supplement and/or waive any guaranty, collateral security agreement, pledge agreement and/or related document (if
any) executed in connection with this Agreement to (x) comply with Requirements of Law or the advice of counsel or (y) cause
any such guaranty, collateral security agreement, pledge agreement or other document to be consistent with this Agreement
and/or the relevant other Loan Documents, (ii) the Borrowers and the Administrative Agent may, without the input or
consent of any other Lender (other than the relevant Lenders (including Additional Revolving Lenders) providing Revolving
Loans under such Sections), (1) effect amendments to this Agreement and the other Loan Documents as may be necessary in the
reasonable opinion of the Borrowers and the Administrative Agent to effect the provisions of Section 2.22, 2.23, 5.12
or 6.13, or any other provision specifying that any waiver, amendment or modification may be made with the consent or
approval of the Administrative Agent and/or (2) to add terms (including representations and warranties, conditions,
prepayments, covenants or events of default), in connection with the addition of any Revolving Loan or Commitment hereunder,
that are favorable to the then-existing Lenders, as reasonably determined by the Administrative Agent, (iii) if the
Administrative Agent and the Borrowers have jointly identified any ambiguity, mistake, defect, inconsistency, obvious error
or any error or omission of a technical nature or any necessary or desirable technical change, in each case, in any provision
of any Loan Document, then the Administrative Agent and the Borrowers shall be permitted to amend such provision solely to
address such matter as reasonably determined by them acting jointly, (iv) the Administrative Agent and the Borrowers may
amend, restate, amend and restate or otherwise modify any applicable ABL Intercreditor Agreement or any other Applicable
Intercreditor Agreement as provided therein and (v) the Administrative Agent may amend the Commitment Schedule to reflect
Commitment reductions or terminations pursuant to Section 2.09, implementations of Additional Revolving Commitments or
incurrences of Additional Revolving Loans pursuant to Sections 2.22 or 2.23 and reductions or terminations of
any such Additional Revolving Commitments or Additional Revolving Loans.
Section 9.03
Expenses; Indemnity.
(a) The
Borrowers shall pay (i) all reasonable and documented out-of-pocket expenses incurred by the Arrangers, the Administrative
Agent and their respective Affiliates (including applicable syndication expenses and travel expenses, but limited, in the
case of legal fees and expenses, to the actual reasonable and documented out-of-pocket fees, disbursements and other charges
of one legal firm of outside counsel to all such Persons taken as a whole and, if reasonably necessary, of one local counsel
in any relevant jurisdiction to all such Persons, taken as a whole) in connection with the syndication and distribution
(including via the Internet or through a service such as SyndTrak) of the Revolving Facilities, the preparation, execution,
delivery and administration of the Loan Documents and any related documentation, including in connection with any amendment,
modification or waiver of any provision of any Loan Document (whether or not the transactions contemplated thereby are
consummated, but only to the extent the preparation of any such amendment, modification or waiver was requested by the
Borrowers and except as otherwise provided separately in writing between the Borrowers, the relevant Arranger and/or the
Administrative Agent) and (ii) all reasonable and documented out-of-pocket expenses incurred by the Administrative Agent, the
Arrangers, the Issuing Banks or the Lenders or any of their respective Affiliates (but limited, in the case of legal fees and
expenses, to the actual reasonable and documented out-of-pocket fees, disbursements and other charges of one firm of outside
counsel to all such Persons taken as a whole and, if reasonably necessary, of one local counsel in any relevant jurisdiction
to all such Persons, taken as a whole) in connection with the enforcement, collection or protection of their respective
rights in connection with the Loan Documents, including their respective rights under this Section 9.03, or in
connection with the Revolving Loans made and/or Letters of Credit issued hereunder. Except to the extent required to be paid
on the Closing Date (and invoiced three (3) Business Days prior thereto), all amounts due under this paragraph (a) shall
be payable by the Borrowers within 30 days of receipt by the Borrowers of an invoice setting forth such expenses in
reasonable detail, together with backup documentation supporting the relevant reimbursement request.
(b)
The Borrowers shall indemnify each Arranger, each Issuing Bank, the Administrative Agent, and each Lender, and each Related
Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each
Indemnitee harmless from, any and all losses, claims, damages and liabilities (but limited, in the case of legal fees and expenses,
to the actual reasonable and documented out-of-pocket fees, disbursements and other charges of one counsel to all Indemnitees taken
as a whole and, if reasonably necessary, one local counsel in any relevant jurisdiction to all Indemnitees, taken as a whole and
solely in the case of an actual or potential conflict of interest, (x) one additional counsel to all affected Indemnitees, taken
as a whole, and (y) one additional local counsel in each relevant jurisdiction to all affected Indemnitees, taken as a whole),
incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of (i) the execution or delivery
of the Loan Documents or any agreement or instrument contemplated thereby and/or the enforcement of the Loan Documents, the performance
by the parties hereto of their respective obligations thereunder or the consummation of the Transactions or any other transactions
contemplated hereby or thereby, (ii) the use of the proceeds of the Revolving Loans or any Letter of Credit, (iii) any actual or
alleged Release or presence of Hazardous Materials on, at, under or from any property currently or formerly owned or operated by
the Borrowers, any of its Restricted Subsidiaries or any other Loan Party or any Environmental Liability related to the Borrowers,
any of its Restricted Subsidiaries or any other Loan Party and/or (iv) any actual or prospective claim, litigation, investigation
or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory and regardless of whether any
Indemnitee is a party thereto (and regardless of whether such matter is initiated by a third party or by the Borrowers, any other
Loan Party or any of their respective Affiliates); provided that such indemnity shall not, as to any Indemnitee, be available to
the extent that any such loss, claim, damage, or liability (i) results from the gross negligence, bad faith or willful misconduct
or material breach of the Loan Documents by such Indemnitee, in each case, as determined by a final non-appealable judgment of
a court of competent jurisdiction or (ii) arises out of any claim, litigation, investigation or proceeding brought by such Indemnitee
against another Indemnitee (other than any claim, litigation, investigation or proceeding (x) that is brought by or against the
Administrative Agent or any Arranger, acting in its capacity or fulfilling its role as the Administrative Agent or as an Arranger
or similar role or (y) that involves act or omission of the Sponsors, Holdings, the Lead Borrower or any of its subsidiaries).
Each Indemnitee shall be obligated to refund or return any and all amounts paid by the Borrowers pursuant to this Section 9.03(b)
to such Indemnitee for any fees, expenses, or damages to the extent such Indemnitee is not entitled to payment thereof in accordance
with the terms hereof. All amounts due under this paragraph (b) shall be payable by the Borrowers within 30 days (x) after
receipt by the Lead Borrower of a written demand therefor, in the case of any indemnification obligations and (y) in the case of
reimbursement of costs and expenses, after receipt by the Lead Borrower of an invoice, setting forth such costs and expenses in
reasonable detail, together with backup documentation supporting the relevant reimbursement request. This Section 9.03(b)
shall not apply to Taxes other than any Taxes that represent losses, claims, damages or liabilities in respect of a non-Tax claim.
(c) No
Borrower shall be liable for any settlement of any proceeding effected without its written consent (which consent shall not
be unreasonably withheld, conditioned or delayed), but if any proceeding is settled with such Borrower’s written
consent, or if there is a final judgment against any Indemnitee in any such proceeding, the Borrowers agree to indemnify and
hold harmless each Indemnitee to the extent and in the manner set forth above. The Borrowers shall not, without the prior
written consent of the affected Indemnitee (which consent shall not be unreasonably withheld, conditioned or delayed), effect
any settlement of any pending or threatened claim, litigation, investigation or proceeding against any Indemnitee in respect
of which indemnity could have been sought hereunder by such Indemnitee unless (i) such settlement includes an unconditional
release of such Indemnitee from all liability or claims that are the subject matter of such proceeding and (ii) such
settlement does not include any statement as to any admission of fault or culpability.
Section 9.04
Waiver of Claim. To the extent permitted by applicable law, no party to this Agreement shall assert, and each hereby
waives, any claim against any other party hereto or any Related Party thereof, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of,
this Agreement or any agreement or instrument contemplated hereby, the Transactions, any Revolving Loan or Letter of Credit or
the use of the proceeds thereof, except to the extent such damages would otherwise be subject to indemnification pursuant to the
terms of Section 9.03.
Section 9.05
Successors and Assigns.
(a)
The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns; provided that (i) except as provided under Section 6.07, the Borrowers
may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Administrative
Agent and each Lender (and any attempted assignment or transfer by the Borrowers without such consent shall be null and void) and
(ii) no Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance with the terms of this
Section 9.05 (any attempted assignment or transfer not complying with the terms of this Section 9.05 shall be subject
to Sections 9.05(f) and (g), as applicable). Nothing in this Agreement, expressed or implied, shall be construed
to confer upon any Person (other than the parties hereto, their respective successors and permitted assigns, Participants (to the
extent provided in paragraph (c) of this Section 9.05) and, to the extent expressly contemplated hereby, the
Related Parties of each of the Arrangers, the Administrative Agent, the Issuing Banks, and the Lenders) any legal or equitable
right, remedy or claim under or by reason of this Agreement.
(b)
(i) Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may assign to one or more Eligible
Assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of any Revolving Loan
or Additional Revolving Commitment added pursuant to Section 2.22 or 2.23 at the time owing to it) with the
prior written consent (not to be unreasonably withheld or delayed) of:
(A)
the Lead Borrower; provided that (1) no consent of the Lead Borrower shall be required during the continuation of
an Event of Default under Section 7.01(a) or Section 7.01(f) or (g) (solely with respect to the
Lead Borrower); (2) the Lead Borrower may withhold its consent to any assignment to any Person that is not a Disqualified Institution
but is known by the Lead Borrower to be an Affiliate of a Disqualified Institution regardless of whether such Person is identifiable
as an Affiliate of a Disqualified Institution on the basis of such Affiliate’s name, and (3) the investment objective or
history of any prospective Lender or its Affiliates shall be a reasonable basis to withhold the Lead Borrower’s consent;
and
(B)
the Administrative Agent; provided, that no consent of the Administrative Agent shall be required for any assignment
to another Lender, an Affiliate of a Lender or an Approved Fund.
(ii)
Assignments shall be subject to the following additional conditions:
(A) except
in the case of any assignment to another Lender or any Affiliate or branch of any Lender or any assignment of the entire
remaining amount of the relevant assigning Lender’s Revolving Loans or commitments of any Class, the principal amount
of Revolving Loans or commitments of the assigning Lender subject to the relevant assignment (determined as of the date on
which the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent and determined
on an aggregate basis in the event of concurrent assignments to Related Funds or by Related Funds) shall not be less than
$5,000,000 unless the Lead Borrower and the Administrative Agent otherwise consent;
(B)
any partial assignment shall be made as an assignment of a proportionate part of all the relevant assigning Lender’s
rights and obligations in respect of any Facility under this Agreement and, for purposes of greater certainty, in the case of an
assignment or transfer by an Initial Canadian Revolving Lender there is a corresponding assignment or transfer by the related Initial
US Revolving Lender (which may, in certain circumstances, be the same institution) to an Eligible Assignee of an amount which bears
the same proportion to the related Initial US Revolving Lender’s Initial US Commitment as the amount assigned or transferred
by the Initial Canadian Revolving Lender bears to the Initial Canadian Revolving Lender’s Initial Canadian Commitment, and
vice versa in the case of an assignment or transfer by an Initial US Revolving Lender;
(C)
the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption via an
electronic settlement system acceptable to the Administrative Agent (or, if previously agreed with the Administrative Agent, manually),
and shall pay to the Administrative Agent a processing and recordation fee of $3,500 (which fee may be waived or reduced in the
sole discretion of the Administrative Agent); and
(D)
the relevant Eligible Assignee, if it is not a Lender, shall deliver on or prior to the effective date of such assignment,
to the Administrative Agent (1) an Administrative Questionnaire and (2) any IRS or other form required under Section 2.17.
(iii)
Subject to the acceptance and recording thereof pursuant to paragraph (b)(iv) of this Section 9.05, from
and after the effective date specified in any Assignment and Assumption, the Eligible Assignee thereunder shall be a party hereto
and, to the extent of the interest assigned pursuant to such Assignment and Assumption, have the rights and obligations of a Lender
under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and
Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all
of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall
continue to be (A) entitled to the benefits of Sections 2.15, 2.16, 2.17 and 9.03 with respect to facts
and circumstances occurring on or prior to the effective date of such assignment and (B) subject to its obligations thereunder
and under Section 9.13). If any assignment by any Lender holding any Promissory Note is made after the issuance of such
Promissory Note, the assigning Lender shall, upon the effectiveness of such assignment or as promptly thereafter as practicable,
surrender such Promissory Note to the Administrative Agent for cancellation, and, following such cancellation, if requested by
either the assignee or the assigning Lender, the applicable Borrower shall issue and deliver a new Promissory Note to such assignee
and/or to such assigning Lender, with appropriate insertions, to reflect the new commitments and/or outstanding Revolving Loans
of the assignee and/or the assigning Lender.
(iv) The
Administrative Agent, acting for this purpose as a non-fiduciary agent of the applicable Borrower, shall maintain at one of
its offices a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and
addresses of the Lenders and their respective successors and assigns, and the commitment of, and principal amount of and
interest on the Revolving Loans and LC Disbursements owing to, each Lender or Issuing Bank pursuant to the terms hereof from
time to time (the “Register”). Failure to make any such recordation, or any error in such recordation,
shall not affect any Borrower’s obligations in respect of such Revolving Loans and LC Disbursements. The entries in the
Register shall be conclusive, absent manifest error, and the Borrowers, the Administrative Agent, the Issuing Banks and the
Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender and the owner
of the amounts owing to it under the Loan Documents as reflected in the Register for all purposes of the Loan Documents,
notwithstanding notice to the contrary. The Register shall be available for inspection by any Borrower, any Issuing Bank, and
each Lender, at any reasonable time and from time to time upon reasonable prior notice.
(v)
Upon its receipt of a duly completed Assignment and Assumption executed by an assigning Lender and an Eligible Assignee,
the Eligible Assignee’s completed Administrative Questionnaire and any tax certification required by Section 9.05(b)(ii)(D)(2)
(unless the assignee is already a Lender hereunder), the processing and recordation fee referred to in paragraph (b) of
this Section 9.05, if applicable, and any written consent to the relevant assignment required by paragraph (b) of
this Section 9.05, the Administrative Agent shall promptly accept such Assignment and Assumption and record the information
contained therein in the Register. No assignment shall be effective for purposes of this Agreement unless it has been recorded
in the Register as provided in this paragraph.
(vi) By
executing and delivering an Assignment and Assumption, the assigning Lender and the Eligible Assignee thereunder shall be
deemed to confirm and agree with each other and the other parties hereto as follows: (A) such assigning Lender warrants that
it is the legal and beneficial owner of the interest being assigned thereby free and clear of any adverse claim and that the
amount of its commitments, and the outstanding balances of its Revolving Loans, in each case without giving effect to any
assignment thereof which has not become effective, are as set forth in such Assignment and Assumption, (B) except as set
forth in clause (A) above, such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statement, warranty or representation made in or in connection with this Agreement, or the
execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement, any other Loan Document
or any other instrument or document furnished pursuant hereto, or the financial condition of the Borrowers or any Restricted
Subsidiary or the performance or observance by the Borrowers or any Restricted Subsidiary of any of its obligations under
this Agreement, any other Loan Document or any other instrument or document furnished pursuant hereto; (C) such assignee
represents and warrants that it is an Eligible Assignee, legally authorized to enter into such Assignment and Assumption; (D)
such assignee confirms that it has received a copy of this Agreement and the ABL Intercreditor Agreement (and any other
Applicable Intercreditor Agreement then in effect), together with copies of the financial statements referred to in Section 4.01(c)
or the most recent financial statements delivered pursuant to Section 5.01 and such other documents and
information as it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and
Assumption; (E) such assignee will independently and without reliance upon the Administrative Agent, the assigning Lender or
any other Lender and based on such documents and information as it deems appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement; (F) such assignee appoints and authorizes the
Administrative Agent to take such action as agent on its behalf and to exercise such powers under this Agreement as are
delegated to the Administrative Agent, by the terms hereof, together with such powers as are reasonably incidental thereto;
and (G) such assignee agrees that it will perform in accordance with their terms all the obligations which by the terms of
this Agreement are required to be performed by it as a Lender.
(c)
(i) Any Lender may, without the consent of any Borrower, the Administrative Agent, any Issuing Bank, or any other Lender,
sell participations to any bank or other entity (other than to any Disqualified Institution or any natural Person) (a “Participant”)
in all or a portion of such Lender’s rights and obligations under this Agreement (including all or a portion of its commitments
and the Revolving Loans owing to it); provided that (A) such Lender’s obligations under this Agreement shall remain
unchanged, (B) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations
and (C) the Borrowers, the Administrative Agent, the Issuing Banks and the other Lenders shall continue to deal solely and directly
with such Lender in connection with such Lender’s rights and obligations under this Agreement. Any agreement or instrument
pursuant to which any Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this
Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement
or instrument may provide that such Lender will not, without the consent of the relevant Participant, agree to any amendment, modification
or waiver described in (x) clause (A) of the first proviso to Section 9.02(b) that directly and adversely
affects the Revolving Loans or commitments in which such Participant has an interest and (y) clause (B)(1), (2)
or (3) of the first proviso to Section 9.02(b). Subject to paragraph (c)(ii) of this Section
9.05, the Borrowers agree that each Participant shall be entitled to the benefits of Sections 2.15, 2.16
and 2.17 (subject to the limitations and requirements of such Sections and Section 2.19) to the same extent as if
it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section 9.05 (it being
understood that the documentation required under Section 2.17(f) shall be delivered to the participating Lender, and
if additional amounts are required to be paid pursuant to Section 2.17(a) or Section 2.17(c), to the Borrowers and
the Administrative Agent upon reasonable written request by the Lead Borrower). To the extent permitted by law, each Participant
also shall be entitled to the benefits of Section 9.09 as though it were a Lender; provided that such Participant
agrees to be subject to Section 2.18(c) as though it were a Lender.
(ii)
No Participant shall be entitled to receive any greater payment under Section 2.15, 2.16 or 2.17
than the participating Lender would have been entitled to receive with respect to the participation sold to such Participant, unless
the sale of the participation to such Participant is made with the Lead Borrower’s prior written consent expressly acknowledging
that such Participant’s entitlement to benefits under Sections 2.15, 2.16 and 2.17 is not limited to
what the participating Lender would have been entitled to receive absent the participation.
Each Lender that sells
a participation shall, acting solely for this purpose as an agent of the Borrowers, maintain a register at one of its offices on
which it enters the name and address of each Participant and their respective successors and assigns, and the principal amounts
and stated interest of each Participant’s interest in the Revolving Loans or other obligations under the Loan Documents (the
“Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion
of the Participant Register (including the identity of any Participant or any information relating to any Participant’s interest
in any commitments, loans, letters of credit or its other obligations under any Loan Document) to any Person except to the extent
that such disclosure is necessary to establish that that such commitment, loan, letter of credit or other obligation is in registered
form under Section 5f.103-1(c) of the Treasury Regulation or is otherwise required hereunder. The entries in the Participant Register
shall be conclusive absent manifest error, and each Lender shall treat each Person whose name is recorded in the Participant Register
as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance
of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant
Register.
(d)
Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement
(other than to any Disqualified Institution or any natural person) to secure obligations of such Lender, including without limitation
any pledge or assignment to secure obligations to any Federal Reserve Bank or other central bank having jurisdiction over such
Lender, and this Section 9.05 shall not apply to any such pledge or assignment of a security interest; provided that
no such pledge or assignment of a security interest shall release any Lender from any of its obligations hereunder or substitute
any such pledgee or assignee for such Lender as a party hereto.
(e)
Notwithstanding anything to the contrary contained herein, any Lender (a “Granting Lender”) may grant
to a special purpose funding vehicle (an “SPC”), identified as such in writing from time to time by the Granting
Lender to the Administrative Agent and the Lead Borrower, the option to provide to the Borrowers all or any part of any Revolving
Loan that such Granting Lender would otherwise be obligated to make to the Borrowers pursuant to this Agreement; provided
that (i) nothing herein shall constitute a commitment by any SPC to make any Revolving Loan and (ii) if an SPC elects not to exercise
such option or otherwise fails to provide all or any part of such Revolving Loan, the Granting Lender shall be obligated to make
such Revolving Loan pursuant to the terms hereof. The making of any Revolving Loan by an SPC hereunder shall utilize the Commitment
or Additional Revolving Commitment of the Granting Lender to the same extent, and as if, such Revolving Loan were made by such
Granting Lender. Each party hereto hereby agrees that (i) neither the grant to any SPC nor the exercise by any SPC of such option
shall increase the costs or expenses or otherwise increase or change the obligations of the Borrowers under this Agreement (including
its obligations under Section 2.15, 2.16 or 2.17) and no SPC shall be entitled to any greater amount under
Section 2.15, 2.16 or 2.17 or any other provision of this Agreement or any other Loan Document that the Granting
Lender would have been entitled to receive, (ii) no SPC shall be liable for any indemnity or similar payment obligation under this
Agreement (all liability for which shall remain with the Granting Lender) and (iii) the Granting Lender shall for all purposes
including approval of any amendment, waiver or other modification of any provision of the Loan Documents, remain the Lender of
record hereunder. In furtherance of the foregoing, each party hereto hereby agrees (which agreement shall survive the termination
of this Agreement) that, prior to the date that is one year and one day after the payment in full of all outstanding commercial
paper or other senior indebtedness of any SPC, it will not institute against, or join any other Person in instituting against,
such SPC any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings under the laws of the U.S. or any State
thereof; provided that (i) such SPC’s Granting Lender is in compliance in all material respects with its obligations
to the Borrowers hereunder and (ii) each Lender designating any SPC hereby agrees to indemnify, save and hold harmless each other
party hereto for any loss, cost, damage or expense arising out of its inability to institute such a proceeding against such SPC
during such period of forbearance. In addition, notwithstanding anything to the contrary contained in this Section 9.05,
any SPC may (i) with notice to, but without the prior written consent of, the Lead Borrower or the Administrative Agent and without
paying any processing fee therefor, assign all or a portion of its interests in any Revolving Loan to the Granting Lender and (ii)
disclose on a confidential basis any non-public information relating to its Revolving Loans to any rating agency, commercial paper
dealer or provider of any surety, guaranty or credit or liquidity enhancement to such SPC. If a Granting Lender grants an option
to an SPC as described herein and such grant is not reflected in the Register, the Granting Lender shall maintain a separate register
on which it records the name and address of each SPC and the principal amounts (and related interest) of each SPC’s interest
with respect to the Revolving Loans, Commitments or other interests hereunder, which entries shall be conclusive absent manifest
error and each Lender shall treat such SPC that is recorded in the register as the owner of such interests for all purposes of
the Loan Documents notwithstanding any notice to the contrary; provided, further, that no Lender shall have any obligation
to disclose any portion of such register to any Person except to the extent disclosure is necessary to establish that the Revolving
Loans, Commitments or other interests hereunder are in registered form for U.S. federal income tax purposes (or as is otherwise
required thereunder).
(f)
(i) Any assignment or participation by a Lender without the Lead Borrower’s consent, to the extent the Lead Borrower’s
consent is required under this Section 9.05, to any other Person, shall at the Lead Borrower’s election, be treated
in accordance with Section 9.05(g) below or and the Borrowers shall be entitled to seek specific performance to unwind any
such assignment or participation in addition to injunctive relief or any other remedies available to the Borrowers at law or in
equity. Upon the request of any Lender, the Borrowers shall make available to such Lender the list of Disqualified Institutions
at the relevant time and such Lender may provide the list to any potential assignee or participant on a confidential basis in accordance
with Section 9.13 for the purpose of verifying whether such Person is a Disqualified Institution.
(ii)
Without limiting the foregoing, the Administrative Agent, in its capacity as such, shall not be responsible or have any
liability for, or have any duty to ascertain, inquire into, monitor or enforce, compliance with the provisions hereof relating
to Disqualified Institutions (other than with respect to updating the list with names of Disqualified Institutions provided in
writing to the Administrative Agent in accordance with the definition of “Disqualified Institution” or providing the
list (with such updates) upon request in accordance with this Section 9.05). Without limiting the generality of the foregoing,
the Administrative Agent, in its capacity as such, shall not (i) be obligated to ascertain, monitor or inquire as to whether any
Lender or Participant or prospective Lender or Participant is a Disqualified Institution or (ii) have any liability with respect
to or arising out of any assignment or participation of Loans, or disclosure of confidential information, to any Disqualified Institution.
(iii)
If any assignment or participation under this Section 9.05 is made to any Disqualified Institution or to any Person
that cannot be reasonably identified as a Disqualified Institution pursuant to clause (a)(ii) or (b)(ii) of the definition
thereof as of the date of such assignment or participation and subsequently becomes reasonably identifiable as a Disqualified Institution,
then (A) the Lead Borrower may, at the Borrowers’ sole expense and effort, upon notice to the applicable Disqualified Institution
and the Administrative Agent, require such Disqualified Institution to assign, without recourse (in accordance with and subject
to the restrictions contained in this Section 9.05), all of its interests, rights and obligations under this Agreement to
one or more Eligible Assignees; provided that the relevant assignment shall otherwise comply with this Section 9.05
(except that no registration and processing fee required under this Section 9.05 shall be required with respect to
any assignment pursuant to this paragraph); and (B) the Revolving Loans and Commitments held by such Disqualified Institution shall
be deemed not to be outstanding for purposes of any amendment, waiver or consent hereunder, and such Disqualified Institution shall
not be permitted to attend meetings of the Lenders or receive information prepared by the Administrative Agent or any Lender in
connection with this Agreement. Nothing in this Section 9.05(f)(iii) shall be deemed to prejudice any right or remedy
that Holdings or any Borrower may otherwise have at law or equity. Each Lender acknowledges and agrees that Holdings and
its subsidiaries will suffer irreparable harm if such Lender breaches any obligation under this Section 9.05 insofar as
such obligation relates to any assignment, participation or pledge to any Disqualified Institution without the Lead Borrower’s
prior written consent and, therefore, each Lender agrees that Holdings and/or the Borrowers may seek to obtain specific performance
or other equitable or injunctive relief to enforce this Section 9.05(f)(iii) against such Lender with respect to such breach
without posting a bond or presenting evidence of irreparable harm.
(g) If
any assignment or participation under this Section 9.05 is made to any Person that is a Disqualified Institution or to
any Person that cannot be reasonably identified as a Disqualified Institution pursuant to clause (a)(ii) or (c)(ii) of
the definition thereof as of the date of such assignment or participation and subsequently becomes reasonably identifiable as
a Disqualified Institution, then, notwithstanding any other provision of this Agreement (1) the Lead Borrower may, at the
Lead Borrower’s sole expense and effort, upon notice to such Person and the Administrative Agent, (A) terminate any
Commitment of such Person and repay all obligations of the Lead Borrower owing to such Person, and/or (B) require such Person
to assign, without recourse (in accordance with and subject to the restrictions contained in this Section 9.05), all
of its interests, rights and obligations under this Agreement to one or more Eligible Assignees; provided that in the
case of clause (B) above, the relevant assignment shall otherwise comply with this Section 9.05 (except that no
registration and processing fee required under this Section 9.05 shall be required with respect to any assignment
pursuant to this paragraph); (ii) the Revolving Loans and Commitments held by such Person shall be deemed not to be
outstanding for purposes of any amendment, waiver or consent hereunder, and such Person shall not be permitted to attend
meetings of the Lenders or receive information prepared by the Administrative Agent or any Lender in connection with this
Agreement and will not be permitted to attend or participate in conference calls or meetings attended solely by the Lenders
and the Administrative Agent, (iii) such Person shall be otherwise deemed to be a Defaulting Lender, and (iv) in no event
shall such Person be entitled to receive amounts set forth in Section 2.13(e). Nothing in this Section
9.05(g) shall be deemed to prejudice any right or remedy that Holdings or the Lead Borrower may otherwise have at law or
equity. Each Lender acknowledges and agrees that Holdings and its subsidiaries will suffer irreparable harm if such
Lender breaches any obligation under this Section 9.05 insofar as such obligation relates to any assignment,
participation or pledge to any Disqualified Institution without the Lead Borrower’s prior written consent and,
therefore, each Lender agrees that Holdings and/or the Lead Borrower may seek to obtain specific performance or other
equitable or injunctive relief to enforce this Section 9.05(g) against such Lender with respect to such breach without
posting a bond or presenting evidence of irreparable harm.
Section 9.06
Survival. All covenants, agreements, representations and warranties made by the Loan Parties in the Loan Documents
and in the certificates or other instruments delivered in connection with or pursuant to this Agreement or any other Loan Document
shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of the Loan
Documents and the making of any Revolving Loans and issuance of Letters of Credit regardless of any investigation made by any such
other party or on its behalf and notwithstanding that the Administrative Agent may have had notice or knowledge of any existing
Default or Event of Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue
in full force and effect until the Termination Date. The provisions of Sections 2.15, 2.16, 2.17, 9.03,
9.13 and Article 8 shall survive and remain in full force and effect regardless of the consummation of the transactions
contemplated hereby, the repayment of the Revolving Loans, the expiration or termination of the Letters of Credit, Commitments,
any Additional Revolving Commitment, the occurrence of the Termination Date or the termination of this Agreement or any provision
hereof but in each case, subject to the limitations set forth in this Agreement.
Section 9.07
Counterparts; Integration; Effectiveness; Electronic Execution. (a) This Agreement may be executed in counterparts
(and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement, the other Loan Documents, the ABL Intercreditor Agreement (and
any Applicable Intercreditor Agreement) and the Fee Letter and any separate letter agreements with respect to fees payable to the
Administrative Agent constitute the entire agreement among the parties relating to the subject matter hereof and supersede any
and all previous agreements and understandings, oral or written, relating to the subject matter hereof. This Agreement shall become
effective when it has been executed by Holdings, the applicable Borrower and the Administrative Agent and when the Administrative
Agent has received counterparts hereof which, when taken together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns.
Delivery of an executed counterpart of a signature page to this Agreement by facsimile or by email as a “.pdf” or “.tiff”
attachment shall be effective as delivery of a manually executed counterpart of this Agreement.
(b) The
words “execute,” “execution,” “signed,” “signature,” and words of like import in
or related to any document to be signed in connection with this Agreement and the transactions contemplated hereby (including without
limitation Assignment and Assumptions, amendments or other modifications, Borrowing Requests, waivers and consents) shall be deemed
to include electronic signatures, the electronic matching of assignment terms and contract formations on electronic platforms approved
by the Administrative Agent, or the keeping of records in electronic form, each of which shall be of the same legal effect, validity
or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the
extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act,
the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions
Act; provided that notwithstanding anything contained herein to the contrary the Administrative Agent is under no obligation
to agree to accept electronic signatures in any form or in any format unless expressly agreed to by the Administrative Agent pursuant
to procedures approved by it.
Section 9.08
Severability. To the extent permitted by law, any provision of any Loan Document held to be invalid, illegal or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability of the remaining provisions thereof; and the invalidity of a particular
provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.
Section 9.09
Right of Setoff. At any time when an Event of Default exists, upon the written consent of the Administrative Agent,
each Lender and each of their respective Affiliates and branches is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other obligations (in any currency) at any time owing by the Administrative Agent, such Issuing Bank,
or such Lender or Affiliate (including by branches and agencies of the Administrative Agent, such Issuing Bank, or such Lender,
wherever located) to or for the credit or the account of the Borrowers or any Loan Party against any of and all the Secured Obligations
held by the Administrative Agent, such Issuing Bank, or such Lender or Affiliate or branch, in each case, except to the extent
such amounts, deposits, obligations, credit or account constitute Excluded Assets, irrespective of whether or not the Administrative
Agent, such Issuing Bank, or such Lender or Affiliate shall have made any demand under the Loan Documents and although such obligations
may be contingent or unmatured or are owed to a branch or office of such Lender or Issuing Bank different than the branch or office
holding such deposit or obligation on such Indebtedness. Any applicable Lender or Issuing Bank shall promptly notify the Lead Borrower
and the Administrative Agent of such set-off or application; provided that any failure to give or any delay in giving such
notice shall not affect the validity of any such set-off or application under this Section 9.09, except to the extent such
amounts, deposits, obligations, credit or account constitute Excluded Assets. The rights of each Lender, Issuing Bank, the Administrative
Agent under this Section 9.09 are in addition to other rights and remedies (including other rights of setoff) which such
Lender, such Issuing Bank, the Administrative Agent or Affiliate or branch may have.
Section 9.10
Governing Law; Jurisdiction; Consent to Service of Process.
(a) THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS (OTHER THAN AS EXPRESSLY SET FORTH IN OTHER LOAN DOCUMENTS) AND ANY CLAIM, CONTROVERSY
OR DISPUTE ARISING UNDER OR RELATED TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (OTHER THAN AS EXPRESSLY SET FORTH IN THE
OTHER LOAN DOCUMENTS), WHETHER IN TORT, CONTRACT (AT LAW OR IN EQUITY) OR OTHERWISE, SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. Notwithstanding
the foregoing or anything to the contrary in this Agreement, interpretation of the provisions of the Merger Agreement
(including with respect to satisfaction of the conditions contained therein, whether the Acquisition has been consummated as
contemplated by the Merger Agreement, any interpretation of Closing Date Material Adverse Effect, any determination of
whether a Closing Date Material Adverse Effect has occurred or could reasonably be expected to occur, whether the
representations and warranties made by the Company and its subsidiaries in the Merger Agreement (including any Specified
Merger Agreement Representations) are accurate and whether as a result of any inaccuracy thereof any party has the right to
terminate its obligations under the Merger Agreement or decline to consummate the Acquisition) and all issues, claims and
disputes concerning the construction, validity, interpretation and enforceability of the Merger Agreement and the exhibits
and schedules thereto shall, in each case, be governed by, and construed in accordance with, the laws of the State of NEW
JERsey (without regard to any jurisdiction’s conflict-of-laws principles).
(b)
Each party hereto hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction
(subject to the last sentence of this clause (b)) of any U.S. Federal or New York State court sitting in the Borough of
Manhattan, in the City of New York (or any appellate court therefrom) over any suit, action or proceeding arising out of or relating
to any Loan Documents and agrees that all claims in respect of any such action or proceeding shall (except as permitted below)
be heard and determined in such New York State or, to the extent permitted by law, federal court; provided that with respect
to any suit, action or proceeding arising out of or relating to the Merger Agreement or the transactions contemplated thereby which
does not involve any claims against the Arrangers, the Lenders or any indemnified person, this sentence shall not override any
jurisdiction provision in the Merger Agreement. Each party hereto agrees that service of any process, summons, notice or document
by registered mail addressed to such person shall be effective service of process against such person for any suit, action or proceeding
brought in any such court. Each party hereto agrees that a final judgment in any such action or proceeding may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law. Each party hereto agrees that the Administrative
Agent and the Secured Parties retain the right to bring proceedings against any Loan Party in the courts of any other jurisdiction
solely in connection with the exercise of any rights under any Collateral Document.
(c)
Each party hereto hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or
relating to this Agreement or any other Loan Document in any court referred to in paragraph (b) of this Section 9.10.
Each party hereto hereby irrevocably waives, to the fullest extent permitted by law, any claim or defense of an inconvenient forum
to the maintenance of such action, suit or proceeding in any such court.
(d)
To the extent permitted by law, each party hereto hereby irrevocably waives personal service of any and all process upon
it and agrees that all such service of process may be made by registered mail (or any substantially similar form of mail) directed
to it at its address for notices as provided for in Section 9.01. Each Party hereto hereby waives any objection to
such service of process and further irrevocably waives and agrees not to plead or claim in any action or proceeding commenced hereunder
or under any Loan Document that service of process was invalid and ineffective. Nothing in this Agreement or any other Loan Document
will affect the right of any party to this Agreement to serve process in any other manner permitted by law.
Section 9.11
Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY SUIT, ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY) DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY HERETO (a) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY
OF ANY OTHER PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION,
SEEK TO ENFORCE THE FOREGOING WAIVER AND (b) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO
THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.11.
Section 9.12
Headings. Article and Section headings and the Table of Contents used herein are for convenience of reference only,
are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.
Section 9.13 Confidentiality.
Each of the Administrative Agent, each Issuing Bank, each Lender, and each Arranger agrees (and each Lender agrees to cause
its SPC, if any) to maintain the confidentiality of the Confidential Information (as defined below), except that Confidential
Information may be disclosed (a) to its and its Affiliates’ directors, officers, managers, employees, independent
auditors, or other experts and advisors, including accountants, legal counsel and other advisors (collectively, the
“Representatives”) on a “need to know” basis solely in connection with the transactions
contemplated hereby and who are informed of the confidential nature of the Confidential Information and are or have been
advised of their obligation to keep the Confidential Information of this type confidential; provided that (x) such
Person shall be responsible for its Affiliates’ and their Representatives’ compliance with this paragraph; and
(y) unless the Lead Borrower otherwise consents, no such disclosure shall be made by the Administrative Agent, any Issuing
Bank, any Arranger, any Lender or any Affiliate or Representative thereof to any Affiliate or Representative of the
Administrative Agent, any Issuing Bank, any Arranger, or any Lender that is a Disqualified Institution, (b) upon the
demand or request of any regulatory or Governmental Authority (including any self-regulatory body or any Federal Reserve Bank
or other central bank acting as pledgee pursuant to Section 9.05) purporting to have jurisdiction over such Person or
its Affiliates (in which case such Person shall, except with respect to any audit or examination conducted by bank
accountants or any Governmental Authority or regulatory or self-regulatory authority exercising examination or regulatory
authority, to the extent practicable and permitted by law, (i) inform the Lead Borrower promptly in advance thereof and (ii)
use commercially reasonable efforts to ensure that any information so disclosed is accorded confidential treatment), (c) to
the extent compelled by legal process in, or reasonably necessary to, the defense of such legal, judicial or administrative
proceeding, in any legal, judicial or administrative proceeding or otherwise as required by applicable Requirements of Law
(in which case such Person shall (i) to the extent practicable and permitted by law, inform the Lead Borrower promptly in
advance thereof and (ii) use commercially reasonable efforts to ensure that any such information so disclosed is accorded
confidential treatment), (d) to any other party to this Agreement, (e) to any Lender, Participant, counterparty or
prospective Lender, Participant or counterparty, subject to an acknowledgment and agreement by the relevant recipient that
the Confidential Information is being disseminated on a confidential basis (on substantially the terms set forth in this
paragraph or as otherwise reasonably acceptable to the Borrower and the Administrative Agent) in accordance with the standard
syndication process of the Arrangers or market standards for dissemination of the relevant type of information, which shall
in any event require “click through” or other affirmative action on the part of the recipient to access the
Confidential Information and acknowledge its confidentiality obligations in respect thereof, to (i) any Eligible Assignee of
or Participant in, or any prospective Eligible Assignee of or prospective Participant in, any of its rights or obligations
under this Agreement, including any SPC (in each case other than a Disqualified Institution), (ii) any pledgee referred to in Section 9.05
and (iii) any actual or prospective, direct or indirect contractual counterparty (or its advisors) to any Derivative
Transaction (including any credit default swap) or similar derivative product to which any Loan Party is a party, (f) with
the prior written consent of the Lead Borrower and subject to the Lead Borrower’s prior approval of the information to
be disclosed (not to be unreasonably withheld or delayed) to one or more ratings agencies in connection with obtaining
ratings (including “shadow ratings”) of the Lead Borrower or the Revolving Loans, (g) to the extent the
Confidential Information becomes publicly available other than as a result of a breach of this Section 9.13 by such
Person, its Affiliates or their respective Representatives, (h) to insurers, any numbering administration or settlement
services providers on a “need to know” basis solely in connection with the transactions contemplated hereby and
who are informed of the confidential nature of the Confidential Information and are or have been advised of their obligation
to keep the Confidential Information of this type confidential; provided that any disclosure made in reliance on this clause
(h) is limited to the general terms of this Agreement and does not include financial or other information relating to
Holdings, the Lead Borrower and/or any of their respective subsidiaries and (i) to the extent required to be so disclosed in
any public filings by a Lender with the SEC. For purposes of this Section 9.13, “Confidential
Information” means all information relating to the Borrowers and/or any of its subsidiaries and their respective
businesses, the Sponsors or the Transactions (including any information obtained by the Administrative Agent, any Issuing
Bank, any Lender or any Arranger, or any of their respective Affiliates or Representatives, based on a review of the books
and records relating to the Lead Borrower and/or any of its subsidiaries and their respective Affiliates from time to time,
including prior to the date hereof) other than any such information that is publicly available to the Administrative Agent or
any Arranger, any Issuing Bank, or Lender on a non-confidential basis prior to disclosure by the Lead Borrower or any of its
subsidiaries. For the avoidance of doubt, in no event shall any disclosure of any Confidential Information be made to Person
that is a Disqualified Institution at the time of disclosure.
Section 9.14
No Fiduciary Duty. Each of the Administrative Agent, the Issuing Banks, the Arrangers, each Lender, and their respective
Affiliates (collectively, solely for purposes of this paragraph, the “Lenders”), may have economic interests
that conflict with those of the Loan Parties, their stockholders and/or their respective affiliates. Each Loan Party agrees that
nothing in the Loan Documents or otherwise will be deemed to create an advisory, fiduciary or agency relationship or fiduciary
or other implied duty between any Lender, on the one hand, and such Loan Party, its respective stockholders or its respective affiliates,
on the other. Each Loan Party acknowledges and agrees that: (i) the transactions contemplated by the Loan Documents (including
the exercise of rights and remedies hereunder and thereunder) are arm’s-length commercial transactions between the Lenders,
on the one hand, and the Loan Parties, on the other, and (ii) in connection therewith and with the process leading thereto, (x)
no Lender has assumed an advisory or fiduciary responsibility in favor of any Loan Party, its respective stockholders or its respective
affiliates with respect to the transactions contemplated hereby (or the exercise of rights or remedies with respect thereto) or
the process leading thereto (irrespective of whether any Lender has advised, is currently advising or will advise any Loan Party,
its respective stockholders or its respective Affiliates on other matters) or any other obligation to any Loan Party except the
obligations expressly set forth in the Loan Documents and (y) each Lender is acting solely as principal and not as the agent or
fiduciary of such Loan Party, its respective management, stockholders, creditors or any other Person. Each Loan Party acknowledges
and agrees that such Loan Party has consulted its own legal, tax and financial advisors to the extent it deemed appropriate and
that it is responsible for making its own independent judgment with respect to such transactions and the process leading thereto.
Section 9.15
Several Obligations. The respective obligations of the Lenders hereunder are several and not joint and the failure
of any Lender to make any Revolving Loan, issue any Letter of Credit or perform any of its obligations hereunder shall not relieve
any other Lender from any of its obligations hereunder.
Section 9.16
USA PATRIOT Act. Each Lender that is subject to the requirements of the USA PATRIOT Act hereby notifies the Loan Parties
that pursuant to the requirements of the USA PATRIOT Act, it is required to obtain, verify and record information that identifies
each Loan Party, which information includes the name and address of such Loan Party and other information that will allow such
Lender to identify such Loan Party in accordance with the USA PATRIOT Act.
Section 9.17
Canadian Anti-Money Laundering.
(a)
Each Lender that is subject to the requirements of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act
(Canada) or other applicable Canadian anti-money laundering, anti-terrorist and “know your client” laws (collectively,
the “Canadian AML Laws”) hereby notifies the Loan Parties that pursuant to the requirements of the Canadian
AML Laws, it is required to obtain, verify and record information regarding each Loan Party, its directors, authorized signing
officers, direct or indirect shareholders or other Persons in control of each Loan Party, and the transactions contemplated hereby.
If the Administrative Agent has ascertained the identity of any Canadian Loan Party or any authorized signatories of any Canadian
Loan Party for the purposes of any Canadian AML Laws:
(i)
shall be deemed to have done so as an agent for each Lender, and this Agreement shall constitute a “written agreement”
in such regard between each Lender and the Administrative Agent within the meaning of applicable Canadian AML Laws; and
(ii)
shall provide to each Lender copies of all information obtained in such regard without any representation or warranty as
to its accuracy or completeness.
(b)
Notwithstanding the preceding sentence and except as may otherwise be agreed in writing, each of the Lenders agrees that
the Administrative Agent has no obligation to ascertain the identity of each Loan Party or any authorized signatories of each Canadian
Loan Party on behalf of any Lender, or to confirm the completeness or accuracy of any information it obtains from each Canadian
Loan Party or any such authorized signatory in doing so.
Section 9.18
Disclosure. Each Loan Party, each Issuing Bank and each Lender hereby acknowledges and agrees that the Administrative
Agent and/or its Affiliates from time to time may hold investments in, make other loans to or have other relationships with any
of the Loan Parties and their respective Affiliates and each Issuing Bank.
Section 9.19
Appointment for Perfection. Each Lender hereby appoints each other Lender as its agent for the purpose of perfecting
Liens for the benefit of the Administrative Agent, the Issuing Banks and the Lenders, in Collateral which, in accordance with Article
9 of the UCC, the PPSA or any other applicable law can be perfected only by possession and such possession is required by the Perfection
Requirements. If any Lender or Issuing Bank (other than the Administrative Agent) obtains possession of any Collateral, such Lender
or Issuing Bank shall notify the Administrative Agent thereof; and, promptly upon the Administrative Agent’s request therefor
shall deliver such Collateral to the Administrative Agent or otherwise deal with such Collateral in accordance with the Administrative
Agent’s instructions.
Section 9.20
Interest Rate Limitation.
(a) Subject
to Section 9.20(b) below, notwithstanding anything herein to the contrary, if at any time the interest rate applicable to any
Revolving Loan or Letter of Credit, together with all fees, charges and other amounts which are treated as interest on such
Revolving Loan or Letter of Credit under applicable law (collectively the “Charged Amounts”), shall exceed
the maximum lawful rate (the “Maximum Rate”) which may be contracted for, charged, taken, received or
reserved by the Lender or Issuing Bank holding such Revolving Loan or Letter of Credit in accordance with applicable law, the
rate of interest payable in respect of such Revolving Loan or Letter of Credit hereunder, together with all Charged Amounts
payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charged Amounts
that would have been payable in respect of such Revolving Loan but were not payable as a result of the operation of this Section
9.20 shall be cumulated and the interest and Charged Amounts payable to such Lender or Issuing Bank in respect of other
Revolving Loans or Letter of Credit or periods shall be increased (but not above the Maximum Rate therefor) until such
cumulated amount, together with interest thereon at the Federal Funds Effective Rate to the date of repayment, shall have
been received by such Lender or Issuing Bank.
(b)
If any provision of this Agreement would oblige a Loan Party to make any payment of interest or other amount payable to
Administrative Agent in an amount or calculated at a rate which would be prohibited by law or would result in a receipt by Administrative
Agent of “interest” at a “criminal rate” (as such terms are construed under the Criminal Code (Canada)),
then, notwithstanding such provision, such amount or rate shall be deemed to have been adjusted with retroactive effect to the
maximum amount or rate of interest, as the case may be, as would not be so prohibited by applicable law or so result in a receipt
by Administrative Agent of “interest” at a “criminal rate”, such adjustment to be effected, to the extent
necessary (but only to the extent necessary), as follows:
(i)
first, by reducing the amount or rate of interest; and
(ii)
thereafter, by reducing any fees, commissions, costs, expenses, premiums and other amounts required to be paid which would
constitute interest for purposes of section 347 of the Criminal Code (Canada).
Any provision of this
Agreement that would oblige a Loan Party to pay any fine, penalty or rate of interest on any arrears of principal or interest secured
by a mortgage on real property that has the effect of increasing the charge on arrears beyond the rate of interest payable on principal
money not in arrears shall not apply to such Loan Party, which shall be required to pay interest on money in arrears at the same
rate of interest payable on principal money not in arrears.
(c)
Notwithstanding Section 9.20(b), and after giving effect to all adjustments contemplated thereby, if any Lender shall have
received an amount in excess of the maximum amount permitted by the Criminal Code (Canada), then the applicable Loan Party shall
be entitled, by notice in writing to the affected Lender, to obtain reimbursement from that Lender in an amount equal to the excess,
and pending reimbursement, the amount of the excess shall be deemed to be an amount payable by that Lender to such Loan Party.
Section 9.21
ABL Intercreditor Agreement.
REFERENCE IS MADE
TO THE ABL INTERCREDITOR AGREEMENT AND EACH OTHER APPLICABLE INTERCREDITOR AGREEMENT. EACH LENDER HEREUNDER AGREES THAT IT
WILL BE BOUND BY AND WILL TAKE NO ACTIONS CONTRARY TO THE PROVISIONS OF THE ABL INTERCREDITOR AGREEMENT OR SUCH OTHER
APPLICABLE INTERCREDITOR AGREEMENT AND AUTHORIZES AND INSTRUCTS THE ADMINISTRATIVE AGENT TO ENTER INTO THE ABL INTERCREDITOR
AGREEMENT AND ANY OTHER APPLICABLE INTERCREDITOR AGREEMENT AS “ABL AGENT” AND ON BEHALF OF SUCH LENDER. THE
PROVISIONS OF THIS SECTION 9.21 ARE NOT INTENDED TO SUMMARIZE ALL RELEVANT PROVISIONS OF THE ABL INTERCREDITOR
AGREEMENT AND ANY OTHER APPLICABLE INTERCREDITOR AGREEMENT. REFERENCE MUST BE MADE TO THE ABL INTERCREDITOR AGREEMENT OR THE
OTHER APPLICABLE INTERCREDITOR AGREEMENT ITSELF TO UNDERSTAND ALL TERMS AND CONDITIONS THEREOF. EACH LENDER IS RESPONSIBLE
FOR MAKING ITS OWN ANALYSIS AND REVIEW OF THE ABL INTERCREDITOR AGREEMENT (AND ANY OTHER APPLICABLE INTERCREDITOR AGREEMENT)
AND THE TERMS AND PROVISIONS THEREOF, AND NEITHER THE ADMINISTRATIVE AGENT NOR ANY OF ITS AFFILIATES MAKES ANY REPRESENTATION
TO ANY LENDER AS TO THE SUFFICIENCY OR ADVISABILITY OF THE PROVISIONS CONTAINED IN THE ABL INTERCREDITOR AGREEMENT OR ANY
OTHER APPLICABLE INTERCREDITOR AGREEMENT. THE FOREGOING PROVISIONS ARE INTENDED AS AN INDUCEMENT TO THE LENDERS UNDER THE
FIRST LIEN CREDIT AGREEMENT TO EXTEND CREDIT THEREUNDER AND SUCH LENDERS ARE INTENDED THIRD PARTY BENEFICIARIES OF SUCH
PROVISIONS AND THE PROVISIONS OF THE ABL INTERCREDITOR AGREEMENT AND, IF APPLICABLE, ANY OTHER APPLICABLE INTERCREDITOR
AGREEMENT.
Section 9.22
Conflicts. Notwithstanding anything to the contrary contained herein or in any other Loan Document (but excluding
any Applicable Intercreditor Agreement), in the event of any conflict or inconsistency between this Agreement and any other Loan
Document (excluding any Applicable Intercreditor Agreement), the terms of this Agreement shall govern and control; provided
that in the case of any conflict or inconsistency between any Applicable Intercreditor Agreement and any other Loan Document, the
terms of such Applicable Intercreditor Agreement shall govern and control.
Section 9.23
Release of Guarantors. Notwithstanding anything in Section 9.02(b) to the contrary, any Subsidiary Guarantor
shall automatically be released from its obligations hereunder (and its Loan Guaranty shall be automatically released) (a) upon
the consummation of any permitted transaction or series of related transactions if as a result thereof such Subsidiary Guarantor
ceases to be a Restricted Subsidiary (or becomes an Excluded Subsidiary as a result of a single transaction or series of related
transactions permitted hereunder), as certified by the Responsible Officer of the Lead Borrower and/or (b) upon the occurrence
of the Termination Date. In connection with any such release, the Administrative Agent shall promptly execute and deliver to the
relevant Loan Party, at such Loan Party’s expense, all documents that such Loan Party shall reasonably request to evidence
termination or release. Any execution and delivery of documents pursuant to the preceding sentence of this Section 9.23
shall be without recourse to or warranty by the Administrative Agent (other than as to the Administrative Agent’s authority
to execute and deliver such documents).
Section 9.24
Judgment Currency.
(a)
If, for the purpose of obtaining judgment in any court, it is necessary to convert a sum owing hereunder in one currency
into another currency, each party hereto agrees, to the fullest extent that it may effectively do so, that the rate of exchange
used shall be that at which in accordance with normal banking procedures in the relevant jurisdiction the first currency could
be purchased by the Administrative Agent with such other currency on the Business Day immediately preceding the day on which final
judgment is given.
(b) The
obligations of the Loan Parties in respect of any sum due to any party hereto or any holder of any obligation owing hereunder
(the “Applicable Creditor”) shall, notwithstanding any judgment in a currency (the “Judgment
Currency”) other than the currency in which such sum is stated to be due hereunder (the “Agreement
Currency”), be discharged only to the extent that, on the Business Day following receipt by the Applicable Creditor of
any sum adjudged to be so due in the Judgment Currency, the Applicable Creditor may in accordance with normal banking
procedures in the relevant jurisdiction purchase the Agreement Currency with the Judgment Currency; if the amount of the
Agreement Currency so purchased is (x) less than the sum originally due to the Applicable Creditor in the Agreement Currency,
the applicable Loan Parties agree, as a separate obligation and notwithstanding any such judgment, to indemnify the
Applicable Creditor against such loss or (y) greater than the sum originally due to the Applicable Creditor in the Agreement
Currency, the Applicable Creditor agrees to return the amount of any excess to the Borrowers (or to any other Person who may
be entitled thereto under the applicable Requirements of Law). The obligations under this Section shall survive the
termination of this Agreement and the payment of all other amounts owing hereunder.
Section 9.25
Acknowledgement and Consent to Bail-In of EEA Financial Institutions. Notwithstanding anything to the contrary in
any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges
that any liability of any EEA Financial Institution arising under any Loan Document, to the extent such liability is unsecured,
may be subject to the Write-Down and Conversion Powers of an EEA Resolution Authority and agrees and consents to, and acknowledges
and agrees to be bound by:
(a)
the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder
which may be payable to it by any party hereto that is an EEA Financial Institution; and
(b)
the effects of any Bail-in Action on any such liability, including, if applicable:
(i)
a reduction in full or in part or cancellation of any such liability;
(ii)
a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial
Institution, its parent entity, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares
or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement
or any other Loan Document; or
(c)
the variation of the terms of such liability in connection with the exercise of the Write-Down and Conversion Powers of
any EEA Resolution Authority.
Section 9.26
Lender Representation. Each Lender as of the Closing Date represents and warrants as of the Closing Date to the Administrative
Agent and each other Arranger and their respective Affiliates, and not, for the avoidance of doubt, for the benefit of the Lead
Borrower or any other Loan Party, that such Lender is not and will not be (1) an employee benefit plan subject to Title I of ERISA,
(2) a plan or account subject to Section 4975 of the Code; (3) an entity deemed to hold “plan assets” of any such plans
or accounts for purposes of ERISA or the Code; or (4) a “governmental plan” within the meaning of ERISA.
[Signature Pages Follow]
IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first
above written.
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HAYWARD INTERMEDIATE,
INC.,
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as Holdings
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By:
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/s/ Andrew Diamond
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Name: Andrew Diamond
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Title: Senior Vice President, Finance and Chief Financial Officer
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HAYWARD ACQUISITION
CORP.,
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as Initial US Borrower
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By:
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/s/ Mark McFadden
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Name: Mark McFadden
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Title: President
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By:
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/s/ Kevin Brown
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Name: Kevin Brown
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Title: Vice President, Assistant Secretary and Assistant Treasuer
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HAYWARD INDUSTRIES,
INC.,
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as US Borrower
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By:
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/s/ Andrew Diamond
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Name: Andrew Diamond
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Title: Senior Vice President, Finance and Chief Financial Officer
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HAYWARD POOL PRODUCTS
CANADA, INC.
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PRODUITS DE PISCINES HAYWARD
CANADA, INC.,
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as Canadian Borrower
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By:
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/s/ Andrew Diamond
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Name: Andrew Diamond
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Title: Vice President
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Signature Page to ABL Credit Agreement
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BANK OF AMERICA, N.A.
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individually, as Administrative
Agent
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By:
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/s/ Daniel K. Clancy
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Name: Daniel K. Clancy
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Title: Senior Vice President
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Bank of America, N.A.
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individually, as Issuing Bank, Swingline Lender and Lender
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By:
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/s/ Daniel K. Clancy
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Name: Daniel K. Clancy
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Title: Senior Vice President
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Bank of America, N.A. (ACTING THROUGH ITS CANADA BRANCH
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individually, as Lender
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By:
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/s/ Sylwia Durkiewicz
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Name: Sylwia Durkiewicz
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Title: Vice President
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PNC Bank, National Association as Lender and Issuing
Bank
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By:
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/s/ Sara V. Traberman
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Name: Sara V. Traberman
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Title: Senior Vice President
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PNC Bank Canada Branch as Lender and Issuing Bank
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By:
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/s/ James Bruce
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Name: James Bruce
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Title: Senior Vice President
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WELLS FARGO BANK N.A. as Lender
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By:
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/s/ Kevin M. Cox
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Name: Kevin M. Cox
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Title: Managing Director
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WELLS FARGO CAPITAL FINANCE CORPORATION CANADA as
Lender
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By:
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/s/ David G. Phillips
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Name: David G. Phillips
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Title: Senior Vice President
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JFIN BUSINESS CREDIT FUND I LLC
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By: Jefferies Finance LLC, as Collateral Manager
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By:
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/s/ J. Paul McDonnell
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Name: J. Paul McDonnell
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Title: Managing Director
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Morgan Stanley Senior Funding, Inc., as Lender
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By:
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/s/ Ryan Murphy
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Name: Ryan Murphy
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Title: Authorize Signatory
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NOMURA CORPORATE FUNDING AMERICAS, LLC, as Lender
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By:
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/s/ Lee Olive
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Name: Lee Olive
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Title: Managing Director
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JPMORGAN CHASE BANK, N.A., as lender
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By:
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/s/ John Lee
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Name: John Lee
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Title: Authorized Officer
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JP MORGAN CHASE BANK, N.A. TORONTO BRANH, as Lender
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By:
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/s/ Auggie Marchetti
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Name: Auggie Marchetti
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Title: Authorized Officer
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Signature Page to ABL Credit Agreement
Signature Page to ABL Credit Agreement
SCHEDULES:
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Schedule 1.01(a)
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-
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Commitment Schedule
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Schedule 1.01(d)
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-
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Existing Letters of Credit
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Schedule 3.05
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-
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Fee Owned Real Estate Assets
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Schedule 3.13
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-
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Subsidiaries
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Schedule 3.19
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-
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Deposit Accounts and Securities Accounts
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Schedule 5.10
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-
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Unrestricted Subsidiaries
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Schedule 6.01
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-
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Existing Indebtedness
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Schedule 6.02
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-
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Existing Liens
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Schedule 6.06
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-
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Existing Investments
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Schedule 6.07(s)
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-
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Dispositions
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Schedule 9.01
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-
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Borrower’s Website Address for Electronic Delivery
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Schedule 1.01(a)
Commitment Schedule
Initial Commitments
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Initial Revolving Lender
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Initial US
Commitment
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Initial Revolving Lender
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Initial Canadian
Commitment
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Initial
Commitment
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Bank of America, N.A.
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$74,800,000
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Bank of America, N.A. (acting through its Canada branch)
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$10,2000,000
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$85,000,000
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PNC Bank, National Association
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$44,000,000
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PNC Bank Canada Branch
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$6,000,000
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$50,000,000
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Wells Fargo Bank N.A.
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$44,000,000
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Wells Fargo Bank Capital Finance Corporation Canada
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$6,000,000
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$50,000,000
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JFIN Business Credit Fund I LLC
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$18,920,000
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JFIN Business Credit Fund I LLC
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$2,580,000
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$21,500,000
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Morgan Stanley Senior Funding, Inc.
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$18,920,000
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Morgan Stanley Senior Funding, Inc.
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$2,580,000
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$21,500,000
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Nomura Corporate Funding Americas, LLC
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$10,560,000
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Nomura Corporate Funding Americas, LLC
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$1,440,000
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$12,000,000
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JPMorgan Chase Bank, N.A.
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$8,800,000
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JPMorgan Chase Bank, N.A. Toronto Branch
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$1,200,000
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$10,000,000
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Total
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$220,000,000
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Total
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$30,000,000
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$250,000,000
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Letters of Credit
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Issuing Bank
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Maximum US
Letters of Credit
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Issuing Bank
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Maximum Canadian
Letters of Credit
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Maximum Letters of
Credit
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Bank of America, N.A.
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$15,000,000
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Bank of America, N.A. (acting through its Canada branch)
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$5,000,000
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$20,000,000
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Total
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$15,000,000
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Total
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$5,000,000
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$20,000,000
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Swingline Commitment
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Swingline Lender
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Swingline Commitment
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Bank of America, N.A.
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$25,000,000
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Total
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$25,000,000
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Schedule 1.01(d)
Existing Letters of Credit
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1.
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Irrevocable Standby Letter of Credit No. 68011079, as amended, in the amount of $1,155,000 issued
by BofA for the benefit of Federal Insurance Company.
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2.
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Irrevocable Standby Letter of Credit No. 68074737, as amended, in the amount of $1,875,000 issued
by BofA for the benefit of Hartford Fire Insurance Company.
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3.
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Irrevocable Standby Letter of Credit No. 68018146, as amended, in the amount of CAD $46,276.30
issued by BofA for the benefit of The Corporation of the Town of Oakville, Ontario, Canada.
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Schedule 3.05
Fee Owned Real Estate Assets
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Loan Party
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Address of Owned Real Property
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Hayward Industries, Inc.
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One Hayward Industrial Drive
Clemmons, North Carolina
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Goldline Properties LLC
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61 Whitecap Drive
North Kingstown, Rhode Island
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Hayward Industries, Inc.
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2935 and 2939 Sidco Drive
Nashville, Tennessee
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Hayward Industries, Inc.
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2869 and 2875 Pomona Boulevard (Tract 35501, Lots 16 and 23,
respectively)
2870, 2876, 2880 and 2884 Surveyor Street (Tract 35501, Lots
18, 19, 20 and 21, respectively)
159 Voyager Street (Tract 35501, Lot 17)
126 Explorer Street (Tract 35501, Lot 22)
Pomona, California
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Schedule 3.13
Subsidiaries
|
Subsidiary
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Type of Entity
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Owner
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% Ownership
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Hayward Acquisition Corp.
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Corporation
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Hayward Intermediate, Inc.
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100%
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Hayward Industries, Inc.
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Corporation
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Hayward Intermediate, Inc.
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100%
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Hayward Industrial Products, Inc.
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Corporation
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Hayward Industries, Inc.
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100%
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Goldline Properties LLC
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Limited Liability Company
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Hayward Industries, Inc.
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100%
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Hayward/Wright-Austin, Inc.
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Corporation
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Hayward Industrial Products, Inc.
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100%
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Webster Pumps, Inc.
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Corporation
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Hayward Industrial Products, Inc.
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100%
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Hayward Pool Products Canada, Inc.
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Corporation
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Hayward Industries, Inc.
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100%
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Hayward Enterprises Europe S.A.
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Société Anonyme
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Hayward Industries, Inc.
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100%
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Hayward Pool Europe S.A.
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Société Anonyme
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Hayward Industries, Inc.
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91%
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Hayward Pool Europe S.A.
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Société Anonyme
|
Hayward Enterprises Europe S.A.
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9%
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Hayward Consolidated Pty. Ltd.
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Proprietary Limited Company
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Hayward Industries, Inc.
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100%
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Hayward Pool Products (Australia) Pty. Ltd.
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Proprietary Limited Company
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Hayward Consolidated Pty. Ltd.
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100%
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Hayward Industries (Wuxi) Co. Ltd.
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Chinese Limited Company
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Hayward Industries, Inc.
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100%
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Hayward Pool Products Trading (Shanghai) Co. Ltd.
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Chinese Limited Company
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Hayward Industries, Inc.
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100%
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Hayward Pool Acquisition, S.L.U.
|
Sociedad de Responsabilidad Limitada
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Hayward Industries, Inc.
|
100%
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Kripsol Gestión, S.L.U.
|
Sociedad de Responsabilidad Limitada
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Hayward Pool Acquisition, S.L.U.
|
100%
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Kripsol Ibérica, S.L.U.
|
Sociedad de Responsabilidad Limitada
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Hayward Pool Acquisition, S.L.U.
|
100%
|
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Kripsol Industrial, S.L.U.
|
Sociedad de Responsabilidad Limitada
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Kripsol Gestión, S.L.U.
|
100%
|
|
Fiberpool Internacional, S.L.
|
Sociedad de Responsabilidad Limitada
|
Kripsol Gestión, S.L.U.
|
84.73%
|
|
Fiberpool Internacional, S.L.
|
Sociedad de Responsabilidad Limitada
|
Hayward Pool Acquisition, S.L.U.
|
15.27%
|
|
Subsidiary
|
Type of Entity
|
Owner
|
% Ownership
|
|
Kripsol Export, S.L.U.
|
Sociedad de Responsabilidad Limitada
|
Kripsol Gestión, S.L.U.
|
100%
|
|
Ditecpol, S.L.U.
|
Sociedad de Responsabilidad Limitada
|
Kripsol Gestión, S.L.U.
|
100%
|
|
Kripsol Hidráulica, S.L.U.
|
Sociedad de Responsabilidad Limitada
|
Kripsol Gestión, S.L.U.
|
100%
|
|
Kripsol Aragón, S.L.U.
|
Sociedad de Responsabilidad Limitada
|
Kripsol Hidráulica, S.L.U.
|
100%
|
|
Kripsol Piscinas S.A.
|
Sociedad Anónima
|
Kripsol Ibérica, S.L.U.
|
70%
|
|
Kripsol Piscinas S.A.
|
Sociedad Anónima
|
Kripsol Gestión, S.L.U.
|
30%
|
|
Kripsol Intermark Málaga S.L.
|
Sociedad de Responsabilidad Limitada
|
Kripsol Ibérica, S.L.U.
|
77.78%
|
|
Kripsol Intermark Málaga S.L.
|
Sociedad de Responsabilidad Limitada
|
Hayward Pool Acquisition, S.L.U.
|
22.22%
|
|
Sugar Valley, S.L.U.
|
Sociedad de Responsabilidad Limitada
|
Hayward Pool Acquisition, S.L.U.
|
100%
|
Schedule 3.15
Labor Disputes
None.
Schedule 3.19
Deposit Accounts and Securities Accounts
|
Owner
|
Type of Account
|
Bank or Intermediary
|
Account Numbers
|
Excluded Account (Y/N)
|
|
Hayward Industries, Inc.
|
JPMORGAN CHASE CONCENTRATION
|
JPMorgan Chase
|
304-682616
|
Y
|
|
Hayward Industries, Inc.
|
BOA DEPOSITORY
|
Bank of America
|
0913700096
|
Y
|
|
Hayward Industries, Inc.
|
BOA MANUAL PAYROLL CHECKS
|
Bank of America
|
0038-1267-0094
|
Y
|
|
Hayward Industries, Inc.
|
BOA - POMONA WORKING FUNDS
|
Bank of America
|
0038-1514-0602
|
Y
|
|
Hayward Industries, Inc.
|
BOA - NASHVILLE WORKING FUNDS
|
Bank of America
|
0038-1514-0592
|
Y
|
|
Hayward Industries, Inc.
|
HAYWARD POOL PRODUCTS DEPOSITORY
|
JPMorgan Chase
|
304-909645
|
Y
|
|
Hayward Industries, Inc.
|
FLOW CONTROL DEPOSITORY
|
JPMorgan Chase
|
304-910058
|
Y
|
|
Hayward Industries, Inc.
|
HAYWARD IMG OPERATING
|
Bank of America
|
0038-1515-2742
|
Y
|
|
Hayward Industries, Inc.
|
FUNDING ACCOUNT
|
Wells Fargo, N.A.
|
2000-02966-8528
|
Y
|
|
Hayward Industries, Inc.
|
REBATE CDA
|
Wells Fargo, N.A.
|
2079-95106-7134
|
Y
|
|
Hayward Industries, Inc.
|
CDA
|
Wells Fargo, N.A.
|
2079-95106-7121
|
Y
|
|
Hayward Industries, Inc.
|
HAYWARD POOL PRODUCTS (CLEMMONS) WORKING FUND
|
Wells Fargo, N.A.
|
2000-02966-8531
|
Y
|
|
Hayward Industries, Inc.
|
HAYWARD IMG WORKING FUND
|
Bank of America
|
0038-1514-8963
|
Y
|
|
Hayward Pool Products Canada, Inc.
|
MAIN DISBURSEMENT ACCOUNT
|
Bank of Montreal
|
31442-1042-750
|
Y
|
|
Hayward Pool Products Canada, Inc.
|
US FUNDS A/C FOR FOREIGN SUBS
|
Bank of Montreal
|
0060-0623277
669-4
|
Y
|
|
Hayward Pool Products Canada, Inc.
|
BANK OF MONTREAL US FUNDS
|
Bank of Montreal
|
31442-4607-323
|
Y
|
Schedule 5.10
Unrestricted Subsidiaries
None.
Schedule 6.01
Existing Indebtedness
|
|
1.
|
Credit account facility
(Póliza de cuenta de crédito interés variable euribor) dated as of November 17, 2015 between Kripsol
Industrial and Caixabank, S.A. in an amount not exceeding €500,000.
|
|
|
2.
|
Credit account facility dated as of November 17, 2015 between Kripsol Industrial and Caixabank,
S.A. in an amount not exceeding €500,000.
|
|
|
3.
|
Credit facility for commercial
risks (Póliza de crédito para cobertura de riesgos comerciales) dated as of November 17, 2015 between Kripsol
Industrial and Caixabank, S.A. in an amount not exceeding €500,000.
|
|
|
4.
|
Bank guarantee agreement dated as of November 17, 2015 between Kripsol Industrial and Caixabank,
S.A. in an amount not exceeding €500,000.
|
|
|
5.
|
Bank guarantee dated
as of March 15, 2016 issued by Banco Popular Español, S.A. in favor of Fire-Consult, S.L. in an amount not exceeding
€5,000
|
|
|
6.
|
Credit policy in the form of advance commercial documents dated as of November 17, 2015 between
Kripsol Industrial and Banco Santander, S.A. in an amount not exceeding €500,000.
|
|
|
7.
|
Finance agreement (contrato
de financiación) dated as of May 11, 2015 between Kripsol Gestión, S.L. and De Lage Landen International, B.V. in
an outstanding amount of €38,341.36.
|
Schedule 6.02
Existing
Liens
1. The
following UCC liens:
|
Debtor
|
Secured Party
|
Description of Collateral
|
File No. of Financing
Statement/Jurisdiction
|
Hayward Industries, Inc.
Hayward Manufacturing Co., Inc.
|
Regal Beloit America, Inc.
|
Specific equipment (motors).
|
24791076/Department of Treasury/Commercial Recording, New Jersey
|
|
Hayward Industries, Inc.
|
Konica Minolta Business Solutions Inc
|
Specific equipment.
|
26319681/Department of Treasury/Commercial Recording, New Jersey
|
|
Hayward Industries, Inc.
|
Toyota Motor Credit Corporation
TOYOTALIFT, INC.
|
Specific equipment.
|
26421995/Department of Treasury/Commercial Recording, New Jersey
|
|
Hayward Industries, Inc.
|
KMBS Business Solutions U.S.A., INC
|
Specific equipment.
|
26700380/Department of Treasury/Commercial Recording, New Jersey
|
|
Hayward Industries, Inc.
|
TOYOTALIFT, INC.
TOYOTA INDUSTRIES COMMERCIAL FINANCE, INC.
|
Specific equipment.
|
51407650/Department of Treasury/Commercial Recording, New Jersey
|
|
Hayward Industries, Inc.
|
KONICA MINOLTA PREMIER FINANCE
|
Specific equipment.
|
51571450/Department of Treasury/Commercial Recording, New Jersey
|
2. The
following PPSA liens:
|
Debtor
|
Secured Party
|
Description of Collateral
|
File No. of Financing
Statement/Jurisdiction
|
|
HAYWARD POOL PRODUCTS CANADA, INC.
|
ADDISON LEASING
|
Consumer Goods and Motor Vehicles Included
Amount: 52,291
Year / make: 2015 ACURA
Model: MDX NAVIGATION
V.I.N.: 5FRYD4H44FB501424
|
698740038 / Ontario
|
|
HAYWARD POOL PRODUCTS CANADA, INC.
|
ADDISON LEASING
|
Consumer Goods and Motor Vehicles Included
Amount: 31,811
Year / make: 2015 TOYOTA
Model : VENZA BASE [A6]
V.I.N.: 4T3BA3BBXFU066081
|
701952516 / Ontario
|
|
Debtor
|
Secured Party
|
Description of Collateral
|
File No. of Financing
Statement/Jurisdiction
|
|
HAYWARD POOL PRODUCTS CANADA, INC.
|
ADDISON LEASING
|
Consumer Goods and Motor Vehicles Included
Amount: 32,955
Year / make: 2016 TOYOTA
Model: VENZA BASE [A6]
V.I.N.:4T3BA3BB2GU076251
|
709953489 / Ontario
|
|
HAYWARD POOL PRODUCTS CANADA, INC.
|
ADDISON LEASING OF CANADA LTD
|
Consumer Goods and Motor Vehicles Included
Amount: 37,702
Year / make: 2016 NISSAN
Model: PATHFINDER SL
V.I.N.: 5N1AR2MM3GC650481
|
716828328 / Ontario
|
|
HAYWARD POOL PRODUCTS CANADA, INC.
|
ADDISON LEASING OF CANADA LTD
|
Consumer Goods and Motor Vehicles Included
Amount: 33,185
Year/make: 2017
Model: HYUNDAI SANTA FE SPORT
V.I.N.:5XYZUDLA1HG392273
|
717510303 / Ontario
|
|
HAYWARD POOL PRODUCTS CAN INC
|
HONDA CANADA FINANCE INC.
|
Consumer Goods, Equipment and Motor Vehicles Included
Amount: 47,781
Year / make: 2017 ACURA
Model: RDX
V.I.N.: 5J8TB4H59HL800922
|
719006841 / Ontario
|
|
HAYWARD POOL PRODUCTS CANADA, INC.
|
ADDISON LEASING OF CANADA LTD
|
Consumer Goods and Motor Vehicles Included
Amount: 63,226
Year / make: 2016
Model: TOYOTA VENZA BASE [A6]
V.I.N.:4T3BA3BB3GU077702 Year / make: 2016 DODGE
Model: GRAND CARAVAN S
V.I.N.: 2C4RDGBG7GR226583
|
719340012 / Ontario
|
|
HAYWARD POOL PRODUCTS CANADA, INC.
|
QUEST AUTOMOTIVE LEASING SERVICES LTD.
|
Consumer Goods, Equipment, Other and Motor Vehicles Included
Amount: 37,112
Year / Make: 2016 RAM
Model: 1500 ST
V.I.N.: 3C6RR7KTXGG249884
|
722192373 / Ontario
|
|
HAYWARD POOL PRODUCTS CANADA, INC.
|
QUEST AUTOMOTIVE LEASING SERVICES LTD.
|
Equipment, Other and Motor Vehicles Included
Amount: 39,556
Year / make: 2016 TOYOTA VENZA
Model: XLE V6
V.I.N.: 4T3BK3BB7GU125649
|
723482901 / Ontario
|
|
Debtor
|
Secured Party
|
Description of Collateral
|
File No. of Financing
Statement/Jurisdiction
|
|
HAYWARD POOL PRODUCTS CANADA, INC.
|
QUEST AUTOMOTIVE LEASING SERVICES LTD.
|
Equipment, Other and Motor Vehicles Included
Amount: 36,120
Year / make: 2017 DODGE
Model: GRAND CARAVAN
V.I.N.: 2C4RDGBG1HR687568
|
725080284 / Ontario
|
|
HAYWARD POOL PRODUCTS CANADA INC.
|
CBSC CAPITAL INC.
|
Equipment, Accounts and Other ALL PERSONAL PROPERTY OF THE DEBTOR FINANCED BY THE SECURED PARTY, WHEREVER SITUATED, CONSISTING OF TWO COPIERS, TOGETHER WITH ALL PARTS AND ACCESSORIES RELATING THERETO, ALL ATTACHMENTS, ACCESSORIES AND ACCESSIONS THERETO OR THEREON, ALL REPLACEMENTS, SUBSTITUTIONS, ADDITIONS AND IMPROVEMENTS OF ALL OR ANY PART OF THE FOREGOING AND ALL PROCEEDS IN ANY FORM DERIVED THEREFROM.
|
725451615 / Ontario
|
|
HAYWARD POOL PRODUCTS CANADA, INC.
|
QUEST AUTOMOTIVE LEASING SERVICES LTD.
|
Equipment, Other and Motor Vehicles Included
Amount: 37,704
Year / make: 2017 HYUNDAI
Model: SANTA FE 2.0T SPORT
V.I.N.: 5XYZUDLA2HG471676
|
725914395 / Ontario
|
|
HAYWARD POOL PRODUCTS CANADA, INC.
|
QUEST AUTOMOTIVE LEASING SERVICES LTD.
|
Equipment, Other and Motor Vehicles Included
Amount: 38,588
Year / make: 2016 TOYOTA
Model: VENZA XLE V6 AWD
V.I.N.: 4T3BK3BB8GU126440
|
726571332 / Ontario
|
|
HAYWARD POOL PRODUCTS CANADA, INC.
|
QUEST AUTOMOTIVE LEASING SERVICES LTD.
|
Equipment, Other and Motor Vehicles Included
Amount: 35,236
Year / make: 2017 NISSAN
Make: ROGUE SV AWD
V.I.N: 5N1AT2MV4HC751573
|
726777036 / Ontario
|
|
Debtor
|
Secured Party
|
Description of Collateral
|
File No. of Financing
Statement/Jurisdiction
|
|
HAYWARD POOL PRODUCTS CANADA, INC.
|
QUEST AUTOMOTIVE LEASING SERVICES LTD.
|
Equipment, Other and Motor Vehicles Included
Amount: 38,840
Year / make: 2016 TOYOTA
Model: VENZA XLE V6
V.I.N.: 4T3BK3BB8GU125482
|
727758315 / Ontario
|
|
HAYWARD POOL PRODUCTS CANADA, INC.
|
QUEST AUTOMOTIVE LEASING SERVICES LTD.
|
Equipment, Other and Motor Vehicles Included
Amount: 45,584
Year / make: 2017 NISSAN
Model: PATHFINDER SL TECH
V.I.N.: 5N1DR2MM3HC657252
|
728146521 / Ontario
|
Schedule 6.06
Existing Investments
|
|
1.
|
Credit account facility
(Póliza de cuenta de crédito interés variable euribor) dated as of November 17, 2015 between Kripsol
Industrial and Caixabank, S.A. in an amount not exceeding €500,000.
|
|
|
2.
|
Credit account facility dated as of November 17, 2015 between Kripsol Industrial and Caixabank,
S.A. in an amount not exceeding €500,000.
|
|
|
3.
|
Credit facility for commercial
risks (Póliza de crédito para cobertura de riesgos comerciales) dated as of November 17, 2015 between Kripsol
Industrial and Caixabank, S.A. in an amount not exceeding €500,000.
|
|
|
4.
|
Bank guarantee agreement dated as of November 17, 2015 between Kripsol Industrial and Caixabank,
S.A. in an amount not exceeding €500,000.
|
|
|
5.
|
Bank guarantee dated
as of March 15, 2016 issued by Banco Popular Español, S.A. in favor of Fire-Consult, S.L. in an amount not exceeding
€5,000.
|
|
|
6.
|
Credit policy in the form of advance commercial documents dated as of November 17, 2015 between
Kripsol Industrial and Banco Santander, S.A. in an amount not exceeding €500,000.
|
|
|
7.
|
Finance agreement (contrato
de financiación) dated as of May 11, 2015 between Kripsol Gestión, S.L. and De Lage Landen International, B.V. in
an outstanding amount of €38,341.36.
|
|
|
8.
|
Revolving Credit Facility, dated as of March 18, 2014 between Hayward Industries, Inc. and Hayward
Pool Products (Australia) Pty. Ltd. in an amount not exceeding of €10,000,000.
|
|
|
9.
|
Revolving Credit Facility, dated as of March 18, 2014 between Hayward Industries, Inc. and Hayward
Pool Products Canada, Inc. in an amount not exceeding €10,000,000.
|
|
|
10.
|
Revolving Credit Facility, dated as of March 18, 2014 between Hayward Industries, Inc. and Hayward
Pool Europe S.A. in an amount not exceeding €10,000,000.
|
|
|
11.
|
Loan Agreement, dated as of July 21, 2016 between Hayward Industries, Inc. and Hayward Pool Acquisition,
S.L.U. in an outstanding amount of €38,805,733.17.
|
|
|
12.
|
Loan Agreement, dated as of November 2, 2016 between Hayward Industries, Inc. and Hayward Pool
Acquisition, S.L.U. in an outstanding amount of €17,321,502.66.
|
Schedule 6.07(s)
Dispositions
|
|
1.
|
A disposition of leasehold interests in a Spanish real estate asset valued at approximately $10
million.
|
Schedule 9.01
Borrower’s
Website Address for Electronic Delivery
None.
EXHIBIT A-1
[FORM
OF]
ASSIGNMENT AND ASSUMPTION
This
Assignment and Assumption (the “Assignment and Assumption”) is dated as of the Effective Date set forth
below and is entered into by and between [Insert name of Assignor] (the “Assignor”) and [Insert name of Assignee]
(the “Assignee”). [It is understood and agreed that the rights and obligations of [the Assignors][the Assignees]1
hereunder are several and not joint.]2
Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified
below (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”), receipt of a copy of which is hereby acknowledged by the Assignee. The Standard Terms and Conditions set
forth in Annex I attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment
and Assumption as if set forth herein in full.
For
an agreed consideration, the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby irrevocably
purchases and assumes from the Assignor, subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement,
as of the Effective Date inserted by the Administrative Agent as contemplated below, (i) all of the Assignor’s rights
and obligations in its capacity as a Lender under the Credit Agreement and any other documents or instruments delivered pursuant
thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations
of the Assignor under the respective facilities identified below (including any letters of credit and guarantees included in such
facilities) and (ii) to the extent permitted to be assigned under applicable Requirements of Law, all claims, suits, causes of
action and any other right of the Assignor (in its capacity as a Lender) against any Person, whether known or unknown, arising
under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions
governed thereby or in any way based on or related to any of the foregoing, including contract claims, tort claims, malpractice
claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant
to clause (i) above (the rights and obligations sold and assigned pursuant to clauses (i) and (ii) above being referred
to herein collectively as the “Assigned Interest”). In the case where the Assigned Interest covers all of the
Assignor’s rights and obligations under the Credit Agreement, the Assignor shall cease to be a party thereto but shall continue
to be entitled to the benefits of Sections 2.15, 2.16, 2.17 and 9.03 of the Credit Agreement with respect
to facts and circumstances occurring on or prior to the Effective Date and subject to its obligations hereunder and under Section
9.13 of the Credit Agreement.
Such sale and assignment
is (i) subject to acceptance and recording thereof in the Register by the Administrative Agent pursuant to Section 9.05(b)(iv)
of the Credit Agreement, (ii) without recourse to the Assignor and (iii) except as expressly provided in this Assignment and Assumption,
without representation or warranty by the Assignor.
1. Assignor:
[●]
2. Assignee:
[●]
[and
is an Affiliate/Approved Fund of [identify Lender]3]
1 Select
as applicable
2 Include bracketed
language if there are either multiple Assignors or multiple Assignees.
3 Select as
applicable.
3. Borrower:
HAYWARD INDUSTRIES, INC., a New Jersey corporation
4. Administrative
Agent: Bank of America, N.A., as administrative agent under the Credit Agreement
5. Credit
Agreement: That certain ABL Credit Agreement dated as of August 4, 2017 (as amended, restated, amended and restated, supplemented
or otherwise modified and in effect on the date hereof, the “Credit Agreement”), by among Hayward Industries,
Inc., a New Jersey corporation (as survivor of the Merger (as defined in the Credit Agreement) with Hayward Acquisition Corp.,
a New Jersey corporation) (the “US Borrower”), Hayward Pool Products Canada, Inc. / Produits De Piscines Hayward
Canada, Inc., a Canadian federal corporation (the “Canadian Borrower”), Hayward Intermediate, Inc., a Delaware
corporation (“Holdings”), the Lenders from time to time party thereto including, Bank of America, N.A. in its
capacities as administrative agent and collateral agent (the “Administrative Agent”).
6. Assigned
Interest:
Aggregate Amount of
Commitment/Loans
|
Class of Loans
Assigned
|
Amount
of
Commitment/Loans
Assigned4
|
Percentage Assigned of
Commitment/Loans
under Relevant Class5
|
CUSIP Number
|
|
$
|
|
$
|
%
|
|
|
$
|
|
$
|
%
|
|
|
$
|
|
$
|
%
|
|
Effective Date: [●][●],
20[●] [TO BE INSERTED BY THE ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER
IN THE REGISTER THEREFOR].
7. [The][Each]
Assignee represents and warrants as of the Effective Date to the Administrative Agent, [the][each] Assignor and the respective
Affiliates of each, and not, for the avoidance of doubt, for the benefit of the US Borrower or any other Loan Party, that [the][such]
Assignee is not and will not be (1) an employee benefit plan subject to Title I of the Employee Retirement Income Security Act
of 1974, as amended (“ERISA”), (2) a plan or account subject to Section 4975 of the Internal Revenue Code of 1986 (the
“Code”); (3) an entity deemed to hold “plan assets” of any such plans or accounts for purposes of ERISA
or the Code; or (4) a “governmental plan” within the meaning of ERISA.
8. THE
PARTIES HERETO ACKNOWLEDGE THAT ANY ASSIGNMENT TO ANY DISQUALIFIED INSTITUTION OR, TO THE EXTENT THE US BORROWER’S
CONSENT IS REQUIRED UNDER SECTION 9.05 OF THE CREDIT AGREEMENT AND HAS NOT BEEN OBTAINED (OR DEEMED OBTAINED PURSUANT
TO THE FIRST PROVISO OF SECTION 9.05(b)(i)(A)), TO ANY OTHER PERSON, SHALL, AT THE BORROWER’S ELECTION,
BE TREATED IN ACCORDANCE WITH SECTIONS 9.05(f) AND (g), AS APPLICABLE OR THE US BORROWER SHALL BE ENTITLED TO SEEK SPECIFIC PERFORMANCE
TO UNWIND ANY SUCH ASSIGNMENT IN ADDITION TO INJUNCTIVE RELIEF OR ANY OTHER REMEDIES AVAILABLE TO THE US BORROWER AT LAW OR IN
EQUITY, INCLUDING THE REMEDIES SPECIFIED IN SECTION 9.05 OF THE CREDIT AGREEMENT.
4 Not to be less than $5,000,000 in the case of
any Revolving Loans unless otherwise agreed by the Lead Borrower and the Administrative Agent.
5 Set forth, to at least 9 decimals, as a percentage
of the Commitment/Loans of all Lenders thereunder.
[Signature Page
Follows]
The terms set forth
in this Assignment and Assumption are hereby agreed to:
|
|
ASSIGNOR
|
|
|
|
|
|
[NAME OF ASSIGNOR]
|
|
|
|
|
|
By:
|
|
|
|
|
Name:
|
|
|
|
Title:
|
[Signature Page to Assignment and Assumption]
[ASSIGNEE HAS EXAMINED THE LIST
OF DISQUALIFIED INSTITUTIONS AND (I) REPRESENTS AND WARRANTS THAT (A) IT IS NOT IDENTIFIED ON SUCH LIST AND (B) IT IS NOT AN AFFILIATE
OF ANY INSTITUTION IDENTIFIED ON SUCH LIST AND (II) ACKNOWLEDGES THAT ANY ASSIGNMENT MADE TO AN AFFILIATE OF A DISQUALIFIED INSTITUTION
SHALL BE SUBJECT TO SECTION 9.05(g) OF THE CREDIT AGREEMENT.]6
|
|
ASSIGNEE
|
|
|
|
|
|
[NAME OF ASSIGNEE]
|
|
|
|
|
|
By:
|
|
|
|
|
Name:
|
|
|
|
Title:
|
|
|
|
|
|
|
[Consented
to and]7 Accepted:
|
|
|
|
|
|
BANK
OF AMERICA, N.A., as Administrative Agent8
|
|
|
|
|
|
By:
|
|
|
|
|
Name:
|
|
|
|
Title:
|
|
|
|
|
|
|
[Consented to:
|
|
|
|
|
|
HAYWARD INDUSTRIES, INC.,
|
|
|
|
|
|
By:
|
|
|
|
|
Name:
|
|
|
|
Title:9
|
6 To be completed by Assignee except in connection
with the primary syndication.
7 To be added only if the consent of the Administrative
Agent is required
8 To be added only if the consent of the Administrative
Agent is required.
9 To be added only if the consent of the Lead Borrower
is required by Section 9.05(b)(i)(A) of the Credit Agreement.
[Signature Page to Assignment and Assumption]
Annex I
STANDARD
TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION
1. Representations
and Warranties.
1.1 Assignor.
The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned
Interest is free and clear of any lien, encumbrance or other adverse claim, (iii) its Commitment, and the outstanding balances
of its Revolving Loans, in each case without giving effect to assignments thereof which have not become effective, are as set forth
herein and (iv) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and
Assumption and to consummate the transactions contemplated hereby; and (b) makes no representation or warranty and assumes no responsibility
with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement, any other
Loan Document or any other instrument or document furnished pursuant thereto (other than this Assignment and Assumption) or any
collateral thereunder, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents
or any collateral thereunder, (iii) the financial condition of the US Borrower, any of its Restricted Subsidiaries or Affiliates
or any other Person obligated in respect of any Loan Document or (iv) the performance or observance by Holdings, the US Borrower,
any of its Restricted Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Loan Document.
1.2 Assignee.
The Assignee (a) represents and warrants that (i) it is an Eligible Assignee and has full power and authority, and has taken
all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby
and to become a Lender under the Credit Agreement, (ii) it satisfies the requirements, if any, specified in the Credit Agreement
that are required to be satisfied by it in order to acquire the Assigned Interest and become a Lender, (iii) from and after the
Effective Date, it shall be bound by the provisions of the Credit Agreement and the other Loan Documents as a Lender thereunder
and, to the extent of the Assigned Interest, shall have the obligations of a Lender thereunder and (iv) it has received a copy
of the Credit Agreement, the ABL Intercreditor Agreement and the Term Intercreditor Agreement, together with copies of the most
recent financial statements referred to in Section 4.01(c) or the most recent financial statements delivered pursuant to
Section 5.01 thereof, as applicable, and such other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into this Assignment and Assumption and to purchase the Assigned Interest on the basis of
which it has made such analysis and decision independently and without reliance on the Administrative Agent or any other Lender,
(v) it has examined the list of Disqualified Institutions and it is not (A) a Disqualified Institution or (B) an Affiliate of a
Disqualified Institution and (vi) if it is a Foreign Lender, attached to the Assignment and Assumption is any documentation required
to be delivered by it pursuant to Section 2.17 of the Credit Agreement, duly completed and executed by the Assignee and
(b) agrees that (i) it will, independently and without reliance on the Administrative Agent, the Assignor or any other Lender,
and based on such documents and information as it deems appropriate at the time, continue to make its own credit decisions in taking
or not taking action under the Loan Documents, (ii) it appoints and authorizes the Administrative Agent to take such action on
its behalf and to exercise such powers and discretion under the Credit Agreement, the ABL Intercreditor Agreement and the Term
Intercreditor Agreement, the other Loan Documents or any other instrument or document furnished pursuant hereto or thereto as are
delegated to the Administrative Agent by the terms thereof, together with such powers as are reasonably incidental thereto, and
(iii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required
to be performed by it as a Lender.
2. Payments.
From and after the Effective Date, the Administrative Agent shall make all payments in respect of the Assigned Interest (including
payments of principal, interest, fees and other amounts) to the Assignor for amounts which have accrued to but excluding the Effective
Date and to the Assignee for amounts which have accrued from and after the Effective Date.
3. General
Provisions. This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto
and their respective successors and permitted assigns. This Assignment and Assumption may be executed in any number of counterparts,
which together shall constitute one instrument. Delivery of an executed counterpart of a signature page of this Assignment and
Assumption by facsimile or by email as a “.pdf’ or “.tiff’ attachment shall be effective as delivery of
a manually executed counterpart of this Assignment and Assumption. This Assignment and Assumption shall be construed in accordance
with and governed by the laws of the State of New York. The Administrative Agent, acting as a non-fiduciary agent of the US Borrower,
shall record this Assignment and Assumption in the Register as of the Effective Date.
EXHIBIT B-1
[FORM
OF]
BORROWING REQUEST
Bank of America, N.A.
Four Penn Center 1600 JFK Blvd.
Philadelphia, PA 19103
Attn: Christy Bowen
Facsimile: 267-675-0175
Email: Christy.kuklinski@baml.com
[●] [●], 20[●]10
Ladies and Gentlemen:
Reference
is hereby made to that certain ABL Credit Agreement, dated as of August 4, 2017 (as the same may be amended, restated, amended
and restated, supplemented or otherwise modified from time to time and in effect on the date hereof, the “Credit
Agreement”), by and among Hayward Industries, Inc., a New Jersey corporation (as survivor of the Merger (as defined in
the Credit Agreement) with Hayward Acquisition Corp., a New Jersey corporation) (the “US Borrower”), Hayward
Pool Products Canada, Inc. / Produits De Piscines Hayward Canada, Inc., a Canadian federal corporation (the “Canadian
Borrower”), Hayward Intermediate, Inc., a Delaware corporation (“Holdings”), the Lenders from time
to time party thereto including, Bank of America, N.A. in its capacities as administrative agent and collateral agent (the “Administrative
Agent”).
The
undersigned hereby gives you notice pursuant to Section 2.03 of the Credit Agreement that it requests the Borrowings under
the Credit Agreement to be made on [●] [●], 20[●], and in that connection sets forth below the terms on
which the Borrowings are requested to be made:
(A) Borrower
[●]
10 For Borrowings after the
Closing Date, must be in writing, which must be received by the Administrative Agent (by hand delivery, fax or other electronic
transmission (including “.pdf” or “.tiff”)) not later than (i) 2:00 p.m. three (3) Business Days prior
to the requested day of any Borrowing of LIBO Rate Revolving Loans or CDOR Revolving Loans (or two Business Days in the case of
any Borrowing of LIBO Rate Revolving Loans denominated in Dollars to be made on the Closing Date), (ii) four (4) Business days
prior to the requested day of any Borrowing of LIBO Rate Revolving Loans denominated in a currency other than Dollars (or one
Business Day in the case of any Borrowing of LIBO Rate Revolving Loans denominated in a currency other than Dollars to be made
on the Closing Date) or (iii) by 12:00 p.m. (Noon) on the requested date of any Borrowing of ABR Revolving Loans, Canadian Base
Rate Revolving Loans or Canadian Prime Rate Revolving Loans (other than Swingline Loans) (or, in each case, such later time as
shall be acceptable to the Administrative Agent); provided, however, that if the applicable Borrower wishes to request LIBO Rate
Revolving Loans or CDOR Revolving Loans having an Interest Period of other than one, two, three or six months in duration as provided
in the definition of “Interest Period,” (A) the applicable notice from the applicable Borrower (or the Lead Borrower
on its behalf) must be received by the Administrative Agent not later than 2:00 p.m. four (4) Business Days prior to the requested
date of such Borrowing (or such later time as shall be reasonably acceptable to the Administrative Agent), whereupon the Administrative
Agent shall give prompt notice to the appropriate Lenders of such request and determine whether the requested Interest Period
is acceptable to them and (B) not later than 12:00 p.m. (Noon) three (3) Business Days before the requested date of such Borrowing,
the Administrative Agent shall notify the applicable Borrower whether or not the requested Interest Period has been consented
to by all the appropriate Lenders.
(B) Date
of Borrowing (which shall be a Business Day) [●]
(C) Aggregate
Amount of Borrowing11 $[●]
(D) Currency
of Borrowing [●]
(E) Type
of Borrowing12 [●]
(F) Class
of Borrowing [●]
(G) Interest
Period13 (in the case [●]
of a LIBO Rate Borrowing
or CDOR Borrowing)
(H) Amount,
Account Number and Location
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Wire Transfer Instructions:
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Amount
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$[●]
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Bank:
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[●]
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ABA No.:
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[●]
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Account No.:
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[●]
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Account Name:
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[●]
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[The undersigned hereby
certifies that the following statements are true on the date hereof, and will be true on the date of the Requested Borrowing:
(A) The
representations and warranties of the Loan Parties set forth in the Credit Agreement and the other Loan Documents are true and
correct in all material respects on and as of the date of the Borrowing with the same effect as though such representations and
warranties had been made on and as of the date of such Borrowing; provided that (A) to the extent that any representation
and warranty specifically refers to a given date or period, it is true and correct in all material respects as of such date or
for such period and (B) if any such representation is qualified by or subject to a Material Adverse Effect or other “materiality”
qualification, such representation is true and correct (after giving effect to any qualification therein) in all respects on such
date.
(B) At
the time of and immediately after giving effect to the Borrowing, no Default or Event of Default exists.]14
11 Subject to Section 2.02(c) of the Credit Agreement.
12 State whether a LIBO Rate Borrowing, ABR Borrowing
CDOR Borrowing or Canadian Prime Rate Borrowing. If, with respect to Revolving Loans denominated in Canadian Dollars, no Type
of Borrowing is specified, then the requested Borrowing shall be a Canadian Prime Rate Borrowing. If, with respect to Revolving
Loans denominated in Dollars, no Type of Borrowing is specified, then the requested Borrowing shall be an ABR Borrowing.
13 Must be a period contemplated by the definition
of “Interest Period”. If no Interest Period is specified, then the Interest Period shall be of one-month’s duration.
14 Include bracketed language only for Borrowings
after Closing Date other than (i) Incremental Revolving Loans made in connection with any acquisition to the extent not otherwise
required by the applicable Additional Revolving Lenders and (ii) Borrowings under any Refinancing Amendment and/or Extension to
the extent not otherwise required by the applicable lenders in respect thereof.
[This
Borrowing Request (and the Borrowing) is conditioned on the consummation of [_____]15 prior to or substantially
simultaneously with the Borrowing.]16
15 Identify applicable permitted acquisition, investment
or irrevocable repayment or redemption of Indebtedness that such Borrowing is being used to fund.
16 To be included for a Borrowing Request made in
connection with any permitted acquisition, investment or irrevocable repayment or redemption of Indebtedness.
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Very truly yours,
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[HAYWARD INDUSTRIES, INC.
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By:
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Name:
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Title:]
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[HAYWARD ACQUISITION CORP.
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By:
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Name:
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Title:]
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[HAYWARD POOL PRODUCTS CANADA, INC.
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By:
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Name:
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Title:]
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[Signature Page to Borrowing Request]
EXHIBIT B-2
[FORM
OF]
LETTER OF CREDIT REQUEST
Bank of America, N.A.
Four Penn Center
1600 JFK Blvd.
Philadelphia, PA 19103
Attn: Christy Bowen
Facsimile: 267-675-0175
Email: Christy.kuklinski@baml.com
[●] [●], 20[●]17
Ladies and Gentlemen:
We
hereby request that [●]18, as an Issuing Bank, in its individual capacity, [issue, amend, renew, extend][a/an]
[existing] Letter of Credit on [●]19
(the “Date of Issuance”), which Letter of Credit shall be in the aggregate amount of [●]20
and shall be for the account of [●]21.
The beneficiary of the requested Letter of Credit is [●]22,
and such Letter of Credit will be in support of [●]23.
For the purposes of this Letter of Credit Request, unless otherwise defined herein, all capitalized terms used herein and defined
in the ABL Credit Agreement dated as of August 4, 2017 (as amended, restated, amended and restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”), by and among Hayward Industries, Inc., a New Jersey corporation
(as survivor of the Merger (as defined in the Credit Agreement) with Hayward Acquisition Corp., a New Jersey corporation) (the
“US Borrower”), Hayward Pool Products Canada, Inc. / Produits De Piscines Hayward Canada, Inc., a Canadian
federal corporation (the “Canadian Borrower”), Hayward Intermediate, Inc., a Delaware corporation (“Holdings”),
the Lenders from time to time party thereto and Bank of America, N.A. in its capacities as administrative agent and collateral
agent (the “Administrative Agent”).
[We hereby certify that:
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(A)
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The representations and
warranties of the Loan Parties set forth in the Credit Agreement and the other Loan Documents are true and correct in all material
respects on and as of the Date of Issuance with the same effect as though such representations and warranties had been made on
and as of the Date of Issuance; provided that to the extent that a representation and warranty specifically refers to an earlier
date, it is true and correct in all material respects as of such earlier date; provided, further, that any representation or warranty
that is qualified as to “materiality,” “Material Adverse Effect” or similar language is true and
correct (after giving effect to any qualification therein) in all respects on such respective dates.
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17 Must be delivered to the
applicable Issuing Bank and the Administrative Agent, at least three Business Days in advance of the requested date of issuance,
amendment, extension or renewal (or such shorter period as is acceptable to the applicable Issuing Bank).
18 Insert name of the applicable
Issuing Bank.
19 Insert date of issuance,
which must be a Business Day.
20 Insert aggregate initial
amount of Letter of Credit.
21 Insert name of account
party.
22 Insert name and address
of beneficiary.
23 Insert brief description
of obligations(s) to be supported by the Letter of Credit.
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(B)
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As of the Date of Issuance and immediately after giving effect to the requested Letter of Credit,
no Default or Event of Default exists.]24
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24 Include bracketed language only for issuances,
amendments, modifications, extensions or renewals, of Letters of Credit after Closing Date (other than any such amendment, modification,
extension or renewal that does not increase the Stated Amount of the relevant Letter of Credit).
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Very truly yours,
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[HAYWARD INDUSTRIES, INC.
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By:
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Name:
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Title:]
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[HAYWARD POOL PRODUCTS CANADA, INC.
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By:
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Name:
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Title:]
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EXHIBIT B-3
[FORM
OF]
SWINGLINE LOAN REQUEST
To: Bank of America, N.A., as Swingline Lender
Bank of America, N.A., as Administrative Agent
Four Penn Center
1600 JFK Blvd.
Philadelphia, PA 19103
Attn: Christy Bowen
Facsimile: 267-675-0175
Email: Christy.kuklinski@baml.com
[●] [●], 20[●]
Ladies and Gentlemen:
Reference
is made to that certain ABL Credit Agreement dated as of August 4, 2017 (as amended, restated, amended and restated, supplemented
or otherwise modified and in effect on the date hereof, the “Credit Agreement”), by and among Hayward
Industries, Inc., a New Jersey corporation (as survivor of the Merger (as defined in the Credit Agreement) with Hayward Acquisition
Corp., a New Jersey corporation) (the “US Borrower”), Hayward Pool Products Canada, Inc. / Produits De Piscines
Hayward Canada, Inc., a Canadian federal corporation (the “Canadian Borrower”), Hayward Intermediate, Inc.,
a Delaware corporation (“Holdings”), the Lenders from time to time party thereto including, Bank of America,
N.A. in its capacities as administrative agent and collateral agent (the “Administrative Agent”).
The undersigned hereby
requests a Swingline Loan:
1. On
(a
Business Day).
2. In
the amount of $ .
The Swingline Loan
requested herein complies with the requirements of Section 2.04(b) of the Credit Agreement.
The undersigned hereby
certifies that the following statements are true on the date hereof:
(A) The
representations and warranties of the Loan Parties set forth in the Credit Agreement and the other Loan Documents are true and
correct in all material respects on and as of the date of the Borrowing with the same effect as though such representations and
warranties had been made on and as of the date of such Borrowing; provided that (A) to the extent that any representation
and warranty specifically refers to a given date or period, it is true and correct in all material respects as of such date or
for such period and (B) if any such representation is qualified by or subject to a Material Adverse Effect or other “materiality”
qualification, such representation is true and correct in all respects.
(B) At
the time of and immediately after giving effect to the Borrowing, no Default or Event of Default exists.
[Signature Page Follows]
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Very truly yours,
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[HAYWARD INDUSTRIES, INC.
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By:
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Name:
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Title:]
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EXHIBIT C
FORM
OF]
COMPLIANCE CERTIFICATE
[●] [●], 20[●]
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To:
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The Administrative Agent
and each of the Lenders party to the Credit Agreement described below
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This
Compliance Certificate is furnished pursuant to that certain ABL Credit Agreement dated as of August 4, 2017 (as amended, restated,
amended and restated, supplemented or otherwise modified and in effect on the date hereof, the “Credit Agreement”),
by and among Hayward Industries, Inc., a New Jersey corporation (as survivor of the Merger (as defined in the Credit Agreement)
with Hayward Acquisition Corp., a New Jersey corporation) (the “US Borrower”), Hayward Pool Products Canada,
Inc. / Produits De Piscines Hayward Canada, Inc., a Canadian federal corporation (the “Canadian Borrower”),
Hayward Intermediate, Inc., a Delaware corporation (“Holdings”), the Lenders from time to time party thereto
including, Bank of America, N.A. in its capacities as administrative agent and collateral agent (the “Administrative Agent”).
Unless otherwise defined herein, capitalized terms used in this Compliance Certificate have the meanings ascribed thereto in the
Credit Agreement.
THE UNDERSIGNED HEREBY
CERTIFIES, AS A RESPONSIBLE OFFICER OF THE LEAD BORROWER, IN SUCH CAPACITY AND NOT IN AN INDIVIDUAL CAPACITY, THAT:
1. I
am the duly elected [●] of the Lead Borrower and a Responsible Officer of the Lead Borrower;
2. I
have reviewed the terms of the Credit Agreement and I have made, or have caused to be made under my supervision, a review in reasonable
detail of the transactions and conditions of the Lead Borrower and its Restricted Subsidiaries, on a consolidated basis, during
the [Fiscal Quarter][Fiscal Year] covered by the attached financial statements;
3. [The
attached financial statements fairly present, in all material respects, in accordance with GAAP, the consolidated financial condition
of the Lead Borrower as at the dates indicated and its income and cash flows for the periods indicated, subject to the absence
of footnotes and changes resulting from audit and normal year-end adjustments.]25
4. [Except
as described in the disclosure set forth below, the][The] examinations described in paragraph 2 did not disclose, and I
have no knowledge of the existence of any condition or event which constitutes a Default or Event of Default that exists as of
the date of this Compliance Certificate [and the disclosure set forth below specifies, in reasonable detail, the nature of any
such condition or event and any action taken or proposed to be taken with respect thereto.]
5. Schedule
1 attached hereto sets forth reasonably detailed calculations of the Fixed Charge Coverage Ratio as of the date hereof.
6. [Attached
as Schedule 2 hereto is a list of the subsidiaries of the Lead Borrower that identifies each subsidiary as a Restricted
Subsidiary or an Unrestricted Subsidiary as of the date hereof.] [There is no change in the list of Restricted Subsidiaries and
Unrestricted Subsidiaries since the later of the Closing Date and the date of the last Compliance Certificate.]
25 Include to the extent the relevant
Compliance Certificate is delivered in connection with unaudited quarterly financials.
7. [Attached
as Schedule 3 hereto are [[(i)] a summary of the pro forma adjustments necessary to eliminate the accounts of Unrestricted
Subsidiaries from the attached financial statements]26 [[and (ii)] if the attached financial statements relate
to any Parent Company, consolidating financial information summarizing in reasonable detail the information related to such Parent
Company, on the one hand, and the information relating to the Lead Borrower and its consolidated subsidiaries on a standalone basis,
on the other hand]27.]
8. [Attached
hereto as Schedule 4 is the Narrative Report required to be delivered with the attached financial statements in accordance
with Section 5.01(a) or (b) of the Credit Agreement, as applicable]28.
26 Only required if a subsidiary
of the Lead Borrower is or has been designated as an Unrestricted Subsidiary at the time of delivery of the applicable Compliance
Certificate.
27 Only include to the extent
the applicable financial statements cover any Parent Company (i.e., Holdings or any Person above Holdings as to which the Lead
Borrower is an indirect Wholly-Owned Subsidiary).
28 Only include to the extent
the Lead Borrower has opted to include a Narrative Report instead of holding a conference call for the applicable Fiscal Quarter.
[Signature Page Follows]
The foregoing certifications,
together with the information set forth in the Schedules hereto and the financial statements delivered with this Compliance Certificate
in support hereof, are made and delivered as of the date first written above.29
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HAYWARD INDUSTRIES, INC.
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By:
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Name:
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Title:
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29 Please note the deadlines for satisfaction of
the following requirements correspond with the delivery of each Compliance Certificate (unless otherwise indicated):
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1.
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The delivery of documents and deliverables required under Section 4.02(a) of the Security
Agreement relating to any (i) certificated Pledged Stock and/or (ii) Material Debt Instruments, in each case to the extent
the same constitutes Collateral and acquired during the Fiscal Quarter covered by the attached financial statements and/or
(iii) Deposit Accounts and Securities Accounts (other than Excluded Accounts). NOTE: If any Loan Party acquires
such (i) certificated Pledged Stock and/or (ii) Material Debt Instruments and/or (iii) Deposit Accounts and Securities Accounts
(other than Excluded Accounts) during the fourth Fiscal Quarter of any Fiscal Year, the documents and deliverables required
under Section 4.02(a) of the Security Agreement must be delivered within 60 days after the end of such Fiscal Quarter.
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2.
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The delivery of documents and deliverables required under Section 4.03(c) of the Security
Agreement relating to any registration (or any application for registration of) any Patent, Trademark or Copyright with the
United States Patent and Trademark Office or the United States Copyright Office, as applicable, filed or acquired during the
Fiscal Quarter covered by the attached financial statements. NOTE: If any Loan Party acquires any registration
(or files any application for registration) of any Patent, Trademark or Copyright with the United States Patent and Trademark
Office or the United States Copyright Office, as applicable, during the fourth Fiscal Quarter of any Fiscal Year, to the extent
the same constitutes Collateral, the documents and deliverables required under Section 4.03(c) of the Security Agreement
must be delivered within 60 days after the end of such Fiscal Quarter.
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3.
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To the extent the relevant Compliance Certificate is delivered in connection with audited
annual or unaudited quarterly financial statements, delivery of the Perfection Certificate Supplement required by Section
5.01(c) of the Credit Agreement.
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4.
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The delivery of the documents required to be delivered under Section 5.12 of the
Credit Agreement as a result of (i) the formation or acquisition after the Closing Date of any Restricted Subsidiary that
is a Domestic Subsidiary (other than an Excluded Subsidiary), (ii) the formation or acquisition after the Closing Date of
any Restricted Subsidiary that is a Canadian Subsidiary of an existing Canadian Loan Party, (iii), the designation of any
Unrestricted Subsidiary as a Restricted Subsidiary (with respect to any US Secured Obligations, to apply only to the designation
of an Unrestricted Subsidiary that is a Domestic Subsidiary) (other than an Excluded Subsidiary), (iv) any Restricted Subsidiary
ceasing to be an Immaterial Subsidiary (with respect to any US Secured Obligations, to apply only to a Restricted Subsidiary
that is a Domestic Subsidiary) and/or (v) any Restricted Subsidiary that is an Excluded Subsidiary ceasing to be an Excluded
Subsidiary, in each case during the Fiscal Quarter covered by the attached financial statements. NOTE: upon
the taking of any action or the occurrence of any event described in clauses (i) through (iv) during the fourth
Fiscal Quarter of any Fiscal Year, the documents required to be delivered under Section 5.12(a) of the Credit Agreement
must be delivered within 60 days after the end of such Fiscal Quarter.
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[Signature Page to Compliance Certificate]
SCHEDULE 1
[Fixed Charge Coverage Ratio]
SCHEDULE 2
[List of Restricted Subsidiaries and
Unrestricted Subsidiaries]
SCHEDULE 3
[Summary of Pro Forma Adjustments/Consolidating
Information]
SCHEDULE 4
[Narrative Report]
EXHIBIT D
[FORM
OF]
INTEREST ELECTION REQUEST
Bank of America, N.A.
Four Penn Center
1600 JFK Blvd.
Philadelphia, PA 19103
Attn: Christy Bowen
Facsimile: 267-675-0175
Email: Christy.kuklinski@baml.com
[●] [●], 20[●]30
Ladies and Gentlemen:
Reference
is hereby made to that certain ABL Credit Agreement dated as of August 4, 2017 (as amended, restated, amended and restated, supplemented
or otherwise modified and in effect on the date hereof, the “Credit Agreement”), by and among Hayward
Industries, Inc., a New Jersey corporation (as survivor of the Merger (as defined in the Credit Agreement) with Hayward Acquisition
Corp., a New Jersey corporation) (the “US Borrower”), Hayward Pool Products Canada, Inc. / Produits De Piscines
Hayward Canada, Inc., a Canadian federal corporation (the “Canadian Borrower”), Hayward Intermediate, Inc.,
a Delaware corporation (“Holdings”), the Lenders from time to time party thereto including, Bank of America,
N.A. in its capacities as administrative agent and collateral agent (the “Administrative Agent”). Terms defined
in the Credit Agreement are used herein with the same meanings unless otherwise defined herein.
The undersigned hereby
gives you notice pursuant to Section 2.08 of the Credit Agreement of an interest rate election, and in that connection sets
forth below the terms thereof:
(A) [on
[insert applicable date] (which is a Business Day), the undersigned will convert $[●]31
of the aggregate outstanding principal amount of the Revolving Loans, bearing interest at the [ABR][LIBO][CDOR][Canadian Prime]
Rate, into a [LIBO][ABR][CDOR][Canadian Prime] Revolving Loan [and, in the case of a [LIBO Rate][CDOR Rate] Revolving Loan, having
an Interest Period of [●] month(s)]32
[; and][.]]
30 The Administrative
Agent must be notified in writing, which must be received by the Administrative Agent (by hand delivery, fax or other electronic
transmission (including “.pdf” or “.tiff”)) not later than (i) 2:00 p.m. three (3) Business Days prior
to the requested day of any conversion or continuation of LIBO Rate Revolving Loans or CDOR Revolving Loans, (ii) four (4) Business
days prior to the requested day of any conversion or continuation of LIBO Rate Revolving Loans denominated in a currency other
than Dollars or (iii) by 12:00 p.m. (Noon) on the requested date of any conversion or continuation of ABR Revolving Loans, Canadian
Base Rate Revolving Loans or Canadian Prime Rate Revolving Loans (other than Swingline Loans) (or, in each case, such later time
as shall be acceptable to the Administrative Agent); provided, however, that if the applicable Borrower wishes to request LIBO
Rate Revolving Loans or CDOR Revolving Loans having an Interest Period of other than one, two, three or six months in duration
as provided in the definition of “Interest Period,” (A) the applicable notice from the applicable Borrower (or the
Lead Borrower on its behalf) must be received by the Administrative Agent not later than 2:00 p.m. four (4) Business Days prior
to the requested date of such conversion or continuation, whereupon the Administrative Agent shall give prompt notice to the appropriate
Lenders of such request and determine whether the requested Interest Period is acceptable to them and (B) not later than 12:00
p.m. (Noon) three (3) Business Days before the requested date of such conversion or continuation, the Administrative Agent shall
notify the applicable Borrower whether or not the requested Interest Period is available to the appropriate Lenders.
31 Subject
to Section 2.02(c) of the Credit Agreement.
32 Must
be a period contemplated by the definition of “Interest Period”.
(B) [on
[insert applicable date] (which is a Business Day), the undersigned will continue $[●] of the aggregate outstanding principal
amount of the Revolving Loans bearing interest at the [LIBO][CDOR] Rate, as [LIBO][CDOR] Rate Revolving Loans having an Interest
Period of [●] month(s)33.]
33 Must be a period contemplated by the definition
of “Interest Period”.
[Signature Page Follows]
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[HAYWARD INDUSTRIES, INC.
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By:
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Name:
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Title:]
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[HAYWARD POOL PRODUCTS CANADA, INC.
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By:
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Name:
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Title:]
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[Signature Page to Interest Election Request]
EXHIBIT E
[FORM
OF]
PERFECTION CERTIFICATE
[ATTACHED]
PERFECTION CERTIFICATE
August 4, 2017
Reference
is hereby made to (i) that certain ABL Credit Agreement, dated as of August 4, 2017 (as amended, restated, amended and restated,
supplemented or otherwise modified and in effect on the date hereof, the “ABL Credit Agreement”), by
and among Hayward Intermediate, Inc., a Delaware corporation (“Holdings”), Hayward Acquisition Corp., a New Jersey
corporation (the “Initial US Borrower”), Hayward Industries, Inc., a New Jersey corporation (upon merging with
the Initial Borrower pursuant to the Merger (as defined in the First Lien Credit Agreement) and as survivor of the Merger, the
“US Borrower”), Hayward Pool Products Canada, Inc./ Produits de Piscines Hayward Canada, Inc., a Canadian corporation
(the “Canadian Borrower” and, together with the Initial US Borrower and the US Borrower, each, a “Borrower”
and, collectively, the “Borrowers”), the lenders from time to time party thereto (the “ABL Lenders”)
and Bank of America, N.A., as administrative agent and collateral agent for the ABL Lenders (together with its successors and permitted
assigns in such capacities, the “ABL Agent”), (ii) that certain US ABL Pledge and Security Agreement, dated
as of August 4, 2017 (as amended, restated, amended and restated, supplemented or otherwise modified and in effect on the date
hereof, the “US ABL Security Agreement”), by and among Initial US Borrower, the US Borrower, Holdings, the other
Grantors from time to time party thereto and the ABL Agent and (iii) that certain Canadian ABL Pledge and Security Agreement, dated
as of August 4, 2017 (as amended, restated, amended and restated, supplemented or otherwise modified and in effect on the date
hereof, the “Canadian ABL Security Agreement” and, together with the US ABL Security Agreement, each, a “Security
Agreement” and, collectively, the “Security Agreements”), by and between the Canadian Borrower and
the ABL Agent. Capitalized terms used but not defined herein have the meanings assigned to such terms in the applicable Security
Agreement. As used herein, the term “Company” means each of Holdings, the Borrowers and the other Loan Parties.
As
of the date hereof, the undersigned hereby represents and warrants to the ABL Agent as follows:
1. Names.
(a) Set forth in Schedule 1(a) is a true and complete list of (i) the exact legal name of each Company, as such name appears
in its respective Organizational Documents (as defined in the ABL Credit Agreement) (including any French form of its name) filed
with the Secretary of State or other relevant office of such Company’s jurisdiction of organization or formation, (ii) the
type of entity of each Company, (iii) the organizational identification number, if any, of each Company, (iv) the Federal Taxpayer
Identification Number or Revenue Canada business number (as applicable), if any, of each Company and (v) the jurisdiction of organization
or formation of each Company.
(b) Except
as otherwise disclosed in Schedule 1(c) or Schedule 1(d), set forth in Schedule 1(b) is a true and complete
list of (i) any other legal name that any Company has had, together with the date of the relevant change and (ii) in the case of
any Company that is a US Loan Party, all other names used by such Company on any filings with the Internal Revenue Service, in
each case, in the past five years.
(c) Set
forth in Schedule 1(c) is a true and complete list of the information required by Section 1(a) above for any other
Person (i) to which any Company became the successor by merger, consolidation or acquisition or (ii) that has been liquidated into,
or transferred all or substantially all of its assets to, any Company, at any time within the past five years.
(d) Except
as set forth in Schedule 1(d), or as otherwise disclosed in Schedule 1(c), no Company has changed its jurisdiction
of organization or form of entity at any time during the past four months.
2. Locations.
(a) Set forth in Schedule 2(a) is a true and complete list of the address of the chief executive office of each Company
and, in the case of any Company that is a Canadian Loan Party, the registered office of each such Company.
(b) Except
as disclosed in Schedule 2(a), set forth in Schedule 2(b) is a true and complete list of all other locations
where any Company currently maintains any Collateral consisting of Inventory (including property in possession of a third party
(e.g., a warehouseman or other bailee or on consignment), other than Inventory in transit or out for repair in the ordinary course
of business.
3. Stock
Ownership and Other Equity Interests. Set forth Schedule 3 is a true and complete list of all of the issued and outstanding
stock, partnership interests, limited liability company membership interests or other equity interests owned by any Company constituting
Pledged Stock, the beneficial owners of such stock, partnership interests, membership interests or other equity interests and the
percentage of the total issued and outstanding stock, partnership interests, membership interests or other equity interests of
the relevant issuer represented thereby.
4. Instruments
and Tangible Chattel Paper. Set forth in Schedule 4 is a true and complete list of all Instruments (other than checks
to be deposited in the ordinary course of business) and Tangible Chattel Paper, in each case having a face amount exceeding $15,000,000,
held by any Company as of the date hereof, including the names of the obligors, the amounts owing and the due dates.
5. Intellectual
Property. (a) Set forth in Schedule 5(a) is a true and complete list of all Patents. Designs (if applicable) and Trademarks
of each Company registered with and published by (or applied for in) the United States Patent and Trademark Office (“USPTO”)
(excluding, for the avoidance of doubt, any Patent or Trademark that has expired or been abandoned, but including Trademarks that
would constitute Collateral upon the filing of a “Statement of Use” or an “Amendment to Allege Use” with
respect thereto), as applicable, including the name of the registered owner and the registration or publication number (or, if
applicable, the applicant and the application number) of each such Patent, Design (if applicable) and Trademark.
(b) Set
forth in Schedule 5(b) is a true and complete list of all Copyrights of each Company registered with (or applied for in)
the United States Copyright Office (excluding, for the avoidance of doubt, any Copyright that has expired or been abandoned), including
the name of the registered owner and the registration number (or, if applicable, the applicant and the application number) of each
such Copyright.
6. Commercial
Tort Claims. Set forth in Schedule 6 is a true and complete list of all Commercial Tort Claims with an individual value
of at least $10,000,000 (as reasonably determined by the Borrower), held by any Company, including a brief description thereof.
7. Deposit
Accounts, Securities Accounts and Commodity Accounts. Set forth in Schedule 7 is a true and complete list of all Deposit
Accounts and Securities Accounts maintained by each Company, including the name of each institution where each such account is
held, the name of each such account, each account number and the name of each entity that holds each account.
[Signature Page Follows]
IN
WITNESS WHEREOF, each of the undersigned has hereunto signed this Perfection Certificate as of the date first written
of above.
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HAYWARD INTERMEDIATE, INC.
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By:
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Name:
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Title:
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HAYWARD INDUSTRIES, INC.
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By:
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Name:
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Title:
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HAYWARD ACQUISITION CORP.
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By:
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Name:
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Title:
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HAYWARD POOL PRODUCTS CANADA, INC. /
PRODUITS DE PISCINES HAYWARD CANADA, INC.
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By:
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Name:
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Title:
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HAYWARD INDUSTRIAL PRODUCTS, INC.
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By:
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Name:
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Title:
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Signature Page to abl
Perfection Certificate
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GOLDLINE PROPERTIES LLC
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By:
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Name:
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Title:
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HAYWARD/WRIGHT-AUSTIN, INC.
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By:
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Name:
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Title:
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WEBSTER PUMPS, INC.
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By:
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Name:
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Title:
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Signature Page to abl
Perfection Certificate
SCHEDULE 1(a)
LEGAL NAMES
|
Legal Name
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Jurisdiction
|
Type
|
Organizational
Identification Number
|
Federal Taxpayer
Identification Number /
Revenue Canada business
number
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Hayward Intermediate, Inc.
|
Delaware
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Corporation
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6429281
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82-2078678
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Hayward Acquisition Corp.
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New Jersey
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Corporation
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0101044970
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82-2163430
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Hayward Industries, Inc.
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New Jersey
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Corporation
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4465526000
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22-1715653
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Hayward Pool Products Canada, Inc. / Produits de Piscines Hayward Canada, Inc.
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Canada
|
Corporation
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384756-0
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Revenue Canada business number: 102302809RC0002
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Hayward Industrial Products, Inc.
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New Jersey
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Corporation
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0100127855
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22-2337329
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Goldline Properties LLC
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Rhode Island
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Limited Liability Company
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129649
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81-0614191
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Hayward/Wright-Austin, Inc.
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New Jersey
|
Corporation
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0100669270
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22-3460083
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Webster Pumps, Inc.
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New Jersey
|
Corporation
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0100845689
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52-2361310
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SCHEDULE 1(b)
A. PRIOR ORGANIZATIONAL
NAMES
None.
B. OTHER NAMES USED
ON IRS FILINGS:
None.
SCHEDULE 1(c)
PREDECESSOR ENTITIES
|
Company
|
Action
|
Legal Name of
Predecessor Entity
|
Jurisdiction of
Organization of
Predecessor Entity
|
Date of Action
|
|
Hayward Industries, Inc.
|
Merger
|
Poolvergnuegen
|
California
|
03/31/2015
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SCHEDULE 1(d)
CHANGES IN JURISDICTION
OR FORM
None.
SCHEDULE 2(a)
CHIEF
EXECUTIVE OFFICE AND REGISTERED OFFICE ADDRESSES1
|
Company
|
Address
|
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Hayward Pool Products Canada, Inc. / Produits de Piscines Hayward Canada, Inc.
|
2880 Plymouth Dr., Oakville, ON L6H 5R4 Canada
|
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Hayward Intermediate, Inc.
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620 Division St., Elizabeth, NJ 07201
|
|
Hayward Acquisition Corp.
|
620 Division St., Elizabeth, NJ 07201
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|
Hayward Industries, Inc.
|
620 Division St., Elizabeth, NJ 07201
|
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Hayward Industrial Products, Inc.
|
620 Division St., Elizabeth, NJ 07201
|
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Goldline Properties LLC
|
61 Whitecap Dr., North Kingston, RI 02852
|
|
Hayward/Wright-Austin, Inc.
|
620 Division St., Elizabeth, NJ 07201
|
|
Webster Pumps, Inc.
|
620 Division St., Elizabeth, NJ 07201
|
1 The chief executive office and the registered
office of the Canadian Borrower are the same unless otherwise noted.
SCHEDULE 2(b)
LOCATIONS OF
INVENTORY
|
Company
|
Address
|
|
Hayward Industries, Inc.
|
One Hayward Industrial Drive
Clemmons, North Carolina
|
|
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61 Whitecap Drive
North Kingstown, Rhode Island
|
|
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2935 and 2939 Sidco Drive
Nashville, Tennessee
|
|
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2869 and 2875 Pomona Boulevard
2870, 2876, 2880 and 2884 Surveyor Street
159 Voyager Street 126 Explorer Street
Pomona, California
|
|
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6220, 6240 and 6280 Clementine Drive
(Warehouse Nos. 9, 8 and 7, respectively)
Hampton Industrial Park
Clemmons, North Carolina
|
|
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2953 Sidco Drive
Nashville, Tennessee (warehouse)
|
|
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316 Babb Drive
Lebanon, Tennessee (warehouse)
|
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Hayward Industrial Products, Inc.
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One Hayward Industrial Drive
Clemmons, North Carolina
|
|
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6220, 6240 and 6280 Clementine Drive
(Warehouse Nos. 9, 8 and 7, respectively)
Hampton Industrial Park
Clemmons, North Carolina
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460 Podlin Drive
Franklin Park, Illinois (warehouse)
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Hayward Pool Products Canada, Inc. /
Produits de Piscines Hayward Canada, Inc.
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2880 Plymouth Drive
Oakville, Ontario L6H 5R4
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SCHEDULE 3
PLEDGED STOCK
|
Issuer
|
Holder
|
Certificate No.
|
No. Shares/ Interest
|
% of Issued and
Outstanding Shares
|
|
Hayward Industries, Inc.
|
Hayward Intermediate, Inc.
|
1
|
1,000 shares
|
100%
|
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Hayward Industrial Products, Inc.
|
Hayward Industries, Inc.
|
1 (2,500 shares) 3 (10 shares)
|
2,510 shares
|
100%
|
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Hayward/Wright-Austin, Inc.
|
Hayward Industrial Products, Inc.
|
4
|
1,000 shares
|
100%
|
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Webster Pumps, Inc.
|
Hayward Industrial Products, Inc.
|
3
|
1,000 shares
|
100%
|
|
Hayward Pool Products Canada, Inc. / Produits de Piscines Hayward Canada, Inc.
|
Hayward Industries, Inc.
|
6
|
65 shares
|
65%
|
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Hayward Enterprises Europe S.A.
|
Hayward Industries, Inc.
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N/A
|
8,000 shares
|
100%
|
|
Hayward Pool Europe S.A.
|
Hayward Industries, Inc.
|
N/A
|
15,000,006 shares
|
91%
|
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Hayward Consolidated Pty. Ltd.
|
Hayward Industries, Inc.
|
4
|
1.3 shares
|
65%
|
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Hayward Industries (Wuxi) Co. Ltd.
|
Hayward Industries, Inc.
|
N/A
|
N/A
|
100%
|
|
Hayward Pool Products Trading (Shanghai) Co. Ltd.
|
Hayward Industries, Inc.
|
N/A
|
N/A
|
100%
|
|
Hayward Pool Acquisition, S.L.U.
|
Hayward Industries, Inc.
|
N/A
|
100 shares
|
100%
|
|
Goldline Properties LLC
|
Hayward Industries, Inc.
|
N/A
|
N/A
|
100%
|
SCHEDULE 4
INSTRUMENTS
AND TANGIBLE CHATTEL PAPER
Promissory Notes/Instruments: None.
Tangible Chattel Paper: None.
SCHEDULE 5(a)
PATENTS AND TRADEMARKS
PATENTS
REGISTERED
OWNER
|
JURISDICTION
|
PATENT
NO.
|
ISSUE DATE
|
DESCRIPTION
|
|
Hayward Industries, Inc.
|
United States
|
8,343,339
|
1/1/2013
|
Apparatus for Facilitating Maintenance of a Pool Cleaning Device
|
|
Hayward Industries, Inc.
|
United States
|
8,307,485
|
11/13/2012
|
Apparatus for Facilitating Maintenance of a Pool Cleaning Device
|
|
Hayward Industries, Inc.
|
United States
|
8,678,026
|
3/25/2014
|
Automatic Increased-Suction Relief Apparatus
|
|
Hayward Industries, Inc.
|
United States
|
6,289,918
|
9/18/2001
|
Automatic Locking Bypass Valve For Liquid Suction Systems
|
|
Hayward Industries, Inc.
|
United States
|
6,460,564
|
10/8/2002
|
Automatic Locking bypass Valve For Liquid Suction Systems
|
|
Hayward Industries, Inc.
|
United States
|
8,297,920
|
10/30/2012
|
Booster Pump System for Pool Applications
|
|
Hayward Industries, Inc.
|
United States
|
8,734,098
|
5/27/2014
|
Booster Pump System for Pool Applications
|
|
Hayward Industries, Inc.
|
United States
|
8,328,240
|
12/11/2012
|
Bulkhead Fitting
|
|
Hayward Industries, Inc.
|
United States
|
D664,627
|
7/31/2012
|
Chlorinator
|
|
Hayward Industries, Inc.
|
United States
|
8,869,319
|
10/28/2014
|
Circular Suction Outlet Assembly and Cover
|
|
Hayward Industries, Inc.
|
United States
|
D613,829
|
4/13/2010
|
Circular Suction Outlet Assembly Cover Design
|
|
Hayward Industries, Inc.
|
United States
|
D663,701
|
7/17/2012
|
Controller for a Chlorinator
|
|
Hayward Industries, Inc.
|
United States
|
8,402,585
|
3/26/2013
|
Convertible Pressure/Suction Swimming Pool Cleaner
|
|
Hayward Industries, Inc.
|
United States
|
6,706,175
|
3/16/2004
|
Debris-Capturing Apparatus For Pressure Cleaners
|
|
Hayward Industries, Inc.
|
United States
|
7,931,447
|
4/26/2011
|
Drain Safety and Pump Control Device
|
|
Hayward Industries, Inc.
|
United States
|
9,300,101
|
3/29/2016
|
Electric Cable Swivel and Related Fabrication Methods
|
|
Hayward Industries, Inc.
|
United States
|
9,392,711
|
7/12/2016
|
Electrical Junction Box with Built-In Isolation Transformer
|
|
Hayward Industries, Inc.
|
United States
|
7,774,870
|
8/17/2010
|
Elongated Suction Outlet Assembly with Intrinsically Safe Sump
|
|
Hayward Industries, Inc.
|
United States
|
9,630,127
|
4/25/2017
|
Filter Vessel Assembly and Related Methods of Use
|
|
Hayward Industries, Inc.
|
United States
|
6,004,458
|
12/21/1999
|
Filter/Sanitizer
|
REGISTERED
OWNER
|
JURISDICTION
|
PATENT
NO.
|
ISSUE DATE
|
DESCRIPTION
|
|
Hayward Industries, Inc.
|
United States
|
7,677,268
|
3/16/2010
|
Fluid Distribution System for a Swimming Pool Cleaning Apparatus
|
|
Hayward Industries, Inc.
|
United States
|
6,171,073
|
1/9/2001
|
Fluid Vacuum Safety Device for Fluid Transfer and Circulation Systems
|
|
Hayward Industries, Inc.
|
United States
|
5,947,700
|
9/7/1999
|
Fluid Vacuum Safety Device For Fluid Transfer Systems in Swimming Pools
|
|
Hayward Industries, Inc.
|
United States
|
6,854,148
|
2/15/2005
|
Four-Wheel-Drive Automatic Pool Cleaner
|
|
Hayward Industries, Inc.
|
United States
|
9,695947
|
7/4/2017
|
Handle Insert For Valve
|
|
Hayward Industries, Inc.
|
United States
|
7,971,603
|
7/5/2011
|
Header for a Heat Exchanger
|
|
Hayward Industries, Inc.
|
United States
|
9,353,998
|
5/31/2016
|
Header for a Heat Exchanger
|
|
Hayward Industries, Inc.
|
United States
|
D574,938
|
8/12/2008
|
Heat Exchanger
|
|
Hayward Industries, Inc.
|
United States
|
D539,882
|
4/3/2007
|
Heat Pump
|
|
Hayward Industries, Inc.
|
United States
|
6,733,046
|
5/11/2004
|
Hose Swivel Connection Apparatus
|
|
Hayward Industries, Inc.
|
United States
|
9,046,247
|
6/2/2015
|
Low-Profile Niche for Underwater Pool/Spa Lights
|
|
Hayward Industries, Inc.
|
United States
|
9,031,702
|
5/12/2015
|
Modular Pool/Spa Control System
|
|
Hayward Industries, Inc.
|
United States
|
9,285,790
|
3/15/2016
|
Modular Pool/Spa Control System
|
|
Hayward Industries, Inc.
|
United States
|
9,506,569
|
11/29/2016
|
Needle Valve
|
|
Hayward Industries, Inc.
|
United States
|
D630,808
|
1/11/2011
|
Pool Cleaner
|
|
Hayward Industries, Inc.
|
United States
|
D630,809
|
1/11/2011
|
Pool Cleaner
|
|
Hayward Industries, Inc.
|
United States
|
D598,168
|
8/11/2009
|
Pool Cleaner
|
|
Hayward Industries, Inc.
|
United States
|
D728,873
|
5/5/2015
|
Pool Cleaner
|
|
Hayward Industries, Inc.
|
United States
|
D787,760
|
5/23/2017
|
Pool Cleaner
|
|
Hayward Industries, Inc.
|
United States
|
D787,761
|
5/23/2017
|
Pool Cleaner
|
|
Hayward Industries, Inc.
|
United States
|
D789,003
|
6/6/2017
|
Pool Cleaner
|
|
Hayward Industries, Inc.
|
United States
|
D789,624
|
6/13/2017
|
Pool Cleaner
|
|
Hayward Industries, Inc.
|
United States
|
D537,576
|
2/27/2007
|
Pool Cleaner Housing
|
|
Hayward Industries, Inc.
|
United States
|
D550,906
|
9/11/2007
|
Pool Cleaner Housing
|
|
Hayward Industries, Inc.
|
United States
|
6,298,513
|
10/9/2001
|
Pool Cleaner with Open-Ended Pin Supported Flapper Valve
|
|
Hayward Industries, Inc.
|
United States
|
8,869,337
|
10/28/2014
|
Pool Cleaning Device With Adjustable Buoyant Element
|
|
Hayward Industries, Inc.
|
United States
|
9,677,294
|
6/13/2017
|
Pool Cleaning Device with Wheel Drive Assemblies
|
|
Hayward Industries, Inc.
|
United States
|
7,118,632
|
10/10/2006
|
Pool Cleaning Method and Device
|
REGISTERED
OWNER
|
JURISDICTION
|
PATENT
NO.
|
ISSUE
DATE
|
DESCRIPTION
|
|
Hayward Industries, Inc.
|
United States
|
D593,508
|
6/2/2009
|
Portable Controller for Swimming Pool or Spa Equipment
|
|
Hayward Industries, Inc.
|
United States
|
9,502,907
|
11/22/2016
|
Power Supplies for Pool and Spa Equipment
|
|
Hayward Industries, Inc.
|
United States
|
9,501,072
|
11/22/2016
|
Programmable Temperature Control System for Pools & Spas
|
|
Hayward Industries, Inc.
|
United States
|
9,084,314
|
7/14/2015
|
Programmable Underwater Lighting System
|
|
Hayward Industries, Inc.
|
United States
|
D590,842
|
4/21/2009
|
Pump
|
|
Hayward Industries, Inc.
|
United States
|
D536,705S
|
2/13/2007
|
Pump Housing
|
|
Hayward Industries, Inc.
|
United States
|
D551,256
|
9/18/2007
|
A Combined Pump Housing and Pump Cap
|
|
Hayward Industries, Inc.
|
United States
|
D588,159
|
3/10/2009
|
Pump Housing
|
|
Hayward Industries, Inc.
|
United States
|
8,182,212
|
5/22/2012
|
Pump Housing Coupling
|
|
Hayward Industries, Inc.
|
United States
|
6,321,833
|
11/27/2001
|
Sinusoidal Fin Heat Exchanger
|
|
Hayward Industries, Inc.
|
United States
|
D550,805
|
9/11/2007
|
Strainer Basket
|
|
Hayward Industries, Inc.
|
United States
|
D557,374
|
12/11/2007
|
Strainer Basket
|
|
Hayward Industries, Inc.
|
United States
|
9,079,128
|
7/14/2015
|
Strainer Basket and Related Methods of Use
|
|
Hayward Industries, Inc.
|
United States
|
8,186,517
|
5/29/2012
|
Strainer Housing Assembly and Stand For Pump
|
|
Hayward Industries, Inc.
|
United States
|
6,131,227
|
10/17/2000
|
Suction Regulating Skirt For Automated Swimming Pool Cleaner Heads
|
|
Hayward Industries, Inc.
|
United States
|
8,784,652
|
7/22/2014
|
Swimming Pool Cleaner with A Rigid Debris Canister
|
|
Hayward Industries, Inc.
|
United States
|
7,318,448
|
1/15/2008
|
Swimming Pool Cleaning Apparatus and Parts Therefor
|
|
Hayward Industries, Inc.
|
United States
|
6,782,578
|
8/31/2004
|
Swimming Pool Pressure Cleaner with Internal Steering Mechanism
|
|
Hayward Industries, Inc.
|
United States
|
D490,195
|
5/18/2004
|
Swimming Pool Vacuum Cleaner
|
|
Hayward Industries, Inc.
|
United States
|
6,292,970
|
9/25/2001
|
Turbine-Driven Automatic Swimming Pool Cleaners
|
|
Hayward Industries, Inc.
|
United States
|
7,125,146
|
10/24/2006
|
Underwater LED Light
|
|
Hayward Industries, Inc.
|
United States
|
RE43,492
|
6/26/2012
|
Underwater LED Light
|
|
Hayward Industries, Inc.
|
United States
|
9,033,557
|
5/19/2015
|
Underwater Light and Associated Systems and Methods
|
|
Hayward Industries, Inc.
|
United States
|
8,936,721
|
1/20/2015
|
Unitary Filter Tank and an Underdrain for Filtering a Body of Water
|
|
Hayward Industries, Inc.
|
United States
|
9,108,126
|
8/18/2015
|
Unitary Filter Tank and an Underdrain for Filtering a Body of Water
|
REGISTERED
OWNER
|
JURISDICTION
|
PATENT
NO.
|
ISSUE
DATE
|
DESCRIPTION
|
|
Hayward Industries, Inc.
|
United States
|
6,468,052
|
10/22/2002
|
Vacuum Relief Device For Fluid Transfer and Circulation Systems
|
|
Hayward Industries, Inc.
|
United States
|
9,010,721
|
4/21/2015
|
Valve Switchbox
|
|
Hayward Industries, Inc.
|
United States
|
9,010,722
|
4/21/2015
|
Valve Switchbox
|
|
Hayward Industries, Inc.
|
United States
|
8,887,757
|
11/18/2014
|
Wafer Check Valve And Related Methods of Use
|
|
Hayward Industries, Inc.
|
United States
|
9,593,502
|
3/14/2017
|
Swimming Pool Cleaner
|
|
Hayward Industries, Inc.
|
United States
|
9,702,480
|
7/11/2017
|
Valve Switchbox
|
|
Hayward Industries, Inc.
|
United States
|
9,707,499
|
7/18/2017
|
Vertical Slide Backwash Valve
|
|
Hayward Industries, Inc.
|
United States
|
4,523,740
|
6/18/1985
|
Rotatable unitary ball valve
|
|
Hayward Industries, Inc.
|
United States
|
4,593,420
|
6/10/1986
|
Self-draining hydromassage fitting
|
|
Hayward Industries, Inc.
|
United States
|
4,629,557
|
12/16/1986
|
Pump test ring, cover and strainer and method of providing a pressure-testable pump
|
|
Hayward Industries, Inc.
|
United States
|
4,798,670
|
1/17/1989
|
Skimmer vacuum filter apparatus
|
|
Hayward Industries, Inc.
|
United States
|
4,818,389
|
4/4/1989
|
Skimmer with flow enhancer
|
|
Hayward Industries, Inc.
|
United States
|
4,941,217
|
7/17/1990
|
Flow enhancing jet fitting
|
|
Hayward Industries, Inc.
|
United States
|
4,982,460
|
1/8/1991
|
Flow enhancing jet fitting
|
|
Hayward Industries, Inc.
|
United States
|
4,985,943
|
1/22/1991
|
Two-stage adjustable hydrotherapeutic jet and method
|
|
Hayward Industries, Inc.
|
United States
|
5,068,033
|
11/26/1991
|
Underdrain assembly with pivotal ymounted and lockable laterals
|
|
Hayward Industries, Inc.
|
United States
|
5,115,974
|
5/26/1992
|
Apparatus for providing a waterfall or a fountain
|
|
Hayward Industries, Inc.
|
United States
|
5,271,561
|
12/21/1993
|
Rotary jet hydrotherapy device and method
|
|
Hayward Industries, Inc.
|
United States
|
7,531,092
|
5/12/2009
|
Pump
|
|
Hayward Industries, Inc.
|
United States
|
9,593,502
|
3/14/2017
|
Swimming pool cleaner
|
|
Hayward Industries, Inc.
|
United States
|
D299,143
|
12/2711988
|
Pump
|
|
Hayward Industries, Inc.
|
United States
|
D333,341
|
2/16/1993
|
Multi-port valve handle
|
|
Hayward Industries, Inc.
|
United States
|
RE43,492
|
6/26/2012
|
Underwater Led Light
|
|
Hayward Industries, Inc.
|
United States
|
3,640,310
|
2/8/1972
|
Multiport Valve
|
|
Hayward Industries, Inc.
|
United States
|
4,823,837
|
4/25/1989
|
Skimmer Cover Plate
|
|
Hayward Industries, Inc.
|
United States
|
4,988,437
|
1/29/1991
|
In-line Leaf Trap
|
|
Hayward Industries, Inc.
|
United States
|
5,105,496
|
4/21/1992
|
Suction Cleaning Device
|
|
Hayward Industries, Inc.
|
United States
|
5,432,688
|
7/11/1995
|
Plastic Niche and Grounding Assembly therefor
|
|
Hayward Industries, Inc.
|
United States
|
5,607,224
|
3/4/1997
|
Plastic Niche and Grounding Assembly Therefor
|
|
Hayward Industries, Inc.
|
United States
|
5,671,769
|
9/30/1997
|
Swing Check Valve and Method for Repairing Same
|
|
Hayward Industries, Inc.
|
United States
|
6,026,804
|
2/22/2000
|
Heater for Fluids
|
REGISTERED
OWNER
|
JURISDICTION
|
PATENT
NO.
|
ISSUE
DATE
|
DESCRIPTION
|
|
Hayward Industries, Inc.
|
United States
|
5,809,587
|
9/22/1998
|
Safety Device for a Suction Outlet
|
|
Hayward Industries, Inc.
|
United States
|
5,947,700
|
9/7/1999
|
Fluid Vacuum Safety Device for Fluid Transfer Systems in Swimming Pools
|
|
Hayward Industries, Inc.
|
United States
|
6,076,554
|
6/20/2000
|
Multiport Plug Valve with Selectable Port Exclusion
|
|
Hayward Industries, Inc.
|
United States
|
6,082,993
|
7/4/2000
|
Induced Draft Heater with Premixing Burners
|
|
Hayward Industries, Inc.
|
United States
|
7,168,120
|
1/30/2007
|
Pressure-fed Vacuum Swimming Pool Cleaning Robot
|
|
Hayward Industries, Inc.
|
United States
|
8,281,425
|
10/9/2012
|
Load Sensor Safety Vacuum Release System
|
|
Hayward Industries, Inc.
|
United States
|
D373,176
|
8/24/1996
|
A Combined Valve Indicator and Handle
|
|
Hayward Industries, Inc.
|
United States
|
D384,782
|
10/7/1997
|
Swimming Pool Cleaner Housing
|
|
Hayward Industries, Inc.
|
United States
|
D400,319
|
10/27/1998
|
Swimming Pool Cleaner Housing
|
|
Hayward Industries, Inc.
|
United States
|
D417,322
|
11/30/1999
|
Swimming Pool Cleaner Housing
|
|
Hayward Industries, Inc.
|
United States
|
D425,911
|
5/30/2000
|
Pump
|
|
Hayward Industries, Inc.
|
United States
|
D429,393
|
8/8/2000
|
Pool Cleaner Wheel
|
|
Hayward Industries, Inc.
|
United States
|
D433,545
|
11/7/2000
|
Swimming Pool Cleaner Housing
|
|
Hayward Industries, Inc.
|
United States
|
D443,737
|
6/12/2001
|
Four Wheel Pool Cleaner
|
|
Hayward Industries, Inc.
|
United States
|
D444,280
|
6/26/2001
|
Two Wheel Pool Cleaner
|
|
Hayward Industries, Inc.
|
United States
|
D443,959
|
6/19/2001
|
Pool Cleaner
|
|
Hayward Industries, Inc.
|
United States
|
D445,225
|
7/17/2001
|
Pool Cleaner
|
PATENT APPLICATIONS
REGISTERED
OWNER
|
JURISDICTION
|
APPLICATION
NO.
|
FILING
DATE
|
DESCRIPTION
|
|
Hayward Industries, Inc.
|
United States
|
62/369,526
|
8/1/2016
|
Accent Lights with Junction Box Controller
|
|
Hayward Industries, Inc.
|
United States
|
14/212,516
|
3/14/2014
|
Automatic Electric Top Bottom Swimming Pool Cleaner with Internal Pumps
|
|
Hayward Industries, Inc.
|
United States
|
15/587,672
|
05/05/2017
|
Automatic Pool Cleaner Traction Correction
|
|
Hayward Industries, Inc.
|
United States
|
15/349,183
|
11/11/2016
|
Ball Valve
|
|
Hayward Industries, Inc.
|
United States
|
13/954,130
|
7/30/2013
|
Butterfly Valve
|
|
Hayward Industries, Inc.
|
United States
|
15/372,705
|
12/8/2016
|
Butterfly Valve
|
|
Hayward Industries, Inc.
|
United States
|
15/372,747
|
12/8/2016
|
Butterfly Valve
|
|
Hayward Industries, Inc.
|
United States
|
15/372,822
|
12/8/2016
|
Butterfly Valve
|
|
Hayward Industries, Inc.
|
United States
|
13/561,836
|
7/30/2012
|
Chlorinators and Replaceable Cell Cartridges Therefor
|
|
Hayward Industries, Inc.
|
United States
|
14/839,166
|
8/28/2015
|
Combined Ultraviolet and Ozone Fluid Sterilization System
|
|
Hayward Industries, Inc.
|
United States
|
15/208,011
|
7/12/2016
|
Electrical Junction Box with Built-In Isolation Transformer
|
|
Hayward Industries, Inc.
|
United States
|
14/210,804
|
3/14/2014
|
Filtration Media and Filtration Therefor
|
|
Hayward Industries, Inc.
|
United States
|
14/210,835
|
3/14/2014
|
Filtration Media and Filtration Therefor
|
|
Hayward Industries, Inc.
|
United States
|
14/212,044
|
3/14/2014
|
Fluid Sanitization Assembly and Related Methods of Use
|
|
Hayward Industries, Inc.
|
United States
|
62/370,857
|
8/4/2016
|
Gas Switching Device And Associated Methods
|
|
Hayward Industries, Inc.
|
United States
|
14/805,913
|
7/22/2015
|
Gas-Evacuating Filter
|
|
Hayward Industries, Inc.
|
United States
|
15/592,364
|
05/11/2017
|
Hydrocyclonic Pool Cleaner
|
|
Hayward Industries, Inc.
|
United States
|
14/500,307
|
9/29/2014
|
Light With Expanding Compression Member
|
|
Hayward Industries, Inc.
|
United States
|
15/050,207
|
2/22/2016
|
Lighting System For An Environment And A Control Module For Use Therein
|
|
Hayward Industries, Inc.
|
United States
|
14/204,352
|
3/11/2014
|
Local Feature Controller for Pool and Spa Equipment
|
REGISTERED
OWNER
|
JURISDICTION
|
APPLICATION
NO.
|
FILING
DATE
|
DESCRIPTION
|
|
Hayward Industries, Inc.
|
United States
|
14/727,030
|
6/1/2015
|
Low-Profile Niche for Underwater Pool/Spa Lights
|
|
Hayward Industries, Inc.
|
United States
|
14/211,461
|
3/14/2014
|
Modular Pool/Spa Control System
|
|
Hayward Industries, Inc.
|
United States
|
15/634,462
|
6/27/2017
|
Multi-Position Valve
|
|
Hayward Industries, Inc.
|
United States
|
15/592,371
|
05/11/2017
|
Pool Cleaner Caddy with Removable Wheel Assemblies
|
|
Hayward Industries, Inc.
|
United States
|
15/592,285
|
05/11/2017
|
Pool Cleaner Caddy with Retention Mechanism
|
|
Hayward Industries, Inc.
|
United States
|
15/592,244
|
05/11/2017
|
Pool Cleaner Canister Handle
|
|
Hayward Industries, Inc.
|
United States
|
15/592,254
|
05/11/2017
|
Pool Cleaner Check Valve
|
|
Hayward Industries, Inc.
|
United States
|
15/592,266
|
05/11/2017
|
Pool Cleaner Filter Medium
|
|
Hayward Industries, Inc.
|
United States
|
15/592,377
|
05/11/2017
|
Pool Cleaner Impeller Subassembly
|
|
Hayward Industries, Inc.
|
United States
|
15/592,307
|
05/11/2017
|
Pool Cleaner Power Coupling
|
|
Hayward Industries, Inc.
|
United States
|
15/592,398
|
05/11/2017
|
Pool Cleaner Power Coupling
|
|
Hayward Industries, Inc.
|
United States
|
15/592,352
|
05/11/2017
|
Pool Cleaner Power Supply
|
|
Hayward Industries, Inc.
|
United States
|
15/592,277
|
05/11/2017
|
Pool Cleaner Power Supply with Kickstand
|
|
Hayward Industries, Inc.
|
United States
|
15/592,392
|
05/11/2017
|
Pool Cleaner Roller Assembly
|
|
Hayward Industries, Inc.
|
United States
|
15/592,335
|
05/11/2017
|
Pool Cleaner Roller Latch
|
|
Hayward Industries, Inc.
|
United States
|
14/209,461
|
3/13/2014
|
Pool Cleaner with Articulated Cleaning Members
|
|
Hayward Industries, Inc.
|
United States
|
14/994,653
|
1/13/2016
|
Pool Cleaner With Capacitive Water Sensor
|
|
Hayward Industries, Inc.
|
United States
|
15/592,384
|
05/11/2017
|
Pool Cleaner Modular Drivetrain
|
|
Hayward Industries, Inc.
|
United States
|
15/049,888
|
2/22/2016
|
Pool Cleaner With Optical Out-Of-Water And Debris Detection
|
|
Hayward Industries, Inc.
|
United States
|
15/359,016
|
11/22/2016
|
Power Supplies for Pool and Spa Equipment
|
|
Hayward Industries, Inc.
|
United States
|
15/359,046
|
11/22/2016
|
Power Supplies for Pool and Spa Equipment
|
|
Hayward Industries, Inc.
|
United States
|
15/359,112
|
11/22/2016
|
Programmable Temperature Control System for Pools & Spas
|
REGISTERED
OWNER
|
JURISDICTION
|
APPLICATION
NO.
|
FILING
DATE
|
DESCRIPTION
|
|
Hayward Industries, Inc.
|
United States
|
13/159,161
|
6/13/2011
|
Sealing Device for an Immersible Pump
|
|
Hayward Industries, Inc.
|
United States
|
62/398,228
|
9/22/2016
|
Self-Priming Dedicated Water Feature Pump
|
|
Hayward Industries, Inc.
|
United States
|
15/646,678
|
7/11/2017
|
Self-Priming Dedicated Water Feature Pump
|
|
Hayward Industries, Inc.
|
United States
|
15/200,040
|
7/1/2016
|
Spade Connector And Associated Systems And Methods
|
|
Hayward Industries, Inc.
|
United States
|
14/464,947
|
8/21/2014
|
Swimming Pool Cleaner
|
|
Hayward Industries, Inc.
|
United States
|
14/489,240
|
9/17/2014
|
Swimming Pool Cleaner
|
|
Hayward Industries, Inc.
|
United States
|
14/489,259
|
9/17/2014
|
Swimming Pool Cleaner
|
|
Hayward Industries, Inc.
|
United States
|
15/006,869
|
1/26/2016
|
Swimming Pool Cleaner With Hydrocyclonic Particle Separator And/Or Six-Roller Drive System
|
|
Hayward Industries, Inc.
|
United States
|
15/345,617
|
11/8/2016
|
Swimming Pool Deck Jet System And Associated Methods
|
|
Hayward Industries, Inc.
|
United States
|
62/348,186
|
6/10/2016
|
Swimming Pool Heat Exchangers And Associated Systems And Methods
|
|
Hayward Industries, Inc.
|
United States
|
15/617,760
|
6/8/2017
|
Swimming Pool Heat Exchangers And Associated Systems And Methods
|
|
Hayward Industries, Inc.
|
United States
|
14/207,110
|
3/12/2014
|
Swimming Pool Pressure Cleaner Including Automatic Timing Mechanism
|
|
Hayward Industries, Inc.
|
United States
|
14/487,846
|
9/16/2014
|
Swimming Pool Pressure Cleaner Including Automatic Timing Mechanism
|
|
Hayward Industries, Inc.
|
United States
|
14/213,172
|
3/14/2014
|
System and Method for Dynamic Device Discovery and Address Assignment
|
|
Hayward Industries, Inc.
|
United States
|
14/228,689
|
3/28/2014
|
System and Method for Presenting a Sales Demonstration Using a Pool/Spa Controller User Interface
|
|
Hayward Industries, Inc.
|
United States
|
13/562,128
|
7/30/2012
|
Systems and Methods for Controlling Chlorinators
|
|
Hayward Industries, Inc.
|
United States
|
15/115,125
|
7/28/2016
|
Systems and Methods for Interrelated Control of Chlorinators and Pumps
|
REGISTERED
OWNER
|
JURISDICTION
|
APPLICATION
NO.
|
FILING
DATE
|
DESCRIPTION
|
|
Hayward Industries, Inc.
|
United States
|
62/381,903
|
8/31/2016
|
Systems and Methods for Providing Network Connectivity and Remote Monitoring, Optimization, and Control of Pool/Spa Equipment
|
|
Hayward Industries, Inc.
|
United States
|
62/412,504
|
10/25/2016
|
Systems and Methods for Providing Network Connectivity and Remote Monitoring, Optimization, and Control of Pool/Spa Equipment
|
|
Hayward Industries, Inc.
|
United States
|
62/414,545
|
10/28/2016
|
Systems and Methods for Providing Network Connectivity and Remote Monitoring, Optimization, and Control of Pool/Spa Equipment
|
|
Hayward Industries, Inc.
|
United States
|
15/413,095
|
1/23/2017
|
Systems and Methods for Providing Network Connectivity and Remote Monitoring, Optimization, and Control of Pool/Spa Equipment
|
|
Hayward Industries, Inc.
|
United States
|
15/413,117
|
1/23/2017
|
Systems and Methods for Providing Network Connectivity and Remote Monitoring, Optimization, and Control of Pool/Spa Equipment
|
|
Hayward Industries, Inc.
|
United States
|
15/413,128
|
1/23/2017
|
Systems and Methods for Providing Network Connectivity and Remote Monitoring, Optimization, and Control of Pool/Spa Equipment
|
|
Hayward Industries, Inc.
|
United States
|
15/413,141
|
1/23/2017
|
Systems and Methods for Providing Network Connectivity and Remote Monitoring, Optimization, and Control of Pool/Spa Equipment
|
|
Hayward Industries, Inc.
|
United States
|
15/413,111
|
1/23/2017
|
Systems and Methods for Providing Network Connectivity and Remote Monitoring, Optimization, and Control of Pool/Spa Equipment (Chem-Auto)
|
|
Hayward Industries, Inc.
|
United States
|
15/413,217
|
1/23/2017
|
Systems and Methods for Providing Network Connectivity and Remote Monitoring, Optimization, and Control of Pool/Spa Equipment (Cleaners)
|
REGISTERED
OWNER
|
JURISDICTION
|
APPLICATION
NO.
|
FILING
DATE
|
DESCRIPTION
|
|
Hayward Industries, Inc.
|
United States
|
15/413,020
|
1/23/2017
|
Systems and Methods for Providing Network Connectivity and Remote Monitoring, Optimization, and Control of Pool/Spa Equipment (Heaters)
|
|
Hayward Industries, Inc.
|
United States
|
15/413,224
|
1/23/2017
|
Systems and Methods for Providing Network Connectivity and Remote Monitoring, Optimization, and Control of Pool/Spa Equipment (Lighting)
|
|
Hayward Industries, Inc.
|
United States
|
15/413,074
|
1/23/2017
|
Systems and Methods for Providing Network Connectivity and Remote Monitoring, Optimization, and Control of Pool/Spa Equipment (Pumps)
|
|
Hayward Industries, Inc.
|
United States
|
15/413,145
|
1/23/2017
|
Systems and Methods for Providing Network Connectivity and Remote Monitoring, Optimization, and Control of Pool/Spa Equipment (Valve Actuator)
|
|
Hayward Industries, Inc.
|
United States
|
15/413,174
|
1/23/2017
|
Systems and Methods for Providing Network Connectivity and Remote Monitoring, Optimization, and Control of Pool/Spa Equipment (Water Features)
|
|
Hayward Industries, Inc.
|
United States
|
15/413,199
|
1/23/2017
|
Systems and Methods for Providing Network Connectivity and Remote Monitoring, Optimization, and Control of Pool/Spa Equipment (Wiring Hub)
|
|
Hayward Industries, Inc.
|
United States
|
62/474,333
|
3/21/2017
|
Systems and Methods for Sanitizing Pool and Spa Water
|
|
Hayward Industries, Inc.
|
United States
|
13/562,043
|
7/30/2012
|
Systems and Methods for User-Installable Chlorinators
|
|
Hayward Industries, Inc.
|
United States
|
14/600,515
|
1/20/2015
|
Thermally-Dissipative Flow Sensor System
|
|
Hayward Industries, Inc.
|
United States
|
15/183,961
|
6/16/2016
|
Top-Bottom Pool Cleaner Including A Nose
|
|
Hayward Industries, Inc.
|
United States
|
14/208,855
|
3/13/2014
|
Underwater LED Light with Replacement Indicator
|
REGISTERED
OWNER
|
JURISDICTION
|
APPLICATION
NO.
|
FILING
DATE
|
DESCRIPTION
|
|
Hayward Industries, Inc.
|
United States
|
12/769,038
|
4/28/2010
|
Underwater Light Having a Sealed Polymer Housing and Method of Manufacture Therefor
|
|
Hayward Industries, Inc.
|
United States
|
13/786,739
|
3/6/2013
|
Underwater Light Having a Sealed Polymer Housing and Method of Manufacture Therefor
|
|
Hayward Industries, Inc.
|
United States
|
13/840,751
|
3/15/2013
|
Underwater Lighting System With Bather Detection Circuitry
|
|
Hayward Industries, Inc.
|
United States
|
14/205,936
|
3/12/2014
|
Underwater Lighting System With Bather Detection Circuitry
|
|
Hayward Industries, Inc.
|
United States
|
13/034,389
|
2/24/2011
|
Universal Mount for a Variable Speed Pump Drive User Interface
|
|
Hayward Industries, Inc.
|
United States
|
14/526,299
|
10/28/2014
|
Velocity Reducing Port for a Pool Filter
|
|
Hayward Industries, Inc.
|
United States
|
14/337,873
|
7/22/2014
|
Venturi By-Pass System And Associated Methods
|
|
Hayward Industries, Inc.
|
United States
|
14/734,577
|
6/9/2015
|
Water-Cooled Electronic Inverter
|
|
Hayward Industries, Inc.
|
United States
|
11/946,267
|
11/28/2007
|
Buoyant Remote Control Unit for Swimming Pools and Spas
|
|
Hayward Industries, Inc.
|
United States
|
12/017,659
|
1/22/2008
|
Heat Exchangers and Headers Therefor
|
|
Hayward Industries, Inc.
|
United States
|
12/343,729
|
12/24/2008
|
Method and Apparatus for Forming a Thermal Interface for an Electronic Assembly
|
|
Hayward Industries, Inc.
|
United States
|
12/769,038
|
4/28/2010
|
Underwater Light Having A Sealed Hayward Industries, Inc. Polymer Housing and Method of Manufacture Therefor
|
|
Hayward Industries, Inc.
|
United States
|
13/601,436
|
8/31/2012
|
Pool Cleaning Device With Adjustable Buoyant Element
|
|
Hayward Industries, Inc.
|
United States
|
13/786,739
|
3/6/2013
|
Underwater Light Having a Sealed Polymer Housing and Method of Manufacture Therefor
|
|
Hayward Industries, Inc.
|
United States
|
13/897,623
|
5/20/2013
|
Dynamic Ultraviolet Lamp Ballast System
|
|
Hayward Industries, Inc.
|
United States
|
14/207,110
|
3/12/2014
|
Swimming Pool Pressure Cleaner Including Automatic Timing Mechanism
|
REGISTERED
OWNER
|
JURISDICTION
|
APPLICATION
NO.
|
FILING
DATE
|
DESCRIPTION
|
|
Hayward Industries, Inc.
|
United States
|
14/209,461
|
3/13/2014
|
Pool Cleaner with Articulated Cleaning Members
|
|
Hayward Industries, Inc.
|
United States
|
14/213,676
|
3/14/2014
|
Pool Cleaner Drive Mechanism And Associated Systems and Methods
|
|
Hayward Industries, Inc.
|
United States
|
14/212,516
|
3/14/2014
|
Automatic Electric Top Bottom Swimming Pool Cleaner with Internal Pumps
|
|
Hayward Industries, Inc.
|
United States
|
14/206,374
|
3/12/2014
|
Vertical Slide Backwash Valve
|
|
Hayward Industries, Inc.
|
United States
|
14/210,804
|
3/14/2014
|
Filtration Media and Filter Therefor
|
|
Hayward Industries, Inc.
|
United States
|
14/210,835
|
3/14/2014
|
Filtration Media and Filter Therefor
|
|
Hayward Industries, Inc.
|
United States
|
14/207,893
|
3/13/2014
|
Swimming Pool Cleaner With Docking System And/Or Other Related Systems And Methods
|
|
Hayward Industries, Inc.
|
United States
|
14/212,044
|
3/14/2014
|
Fluid Sanitization Assembly And Related Methods of Use
|
|
Hayward Industries, Inc.
|
United States
|
14/205,936
|
3/12/2014
|
Underwater Lighting System With Bather Detection Circuitry
|
|
Hayward Industries, Inc.
|
United States
|
13/840,751
|
3/15/2013
|
Underwater Lighting System With Bather Detection Circuitry
|
|
Hayward Industries, Inc.
|
United States
|
14/208,247
|
3/13/2014
|
Electric Hose Swivel For Skimmer Attachment
|
|
Hayward Industries, Inc.
|
United States
|
14/204,352
|
3/11/2014
|
Local Feature Controller For Pool and Spa Equipment
|
|
Hayward Industries, Inc.
|
United States
|
14/211,461
|
3/14/2014
|
Modular Pool / Spa Control System
|
|
Hayward Industries, Inc.
|
United States
|
14/213,172
|
3/14/2014
|
System And Method For Dynamic Device Discovery and Address Assignment
|
|
Hayward Industries, Inc.
|
United States
|
13/954,130
|
7/30/2013
|
Butterfly Valve
|
|
Hayward Industries, Inc.
|
United States
|
14/020,632
|
9/06/2013
|
Treaded Insert
|
|
Hayward Industries, Inc.
|
United States
|
14/526,299
|
10/28/2014
|
Velocity Reducing Pool Filter Port
|
|
Hayward Industries, Inc.
|
United States
|
14/727,030
|
6/1/2015
|
Low-Profile Niche for Underwater Pool/Spa Lights
|
REGISTERED
OWNER
|
JURISDICTION
|
APPLICATION
NO.
|
FILING
DATE
|
DESCRIPTION
|
|
Hayward Industries, Inc.
|
United States
|
14/228,689
|
3/28/2014
|
System and Method for Presenting a Sales Demonstration Using a Pool/Spa Controller User Interface
|
|
Hayward Industries, Inc.
|
United States
|
14/691,148
|
4/20/2015
|
Valve Switchbox
|
|
Hayward Industries, Inc.
|
United States
|
14/706,502
|
5/7/2017
|
Pool Cleaning Device Having Relief Formed in a Base Portion Thereof
|
|
Hayward Industries, Inc.
|
United States
|
14/734,577
|
6/9/2015
|
Water-Cooled Electronic Inverter
|
|
Hayward Industries, Inc.
|
United States
|
14/600,515
|
1/20/2015
|
Thermally-Dissipative Flow Sensor System
|
|
Hayward Industries, Inc.
|
United States
|
14/801,439
|
7/16/2015
|
Unitary Filter Tank And An Underdrain For Filtering A Body Of Water
|
|
Hayward Industries, Inc.
|
United States
|
14/805,913
|
7/22/2015
|
Gas-Evacuating Filter
|
|
Hayward Industries, Inc.
|
United States
|
14/337,873
|
7/22/2014
|
Venturi By-Pass System And Associated Methods
|
|
Hayward Industries, Inc.
|
United States
|
14/932,363
|
11/4/2015
|
Pool Filter with Integrated Pump
|
|
Hayward Industries, Inc.
|
United States
|
14/994,653
|
1/13/2016
|
Pool Cleaner With Capacitive Water Sensor
|
|
Hayward Industries, Inc.
|
United States
|
15/006,869
|
1/26/2016
|
Swimming Pool Cleaner With Hydrocyclonic Particle Separator And/Or Six-Roller Dnve System
|
|
Hayward Industries, Inc.
|
United States
|
15/04,988
|
2/22/2016
|
Pool Cleaner With Optical Out-Of-Water and Debris Detection
|
|
Hayward Industries, Inc.
|
United States
|
15/208,011
|
7/12/2016
|
Electrical Junction Box With Built-in Isolation Transformer
|
|
Hayward Industries, Inc.
|
United States
|
15/115,125
|
1/28/2014
|
Systems and Methods for Interrelated Control of Chlorinators and Pumps
|
|
Hayward Industries, Inc.
|
United States
|
15/200,040
|
7/1/2016
|
Spade Connector And Associated Systems And Methods
|
|
Hayward Industries, Inc.
|
United States
|
15/359,016
|
11/22/2016
|
Power Supplies for Pool and Spa Equipment
|
|
Hayward Industries, Inc.
|
United States
|
15/359,046
|
11/22/2016
|
Power Supplies for Pool and Spa Equipment
|
|
Hayward Industries, Inc.
|
United States
|
15/372,705
|
12/8/2016
|
Butterfly Valve
|
REGISTERED
OWNER
|
JURISDICTION
|
APPLICATION
NO.
|
FILING
DATE
|
DESCRIPTION
|
|
Hayward Industries, Inc.
|
United States
|
15/372,747
|
12/8/2016
|
Butterfly Valve
|
|
Hayward Industries, Inc.
|
United States
|
15/372,822
|
12/8/2016
|
Butterfly Valve
|
|
Hayward Industries, Inc.
|
United States
|
15/345,617
|
11/8/2016
|
Swimming Pool Deck Jet System and Associated Methods
|
|
Hayward Industries, Inc.
|
United States
|
15/349,183
|
11/11/2016
|
Ball Valve
|
|
Hayward Industries, Inc.
|
United States
|
13/722,112
|
12/20/2012
|
Apparatus for Facilitating Maintenance of a Pool Cleaning Device
|
|
Hayward Industries, Inc.
|
United States
|
14/208,855
|
3/13/2014
|
Underwater Led Light with Replacement Indicator
|
|
Hayward Industries, Inc.
|
United States
|
14/500,307
|
9/29/2014
|
Light with Expanding Compression Member
|
|
Hayward Industries, Inc.
|
United States
|
14/487,846
|
9/16/2014
|
Swimming Pool Pressure Cleaner Including Automatic Timing Mechanism
|
|
Hayward Industries, Inc.
|
United States
|
14/839,166
|
8/28/2015
|
Combined Ultraviolet and Ozone Fluid Sterilization System
|
|
Hayward Industries, Inc.
|
United States
|
15/050,207
|
2/22/2016
|
Lighting System for an Environment and a Control Module for Use Therein
|
|
Hayward Industries, Inc.
|
United States
|
11/127,749
|
5/12/2005
|
Debris Bag for a Swimming Pool Cleaning Apparatus
|
|
Hayward Industries, Inc.
|
United States
|
11/528,493
|
9/27/2006
|
Heat Pump System Having a Defrost mechanism for Low Ambient Air Temperature Operation
|
|
Hayward Industries, Inc.
|
United States
|
11/585,650
|
10/24/2006
|
Filter Housing and Parts Therefor
|
|
Hayward Industries, Inc.
|
United States
|
11/704,717
|
2/9/2007
|
Programmable Aerator Cooling System
|
|
Hayward Industries, Inc.
|
United States
|
11/770,831
|
6/29/2007
|
Pool Cleaner Storage Device
|
|
Hayward Industries, Inc.
|
United States
|
11/789,870
|
4/26/2007
|
Heat Exchanger
|
|
Hayward Industries, Inc.
|
United States
|
11/975,254
|
10/18/2007
|
Pump
|
|
Hayward Industries, Inc.
|
United States
|
11/975,287
|
10/18/2007
|
Debris Bag for a Swimming Pool Cleaning Apparatus
|
|
Hayward Industries, Inc.
|
United States
|
12/163,126
|
6/27/2008
|
Drain Safety and Pump Control Device with Verification
|
REGISTERED
OWNER
|
JURISDICTION
|
APPLICATION
NO.
|
FILING
DATE
|
DESCRIPTION
|
|
Hayward Industries, Inc.
|
United States
|
12/394,157
|
2/27/2009
|
Sealing System for Pressure Vessels
|
|
Hayward Industries, Inc.
|
United States
|
12/435,659
|
5/5/2009
|
Combination Venturi Check Valve
|
|
Hayward Industries, Inc.
|
United States
|
12/693,832
|
1/26/2010
|
True Union Quick-disconnect Cam-lock End Connector
|
|
Hayward Industries, Inc.
|
United States
|
13/034,542
|
2/24/2011
|
Pump Controller with External Device Control Capability
|
|
Hayward Industries, Inc.
|
United States
|
13/568,838
|
8/7/2012
|
Debris-capturing Apparatus for Cleaner
|
|
Hayward Industries, Inc.
|
United States
|
14/222,892
|
3/24/2014
|
Automatic Increased-suction Relief Apparatus
|
|
Hayward Industries, Inc.
|
United States
|
14/337,396
|
7/22/2014
|
Swimming Pool Cleaner with a Rigid Debris Canister
|
TRADEMARKS
REGISTERED
OWNER
|
JURISDICTION
|
REG. NO.
|
REG. DATE
|
TRADEMARK
|
|
Hayward Industries, Inc.
|
United States
|
3,693,133
|
10/06/2009
|
AQUA CONNECT
|
|
Hayward Industries, Inc.
|
United States
|
3,963,248
|
05/17/2011
|
AQUA CONNECT
|
|
Hayward Industries, Inc.
|
United States
|
3,464,568
|
07/08/2008
|
AQUA PLUS
|
|
Hayward Industries, Inc.
|
United States
|
3,871,629
|
11/02/2010
|
AQUA POD
|
|
Hayward Industries, Inc.
|
United States
|
3,704,835
|
11/03/2009
|
AQUA RITE
|
|
Hayward Industries, Inc.
|
United States
|
2,199,560
|
10/27/1998
|
AQUA RITE (Stylized)
|
|
Hayward Industries, Inc.
|
United States
|
2,770,932
|
10/07/2003
|
AQUA SOLAR
|
|
Hayward Industries, Inc.
|
United States
|
2,454,049
|
05/22/2001
|
AQUA TROL
|
|
Hayward Industries, Inc.
|
United States
|
2,184,852
|
08/25/1998
|
AQUABUG
|
|
Hayward Industries, Inc.
|
United States
|
2,234,984
|
03/23/1999
|
AQUACRITTER
|
|
Hayward Industries, Inc.
|
United States
|
2,920,213
|
01/18/2005
|
AQUADRIVE
|
|
Hayward Industries, Inc.
|
United States
|
1,383,031
|
02/18/1986
|
AQUADROID
|
|
Hayward Industries, Inc.
|
United States
|
4,993,931
|
07/05/2016
|
AQUANAUT
|
|
Hayward Industries, Inc.
|
United States
|
1,620,986
|
11/06/1990
|
AQUAPILOT (Stylized)
|
|
Hayward Industries, Inc.
|
United States
|
4,125,679
|
04/10/2012
|
AQUARAY
|
|
Hayward Industries, Inc.
|
United States
|
1,107,778
|
12/05/1978
|
AQUA-VAC
|
|
Hayward Industries, Inc.
|
United States
|
3,612,167
|
04/28/2009
|
CAT 1000
|
|
Hayward Industries, Inc.
|
United States
|
3,612,168
|
04/28/2009
|
CAT 2000
|
|
Hayward Industries, Inc.
|
United States
|
5,022,967
|
08/16/2016
|
CAT 3500
|
|
Hayward Industries, Inc.
|
United States
|
3,612,169
|
04/28/2009
|
CAT 4000
|
|
Hayward Industries, Inc.
|
United States
|
3,612,170
|
04/28/2009
|
CAT 5000
|
REGISTERED
OWNER
|
JURISDICTION
|
REG. NO.
|
REG. DATE
|
TRADEMARK
|
|
Hayward Industries, Inc.
|
United States
|
4,893,384
|
01/26/2016
|
CAT 5500
|
|
Hayward Industries, Inc.
|
United States
|
3,626,278
|
05/26/2009
|
CAT CONTROLLERS
|
|
Hayward Industries, Inc.
|
United States
|
2,865,720
|
07/20/2004
|
COLORLOGIC
|
|
Hayward Industries, Inc.
|
United States
|
4,255,001
|
12/04/2012
|
CRYSTALOGIC
|
|
Hayward Industries, Inc.
|
United States
|
3,077,736
|
04/04/2006
|
DIVER DAVE
|
|
Hayward Industries, Inc.
|
United States
|
3,788,135
|
05/11/2010
|
EASY TEMP
|
|
Hayward Industries, Inc.
|
United States
|
3,623,810
|
05/19/2009
|
ECOMMAND
|
|
Hayward Industries, Inc.
|
United States
|
3,935,362
|
03/22/2011
|
ECOSTAR
|
|
Hayward Industries, Inc.
|
United States
|
3,829,566
|
08/03/2010
|
ES HAYWARD ENERGY SOLUTIONS and Design
|
|
Hayward Industries, Inc.
|
United States
|
1,502,090
|
08/30/1988
|
FIRETILE (Stylized)
|
|
Hayward Industries, Inc.
|
United States
|
1,600,619
|
06/12/1990
|
GOLDLINE
|
|
Hayward Industries, Inc.
|
United States
|
3,455,440
|
06/24/2008
|
GOLDLINE CONTROLS
|
|
Hayward Industries, Inc.
|
United States
|
1,132,980
|
04/15/1980
|
H & Design
|
|
Hayward Industries, Inc.
|
United States
|
4,016,737
|
08/23/2011
|
H & Design
|
|
Hayward Industries, Inc.
|
United States
|
4,118,702
|
03/27/2012
|
H HAYWARD & Design
|
|
Hayward Industries, Inc.
|
United States
|
3,969,301
|
05/31/2011
|
HAYWARD
|
|
Hayward Industries, Inc.
|
United States
|
1,058,211
|
02/08/1977
|
HAYWARD
|
|
Hayward Industries, Inc.
|
United States
|
2,921,665
|
01/25/2005
|
HAYWARD ELITE
|
|
Hayward Industries, Inc.
|
United States
|
3,667,638
|
08/11/2009
|
HAYWARD ENERGY SOLUTIONS
|
|
Hayward Industries, Inc.
|
United States
|
3,489,930
|
08/19/2008
|
HAYWARD VIIO TURBO
|
|
Hayward Industries, Inc.
|
United States
|
3,588,085
|
03/10/2009
|
HAYWARD VIIO TURBO (Stylized)
|
|
Hayward Industries, Inc.
|
United States
|
2,961,464
|
06/07/2005
|
HEATPRO
|
REGISTERED
OWNER
|
JURISDICTION
|
REG. NO.
|
REG. DATE
|
TRADEMARK
|
|
Hayward Industries, Inc.
|
United States
|
4,257,942
|
12/11/2012
|
JIFFY NICHE
|
|
Hayward Industries, Inc.
|
United States
|
4,585,468
|
08/12/2014
|
LIFESTAR
|
|
Hayward Industries, Inc.
|
United States
|
2,124,181
|
12/23/1997
|
NAVIGATOR
|
|
Hayward Industries, Inc.
|
United States
|
4,672,840
|
01/13/2015
|
OMNILOGIC
|
|
Hayward Industries, Inc.
|
United States
|
3,839,066
|
08/24/2010
|
ONCOMMAND
|
|
Hayward Industries, Inc.
|
United States
|
2,055,038
|
04/22/1997
|
PERFLEX
|
|
Hayward Industries, Inc.
|
United States
|
3,489,931
|
08/19/2008
|
PHANTOM TURBO
|
|
Hayward Industries, Inc.
|
United States
|
3,499,911
|
09/09/2008
|
PHANTOM TURBO (Stylized)
|
|
Hayward Industries, Inc.
|
United States
|
5,055,736
|
10/04/2016
|
PHOENIX
|
|
Hayward Industries, Inc.
|
United States
|
2,422,021
|
01/16/2001
|
POOL VAC ULTRA
|
|
Hayward Industries, Inc.
|
United States
|
3,612,163
|
04/28/2009
|
POOLCOMM
|
|
Hayward Industries, Inc.
|
United States
|
2,075,752
|
07/01/1997
|
POWER-FLO
|
|
Hayward Industries, Inc.
|
United States
|
3,101,841
|
06/06/2006
|
POWERFLO MATRIX
|
|
Hayward Industries, Inc.
|
United States
|
3,538,131
|
11/25/2008
|
PRO LOGIC
|
|
Hayward Industries, Inc.
|
United States
|
4,667,908
|
01/06/2015
|
PURE-BLU
|
|
Hayward Industries, Inc.
|
United States
|
4,573,094
|
07/22/2014
|
SALINE C
|
|
Hayward Industries, Inc.
|
United States
|
4,255,050
|
12/04/2012
|
SALT & SWIM
|
|
Hayward Industries, Inc.
|
United States
|
3,640,451
|
06/16/2009
|
SENSE AND DISPENSE
|
|
Hayward Industries, Inc.
|
United States
|
4,023,757
|
09/06/2011
|
SHARKVAC BY HAYWARD
|
|
Hayward Industries, Inc.
|
United States
|
2,114,157
|
11/18/1997
|
SKIM-MASTER
|
|
Hayward Industries, Inc.
|
United States
|
2,191,368
|
09/22/1998
|
SMARTDRIVE
|
|
Hayward Industries, Inc.
|
United States
|
3,652,589
|
07/07/2009
|
STRATUM
|
REGISTERED
OWNER
|
JURISDICTION
|
REG. NO.
|
REG. DATE
|
TRADEMARK
|
|
Hayward Industries, Inc.
|
United States
|
1,518,655
|
01/03/1989
|
SUPER PUMP
|
|
Hayward Industries, Inc.
|
United States
|
4,335,834
|
05/14/2013
|
SURE-TUFF
|
|
Hayward Industries, Inc.
|
United States
|
2,063,080
|
05/20/1997
|
SWIM PRO
|
|
Hayward Industries, Inc.
|
United States
|
3,280,886
|
08/14/2007
|
SWIM PURE PLUS
|
|
Hayward Industries, Inc.
|
United States
|
3,280,894
|
08/14/2007
|
SWIM PURE PLUS & Design
|
|
Hayward Industries, Inc.
|
United States
|
4,117,446
|
03/27/2012
|
TANK-TITE
|
|
Hayward Industries, Inc.
|
United States
|
2,346,109
|
04/25/2000
|
TIGERSHARK & Design
|
|
Hayward Industries, Inc.
|
United States
|
3,687,673
|
09/22/2009
|
TOTAL POOL MANAGEMENT
|
|
Hayward Industries, Inc.
|
United States
|
3,190,201
|
12/26/2006
|
TRISTAR
|
|
Hayward Industries, Inc.
|
United States
|
4,993,932
|
07/05/2016
|
TRIVAC
|
|
Hayward Industries, Inc.
|
United States
|
3,156,434
|
10/17/2006
|
TURBO CELL
|
|
Hayward Industries, Inc.
|
United States
|
3,976,710
|
06/14/2011
|
VARI-FLO
|
|
Hayward Industries, Inc.
|
United States
|
4,974,303
|
06/07/2016
|
V-FLEX
|
|
Hayward Industries, Inc.
|
United States
|
3,489,929
|
08/19/2008
|
VIIO TURBO
|
|
Hayward Industries, Inc.
|
United States
|
3,099,241
|
05/30/2006
|
WANDA THE WHALE
|
|
Hayward Industries, Inc.
|
United States
|
3,047,028
|
01/17/2006
|
XSTREAM
|
|
Hayward Industries, Inc.
|
United States
|
3,198,500
|
01/16/2007
|
XSTREAM & Design
|
TRADEMARK APPLICATIONS
|
APPLICANT
|
JURISDICTION
|
SERIAL NO.
|
FILING
DATE
|
TRADEMARK
|
|
Hayward Industrial Properties, Inc.
|
United States
|
87/369,104
|
03/13/2017
|
HAYWARD FILTRATION
|
|
Hayward Industries, Inc.
|
United States
|
87/290,262
|
01/05/2017
|
HEXADRIVE
|
|
Hayward Industries, Inc.
|
United States
|
87/290,350
|
01/05/2017
|
HYDRORITE UVO3
|
|
Hayward Industries, Inc.
|
United States
|
87/290,252
|
01/05/2017
|
OPTISENSE
|
|
Hayward Industries, Inc.
|
United States
|
87/368,985
|
03/13/2017
|
PROFILE2
|
|
Hayward Industries, Inc.
|
United States
|
87/290,239
|
01/05/2017
|
SPINTECH
|
|
Hayward Industries, Inc.
|
United States
|
87/449,312
|
05/15/2017
|
SWIMPURE
|
|
Hayward Industries, Inc.
|
United States
|
87/325,729
|
02/06/2017
|
SYSTEM2
|
|
Hayward Industries, Inc.
|
United States
|
87/325,767
|
02/06/2017
|
SYSTEM2 SEALING TECHNOLOGY
|
|
Hayward Industries, Inc.
|
United States
|
87/290,228
|
01/05/2017
|
TOUCHFREE
|
SCHEDULE 5(b)
COPYRIGHTS
COPYRIGHTS
REGISTERED
OWNER
|
TITLE
|
COUNTRY
|
REG. NO.
|
REG. DATE
|
|
Hayward Industries, Inc.
|
AQUA RITE OPERATION & INSTALLATION MANUAL
|
United States
|
TX0007840642
|
5/27/2014
|
|
Hayward Industries, Inc.
|
AQUA RITE OPERATION & INSTALLATION MANUAL
|
United States
|
TX0007840644
|
5/27/2014
|
|
Hayward Industries, Inc.
|
AQUA RITE OPERATION & INSTALLATION MANUAL
|
United States
|
TX0007841245
|
5/28/2014
|
COPYRIGHT APPLICATIONS
None.
scheudule
6
COMMERCIAL
TORT CLAIMS
None.
Schedule
7
DEPOSIT ACCOUNTS,
SECURITIES ACCOUNTS AND COMMODITY ACCOUNTS
|
Owner
|
Type of Account
|
Bank or Intermediary
|
Account Numbers
|
|
Hayward Industries, Inc.
|
JPMORGAN CHASE CONCENTRATION
|
JPMorgan Chase
|
304-682616
|
|
Hayward Industries, Inc.
|
BOA DEPOSITORY
|
Bank of America
|
0913700096
|
|
Hayward Industries, Inc.
|
BOA MANUAL PAYROLL CHECKS
|
Bank of America
|
0038-1267-0094
|
|
Hayward Industries, Inc.
|
BOA - POMONA WORKING FUNDS
|
Bank of America
|
0038-1514-0602
|
|
Hayward Industries, Inc.
|
BOA - NASHVILLE WORKING FUNDS
|
Bank of America
|
0038-1514-0592
|
|
Hayward Industries, Inc.
|
HAYWARD POOL PRODUCTS DEPOSITORY
|
JPMorgan Chase
|
304-909645
|
|
Hayward Industries, Inc.
|
FLOW CONTROL DEPOSITORY
|
JPMorgan Chase
|
304-910058
|
|
Hayward Industries, Inc.
|
HAYWARD IMG OPERATING
|
Bank of America
|
0038-1515-2742
|
|
Hayward Industries, Inc.
|
HAYWARD IMG WORKING FUND
|
Bank of America
|
0038-1514-8963
|
|
Hayward Pool Products Canada, Inc. / Produits de Piscines Hayward Canada, Inc.
|
MAIN DISBURSEMENT ACCOUNT
|
Bank of Montreal
|
31442-1042-750
|
|
Hayward Pool Products Canada, Inc. / Produits de Piscines Hayward Canada, Inc.
|
US FUNDS A/C FOR FOREIGN SUBS
|
Bank of Montreal
|
0060-0623277-669-4
|
|
Hayward Pool Products Canada, Inc. / Produits de Piscines Hayward Canada, Inc.
|
BANK OF MONTREAL US FUNDS
|
Bank of Montreal
|
31442-4607-323
|
EXHIBIT F
[FORM
OF]
PERFECTION CERTIFICATE SUPPLEMENT
[Insert date]
Reference
is hereby made to (i) that certain ABL Credit Agreement, dated as of August 4, 2017 (as amended, restated, amended and restated,
supplemented or otherwise modified and in effect on the date hereof, the “ABL Credit Agreement”), by
and among Hayward Intermediate, Inc., a Delaware corporation (“Holdings”), Hayward Industries, Inc., a New Jersey
corporation (the “US Borrower”), Hayward Pool Products Canada, Inc., a Canadian corporation (the “Canadian
Borrower” and, together with the US Borrower, each, a “Borrower” and, collectively, the “Borrowers”),
the lenders from time to time party thereto (the “ABL Lenders”) and Bank of America, N.A., as administrative
agent and collateral agent for the ABL Lenders (in such capacities, the “ABL Agent”), (ii) that certain US ABL
Pledge and Security Agreement, dated as of August 4, 2017 (as amended, restated, amended and restated, supplemented or otherwise
modified and in effect on the date hereof, the “US ABL Security Agreement”), by and among the US Loan Parties
(as defined in the ABL Credit Agreement) from time to time party thereto and the ABL Agent and (iii) that certain Canadian ABL
Pledge and Security Agreement, dated as of August 4, 2017 (as amended, restated, amended and restated, supplemented or otherwise
modified and in effect on the date hereof, the “Canadian ABL Security Agreement” and, together with the US ABL
Security Agreement, each, a “Security Agreement” and, collectively, the “Security Agreements”),
by and among the Canadian Loan Parties (as defined in the ABL Credit Agreement) from time to time party thereto and the ABL Agent
and (iii) the Perfection Certificate, dated as of August 4, 2017 (as supplemented by any perfection certificate and/or perfection
certificate supplement delivered prior to the date hereof, the “Prior Perfection Certificate”), executed by
the Loan Parties (as defined in the Credit Agreement) signatory thereto. Capitalized terms used but not defined herein have the
meanings assigned to such terms in the applicable Security Agreement.
As
used herein, the term “Company” means each of Holdings, the Borrowers and the other Loan Parties (as
defined in the Credit Agreement).
As
of [[●], 20[●]] (the “Supplement Date”)35,
the undersigned hereby represents and warrants to each Administrative Agent as follows:
1. Names.
(a) Except as set forth in Schedule 1(a) hereto, the true and complete list of (i) the exact legal name of each Company,
as such name appears in its respective Organizational Documents (as defined in the ABL Credit Agreement) (including any French
form of its name) filed with the Secretary of State or other relevant office of such Company’s jurisdiction of organization
or formation, (ii) the type of entity of each Company, (iii) the organizational identification number, if any, of each Company,
(iv) the Federal Taxpayer Identification Number, if any, of each Company and (v) the jurisdiction of organization or formation
of each Company is set forth in Schedule 1(a) to the Prior Perfection Certificate.
(b) Except
as otherwise disclosed in Schedule 1(b), 1(c) or 1(d), the true and complete list of all other names used
by such Company on any filings with the Internal Revenue Service, in each case, in the past five years is set forth on Schedule
1(b), Schedule 1(c) and Schedule 1(d) of the Prior Perfection Certificate.
35 To refer
to end of fiscal year or fiscal quarter as to which the Perfection Certificate Supplement relates.
(c) Except
as set forth in Schedule 1(c) hereto, the true and complete list of the information required by Section 1(a) above
for any other Person (i) to which any Company became the successor by merger, consolidation or acquisition or (ii) that has been
liquidated into, or transferred all or substantially all of its assets to, any Company, at any time within the past five years,
is set forth in Schedule 1(c) to the Prior Perfection Certificate.
(d) Except
as set forth in Schedule 1(d) hereto, or as otherwise disclosed in Schedule 1(c) or in such Schedules to the
Prior Perfection Certificate, no Company has changed its jurisdiction of organization or form of entity since the earlier of (i)
the Supplement Date or (ii) at any time during the past four months.
2. Locations.
Except as set forth in Schedule 2(a) hereto, the true and complete list of the address of the chief executive offices and
(in the case of any Company that is a Canadian Loan Party) principal place of business of each Company is set forth in Schedule
2(a) to the Prior Perfection Certificate.
(b) Except
as set forth in Schedule 2(a) or Schedule 2(b) hereto, the true and complete list of all other locations where any
Company currently maintains any Collateral consisting of Inventory (including property in possession of a third party (e.g., a
warehouseman or other bailee or on consignment), other than Inventory in transit or out for repair in the ordinary course of business
is set forth in Schedule 2(a) or Schedule 2(b) to the Prior Perfection Certificate.
3. Stock
Ownership and Other Equity Interests. Except as set forth in Schedule 3 hereto, the true and complete list of all of
the issued and outstanding stock, partnership interests, limited liability company membership interests or other equity interests
owned by any Company constituting Pledged Stock, the beneficial owners of such stock, partnership interests, membership interests
or other equity interests and the percentage of the total issued and outstanding stock, partnership interests, membership interests
or other equity interests of the relevant issuer represented thereby is set forth in Schedule 3 to the Prior Perfection
Certificate.
4. Instruments
and Tangible Chattel Paper. Except as set forth on Schedule 4 hereto, the true and complete list of all Instruments
(other than checks to be deposited in the ordinary course of business) having a face amount exceeding $15,000,000 and Tangible
Chattel Paper having a face amount exceeding $15,000,000, in each case, held by any Company as of the Supplement Date, including
the names of the obligors, the amounts owing and the due dates, is set forth in Schedule 4 to the Prior Perfection Certificate.
5. Intellectual
Property.
(a) Except
as set forth on Schedule 5(a) hereto, the true and complete list of all Patents, Designs (if applicable) and Trademarks
of each Company registered with and published by (or applied for in) the United States Patent and Trademark Office (“USPTO”)
(excluding, for the avoidance of doubt, any Patent or Trademark that has expired or been abandoned, but including Trademarks that
would constitute Collateral upon the filing of a “Statement of Use” or an “Amendment to Allege Use” with
respect thereto), as applicable, including the name of the registered owner and the registration or publication number (or, if
applicable, the applicant and the application number) of each such Patent, Design (if applicable) and Trademark, is set forth in
Schedule 5(a) to the Prior Perfection Certificate.
(b) Except
as set forth on Schedule 5(b) hereto, the true and complete list of all Copyrights of each Company registered with (or applied
for in) the United States Copyright Office (excluding, for the avoidance of doubt, any Copyright that has expired or been abandoned),
including the name of the registered owner and the registration number (or, if applicable, the applicant and the application number)
of each such Copyright, is set forth in Schedule 5(b) to the Prior Perfection Certificate.
6. Commercial
Tort Claims. Except as set forth on Schedule 6 hereto, the true and complete list of all Commercial Tort Claims with
an individual value of at least $10,000,000 (as reasonably determined by the Borrowers), held by any Company, including a brief
description thereof, is set forth in Schedule 6 to the Prior Perfection Certificate.
7. Deposit
Accounts and Securities Accounts. Except as set forth on Schedule 7 hereto, the true and complete list of all Deposit Accounts
and Securities Accounts maintained by each Company, including the name of each institution where each such account is held, the
name of each such account, each account number and the name of each entity that holds each account is set forth in Schedule
7 to the Prior Perfection Certificate.
[Signature Page Follows]
IN WITNESS WHEREOF,
the undersigned have signed this Perfection Certificate Supplement as of the date first written of above.
[Signature Page to Perfection Certificate Supplement]
SCHEDULE 1(a)
LEGAL NAMES
|
Legal Name
|
Jurisdiction
|
Type of Entity
|
Organizational
Identification
Number
|
Federal
Taxpayer
Identification
Number
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SCHEDULE 1(b)
OTHER NAMES USED
ON IRS FILINGS
SCHEDULE 1(c)
PREDECESSOR ENTITIES
|
Company
|
Action
|
Legal Name of
Predecessor Entity
|
Jurisdiction of
Organization of
Predecessor Entity
|
Date of Action
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SCHEDULE 1(d)
CHANGES IN JURISDICTION
OR FORM
|
Company
|
Current Jurisdiction of
Organization/Form
|
Prior Jurisdiction of
Organization/Form
|
Date of Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SCHEDULE 2(a)
CHIEF
EXECUTIVE OFFICE ADDRESSES
|
Company
|
Chief Executive Office Address
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SCHEDULE 2(b)
LOCATIONS OF
INVENTORY
schedule
3
PLEDGED
STOCK
|
Issuer
|
Holder
|
Certificate No.
|
% of Issued and
Outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SCHEDULE
4
INSTRUMENTS AND
TANGIBLE CHATTEL PAPER
1. Promissory
Notes/Instruments:
|
Obligee
|
Obligor
|
Principal Amount
|
Maturity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2. Tangible
Chattel Paper:
SCHEDULE 5(a)
PATENTS AND TRADEMARKS
PATENTS
|
REGISTERED OWNER
|
SERIAL NUMBER
|
DESCRIPTION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PATENT APPLICATIONS
|
APPLICANT
|
APPLICATION NO.
|
DESCRIPTION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TRADEMARKS
|
REGISTERED OWNER
|
REGISTRATION
NUMBER
|
TRADEMARK
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TRADEMARK APPLICATIONS
|
APPLICANT
|
APPLICATION NO.
|
TRADEMARK
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SCHEDULE 5(b)
COPYRIGHTS
COPYRIGHTS
|
REGISTERED OWNER
|
REGISTRATION
NUMBER
|
TITLE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COPYRIGHT APPLICATIONS
|
APPLICANT
|
APPLICATION
|
NUMBER TITLE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SCHEDULE 6
COMMERCIAL TORT
CLAIMS
SCHEDULE 7
DEPOSIT ACCOUNTS
AND SECURITIES ACCOUNTS
|
Owner
|
Type of Account
|
Bank or Intermediary
|
Account Numbers
|
|
|
|
|
|
EXHIBIT G
[FORM OF]
PROMISSORY NOTE
|
$[●]
|
New York, New York
|
|
|
[●] [●], 20[●]
|
FOR VALUE RECEIVED,
the undersigned [Hayward Industries, Inc., a New Jersey corporation (the “US Borrower”)][Hayward Pool Products
Canada, Inc. / Produits De Piscines Hayward Canada, Inc., a Canadian federal corporation (the “Canadian Borrower”)],
hereby promises to pay on demand to [●] (the “Lender”) or its registered permitted assign, at the office
of Bank of America, N.A. (“Bank of America”) at One Bryant Park, New York, New York 10036, Revolving Loans in
the principal amount first written above or such lesser amount as is outstanding from time to time, on the dates and in the amounts
set forth in the ABL Credit Agreement dated as of August 4, 2017 (as amended, restated, amended and restated, supplemented or otherwise
modified and in effect on the date hereof, the “ABL Credit Agreement”), by and among the [US Borrower][Hayward
Industries, Inc., a New Jersey corporation] (as survivor of the Merger (as defined in the ABL Credit Agreement) with Hayward Acquisition
Corp., a New Jersey corporation), [the Canadian Borrower][Hayward Pool Products Canada, Inc. / Produits De Piscines Hayward Canada,
Inc., a Canadian federal corporation (the “Canadian Borrower”)], Hayward Intermediate, Inc., a Delaware corporation
(“Holdings”), the Lenders from time to time party thereto including, Bank of America, N.A. in its capacities
as administrative agent and collateral agent (the “Administrative Agent”). The [US][Canadian] Borrower also
promises to pay interest from the date of such Revolving Loans on the principal amount thereof from time to time outstanding, in
like Dollars, at such office, in each case, in the manner and at the rate or rates per annum and payable on the dates provided
in the ABL Credit Agreement. Terms used but not defined herein shall have the meanings assigned to such terms in the ABL Credit
Agreement.
The [US][Canadian]
Borrower promises to pay interest on any overdue principal and, to the extent permitted by Requirements of Law, overdue interest
from the relevant due dates, in each case, in the manner, at the rate or rates and under the circumstances provided in the ABL
Credit Agreement.
The [US][Canadian]
Borrower hereby waives diligence, presentment, demand, protest and notice of any kind to the extent possible under any applicable
Requirements of Law. The non exercise by the holder hereof of any of its rights hereunder in any particular instance shall not
constitute a waiver thereof in that or any subsequent instance.
All Borrowings evidenced
by this Promissory Note and all payments and prepayments of the principal hereof and interest hereon and the respective dates thereof
shall be endorsed by the holder hereof on the schedules attached hereto and made a part hereof or on a continuation thereof which
shall be attached hereto and made a part hereof, or otherwise recorded by such holder in its internal records; provided, however,
that the failure of the holder hereof to make such a notation or any error in such notation shall not affect the obligations of
the [US][Canadian] Borrower under this Promissory Note.
This Promissory Note
is one of the promissory notes referred to in the ABL Credit Agreement that, among other things, contains provisions for the acceleration
of the maturity hereof upon the happening of certain events, for optional and mandatory prepayment of the principal hereof prior
to the maturity hereof and for the amendment or waiver of certain provisions of the ABL Credit Agreement, all upon the terms and
conditions therein specified. This Promissory Note is entitled to the benefit of the ABL Credit Agreement, and the obligations
hereunder are guaranteed and secured as provided therein and in the other Loan Documents referred to in the ABL Credit Agreement.
If any assignment by
the Lender holding this Promissory Note occurs after the date of the issuance hereof, the Lender agrees that it shall, upon the
effectiveness of such assignment or as promptly thereafter as practicable, surrender this Promissory Note to the Administrative
Agent for cancellation.
THE ASSIGNMENT OF THIS
PROMISSORY NOTE AND ANY RIGHTS WITH RESPECT THERETO ARE SUBJECT TO THE PROVISIONS OF THE ABL CREDIT AGREEMENT, INCLUDING THE PROVISIONS
GOVERNING THE REGISTER AND THE PARTICIPANT REGISTER.
THIS PROMISSORY NOTE
SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
|
|
[HAYWARD INDUSTRIES, INC.
|
|
|
|
|
|
By:
|
|
|
|
|
Name:
|
|
|
|
Title: ]
|
|
|
|
|
|
[HAYWARD POOL PRODUCTS CANADA, INC. /
PRODUITS DE PISCINES HAYWARD CANADA, INC.
|
|
|
|
|
|
By:
|
|
|
|
|
Name:
|
|
|
|
Title: ]
|
[Signature Page to Promissory Note]
SCHEDULE A
LOANS, CONVERSIONS
AND REPAYMENTS OF ABR LOANS
|
Date
|
Amount of
ABR Loans
|
Amount Converted
to ABR Loans
|
Amount of
Principal of ABR
Loans Repaid
|
Amount of ABR
Loans Converted
to LIBO Rate
Loans
|
Unpaid Principal
Balance of ABR
Loans
|
Notation Made
By
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Schedule A to Promissory Note
SCHEDULE B
LOANS, CONTINUATIONS,
CONVERSIONS AND REPAYMENTS OF LIBO rate LOANS
|
Date
|
Amount of LIBO
Rate Loans
|
Amount
Converted to
LIBO Rate Loans
|
Amount of
Principal of
LIBO Rate
Loans Repaid
|
Amount of LIBO
Rate Loans
Converted to
ABR Loans
|
Unpaid Principal
Balance of LIBO
Rate Loans
|
Notation Made
By
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Schedule B to Promissory Note
SCHEDULE C
LOANS, CONTINUATIONS,
CONVERSIONS AND REPAYMENTS OF CDOR rate LOANS
|
Date
|
Amount of
CDOR Rate
Loans
|
Amount
Converted to
CDOR Rate Loans
|
Amount of
Principal of
CDOR Rate
Loans Repaid
|
Amount of CDOR
Rate Loans
Converted to
ABR Loans
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Unpaid Principal
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Schedule C to Promissory Note
EXHIBIT H
[FORM
OF]
US LOAN GUARANTY AGREEMENT
[ATTACHED]
Execution Version
ABL GUARANTY
THIS ABL GUARANTY dated
as of August 4, 2017 (as it may be amended, restated, amended and restated, supplemented or otherwise modified from time to time,
this “ABL Guaranty”), is entered into by and among Hayward Intermediate, Inc., a Delaware corporation (“Holdings”),
Hayward Acquisition Corp., a New Jersey corporation (the “Initial US Borrower”), Hayward Industries, Inc., a
New Jersey corporation (upon merging with the Initial US Borrower pursuant to the Merger (as defined in the ABL Credit Agreement)
and as survivor of the Merger, the “US Borrower”), Hayward Pool Products Canada, Inc. / Produits De Piscines
Hayward Canada, Inc., a Canadian federal corporation (the “Canadian Borrower”), the other Loan Guarantors (as
defined herein) and Bank of America, N.A. in its capacities as administrative agent and collateral agent (together with its successors
and permitted assigns in such capacities, the “Administrative Agent”).
PRELIMINARY STATEMENT
Reference is hereby
made to that certain ABL Credit Agreement, dated as of the date hereof (as amended, restated, amended and restated, supplemented
or otherwise modified from time to time, the “ABL Credit Agreement”), by and among, inter alios, Holdings, the
Initial US Borrower, the US Borrower, the Canadian Borrower, the Lenders from time to time party thereto and the Administrative
Agent.
The US Loan Guarantors
are entering into this ABL Guaranty in order to induce the Lenders to enter into and extend credit to the US Borrower under the
ABL Credit Agreement and to guarantee the Secured Obligations. The Canadian Loan Guarantors are entering into this ABL Guaranty
in order to induce the Lenders to enter into and extend credit to the Canadian Borrower under the ABL Credit Agreement and to guarantee
the Canadian Secured Obligations.
Each US Loan Guarantor
will obtain benefits from the incurrence of Loans by the US Borrower for the account of the US Borrower and its Restricted Subsidiaries
and the incurrence by the Loan Parties of Secured Hedging Obligations and Banking Services Obligations. Each Canadian Loan Guarantor
will obtain benefits from the incurrence of Loans by the Canadian Borrower for the account of the Canadian Borrower and the Canadian
Restricted Subsidiaries and the incurrence by the Canadian Loan Parties of Canadian Secured Hedging Obligations and Canadian Secured
Banking Services Obligations.
ACCORDINGLY, the parties
hereto agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.01. Definitions
of Certain Terms Used Herein. As used in this ABL Guaranty, in addition to the terms defined in the preamble and Preliminary
Statement above, the following terms shall have the following meanings:
“ABL Credit
Agreement” has the meaning assigned to such term in the Preliminary Statement.
“ABL Guaranty”
has the meaning assigned to such term in the preamble.
“Accommodation
Payments” has the meaning assigned to such term in Section 2.09.
“Administrative
Agent” has the meaning assigned to such term in the preamble.
“Borrowers”
means, collectively, the Canadian Borrower, the Initial US Borrower (prior to the Merger) and the US Borrower (upon and following
the Merger).
“Canadian
Borrower” has the meaning assigned to such term in the Preliminary Statement.
“Canadian
Guaranteed Obligations” has the meaning assigned to such term in Section 2.01(a).
“Canadian
Loan Guarantors” means (i) Holdings, (ii) the Subsidiary Guarantors, (iii) the US Borrower and (iv) solely with respect
to Canadian Secured Hedging Obligations and Canadian Secured Banking Services Obligations, the Canadian Borrower.
“Canadian
Person” means any Person that is incorporated or organized under the laws of Canada or any province or territory thereof.
“Company”
has the meaning assigned to such term in the Preliminary Statement.
“Exhibit”
refers to a specific exhibit to this ABL Guaranty, unless another document is specifically referenced.
“Guaranteed
Obligations” has the meaning assigned to such term in Section 2.01(b).
“Guarantor
Percentage” has the meaning assigned to such term in Section 2.09(a).
“Guaranty
Supplement” has the meaning assigned to such term in Section 3.04.
“Holdings”
has the meaning assigned to such term in the preamble.
“Initial Borrower”
has the meaning assigned to such term in the Preliminary Statement.
“Loan Guarantors”
means, collectively, the Canadian Loan Guarantors and the US Loan Guarantors.
“Maximum Liability”
has the meaning assigned to such term in Section 2.09(a).
“Non ECP Guarantor”
means each Loan Guarantor other than a Qualified ECP Guarantor.
“Non Paying
Guarantor” has the meaning assigned to such term in Section 2.09(a).
“Obligated
Party” has the meaning assigned to such term in Section 2.02.
“Paying Guarantor”
has the meaning assigned to such term in Section 2.09(a).
“Qualified
ECP Guarantor” means, in respect of any Swap Obligation, each Loan Guarantor that has total assets exceeding $10,000,000
at the time the relevant guarantee or grant of the relevant security interest becomes effective with respect to such Swap Obligation
or such other person as constitutes an “eligible contract participant” under the Commodity Exchange Act or any regulations
promulgated thereunder and can cause another person to qualify as an “eligible contract participant” at such time by
entering into a keepwell under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.
“UFCA”
has the meaning assigned to such term in Section 2.09(a).
“UFTA”
has the meaning assigned to such term in Section 2.09(a).
“US Borrower”
means (i) prior to the Merger, the Initial Borrower and (ii) after the Merger, the Company.
“US Guaranteed
Obligations” has the meaning assigned to such term in Section 2.01(b).
“US Loan Guarantors”
means (i) Holdings, (ii) the Subsidiary Guarantors that are not Canadian Persons and (iii) solely with respect to Secured Hedging
Obligations and Banking Services Obligations, the US Borrower.
The foregoing definitions
shall be equally applicable to both the singular and plural forms of the defined terms. Capitalized terms used in this ABL Guaranty
and not otherwise defined herein shall have the meanings set forth in the ABL Credit Agreement.
The rules of construction
specified in Sections 1.03 and 1.04 of the ABL Credit Agreement also apply to this ABL Guaranty, mutatis mutandis.
ARTICLE 2
LOAN GUARANTY
Section 2.01. Guaranty.
(a) Except as otherwise provided for herein (including under Section 3.14), each Canadian Loan Guarantor hereby agrees that
it is jointly and severally liable for, and, as primary obligor and not merely as surety, and absolutely and unconditionally and
irrevocably guarantees to the Administrative Agent (acting as agent for the Secured Parties, pursuant to Article 8 of the ABL Credit
Agreement) for the ratable benefit of the Secured Parties, (i) the full and prompt payment, when and as the same shall become due,
whether at stated maturity, upon acceleration or otherwise (including whether or not any bankruptcy or similar proceeding shall
have stayed the accrual or collection of any of the Canadian Secured Obligations or operated as a discharge thereof), and at all
times thereafter, and (ii) performance of the Canadian Secured Obligations (excluding, for the avoidance of doubt, (A) with respect
to any Canadian Loan Guarantor (other than the Borrowers) any Excluded Swap Obligations and (B) in the case of the Canadian Borrower,
in respect of its own obligations), together with any and all expenses which may be incurred by the Administrative Agent and the
other Secured Parties in respect of the Canadian Loan Parties in collecting any of the Canadian Secured Obligations that are reimbursable
in accordance with Section 9.03 of the ABL Credit Agreement (collectively the “Canadian Guaranteed Obligations”).
Each Canadian Loan Guarantor further agrees that the Canadian Guaranteed Obligations may be increased, extended or renewed in whole
or in part without notice to or further assent from it, and that it remains bound upon its guarantee notwithstanding any such extension
or renewal. If any or all of the Canadian Guaranteed Obligations become due and payable hereunder, each Canadian Loan Guarantor,
unconditionally and irrevocably, promises to pay such Canadian Guaranteed Obligations to the Administrative Agent for the benefit
of the Secured Parties, on demand.
(b) Except
as otherwise provided for herein (including under Section 3.14), each US Loan Guarantor hereby agrees that it is jointly
and severally liable for, and, as primary obligor and not merely as surety, and absolutely and unconditionally and irrevocably
guarantees to the Administrative Agent (acting as agent for the Secured Parties, pursuant to Article 8 of the ABL Credit
Agreement) for the ratable benefit of the Secured Parties, (i) the full and prompt payment, when and as the same shall become due,
whether at stated maturity, upon acceleration or otherwise (including whether or not any bankruptcy or similar proceeding shall
have stayed the accrual or collection of any of the Secured Obligations or operated as a discharge thereof), and at all times thereafter,
and (ii) performance of the Secured Obligations (excluding, for the avoidance of doubt, (A) with respect to any US Loan Guarantor
(other than the US Borrower) any Excluded Swap Obligations and (B) in the case of the US Borrower, in respect of its own obligations),
together with any and all expenses which may be incurred by the Administrative Agent and the other Secured Parties in respect of
the US Loan Parties in collecting any of the Secured Obligations that are reimbursable in accordance with Section 9.03 of the ABL
Credit Agreement (collectively the “US Guaranteed Obligations” and, together with the Canadian Guaranteed Obligations,
the “Guaranteed Obligations”). Each US Loan Guarantor further agrees that the US Guaranteed Obligations may
be increased, extended or renewed in whole or in part without notice to or further assent from it, and that it remains bound upon
its guarantee notwithstanding any such extension or renewal. If any or all of the US Guaranteed Obligations become due and payable
hereunder, each US Loan Guarantor, unconditionally and irrevocably, promises to pay such US Guaranteed Obligations to the Administrative
Agent for the benefit of the Secured Parties, on demand.
(c) This
ABL Guaranty is continuing and shall remain in full force and effect until the Termination Date, and all liabilities to which it
applies or may apply under the terms hereof shall be conclusively presumed to have been created in reliance hereon.
Section 2.02. Guaranty
of Payment. This ABL Guaranty is a guaranty of payment and not of collection. Each Canadian Loan Guarantor waives any right
to require the Administrative Agent or any Lender to sue the Borrowers, any Canadian Loan Guarantor, any other guarantor, or any
other Person obligated for all or any part of the Canadian Guaranteed Obligations. Each US Loan Guarantor waives any right to
require the Administrative Agent or any Lender to sue the US Borrower, any US Loan Guarantor, any other guarantor, or any other
Person obligated for all or any part of the US Guaranteed Obligations (the Borrowers, each other Loan Guarantor, each other guarantor
or such other Person, an “Obligated Party”), or otherwise to enforce its rights in respect of any Collateral securing
all or any part of the Guaranteed Obligations. The Administrative Agent may enforce this ABL Guaranty at any time when an Event
of Default has occurred and is continuing.
Section 2.03. No
Discharge or Diminishment of ABL Guaranty.
(a) Except
as otherwise provided for herein (including under Section 3.14), the obligations of each Loan Guarantor hereunder are unconditional,
irrevocable and absolute and not subject to any reduction, limitation, impairment or termination for any reason, including: (i)
any claim of waiver, release, extension, renewal, settlement, surrender, alteration, or compromise of any of the Guaranteed Obligations,
by operation of law or otherwise; (ii) any change in the corporate existence, structure or ownership of any Obligated Party; (iii)
any insolvency, bankruptcy, reorganization, arrangement, receivership, proposal or other similar proceeding affecting any other
Obligated Party, or their assets or any resulting release or discharge of any obligation of any Obligated Party; (iv) the existence
of any claim, setoff or other rights which any Loan Guarantor may have at any time against any Obligated Party, the Administrative
Agent, any Lender or any other Person, whether in connection herewith or in any unrelated transactions; (v) any direction as to
application of payments by any Borrower or by any other party; (vi) any other continuing or other guaranty, undertaking or maximum
liability of a guarantor or of any other party as to the Guaranteed Obligations; (vii) any payment on or in reduction of any such
other guaranty or undertaking; (viii) any dissolution, termination or increase, decrease or change in personnel by any Borrower;
or (ix) any payment made to any Secured Party on the Guaranteed Obligations which any such Secured Party repays to any Borrower
or other Loan Party pursuant to court order in any bankruptcy, proposal, reorganization, arrangement, receivership, liquidation,
winding up, moratorium or other debtor relief proceeding, and each Loan Guarantor waives any right to the deferral or modification
of its obligations hereunder by reason of any such proceeding.
(b) Except
for termination of a Loan Guarantor’s obligations hereunder or as expressly permitted by Section 3.14, the obligations
of each Loan Guarantor hereunder are not subject to any defense or setoff, counterclaim, recoupment or termination whatsoever by
reason of the invalidity, illegality or unenforceability of any of the Guaranteed Obligations or otherwise, or any Requirements
of Law purporting to prohibit payment by any Obligated Party, of the Guaranteed Obligations or any part thereof.
(c) Further,
the obligations of any Loan Guarantor hereunder are not discharged or impaired or otherwise affected by: (i) the failure of the
Administrative Agent to assert any claim or demand or to enforce any remedy with respect to all or any part of the Guaranteed Obligations;
(ii) any
waiver or modification of or supplement to any provision of any agreement relating to the Guaranteed Obligations; (iii) any release,
non perfection, or invalidity of any indirect or direct security for the obligations of any Loan Party for all or any part of the
Guaranteed Obligations or any obligations of any other guarantor of or other Person liable for any of the Guaranteed Obligations;
(iv) any action or failure to act by the Administrative Agent with respect to any Collateral securing any part of the Guaranteed
Obligations; or (v) any default, failure or delay, willful or otherwise, in the payment or performance of any of the Guaranteed
Obligations, or any other circumstance, act, omission or delay that might in any manner or to any extent vary the risk of such
Loan Guarantor or that would otherwise operate as a discharge of any Loan Guarantor as a matter of law or equity (other than as
set forth in Section 3.14).
Section 2.04. Defenses
Waived. To the fullest extent permitted by applicable Requirements of Law, and except for termination of a Loan Guarantor’s
obligations hereunder or as otherwise provided for herein (including under Section 3.14), each Loan Guarantor hereby waives
any defense based on or arising out of any defense of any Borrower or any other Loan Guarantor or arising out of the disability
of any Borrower or any other Loan Guarantor or any other party or the unenforceability of all or any part of the Guaranteed Obligations
or any part thereof from any cause, or the cessation from any cause of the liability of any Borrower or any other Loan Guarantor.
Without limiting the generality of the foregoing, each Loan Guarantor irrevocably waives acceptance hereof, presentment, demand,
protest and, to the fullest extent permitted by applicable Requirements of Law, any notice not provided for herein or in any other
Loan Document, including notices of nonperformance, notices of protest, notices of dishonor, notices of acceptance of this ABL
Guaranty and notices of the existence, creation or incurring of new or additional Guaranteed Obligations, as well as any requirement
that at any time any action be taken by any Person against any Obligated Party, or any other Person, including any right under
any statute, at common law, in equity or otherwise (except as may be required by applicable Requirements of Law but solely to the
extent the relevant requirement cannot be waived under such Requirement of Law) to require the Administrative Agent to (i) proceed
against any Borrower, any other Loan Guarantor or any other party, (ii) proceed against or exhaust any security held from any Borrower,
any other Loan Guarantor or any other party or (iii) pursue any other remedy in the Administrative Agent’s power whatsoever.
The Administrative Agent may, at its election and in accordance with the terms of the applicable Loan Documents (including the
ABL Intercreditor Agreement), foreclose on any Collateral held by it by one or more judicial or nonjudicial sales, whether or not
every aspect of any such sale is commercially reasonable (to the extent permitted by applicable Requirements of Law), accept an
assignment of any such Collateral in lieu of foreclosure or otherwise act or fail to act with respect to any Collateral securing
all or a part of the Guaranteed Obligations, and the Administrative Agent may, at its election, compromise or adjust any part of
the Guaranteed Obligations, make any other accommodation with any Obligated Party or exercise any other right or remedy available
to it against any Obligated Party or with respect to any security, without affecting or impairing in any way the liability of such
Loan Guarantor under this ABL Guaranty, except as otherwise provided in Section 3.14. To the fullest extent permitted by
applicable Requirements of Law, each Loan Guarantor waives any defense arising out of any such election even though such election
may operate, pursuant to applicable Requirements of Law, to impair or extinguish any right of reimbursement or subrogation or other
right or remedy of any Loan Guarantor against any Obligated Party or any security.
Section 2.05. Authorization.
Each Loan Guarantor authorizes the Administrative Agent without notice or demand (except as may be required by applicable Requirements
of Law and to the extent the relevant requirement cannot be waived), and without affecting or impairing its liability hereunder
(except as set forth in Section 3.14), from time to time, subject to the terms of the referenced Loan Documents (including
the ABL Intercreditor Agreements), to:
(a) change
the manner, place or terms of payment of, and/or change or extend the time of payment of, renew, increase, accelerate or alter,
any of the Guaranteed Obligations (including any increase or decrease in the principal amount thereof or the rate of interest or
fees thereon), any security therefor, or any liability incurred directly or indirectly in respect thereof, and this ABL Guaranty
shall apply to the Guaranteed Obligations as so changed, extended, renewed or altered;
(b) take
and hold security for the payment of the Guaranteed Obligations and sell, exchange, release, impair, surrender, realize upon or
otherwise deal with in any manner and in any order any property by whomsoever at any time pledged or mortgaged to secure, or howsoever
securing, the Guaranteed Obligations or any liabilities (including any of those hereunder) incurred directly or indirectly in respect
thereof or hereof, and/or any offset there against;
(c) exercise
or refrain from exercising any rights against any Borrower, any other Loan Party or others or otherwise act or refrain from acting;
(d) release
or substitute any endorser, any guarantor, any Borrower, any other Loan Party and/or any other obligor;
(e) settle
or compromise any of the Guaranteed Obligations, any security therefor or any liability (including any of those hereunder) incurred
directly or indirectly in respect thereof or hereof, and/or subordinate the payment of all or any part thereof to the payment of
any liability (whether due or not) of any Borrower to its creditors other than the Secured Parties;
(f) apply
any sums by whomsoever paid or howsoever realized to any liability or liabilities of any Borrower to the Secured Parties regardless
of what liability or liabilities of any Borrower remain unpaid;
(g) consent
to or waive any breach of, or any act, omission or default under, this ABL Guaranty, the ABL Credit Agreement, any other Loan Document,
any Hedge Agreement with respect to any Secured Hedging Obligation, any agreement with respect to Banking Services Obligations
or any of the instruments or agreements referred to herein or therein, or otherwise amend, modify or supplement this ABL Guaranty,
the ABL Credit Agreement, any other Loan Document, any Hedge Agreement with respect to any Secured Hedging Obligation, any agreement
with respect to Banking Services Obligations or any of such other instruments or agreements; and/or
(h) take
any other action which would, under otherwise applicable principles of common law, give rise to a legal or equitable discharge
of the Loan Guarantors from their respective liabilities under this ABL Guaranty.
Section 2.06. Rights
of Subrogation. No Loan Guarantor will assert any right, claim or cause of action, including a claim of subrogation, contribution
or indemnification that it has against any Loan Party in respect of this ABL Guaranty until the occurrence of the Termination Date;
provided that if any amount shall be paid to such Loan Guarantor on account of such subrogation rights at any time prior to the
Termination Date, then unless such Loan Guarantor has already discharged its liabilities under this ABL Guaranty in an amount equal
to (i) in the case of any Canadian Loan Guarantor, such Canadian Loan Guarantor’s maximum liability under applicable law
as of such date and (ii) in the case of any US Loan Guarantor, such US Loan Guarantor’s Maximum Liability as of such date,
such amount shall be held in trust for the benefit of the Secured Parties and shall forthwith be paid to the Administrative Agent
(for the benefit of the Secured Parties) to be credited and applied to the Guaranteed Obligations, whether matured or unmatured,
in accordance with Section 2.18(b) of the ABL Credit Agreement.
Section 2.07. Reinstatement;
Stay of Acceleration. If at any time any payment of any portion of the Guaranteed Obligations is rescinded or must otherwise
be restored or returned upon the insolvency, bankruptcy, arrangement, proposal, receivership or reorganization of any Borrower,
any Loan Party or otherwise, each Loan Guarantor’s obligations under this ABL Guaranty with respect to that payment shall
be reinstated at such time as though the payment had not been made. If acceleration of the time for payment of any of the Guaranteed
Obligations is stayed upon the insolvency, bankruptcy, arrangement, proposal, receivership or reorganization of any Borrower or
other Loan Party, all such amounts otherwise subject to acceleration under the terms of any agreement relating to the Guaranteed
Obligations shall nonetheless be payable by the other applicable Loan Guarantors forthwith on demand by the Administrative Agent.
Section 2.08. Information.
Each Loan Guarantor assumes all responsibility for being and keeping itself informed of the Borrowers’ and other Loan Parties’
financial condition and assets, and of all other circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations
and the nature, scope and extent of the risks that each Loan Guarantor assumes and incurs under this ABL Guaranty, and agrees that
none of the Administrative Agent, any Lender or any other Secured Party shall have any duty to advise any Loan Guarantor of information
known to it regarding those circumstances or risks.
Section 2.09. Contribution;
Subordination; Maximum Liability.
(a) In
the event any US Loan Guarantor (a “Paying Guarantor”) makes any payment or payments under this ABL Guaranty
or suffers any loss as a result of any realization upon any Collateral granted by it to secure its obligations under this ABL Guaranty
(each such payment or loss, an “Accommodation Payment”), each other US Loan Guarantor (each a “Non-Paying
Guarantor”) shall contribute to such Paying Guarantor an amount equal to such Non-Paying Guarantor’s Guarantor
Percentage of such Accommodation Payments by such Paying Guarantor. For purposes of this Section 2.09, each Non Paying Guarantor’s
“Guarantor Percentage” with respect to any such Accommodation Payments by a Paying Guarantor shall be determined as
of the date on which such Accommodation Payment was made by reference to the ratio of (i) such Non Paying Guarantor’s Maximum
Liability as of such date to (ii) the aggregate Maximum Liability of all US Loan Guarantors hereunder (including such Paying Guarantor)
as of such date. As of any date of determination, the “Maximum Liability” of each US Loan Guarantor shall be
equal to the maximum amount of liability which could be asserted against such US Loan Guarantor hereunder and under the ABL Credit
Agreement without (x) rendering such US Loan Guarantor “insolvent” within the meaning of Section 101(32) of the Bankruptcy
Code, Section 2 of the Uniform Fraudulent Transfer Act (“UFTA”) or Section 2 of the Uniform Fraud Conveyance
Act (“UFCA”), (y) leaving such US Loan Guarantor with unreasonably small capital or assets, within the meaning
of Section 548 of the Bankruptcy Code, Section 4 of the UFTA or Section 5 of the UFCA, or (z) leaving such US Loan Guarantor unable
to pay its debts as they become due within the meaning of Section 548 of the Bankruptcy Code, Section 4 of the UFTA or Section
5 of the UFCA. Nothing in this provision shall affect any US Loan Guarantor’s several liability for the entire amount of
the US Guaranteed Obligations (up to such US Loan Guarantor’s Maximum Liability). Each of the US Loan Guarantors covenants
and agrees that its right to receive any contribution under this ABL Guaranty from a Non Paying Guarantor shall be subordinate
and junior in right of payment to the Secured Obligations until the Termination Date. If, prior to the Termination Date, any such
contribution payment is received by a Paying Guarantor at any time when an Event of Default has occurred and is continuing, such
contribution payment shall be collected, enforced and received by such US Loan Guarantor as trustee for the Secured Parties and
be paid over to the Administrative Agent on account of the Secured Obligations, but without affecting or impairing in any manner
the liability of such US Loan Guarantor under the other provisions of this ABL Guaranty. No failure on the part of any US Loan
Guarantor to make the payments required by this Section 2.09 (or any other payments required under applicable law or otherwise)
shall in any respect limit the obligations and liabilities of any US Loan Guarantor with respect to its obligations hereunder,
and each US Loan Guarantor shall remain liable for the full amount of the obligations of such US Loan Guarantor hereunder. This
provision is for the benefit of the Administrative Agent, the Lenders and the other Secured Parties.1
1
Note to DPW: Discuss if an equivalent provision should be included for Canadian Guarantors.
(b) It
is the desire and intent of the US Loan Guarantors and the Secured Parties that this ABL Guaranty shall be enforced against the
US Loan Guarantors to the fullest extent permissible under the Requirements of Law and public policies applied in each jurisdiction
in which enforcement is sought. The provisions of this ABL Guaranty are severable, and in any action or proceeding involving any
state corporate law, or any state, Federal or foreign bankruptcy, insolvency, reorganization or other Requirements of Law affecting
the rights of creditors generally, if the obligations of any US Loan Guarantor under this ABL Guaranty would otherwise be held
or determined to be avoidable, invalid or unenforceable on account of the amount of such US Loan Guarantor’s liability under
this ABL Guaranty, then, notwithstanding any other provision of this ABL Guaranty to the contrary, the amount of such liability
shall, without any further action by the US Loan Guarantors or the Secured Parties, be automatically limited and reduced to such
US Loan Guarantor’s Maximum Liability. Each US Loan Guarantor agrees that the US Guaranteed Obligations may at any time and
from time to time exceed the Maximum Liability of such US Loan Guarantor without impairing this ABL Guaranty or affecting the rights
and remedies of the Administrative Agent hereunder; provided that nothing in this sentence shall be construed to increase any US
Loan Guarantor’s obligations hereunder beyond its Maximum Liability.
(c) It
is the desire and intent of the Canadian Loan Guarantors and the Secured Parties that this ABL Guaranty shall be enforced against
the Canadian Loan Guarantors to the fullest extent permissible under the Requirements of Law and public policies applied in each
jurisdiction in which enforcement is sought. The provisions of this ABL Guaranty are severable, and in any action or proceeding
involving any corporate law, or any state, provincial, federal or foreign bankruptcy, insolvency, reorganization, receivership,
arrangement or other Requirements of Law affecting the rights of creditors generally, if the obligations of any Canadian Loan Guarantor
under this ABL Guaranty would otherwise be held or determined to be avoidable, invalid or unenforceable on account of the amount
of such Canadian Loan Guarantor’s liability under this ABL Guaranty, then, notwithstanding any other provision of this ABL
Guaranty to the contrary, the amount of such liability shall, without any further action by the Canadian Loan Guarantors or the
Secured Parties, be automatically limited and reduced to such Canadian Loan Guarantor’s maximum liability under applicable
law. Each Canadian Loan Guarantor agrees that the Canadian Guaranteed Obligations may at any time and from time to time exceed
the maximum liability under applicable law of such Canadian Loan Guarantor without impairing this ABL Guaranty or affecting the
rights and remedies of the Administrative Agent hereunder; provided that nothing in this sentence shall be construed to
increase any Canadian Loan Guarantor’s obligations hereunder beyond its maximum liability under applicable law.
(d) Each
Loan Guarantor hereby agrees that upon the occurrence and during the continuance of an Event of Default and after notice from the
Administrative Agent to Holdings (provided that no such notice shall be required to be given in the case of any Event of Default
arising under Section 7.01(f) or 7.01(g) of the Credit Agreement), all Indebtedness and other monetary obligations owed by it to,
or to it by, any other Loan Guarantor or any other Subsidiary shall be fully subordinated to the payment in full in cash of all
the Secured Obligations.
Section 2.10. Representations
and Warranties. As and when required in accordance with the terms of the ABL Credit Agreement, each Loan Guarantor hereby makes
each representation and warranty made in the Loan Documents by Holdings and the Borrowers with respect to such Loan Guarantor,
as applicable, and each Loan Guarantor hereby further acknowledges and agrees with respect to itself that such Loan Guarantor has,
independently and without reliance upon any Secured Party and based on such documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into this ABL Guaranty and each other Loan Document to which it is or is to
be a party, and such Loan Guarantor has established adequate means of obtaining from each other Loan Guarantor on a continuing
basis information pertaining to the business, condition (financial or otherwise), operations, performance, properties and prospects
of each other Loan Guarantor.
Section 2.11. Covenants.
Each Loan Guarantor covenants and agrees that until the Termination Date, such Loan Guarantor will perform and observe, and cause
each of its Restricted Subsidiaries to perform and observe, all of the terms, covenants and agreements set forth in the Loan Documents
that the Borrowers have agreed to cause such Loan Guarantor or such Restricted Subsidiary to perform or observe. Until the Termination
Date, no Loan Guarantor shall, without the prior written consent of the Administrative Agent, commence or join with any other
Person in commencing any bankruptcy, reorganization, arrangement, insolvency or case or proceeding against the Borrowers or any
Loan Guarantor (it being understood and agreed, for the avoidance of doubt, that nothing in this Section 2.11 shall prohibit
any Loan Guarantor from commencing or joining with any Borrower or Loan Guarantor as a co debtor in any bankruptcy, reorganization,
arrangement, insolvency or case or proceeding).
ARTICLE 3
GENERAL PROVISIONS
Section 3.01. Liability
Cumulative. The liability of each Loan Guarantor under this ABL Guaranty is in addition to and shall be cumulative with all
liabilities of such Loan Guarantor to the Administrative Agent and the Lenders under the ABL Credit Agreement and the other Loan
Documents to which such Loan Guarantor is a party or in respect of any obligations or liabilities of the other Loan Guarantors,
without any limitation as to amount, unless the instrument or agreement evidencing or creating such other liability specifically
provides to the contrary.
Section 3.02. No
Waiver; Amendments. No delay or omission of the Administrative Agent in exercising any right or remedy granted under this ABL
Guaranty shall impair such right or remedy or be construed to be a waiver of any Default or Event of Default or an acquiescence
therein, and any single or partial exercise of any such right or remedy shall not preclude any other or further exercise thereof
or the exercise of any other right or remedy. No waiver, amendment or other variation of the terms, conditions or provisions of
this ABL Guaranty whatsoever shall be valid unless in writing signed by the Loan Guarantors and the Administrative Agent with the
concurrence or at the direction of the Lenders to the extent required under or otherwise in accordance with Section 9.02
of the ABL Credit Agreement and then only to the extent specifically set forth in such writing.
Section 3.03. Severability
of Provisions. To the extent permitted by applicable Requirements of Law, any provision of this ABL Guaranty held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality
or unenforceability without affecting the validity, legality and enforceability of the remaining provisions of this ABL Guaranty;
and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.
Section 3.04. Additional
Subsidiaries. Certain Restricted Subsidiaries of the US Borrower (including Canadian Persons) may be required to enter into
this ABL Guaranty pursuant to and in accordance with Section 5.12 of the ABL Credit Agreement. Upon execution and delivery
by the Administrative Agent and such Restricted Subsidiary of an instrument in substantially the form of Exhibit A hereto
(each, a “Guaranty Supplement”), such Restricted Subsidiary shall become a Canadian Loan Guarantor or a US Loan
Guarantor hereunder, as applicable, with the same force and effect as if originally named as a Canadian Loan Guarantor or US Loan
Guarantor, as applicable, herein. The execution and delivery of any such instrument shall not require the consent of any other
Loan Guarantor hereunder or any other Person. The rights and obligations of each Loan Guarantor hereunder shall remain in full
force and effect notwithstanding the addition of any new Loan Guarantor as a party to this ABL Guaranty.
Section 3.05. Headings.
The titles of and section headings in this ABL Guaranty are for convenience of reference only, and shall not govern the interpretation
of any of the terms and provisions of this ABL Guaranty.
Section 3.06. Entire
Agreement. This ABL Guaranty and the other Loan Documents constitute the entire agreement among the parties relating to the
subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject
matter hereof.
Section 3.07. CHOICE
OF LAW. THIS ABL GUARANTY AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS ABL GUARANTY, WHETHER IN TORT,
CONTRACT (AT LAW OR IN EQUITY) OR OTHERWISE, SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK.
Section 3.08. CONSENT
TO JURISDICTION; CONSENT TO SERVICE OF PROCESS.
(a) EACH
PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION OF ANY
U.S. FEDERAL OR NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN, IN THE CITY OF NEW YORK (OR ANY APPELLATE COURT THEREFROM)
OVER ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS ABL GUARANTY AND AGREES THAT ALL CLAIMS IN RESPECT OF ANY
SUCH ACTION OR PROCEEDING SHALL (EXCEPT AS PERMITTED BELOW) BE HEARD AND DETERMINED IN SUCH NEW YORK STATE OR, TO THE EXTENT PERMITTED
BY APPLICABLE REQUIREMENTS OF LAW, IN SUCH FEDERAL COURT. EACH PARTY HERETO AGREES THAT SERVICE OF ANY PROCESS, SUMMONS, NOTICE
OR DOCUMENTS BY REGISTERED MAIL ADDRESSED TO SUCH PERSON SHALL BE EFFECTIVE SERVICE OF PROCESS AGAINST SUCH PERSON FOR ANY SUIT,
ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT. EACH PARTY HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING
MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY APPLICABLE REQUIREMENTS OF LAW.
(b) EACH
PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
ABL GUARANTY AND BROUGHT IN ANY COURT REFERRED TO IN PARAGRAPH (a) OF THIS SECTION. EACH PARTY HERETO HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE REQUIREMENTS OF LAW, ANY CLAIM OR DEFENSE OF AN INCONVENIENT FORUM TO THE
MAINTENANCE OF SUCH ACTION, SUIT OR PROCEEDING IN ANY SUCH COURT.
(c) TO
THE EXTENT PERMITTED BY APPLICABLE REQUIREMENTS OF LAW, EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF ANY AND
ALL PROCESS UPON IT AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY REGISTERED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM
OF MAIL) DIRECTED TO IT AT ITS ADDRESS FOR NOTICES AS PROVIDED FOR IN SECTION 9.01 OF THE ABL CREDIT AGREEMENT. EACH PARTY
HERETO HEREBY WAIVES ANY OBJECTION TO SUCH SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN
ANY ACTION OR PROCEEDING COMMENCED HEREUNDER THAT SERVICE OF PROCESS WAS INVALID AND INEFFECTIVE. NOTHING IN THIS ABL GUARANTY
WILL AFFECT THE RIGHT OF ANY PARTY TO THIS ABL GUARANTY TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
Section 3.09. WAIVER
OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
REQUIREMENTS OF LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY SUIT, ACTION, LEGAL PROCEEDING OR COUNTERCLAIM (WHETHER BASED
ON CONTRACT, TORT OR ANY OTHER THEORY) DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS ABL GUARANTY, ANY OTHER LOAN
DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION,
SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO
THIS ABL GUARANTY BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
Section 3.10. Indemnity.
Each Loan Guarantor hereby agrees to indemnify the Administrative Agent and the other Indemnitees, as set forth in Section 9.03
of the ABL Credit Agreement.
Section 3.11. Counterparts.
This ABL Guaranty may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a single contract. Delivery of an executed counterpart
of a signature page of this ABL Guaranty by facsimile or by email as a “.pdf’ or “tif’ attachment shall
be effective as delivery of a manually executed counterpart of this ABL Guaranty.
Section 3.12. Successors
and Assigns. Whenever in this ABL Guaranty any of the parties hereto is referred to, such reference shall be deemed to include
the permitted successors and assigns of such party; and all covenants, promises and agreements by or on behalf of any Loan Guarantor
or the Administrative Agent that are contained in this ABL Guaranty shall bind and inure to the benefit of their respective successors
and permitted assigns. Except in a transaction permitted (or not prohibited) under the ABL Credit Agreement, no Loan Guarantor
may assign any of its rights or obligations hereunder without the written consent of the Administrative Agent.
Section 3.13. Survival
of Agreement. Without limitation of any provision of the ABL Credit Agreement or Section 3.10 hereof, all covenants,
agreements, indemnities, representations and warranties made by the Loan Guarantors in the Loan Documents and in the certificates
or other instruments delivered in connection with or pursuant to this ABL Guaranty or any other Loan Document shall be considered
to have been relied upon by the Lenders and shall survive the execution and delivery of the Loan Documents and the making of any
Loans, regardless of any investigation made by any such Lender or on its behalf and notwithstanding that the Administrative Agent
or any Lender may have had notice or knowledge of any Default or Event of Default or incorrect representation or warranty at the
time any credit is extended under the ABL Credit Agreement, and shall continue in full force and effect until the Termination Date,
or with respect to any individual Loan Guarantor until such Loan Guarantor is otherwise released from its obligations under this
ABL Guaranty in accordance with Section 3.14.
Section 3.14. Release
of Loan Guarantors. A Subsidiary Guarantor shall automatically be released from its obligations hereunder and its ABL Guaranty
shall be automatically released in the circumstances described in Article 8 and Section 9.23 of the ABL Credit Agreement.
In connection with any such release, the Administrative Agent shall promptly execute and deliver to any Loan Guarantor, at such
Loan Guarantor’s expense, all documents that such Loan Guarantor shall reasonably request to evidence such termination or
release. Any execution and delivery of documents pursuant to the preceding sentence of this Section 3.14 shall be without
recourse to or warranty by the Administrative Agent (other than as to the Administrative Agent’s authority to execute and
deliver such documents).
Section 3.15. Payments.
All payments made by any Loan Guarantor hereunder will be made without setoff, counterclaim or other defense and on the same basis
as payments are made by the Borrowers under Sections 2.18 and 2.19 of the ABL Credit Agreement.
Section 3.16. Notice,
etc. All notices and other communications provided for hereunder shall be in writing and shall be delivered by hand or overnight
courier service, mailed by certified or registered mail or sent by facsimile or email, as follows:
(a) if
to any Loan Guarantor, addressed to it in care of the US Borrower at its address specified in Section 9.01 of the ABL Credit
Agreement;
(b) if
to the Administrative Agent or any Lender, at its address specified in Section 9.1 of the ABL Credit Agreement;
(c) if
to any Secured Party in respect of any Secured Hedging Obligations, at its address specified in the Hedge Agreement to which it
is a party; or
(d) if
to any Secured Party in respect of any Banking Services Obligations, at its address specified in the relevant documentation to
which it is a party.
Section 3.17. Set
Off. In addition to any rights now or hereafter granted under applicable Requirements of Law and not by way of limitation of
any such rights. while an Event of Default has occurred and is continuing, the Administrative Agent, each Lender, each Issuing
Bank, each letter of credit issuer under any Additional Revolving Facility and each of their respective Affiliates shall be entitled
to rights of setoff to the extent provided in Section 9.09 of the ABL Credit Agreement.
Section 3.18. Waiver
of Consequential Damages, Etc. To the extent permitted by applicable Requirements of Law, none of the Loan Guarantors nor the
Secured Parties shall assert, and each hereby waives, any claim against each other or any Related Party thereof, on any theory
of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of,
in connection with, or as a result of, this ABL Guaranty or any agreement or instrument contemplated hereby, except, in the case
of any claim by any Indemnitee against any of the Loan Guarantors, to the extent such damages would otherwise be subject to indemnification
pursuant to the terms of Section 3.10.
Section 3.19. Keepwell.
Each Qualified ECP Guarantor hereby jointly and severally, absolutely, unconditionally and irrevocably undertakes to provide such
funds or other support as may be needed from time to time by each Non ECP Guarantor to honor all of its obligations under this
ABL Guaranty in respect of Swap Obligations that would otherwise be Excluded Swap Obligations (provided, however,
that each Qualified ECP Guarantor shall only be liable under this Section 3.19 for the maximum amount of such liability
that can be hereby incurred, and otherwise subject to the limitations on the obligations of Loan Guarantors contained in this ABL
Guaranty, without rendering its obligations under this Section 3.19, or otherwise under this ABL Guaranty, voidable under
applicable Requirements of Law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount). This
Section 3.19 shall be deemed to constitute, a “keepwell, support, or other agreement” for the benefit of each
Non ECP Guarantor for all purposes of Section 1a (18)(A)(v)(II) of the Commodity Exchange Act.
[SIGNATURE PAGES FOLLOW]
IN WITNESS WHEREOF,
each Loan Guarantor and the Administrative Agent have executed this ABL Guaranty as of the date first above written.
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HOLDINGS
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HAYWARD INTERMEDIATE, INC.
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By:
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Name:
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Title:
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US BORROWER
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HAYWARD ACQUISITION CORP.,
as the US Borrower immediately prior to the Merger
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By:
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Name:
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Title:
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HAYWARD INDUSTRIES INC.,
as the US Borrower upon and following the Merger
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By:
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Name:
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Title:
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CANADIAN BORROWER
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HAYWARD POOL PRODUCTS CANADA,
INC.
PRODUITS DE PISCINES HAYWARD CANADA, INC.
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By:
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Name:
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SUBSIDIARY GUARANTORS
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GOLDLINE PROPERTIES LLC
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By:
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Name:
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Title:
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HAYWARD INDUSTRIAL PRODUCTS,
INC.
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By:
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Name:
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HAYWARD / WRIGHT AUSTIN
INC.
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By:
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Name:
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Title:
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WEBSTER PUMPS, INC.
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By:
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Name:
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BANK OF AMERICA, N.A.,
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as Administrative Agent
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By:
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EXHIBIT
A
JOINDER AGREEMENT
THIS JOINDER AGREEMENT
(this “Agreement”) NO. [●], dated as of [●] [●], 20[^], is entered into among [●], a
[●] ([each, a] [the] “New Subsidiary”), and acknowledged and accepted by Bank of America, N.A., as administrative
agent and collateral agent (together with its successors and permitted assigns in such capacities, the “Administrative
Agent”), pursuant to that certain ABL Guaranty, dated as of August 4, 2017 (as amended, restated, amended and restated,
supplemented or otherwise modified from time to time, the “ABL Guaranty”), by and among Hayward Intermediate,
Inc., a Delaware corporation (“Holdings”), the other Loan Guarantors from time to time party thereto and the
Administrative Agent. All capitalized terms used herein and not otherwise defined herein shall have the meanings set forth in the
ABL Guaranty.
[Each] [The] New Subsidiary
and the Administrative Agent, for the benefit of the Secured Parties, hereby agree as follows:
1. [Each]
[The] New Subsidiary hereby acknowledges, agrees and confirms that, by its execution of this Agreement, [each] [the] New Subsidiary
will be deemed to be a [Canadian] [US] Loan Guarantor under the ABL Guaranty and a Loan Guarantor for all purposes of the ABL Credit
Agreement and shall have all of the rights, benefits, duties and obligations of a Loan Guarantor thereunder as if it had executed
the ABL Guaranty. [Each] [The] New Subsidiary hereby ratifies, as of the date hereof, and agrees to be bound by, all of the terms,
provisions and conditions contained in the ABL Guaranty applicable to a [Canadian] [US] Loan Guarantor. Without limiting the generality
of the foregoing terms of this paragraph 1, [each] [the] New Subsidiary hereby absolutely and unconditionally guarantees,
jointly and severally with the other [Canadian] [US] Loan Guarantors, to the Administrative Agent and the Secured Parties, the
prompt payment and performance of the [Canadian] [US] Guaranteed Obligations in full when due (whether at stated maturity, upon
acceleration or otherwise) to the extent of and in accordance with the ABL Guaranty.
2. [Each]
[The] New Subsidiary hereby waives acceptance by the Administrative Agent and the Secured Parties of the guaranty by [each] [the]
New Subsidiary upon the execution of this Agreement by the New Subsidiary.
3. [Each]
[The] New Subsidiary hereby (x) makes, as of the date hereof, each representation and warranty set forth in Section 2.10
of the ABL Guaranty and (y) agrees to perform and observe, and to cause each of its Restricted Subsidiaries to perform and observe,
the covenants set forth in Section 2.11 of the ABL Guaranty.
4. From
and after the execution and delivery hereof by the parties hereto, this Agreement shall constitute a “Loan Document”
for all purposes of the ABL Credit Agreement and the other Loan Documents.
5. This
Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but
all of which shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page of this Agreement
by facsimile or by email as a “.pdf’ or “.tif’ attachment shall be effective as delivery of a manually
executed counterpart of this Agreement.
6. THIS
AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS
OF THE STATE OF NEW YORK.
[Signature Pages Follow]
IN WITNESS WHEREOF,
[each] [the] New Subsidiary has caused this Agreement to be duly executed by its authorized officer, and the Administrative Agent,
for the benefit of the Secured Parties, has caused the same to be accepted by its authorized officer, as of the day and year first
above written.
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[NEW SUBSIDIARY
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By:
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Name:
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Title:
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Acknowledged and accepted:
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BANK OF AMERICA, N.A.,
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as Administrative Agent
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By:
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EXHIBIT I
[FORM
OF]
US SECURITY AGREEMENT
[ATTACHED]
Execution Version
US ABL
PLEDGE AND SECURITY AGREEMENT
US ABL PLEDGE AND SECURITY
AGREEMENT dated as of August 4, 2017 (as it may be amended, restated, amended and restated, supplemented or otherwise modified
from time to time, this “Security Agreement”), by and among Hayward Acquisition Corp., a New Jersey corporation
(the “Initial US Borrower”), Hayward Industries, Inc., a New Jersey corporation (upon merging with the Initial
US Borrower pursuant to the Merger (as defined in the ABL Credit Agreement) and as survivor of the Merger, the “US Borrower”),
Hayward Intermediate, Inc., a Delaware corporation (“Holdings”), the other Grantors (as defined below) and Bank
of America, N.A., in its capacities as administrative agent and collateral agent (together with its successors and permitted assigns
in such capacities, the “Administrative Agent”) for the Secured Parties under that certain ABL Credit Agreement,
dated as of August 4, 2017 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the
“ABL Credit Agreement”), by and among Holdings, the Initial US Borrower, the US Borrower, Hayward Pool Products
Canada, Inc. / Produits De Piscines Hayward Canada, Inc., a Canadian federal corporation (the “Canadian Borrower”
and, together with the US Borrower and the Initial US Borrower, the “Borrowers”), the Administrative Agent and
the Lenders from time to time parties thereto.
PRELIMINARY
STATEMENT
WHEREAS, the Grantors
(as defined below) are entering into this Security Agreement in order to induce the Lenders to enter into and extend credit to
the Borrowers under the ABL Credit Agreement and to secure the Secured Obligations, including, their obligations under the Loan
Guaranty, each Hedge Agreement, the obligations under which constitute Secured Hedging Obligations, and each agreement relating
to Banking Services, the obligations under which constitute Banking Services Obligations; and
WHEREAS, the ABL Intercreditor
Agreement governs the relative rights and priorities of the Term Secured Parties and the ABL Secured Parties in respect of the
Term Priority Collateral and the ABL Priority Collateral (as each term is defined therein);
ACCORDINGLY, the parties
hereto agree as follows:
ARTICLE 1
Definitions
Section 1.01. Terms
Defined in ABL Credit Agreement. Except as set forth in Section 1.02 below, capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned to such terms in the ABL Credit Agreement. The rules of construction set forth
in Section 1.03, Section 1.08 and Section 1.11 of the ABL Credit Agreement shall apply to this Security Agreement
as if specifically incorporated herein, mutatis mutandis.
Section 1.02. Terms
Defined in UCC. Terms defined in the UCC that are not otherwise defined in this Security Agreement or the ABL Credit Agreement
are used herein as defined in Articles 8 or 9 of the UCC, as the context may require (including without limitation, as if such
terms were capitalized in Article 8 or 9 of the UCC, as the context may require, the following terms: “Account,”
“Chattel Paper,” “Commercial Tort Claim,” “Document,” “Electronic
Chattel Paper,” “Equipment,” “Fixture,” “General Intangible,”
“Goods,” “Instruments,” “Inventory,” “Letter of Credit Right,”
“Supporting Obligation” and “Tangible Chattel Paper”).
Section 1.03. Definitions
of Certain Terms Used Herein. As used in this Security Agreement, in addition to the terms defined in the preamble and the
Preliminary Statement above, the following terms shall have the following meanings:
“ABL Credit
Agreement” has the meaning set forth in the Preliminary Statement.
“Administrative
Agent” has the meaning set forth in the preamble.
“Article”
means a numbered article of this Security Agreement, unless another document is specifically referenced.
“Borrowers”
has the meaning set forth in the preamble.
“Canadian
Borrower” has the meaning set forth in the preamble.
“Collateral”
has the meaning set forth in Article 2.
“Contract
Rights” means all rights of any Grantor under any Contract, including, without limitation, (i) any and all rights to
receive and demand payments under such Contract, (ii) any and all rights to receive and compel performance under such Contract
and (iii) any and all other rights, interests and claims now existing or in the future arising in connection with such Contract.
“Contracts”
means all contracts between any Grantor and one or more additional parties (including, without limitation, any Hedge Agreement,
licensing agreement and any partnership agreement, joint venture agreement and/or limited liability company agreement).
“Control”
has the meaning set forth in Article 8 or, if applicable, in Section 9 104, 9 105, 9 106 or 9 107 of Article 9 of the UCC.
“Copyrights”
means, with respect to any Grantor, all of such Grantor’s right, title and interest in and to all Copyrights (as such term
is defined in the ABL Credit Agreement).
“Discharge
of Term Obligations” has the meaning given to such term in the ABL Intercreditor Agreement.
“Domain Names”
means all Internet domain names and associated URL addresses in or to which any Grantor now or hereafter has any right, title or
interest.
“Exhibit”
refers to a specific exhibit to this Security Agreement, unless another document is specifically referenced.
“First Lien
Loan Documents” means the “Loan Documents” as defined in the First Lien Credit Agreement.
“Grantors”
means (i) Holdings, the Initial US Borrower, the US Borrower and the Subsidiary Guarantors party to this Security Agreement on
the Closing Date and (ii) each Subsidiary Guarantor that becomes a party to this Security Agreement as a Grantor after the Closing
Date in accordance with Section 7.10 of this Security Agreement and Section 5.12 of the ABL Credit Agreement. Notwithstanding
anything else provided herein, any reference to Grantors in connection with a representation or covenant under this Security Agreement
that is limited by its terms to the Closing Date shall, for such purposes, mean the Grantors on the Closing Date.
“Holdings”
has the meaning set forth in the preamble.
“Intellectual
Property Collateral” means collectively, all (a) Copyrights, Patents, Trademarks, Trade Secrets, Domain Names, Licenses
and Software and any and all other IP Rights; (b) all income, royalties, damages, claims and payments now or hereafter due and/or
payable with respect to any of the foregoing, including, without limitation, damages, claims and payments for past, present and
future infringements, misappropriation, dilution or other violations of any of the foregoing; (c) all rights to sue for past, present
and future infringements, misappropriation, dilution or other violations of any of the foregoing; and (d) all rights corresponding
to any of the foregoing.
“Intellectual
Property Security Agreement Supplements” means (a) a Trademark Security Agreement Supplement, (b) a Patent Security Agreement
Supplement or (c) a Copyright Security Agreement Supplement, in each case, substantially in the form of Annex A to the relevant
Intellectual Property Security Agreement, as applicable.
“Licenses”
means, with respect to any Grantor, whether as licensor or licensee, all of such Grantor’s right, title, and interest in
and to (a) any and all licensing agreements or similar arrangements with respect to (1) Patents, (2) Copyrights, (3) Trademarks,
(4) Trade Secrets, (5) Software, or (6) any and all other IP Rights, (b) all income, royalties, damages, claims and payments now
or hereafter due and/or payable with respect to any of the foregoing, including, without limitation, damages, claims and payments
for past, present and future breaches thereof, (c) all rights to sue for past, present and future breaches thereof, and (d) all
rights corresponding to any of the foregoing.
“Money”
has the meaning set forth in Article 1 of the UCC.
“Patents”
means, with respect to any Grantor, all of such Grantor’s right, title and interest in and to all Patents (as such term is
defined in the ABL Credit Agreement).
“Perfection
Certificate” means the Perfection Certificate delivered pursuant to Section 4.01(i) of the ABL Credit Agreement, as modified
and supplemented from time to time as a result of the delivery of any Perfection Certificate Supplement pursuant to Section
5.01(c) of the ABL Credit Agreement.
“Permits”
shall mean all licenses, permits, rights, orders, variances, franchises or authorizations of or from any Governmental Authority.
“Pledged Collateral”
means all Pledged Stock and Stock Rights, including all stock certificates, options or rights of any nature whatsoever in respect
of the Pledged Stock or other Stock Rights that may be issued or granted to, or held by, any Grantor while this Security Agreement
is in effect, all Instruments, Securities and other Investment Property owned by any Grantor, whether or not physically delivered
to the Administrative Agent pursuant to this Security Agreement, whether now owned or hereafter acquired by such Grantor and any
and all Proceeds thereof, but in any case, excluding any items constituting Excluded Assets as expressly limited or excluded by
the definition of “Collateral and Guarantee Requirement” in the ABL Credit Agreement.
“Pledged Stock”
means, with respect to any Grantor, the shares of Capital Stock described in Schedule 3 to the Perfection Certificate as
held by such Grantor, together with any other shares of Capital Stock as are hereafter acquired by such Grantor, excluding any
items constituting Excluded Assets.
“Proceeds”
has the meaning assigned in Article 9 of the UCC and, in any event, shall also include but not be limited to (i) any and all proceeds
of any insurance, indemnity, warranty or guaranty payable to the Administrative Agent or any Grantor from time to time with respect
to any of the Collateral, (ii) any and all payments (in any form whatsoever) made or due and payable to any Grantor from time to
time in connection with any requisition, confiscation, condemnation, seizure or forfeiture of all or any part of the Collateral
by any Governmental Authority (or any Person acting under color of Governmental Authority), (iii) any and all Stock Rights and
(iv) any and all other amounts from time to time paid or payable under or in connection with any of the Collateral.
“Receivables”
means any Account, Chattel Paper, Document, Instrument and/or any General Intangible, in each case, that is a right or claim to
receive money or that is otherwise included as Collateral, but in any case, excluding any item constituting Excluded Assets.
“Section”
means a numbered section of this Security Agreement, unless another document is specifically referenced.
“Security
Agreement” has the meaning set forth in the preamble.
“Software”
means computer programs, source code, object code and supporting documentation including “software” as such term is
defined in Article 9 of the UCC, as well as computer programs that may be construed as included in the definition of Goods.
“Stock Rights”
means all dividends, warrants, instruments or other distributions and any other right or property which any Grantor shall receive
or shall become entitled to receive for any reason whatsoever with respect to, in substitution for or in exchange for any Capital
Stock constituting Collateral, any right to receive any Capital Stock constituting Collateral and any right to receive earnings,
in which such Grantor now has or hereafter acquires any right, issued by an issuer of such Capital Stock.
“Term Priority
Collateral” has the meaning given to such term in the ABL Intercreditor Agreement.
“Trade Secrets”
means, with respect to any Grantor, all of such Grantor’s right, title and interest in and to the following: (a) confidential
and proprietary information, including unpatented inventions, invention disclosures, engineering or other data, information, production
procedures, know how, financial data, customer lists, supplier lists, business and marketing plans, processes, schematics, algorithms,
techniques, analyses, proposals, source code and data collections; (b) all income, royalties, damages, claims and payments now
or hereafter due and/or payable with respect to any of the foregoing, including, without limitation, damages, claims and payments
for past, present and future misappropriation or infringements of any of the foregoing; (c) all rights to sue for past, present
and future misappropriation or infringements of any of the foregoing, including the right to settle suits involving claims and
demands for royalties owing; and (d) all rights corresponding to any of the foregoing.
“Trademarks”
means, with respect to any Grantor, all of such Grantor’s right, title and interest in and to all Trademarks (as such term
is defined in the ABL Credit Agreement).
“US Borrower”
has the meaning set forth in the preamble.
ARTICLE 2
Grant of Security Interest
Section 2.01. Grant
of Security Interest.
(a) As
security for the prompt and complete payment or performance, as the case may be, in full of the Secured Obligations, each Grantor
hereby pledges, collaterally assigns, mortgages, transfers and grants to the Administrative Agent, its successors and permitted
assigns, on behalf of and for the benefit of the Secured Parties, a continuing security interest in all of its right, title and
interest in, to and under all of the following personal property and other assets, whether now owned by or owing to, or hereafter
acquired by or arising in favor of such Grantor, and regardless of where located (all of which are collectively referred to as
the “Collateral”):
(i)
all Accounts;
(ii) all Chattel Paper
(including, without limitation, all Tangible Chattel Paper and all Electronic Chattel Paper);
(iii) all Intellectual
Property Collateral;
(iv) all Documents;
(v) all Equipment;
(vi) all Fixtures;
(vii) all General Intangibles;
(viii) all Goods;
(ix) all Instruments;
(x) all Inventory;
(xi) all Investment Property,
Pledged Stock and other Pledged Collateral;
(xii) all letters of credit
and Letter of Credit Rights;
(xiii) all Commercial
Tort Claims described on Schedule 6 to the Perfection Certificate (including any supplements to such schedule);
(xiv) all Permits;
(xv) all Software and
all recorded data of any kind or nature, regardless of the medium of recording;
(xvi) all Contracts, together
with all Contract Rights arising thereunder;
(xvii) all other personal
property not otherwise described in clauses (i) through (xvi) above;
(xviii) all Supporting
Obligations;
(xix) all Deposit Accounts,
Securities Accounts, all cash, Money, Securities and other investments therein, and all Security Entitlements in respect thereof;
and
(xx) all accessions to,
substitutions and replacements for and Proceeds and products of the foregoing, together with all books and records, customer lists,
credit files, computer files, programs, printouts and other computer materials and records related thereto and any General Intangibles
at any time evidencing or relating to any of the foregoing and all collateral security and Guarantees given by any Person with
respect to any of the foregoing.
(b) Notwithstanding
the foregoing, no Lien or security interest is granted hereunder on any Excluded Asset and the term “Collateral” (and
any component definition thereof) shall not include any Excluded Asset or any other asset to the extent expressly limited or excluded
by the definition of “Collateral and Guarantee Requirement” in the ABL Credit Agreement. Notwithstanding anything to
the contrary contained herein, immediately upon the ineffectiveness, lapse or termination of any restriction or condition set forth
in the definition of “Excluded Assets” in the ABL Credit Agreement that prevented the grant of a security interest
in any right, interest or other asset that would have, but for such restriction or condition, constituted Collateral, the Collateral
shall include, and the relevant Grantor shall be deemed to have automatically granted a security interest in, all relevant previously
restricted or conditioned rights, interests or other assets, as the case may be, as if such restriction or condition had never
been in effect.
(c) Notwithstanding
anything to the contrary in this Security Agreement or any other Loan Document, no Grantor shall be required to take any action
with respect to the Collateral pledged hereunder (and no Lien on such Collateral shall be required to be perfected and/or First
Priority, as applicable) to the extent such action is inconsistent with Section 5.12 of the ABL Credit Agreement or the Perfection
Requirements (and is in accordance with applicable Requirements of Law). With respect to any Term Priority Collateral, to the extent
the First Lien Agent determines that any property or assets shall not become part of, or shall be excluded from such Term Priority
Collateral because it constitutes “Excluded Assets” (as defined in the First Lien Credit Agreement), or that any delivery
or notice requirement in respect of any such Term Priority Collateral shall be extended or waived, the Administrative Agent shall
automatically be deemed to accept such determination and shall execute any documentation, if applicable, requested by the US Borrower
in connection therewith (at the Grantor’s expense).
ARTICLE 3
Representations and Warranties
The Grantors, jointly
and severally, represent and warrant to the Administrative Agent as and when required under the ABL Credit Agreement, for the benefit
of the Secured Parties, that:
Section 3.01. Title,
Perfection and Priority; Filing Collateral. Subject to the Legal Reservations, this Security Agreement is effective to create
a legal, valid and enforceable Lien on and security interest in the Collateral in favor of the Administrative Agent for the benefit
of the Secured Parties and, subject to the terms of the last paragraph of Section 4.01 of the ABL Credit Agreement and Section
2.01(c) of this Security Agreement, the Administrative Agent will have a fully perfected First Priority security interest in
the Collateral securing the Secured Obligations to the extent perfection in such Collateral is required by the Perfection Requirements
upon taking all actions to perfect such Liens as in accordance with this Security Agreement and the Collateral and Guarantee Requirement.
Section 3.02. Names,
Type and Jurisdiction of Organization, Organizational and Identification Numbers.
(a) (i)
As of the Closing Date, the exact legal name of each Grantor, as such name appears in its respective Organizational Documents filed
with the Secretary of State of such Grantor’s jurisdiction of organization, is set forth in Schedule 1(a) to the Perfection
Certificate and (ii) as of the Closing Date, each Grantor is the type of entity disclosed next to its name in Schedule 1(a)
to the Perfection Certificate. Also, as of the Closing Date, set forth in Schedule 1(a) to the Perfection Certificate is
the jurisdiction of organization of each Grantor.
(b) Except
as otherwise disclosed in Schedule 1(d) to the Perfection Certificate, as of the Closing Date, set forth in Schedule
1(b) to the Perfection Certificate is any other legal name that any Grantor has had in the past five years, together with the
date of the relevant change.
(c) As
of the Closing Date, set forth in Schedule 1(c) to the Perfection Certificate is a list of the information required by Section
1(a) of the Perfection Certificate for any other Person (i) to which any Grantor became the successor by merger, consolidation
or acquisition or (ii) that has been liquidated into, or transferred all or substantially all of its assets to, any Grantor, at
any time within the past five years preceding the Closing Date.
(d) As
of the Closing Date, except as set forth in Schedule 1(d) to the Perfection Certificate or as otherwise disclosed in Schedule
1(c) to the Perfection Certificate, no Grantor has changed its jurisdiction of organization or form of entity at any time during
the past four months.
Section 3.03. Locations.
The address of each Grantor’s chief executive office as of the Closing Date is accurately disclosed on Schedule 2
to the Perfection Certificate.
Section 3.04. Intellectual
Property.
(a) Upon
filing of appropriate financing statements with the Secretary of State (or equivalent office) of the state of organization of such
Grantor and the filing of the applicable Intellectual Property Security Agreement with the United States Copyright Office or the
United States Patent and Trademark Office, as applicable, the Administrative Agent shall have a fully perfected First Priority
Lien on the Collateral constituting United States issued or registered Patents, Trademarks and Copyrights (and applications therefor).
(b) No
Grantor is aware of (i) any third party claim (A) that any of its owned Patent, Trademark, Domain Name or Copyright registrations
or applications is invalid or unenforceable or (B) challenging such Grantor’s rights to such registrations and applications
or (ii) any basis for such claims with respect to such Grantor, other than, in each case, to the extent any such third party claims
would not reasonably be expected to have a Material Adverse Effect.
Section 3.05. Pledged
Collateral; Instruments and Chattel Paper. (i) All Pledged Stock has been duly authorized and validly issued (to the extent such
concepts are relevant with respect to such Pledged Stock) by the issuer thereof and is fully paid and non assessable, (ii) each
Grantor is the direct owner, beneficially and of record, of the Pledged Stock described in Schedule 3 to the Perfection
Certificate as held by such Grantor, (iii) each Grantor holds the Pledged Stock described in Schedule 3 to the Perfection
Certificate as held by such Grantor free and clear of all Liens (other than Permitted Liens), (iv) as of the Closing Date, subject
to the terms of the last paragraph of Section 4.01 of the ABL Credit Agreement, all certificates or instruments representing
or evidencing the Pledged Collateral which are required to be delivered pursuant to Section 4.02 hereof have been delivered
to the Administrative Agent in suitable form for transfer by delivery or accompanied by duly executed instruments of transfer or
assignment in blank and the Administrative Agent has a perfected First Priority security interest therein to the extent perfection
in such Collateral is required by the Perfection Requirements.
Section
3.06. Recourse. This Security Agreement is made with full recourse to each Grantor and
pursuant to and upon all the warranties, representations, covenants and agreements on the part of such Grantor contained
herein, in the Loan Documents and otherwise in writing in connection herewith and therewith.
ARTICLE 4
Covenants
From the date hereof,
and thereafter until the Termination Date (in each case, subject to Section 2.01(c) of this Security Agreement):
Section 4.01. General.
(a) Authorization
to File Financing Statements; Ratification. Each Grantor hereby (x) authorizes the Administrative Agent to (A) file all financing
statements (including amendments and continuations thereto) with respect to the Collateral naming such Grantor as debtor and the
Administrative Agent as secured party, in form appropriate for filing under the UCC of the relevant jurisdiction, (B) make all
filings with the United States Patent and Trademark Office and the United States Copyright Office (including filing any Intellectual
Property Security Agreement) for the purpose of perfecting, recording, enforcing, maintaining or protecting the Lien of the Administrative
Agent in each Grantor’s United States issued, registered or applied for Patents, Trademarks and Copyrights (in each case,
to the extent constituting Collateral) and naming such Grantor as debtor and the Administrative Agent as secured party and (y)
agrees to take such other actions as required by Section 5.14 of the ABL Credit Agreement, in each case as may from time
to time be necessary and reasonably requested by the Administrative Agent in order to establish and maintain (subject to Permitted
Liens (to the extent such Permitted Liens are not prohibited from being senior to the Lien granted to the Administrative Agent
hereunder)) a valid, enforceable (subject to the Legal Reservations) and perfected First Priority security interest in and subject,
in the case of Pledged Collateral, Deposit Accounts and Securities Accounts, to Section 4.02 hereof, Control of, the Collateral.
Each Grantor shall pay any applicable filing fees, recordation fees and related expenses relating to its Collateral in accordance
with Section 9.03(a) of the ABL Credit Agreement. The Administrative Agent may file financing statements in any applicable
UCC jurisdiction and may (i) indicate the Collateral (A) as “all assets” of the applicable Grantor or words of similar
effect, regardless of whether any particular asset comprised in the Collateral falls within the scope of Article 9 of the UCC of
such jurisdiction, or (B) by any other description which reasonably approximates the description contained in this Security Agreement
and (ii) contain any other information required by part 5 of Article 9 of the UCC for the sufficiency or filing office acceptance
of any financing statement or amendment, including (A) in each case to the extent applicable, whether the Grantor is an organization,
the type of organization and any organization identification number issued to the Grantor and (B) in the case of a financing statement
filed as a fixture filing, a sufficient description of the relevant real property to which the Collateral relates. Each Grantor
agrees to furnish any such information to the Administrative Agent promptly upon request.
(b) Further
Assurances. Each Grantor agrees, at its own expense, to take any and all actions reasonably necessary to defend title to the
Collateral against all Persons (other than Persons holding Permitted Liens on such Collateral that have priority over the Administrative
Agent’s Lien) and to defend the security interest of the Administrative Agent in the Collateral and the priority thereof
against any Lien that is not a Permitted Lien.
(c) Change
of Name, Etc. Following the occurrence of a change for which delivery of any notice is required by Section 5.01(i) of
the ABL Credit Agreement, the relevant Grantor shall promptly make all filings required under the UCC or other applicable Requirements
of Law and take all other actions reasonably requested by the Administrative Agent and deemed by the Administrative Agent to be
necessary or reasonable and appropriate to ensure that the Administrative Agent shall continue at all times following such change
to have a valid, legal, enforceable (subject to the Legal Reservations) and perfected First Priority Lien in such Collateral for
its benefit and the benefit of the other Secured Parties.
Section 4.02. Pledged
Collateral.
(a) Delivery
of Certificated Securities, Tangible Chattel Paper, Instruments, Documents, Deposit Accounts and Securities Accounts. Each
Grantor will, subject to the last paragraph of Section 4.1 of the ABL Credit Agreement and the Perfection Requirements,
(i) on the Closing Date, deliver to the Administrative Agent for the benefit of the Secured Parties, the originals of all (x) certificated
Pledged Stock and (y) Material Debt Instruments, in each case under clauses (x) and (y), to the extent constituting
Collateral owned by such Grantor as of the Closing Date, accompanied by undated instruments of transfer or assignment duly executed
in blank, (ii) after the Closing Date, hold in trust for the Administrative Agent upon receipt and, (x) if the event giving rise
to the obligation under this Section 4.02(a) occurs during the first three Fiscal Quarters of any Fiscal Year, on or before
the date on which financial statements are required to be delivered pursuant to Section 5.01(a) of the ABL Credit Agreement
for the Fiscal Quarter in which the relevant event occurred or (y) if the event giving rise to the obligation under this Section
4.02(a) occurs during the fourth Fiscal Quarter of any Fiscal Year, on or before the date that is 60 days after the end of
such Fiscal Quarter (or, in each of the cases of clauses (x) and (y), such longer period as the Administrative Agent
may reasonably agree), deliver to the Administrative Agent for the benefit of the Secured Parties any (1) certificated Capital
Stock and (2) Material Debt Instruments, in each case, to the extent constituting Collateral received after the date hereof, accompanied
by undated instruments of transfer or assignment duly executed in blank and (iii) in the case of Deposit Accounts and Securities
Accounts (other than Excluded Accounts), take any actions necessary to enable the Administrative Agent to obtain Control with respect
thereto to the extent required hereunder, including without limitation, executing and delivering and causing the relevant depositary
bank or securities intermediary to execute and deliver a control agreement in form and substance reasonably satisfactory to the
Administrative Agent to the extent required pursuant to Section 5.15 of the ABL Credit Agreement.
(b) Uncertificated
Securities and Pledged Collateral. Except to the extent in connection with any Investment or Disposition permitted by the ABL
Credit Agreement, with respect to any Capital Stock owned by any Grantor to the extent required to be pledged to the Administrative
Agent pursuant to the terms hereof (other than Capital Stock held by a Clearing Corporation, Securities Intermediary or other financial
intermediary of any kind) which is not a certificated Security for purposes of the UCC, to the extent constituting Pledged Collateral,
such Grantor shall not permit any issuer of such Capital Stock to (i) enter into any agreement with any Person, other than the
Administrative Agent, whereby such issuer effectively delivers “control” of such partnership interests or limited liability
company interests (as applicable) under the UCC to such Person, or (ii) if such Capital Stock is not a Security for purposes of
the UCC, allow such Capital Stock to become Securities unless such Grantor certificates such securities and complies with the procedures
set forth in Section 4.02(a) within the time period prescribed therein. Each Grantor which is an issuer of any uncertificated Pledged
Collateral described in this Section 4.02(b) hereby agrees to comply with all instructions from the Administrative Agent
without such Grantor’s further consent, in each case subject to the notice requirements set forth in Section 5.01(a)(iv)
hereof.
(c) Registration
in Nominee Name; Denominations. The Administrative Agent, on behalf of the Secured Parties, shall hold certificated Pledged
Collateral required to be delivered to the Administrative Agent under clause (a) above in the name of the applicable Grantor,
endorsed or assigned in blank or in favor of the Administrative Agent, but at any time when an Event of Default shall have occurred
and be continuing, and upon prior written notice to the US Borrower, the Administrative Agent shall have the right (in its sole
and absolute discretion, but subject to the last paragraph of Section 7.01 of the ABL Credit Agreement) to hold the Pledged
Collateral in its own name as pledgee, or in the name of its nominee (as pledgee or as sub agent). At any time when an Event of
Default has occurred and is continuing, but subject to the last paragraph of Section 7.01 of the ABL Credit Agreement, the Administrative
Agent shall have the right to exchange the certificates representing Pledged Collateral for certificates of smaller or larger denominations
for any purpose consistent with this Security Agreement.
(d) Exercise
of Rights in Pledged Collateral. It is agreed that:
(i) without in any way
limiting the foregoing and subject to clause (ii) below, each Grantor shall have the right, unless an Event of Default has
occurred and is continuing after prior written notice to the US Borrower by the Administrative Agent, to exercise all voting rights
or other rights relating to the Pledged Collateral for any purpose that does not violate this Security Agreement, the ABL Credit
Agreement or any other Loan Document;
(ii) the Administrative
Agent or its nominee at any time when an Event of Default has occurred and is continuing shall have the right to exercise the rights
and remedies provided under Section 5.01(a)(iv) (subject to the notice requirements set forth therein) and upon the occurrence
and during the continuance of an Event of Default after prior written notice to the US Borrower, all rights of the Grantors to
exercise or refrain from exercising voting or other consensual rights as a holder with respect to any Pledged collateral shall
cease; and
(iii) subject to Section
5.01(a)(iv), each Grantor shall be entitled to receive and retain any and all dividends, interest, principal and other distributions
paid on or distributed in respect of the Pledged Collateral (unless, and solely to the extent, otherwise provided under the ABL
Credit Agreement or the other Loan Documents); provided that any non cash dividends or other distributions that would constitute
Pledged Collateral, whether resulting from a subdivision, combination or reclassification of the outstanding Capital Stock of the
issuer of any Pledged Collateral or received in exchange for Pledged Collateral or any part thereof, or in redemption thereof,
or as a result of any merger, consolidation, acquisition or other exchange of assets to which such issuer may be a party or otherwise,
shall, to the extent constituting Collateral, hold in trust for the Administrative Agent and be and become part of the Pledged
Collateral, and, if received by any Grantor, shall be delivered to the Administrative Agent as and to the extent required by clause
(a) above. The Administrative Agent shall promptly deliver to the applicable Grantor (without recourse and without any representation
or warranty) any Pledged Collateral in its possession if requested to be delivered to the issuer or the holder thereof in connection
with any redemption or exchange of such Pledged Collateral not prohibited by the ABL Credit Agreement (unless the ABL Credit Agreement
prohibits such redemption or exchange at such time).
Section 4.03. Intellectual
Property.
(a) At
any time when an Event of Default has occurred and is continuing, and upon the written request of the Administrative Agent, each
Grantor will (i) use its commercially reasonable efforts to obtain all consents and approvals necessary and appropriate for the
assignment to or for the benefit of the Administrative Agent of any License held by such Grantor in the U.S. to enable the Administrative
Agent to enforce the security interests granted hereunder and (ii) to the extent required pursuant to any material License in the
U.S. under which such Grantor is the licensee, deliver to the licensor thereunder any notice of the grant of security interest
hereunder or such other notices required to be delivered thereunder in order to permit the security interest created or permitted
to be created hereunder pursuant to the terms of such License.
(b) Each
Grantor shall notify the Administrative Agent promptly if it knows that any application for or registration of any Patent, Trademark,
Domain Name, or Copyright (now or hereafter existing) has become abandoned or dedicated to the public, or of any determination
or development (including the institution of, or any such determination or development in, any proceeding in the United States
Patent and Trademark Office, the United States Copyright Office or any court) abandoning such Grantor’s ownership of any
such Patent, Trademark or Copyright, its right to register the same, or to keep and maintain the same, except, in each case, for
Dispositions not prohibited by the ABL Credit Agreement or where such occurrences individually or in the aggregate, could not reasonably
be expected to result in a Material Adverse Effect.
(c) In
the event that any Grantor (x) files an application for the registration of any Patent, Trademark or Copyright with the United
States Patent and Trademark Office or the United States Copyright Office, (y) acquires any such Patent, Trademark or Copyright
by purchase or assignment, or (z) files a Statement of Use or an Amendment to Allege Use with respect to any “intent to use”
Trademark application, in each case, after the Closing Date and to the extent the same constitutes Collateral (and other than as
a result of an application that is then subject to an Intellectual Property Security Agreement or Intellectual Property Security
Agreement Supplement becoming registered), it shall, (i) if the event giving rise to the obligation under this Section 4.03(c)
occurs during the first three Fiscal Quarters of any Fiscal Year, on or before the date on which financial statements are required
to be delivered pursuant to Section 5.01(a) of the ABL Credit Agreement for the Fiscal Quarter in which the relevant event
occurred or (ii) if the event giving rise to the obligation under this Section 4.03(c) occurs during the fourth Fiscal Quarter
of any Fiscal Year, on or before the date that is 60 days after the end of such Fiscal Quarter (or, in the case of each of clauses
(i) and (ii), such longer period as the Administrative Agent may reasonably agree), notify the Administrative Agent
and, execute and deliver to the Administrative Agent, at such Grantor’s sole cost and expense, any Intellectual Property
Security Agreement or Intellectual Property Security Agreement Supplement, as applicable, or any other instrument as the Administrative
Agent may reasonably request to evidence the Administrative Agent’s security interest in such registered Patent, Trademark
or Copyright (or application therefor), and the General Intangibles of such Grantor relating thereto or represented thereby.
(d) Each
Grantor shall take all actions necessary or reasonably requested by the Administrative Agent to (i) maintain and pursue each application
and to obtain and maintain the registration of each Patent, Trademark, Domain Name and, to the extent consistent with past practices,
Copyright that constitutes Collateral (now or hereafter existing), including by filing applications for renewal, affidavits of
use, affidavits of non contestability and, if consistent with good business judgment (as determined by such Grantor), by initiating
opposition and interference and cancellation proceedings against third parties, (ii) maintain and protect the secrecy or confidentiality
of its Trade Secrets and (iii) otherwise protect and preserve such Grantor’s rights in, and the validity or enforceability
of, its Intellectual Property Collateral, in each case except where failure to do so (A) could not reasonably be expected to result
in a Material Adverse Effect, or (B) is otherwise permitted under the ABL Credit Agreement.
(e) Each
Grantor shall promptly notify the Administrative Agent of any material infringement or misappropriation of such Grantor’s
Patents, Trademarks, Copyrights or Trade Secrets of which it becomes aware, and shall take such actions as are reasonable and appropriate
under the circumstances to protect such Patent, Trademark, Copyright or Trade Secret, except where such infringement, misappropriation
or dilution could not reasonably be expected to cause a Material Adverse Effect.
Section 4.04. Commercial
Tort Claims. After the Closing Date, on or before the date that is 60 days after the end of any Fiscal Quarter or Fiscal Year
(or such longer period as the Administrative Agent may reasonably agree), each relevant Grantor shall notify the Administrative
Agent of any Commercial Tort Claim with an individual value (as reasonably estimated by the US Borrower) in excess of $10,000,000
acquired by it, together with an update to Schedule 6 to the Perfection Certificate containing a summary description thereof
sufficient to create a security interest therein, and such Commercial Tort Claim (and the Proceeds thereof) shall automatically
constitute Collateral, all upon the terms of this Security Agreement.
Section 4.05. Insurance.
Except to the extent otherwise permitted to be retained by any Grantor or applied by any Grantor pursuant to the terms of the Loan
Documents, the Administrative Agent shall, at the time any proceeds of any insurance in respect of the Collateral are distributed
to the Administrative Agent, apply such proceeds at any time the Administrative Agent is exercising remedies in accordance with
Section 5.01, in accordance with Section 5.04 hereof. Each Grantor assumes all liability and responsibility in connection
with the Collateral acquired by it, and the liability of such Grantor to pay the Secured Obligations shall in no way be affected
or diminished by reason of the fact that such Collateral may be lost, destroyed, stolen, damaged or for any reason whatsoever unavailable
to such Grantor.
Section 4.06. Grantors
Remain Liable Under Contracts. Each Grantor (rather than the Administrative Agent or any Secured Party) shall remain liable
(as between itself and any relevant counterparty) to observe and perform all the conditions and obligations to be observed and
performed by it under any Contract relating to the Collateral, all in accordance with the terms and conditions thereof. Neither
the Administrative Agent nor any other Secured Party shall have any obligation or liability under any Contract by reason of or
arising out of this Security Agreement or the receipt by the Administrative Agent or any other Secured Party of any payment relating
to such Contract pursuant hereto, nor shall the Administrative Agent or any other Secured Party be obligated in any manner to perform
any of the obligations of any Grantor under or pursuant to any Contract, to make any payment, to make any inquiry as to the nature
or sufficiency of any performance or to collect the payment of any amounts which may have been assigned to them or to which they
may be entitled at any time or times
Section 4.07. Grantors
Remain Liable Under Accounts. Notwithstanding anything herein to the contrary, the Grantors shall remain liable under each
of the Accounts to observe and perform all of the conditions and obligations to be observed and performed by it thereunder, all
in accordance with the terms of any agreement giving rise to such Accounts. Neither the Administrative Agent nor any other Secured
Party shall have any obligation or liability under any Account (or any agreement giving rise thereto) by reason of or arising out
of this Security Agreement or the receipt by the Administrative Agent or any other Secured Party of any payment relating to such
Account pursuant hereto, nor shall the Administrative Agent or any other Secured Party be obligated in any manner to perform any
of the obligations of any Grantor under or pursuant to any Account (or any agreement giving rise thereto), to make any payment,
to make any inquiry as to the nature or the sufficiency of any payment received by them or as to the sufficiency of any performance
by any party under any Account (or any agreement giving rise thereto), to present or file any claim, to take any action to enforce
any performance or to collect the payment of any amounts which may have been assigned to them or to which they may be entitled
at any time or times.
ARTICLE 5
Remedies
Section 5.01. Remedies.
(a) Each
Grantor agrees that, at any time when an Event of Default has occurred and is continuing, but subject to the last paragraph of
Section 7.01 of the ABL Credit Agreement, the Administrative Agent may exercise any or all of the following rights and remedies
(in addition to the rights and remedies existing under applicable Requirements of Law):
(i) the rights and remedies
provided in this Security Agreement, the ABL Credit Agreement, or any other Loan Document; provided that this Section
5.01(a) shall not limit any rights available to the Administrative Agent prior to the occurrence and continuance of an Event
of Default;
(ii) the rights and remedies
available to a secured party under the UCC of each relevant jurisdiction (whether or not the UCC applies to the affected Collateral)
or under any other applicable Requirements of Law (including, without limitation, any law governing the exercise of a bank’s
right of setoff or bankers’ Lien) or in equity when a debtor is in default under a security agreement;
(iii) without notice (except
as specifically provided in Section 7.01 or elsewhere herein), demand or advertisement of any kind to any Grantor or any
other Person, but subject to the terms of any applicable lease agreement, personally, or by agents or attorneys, enter the premises
of any Grantor where any Collateral is located (through self help and without judicial process) to collect, receive, assemble,
process, appropriate, sell, lease, assign, grant an option or options to purchase or otherwise dispose of, deliver, or realize
upon, the Collateral or any part thereof in one or more parcels at one or more public or private sales (which sales may be adjourned
or continued from time to time with or without notice and may take place at such Grantor’s premises or elsewhere), for cash,
on credit or for future delivery without assumption of any credit risk, and upon such other terms as the Administrative Agent may
deem commercially reasonable;
(iv) upon one Business
Day’s written notice to the US Borrower, (A) transfer and register in its name or in the name of its nominee the whole or
any part of the Pledged Collateral and (B) exercise the voting and all other rights as a holder with respect thereto, to collect
and receive all cash dividends, interest, principal and other distributions made thereon and to otherwise act with respect to the
Pledged Collateral as though the Administrative Agent was the outright owner thereof; and
(v) to take possession
of the Collateral or any part thereof, by directing such Grantor in writing to deliver the same to the Administrative Agent at
any reasonable place or places designated by the Administrative Agent, in which event such Grantor shall at its own expense forthwith
cause the same to be moved to the place or places so designated by the Administrative Agent and there delivered to the Administrative
Agent.
(b) Each
Grantor acknowledges and agrees that compliance by the Administrative Agent, on behalf of the Secured Parties, with any applicable
state or federal Requirements of Law in connection with a disposition of the Collateral will not be considered to adversely affect
the commercial reasonableness of any sale of the Collateral.
(c) The
Administrative Agent shall have the right in any public sale and, to the extent permitted by applicable Requirements of Law, in
any private sale, to purchase for the benefit of the Administrative Agent and the Secured Parties, all or any part of the Collateral
so sold, free of any right of equity redemption that Grantor is permitted to release and waive pursuant to applicable Requirements
of Law, and, each Grantor hereby expressly releases such right to equity redemption to the extent permitted by applicable Requirements
of Law.
(d) Until
the Administrative Agent is able to effect a sale, lease, transfer or other disposition of any particular Collateral under this
Section 5.01, the Administrative Agent shall have the right to hold or use such Collateral, or any part thereof, to the
extent that it deems appropriate for the purpose of preserving such Collateral or the value of such Collateral, or for any other
purpose deemed reasonably appropriate by the Administrative Agent. At any time when an Event of Default has occurred and is continuing,
the Administrative Agent may, if it so elects, seek the appointment of a receiver or keeper to take possession of any Collateral
and to enforce any of the Administrative Agent’s remedies (for the benefit of the Administrative Agent and Secured Parties),
with respect to such appointment without prior notice or hearing as to such appointment.
(e) Notwithstanding
the foregoing, neither the Administrative Agent nor any Secured Party shall be required to (i) make any demand upon, or pursue
or exhaust any of their rights or remedies against, the Grantors, any other obligor, guarantor, pledgor or any other Person with
respect to the payment of the Secured Obligations or to pursue or exhaust any of their rights or remedies with respect to any Collateral
therefor or any direct or indirect Guarantee thereof, (ii) marshal the Collateral or any Guarantee of the Secured Obligations or
to resort to the Collateral or any such Guarantee in any particular order, or (iii) effect a public sale of any Collateral.
(f) Each
Grantor recognizes that the Administrative Agent may be unable to effect a public sale of any or all the Pledged Collateral and
may be compelled to resort to one or more private sales thereof. Each Grantor also acknowledges that any private sale may result
in prices and other terms less favorable to the seller than if such sale were a public sale and, notwithstanding such circumstances,
agrees that no such private sale shall be deemed to have been made in a commercially unreasonable manner solely by virtue of such
sale being private. The Administrative Agent shall be under no obligation to delay a sale of any of the Pledged Collateral for
the period of time necessary to permit any Grantor or the issuer of any Pledged Collateral to register such securities for public
sale under the Securities Act of 1933, as amended, or under applicable state securities laws, even if any Grantor and the issuer
would agree to do so.
(g) The
Administrative Agent and each Secured Party (by its acceptance of the benefits of this Security Agreement) acknowledges and agrees
that notwithstanding any other provisions in this Security Agreement or any other Loan Document, the exercise of rights or remedies
with respect to certain Collateral and the enforcement of any security interests therein may be limited or restricted by, or require
any consents, authorizations approvals or licenses under, any Requirement of Law.
(h) Notwithstanding
the foregoing, any rights and remedies provided in this Section 5.01 shall be subject to the ABL Intercreditor Agreement
(and any other Applicable Intercreditor Agreement).
Section 5.02. Grantors’
Obligations Upon Default. Upon the request of the Administrative Agent at any time when an Event of Default has occurred and
is continuing, but subject to the last paragraph of Section 7.01 of the ABL Credit Agreement, each Grantor will:
(a) at
its own cost and expense (i) assemble and make available to the Administrative Agent, the Collateral and all books and records
relating thereto at any place or places reasonably specified by the Administrative Agent, whether at such Grantor’s premises
or elsewhere, (ii) deliver all tangible evidence of its Accounts and Contract Rights (including, without limitation, all documents
evidencing the Accounts and all Contracts) and such books and records to the Administrative Agent or to its representatives (copies
of which evidence and books and records may be retained by such Grantor) and (iii) if the Administrative Agent so directs and in
a form and in a manner reasonably satisfactory to the Administrative Agent, legend the Accounts and the Contracts, as well as books,
records and documents (if any) of such Grantor evidencing or pertaining to such Accounts and Contracts with an appropriate reference
to the fact that such Accounts and Contracts have been assigned to the Administrative Agent and that the Administrative Agent has
a security interest therein; and
(b) subject
to the terms of any applicable lease agreement, permit the Administrative Agent and/or its representatives and/or agents, to enter,
occupy and use any premises where all or any part of the Collateral, or the books and records relating thereto, or both, are located,
to take possession of all or any part of the Collateral or the books and records relating thereto, or both, to remove all or any
part of the Collateral or the books and records relating thereto, or both, and to conduct sales of the Collateral, without any
obligation to pay any Grantor for such use and occupancy.
Section 5.03. Intellectual
Property Remedies.
(a) For
the purpose of enabling the Administrative Agent to exercise the rights and remedies under this Article 5 at any time when
an Event of Default has occurred and is continuing, but subject to the last paragraph of Section 7.01 of ABL Credit Agreement,
and at such time as the Administrative Agent shall be lawfully entitled to exercise such rights and remedies, each Grantor hereby
grants to the Administrative Agent a power of attorney to sign any document which may be required by the United States Patent and
Trademark Office, the United States Copyright Office or similar registrar or domain name registrar in order to effect an absolute
assignment of all right, title and interest in each registered Patent, Trademark, Domain Name and Copyright and each application
for any such registration, and record the same. At any time when an Event of Default has occurred and is continuing, but subject
to the last paragraph of Section 7.01 of the ABL Credit Agreement, the Administrative Agent may (i) declare the entire right,
title and interest of such Grantor in and to each item of Intellectual Property Collateral to be vested in the Administrative Agent
for the benefit of the Secured Parties, in which event such right, title and interest shall immediately vest in the Administrative
Agent for the benefit of the Secured Parties, and the Administrative Agent shall be entitled to exercise the power of attorney
referred to in this Section 5.03 to execute, cause to be acknowledged and notarized and record such absolute assignment
with the applicable agency or registrar; (ii) sell any Grantor’s Inventory directly to any Person, including without limitation
Persons who have previously purchased any Grantor’s Inventory from such Grantor and in connection with any such sale or other
enforcement of the Administrative Agent’s rights under this Security Agreement and subject to any restrictions contained
in applicable third party licenses entered into by such Grantor, sell Inventory which bears any Trademark owned by or licensed
to any Grantor and any Inventory that is covered by any Intellectual Property Collateral owned by or licensed to any Grantor, and
the Administrative Agent may finish any work in process and affix any relevant Trademark owned by or licensed to such Grantor,
and sell such Inventory as provided herein; (iii) direct such Grantor to refrain, in which event such Grantor shall refrain, from
using any Intellectual Property Collateral in any manner whatsoever, directly or indirectly; and (iv) assign or sell any Intellectual
Property, in each case to the extent constituting Collateral, as well as the goodwill of such Grantor’s business connected
with the use of and symbolized by any such Trademark and the right to carry on the business and use the assets of such Grantor
in connection with which any such Trademark or Domain Name has been used.
(b) Each
Grantor hereby grants to the Administrative Agent an irrevocable (until the Termination Date), nonexclusive, royalty free, world
wide license to its right to use, license or sublicense any IP Rights now owned or hereafter acquired by such Grantor, wherever
the same may be located, and including in such license access to all media in which any of the licensed items may be recorded or
stored and (to the extent not prohibited by any applicable license) to all computer software and programs used for compilation
or printout thereof. The use of the license granted to the Administrative Agent pursuant to the preceding sentence may be exercised,
at the option of the Administrative Agent, only when an Event of Default has occurred and is continuing, but subject to the last
paragraph of Section 7.01 of the ABL Credit Agreement; provided that such licenses to be granted hereunder with respect
to Trademarks shall be subject to, with respect to the goods and/or services on which such Trademarks are used, the maintenance
of quality standards that are sufficient to preserve the validity of such Trademarks and are consistent with past practices.
Section 5.04. Application
of Proceeds.
(a) Subject
to the ABL Intercreditor Agreement (and any other Applicable Intercreditor Agreement), the Administrative Agent shall apply the
proceeds of any collection, sale, foreclosure or other realization upon any Collateral received by it pursuant to the exercise
of remedies in accordance with this Security Agreement and as set forth in Section 2.18(b) of the ABL Credit Agreement.
(b) Except
as otherwise provided herein or in any other Loan Document, the Administrative Agent shall have absolute discretion as to the time
of application of any such proceeds, money or balance received by it pursuant to the exercise of remedies in accordance with this
Security Agreement. Upon any sale of Collateral by the Administrative Agent (including pursuant to a power of sale granted by statute
or under a judicial proceeding), a receipt by the Administrative Agent or of the officer making the sale of such proceeds, moneys
or balances shall be a sufficient discharge to the purchaser or purchasers of the Collateral so sold and such purchaser or purchasers
shall not be obligated to see to the application of any part of the purchase money paid over to the Administrative Agent or such
officer or be answerable in any way for the misapplication thereof. It is understood that the Grantors shall remain jointly and
severally liable to the extent of any deficiency between the amount of the proceeds of the Collateral and the aggregate amount
of the Secured Obligations.
ARTICLE 6
Account Verification; Attorney in Fact; Proxy
Section 6.01. Account
Verification. The Administrative Agent may at any time and from time to time when an Event of Default has occurred and is continuing,
but subject to the last paragraph of Section 7.01 of the ABL Credit Agreement, and upon prior written notice to the relevant
Grantor, in the Administrative Agent’s own name, in the name of a nominee of the Administrative Agent, or in the name of
any Grantor, communicate (by mail, telephone, facsimile or otherwise) with the Account Debtors of such Grantor, parties to Contracts
with such Grantor and obligors in respect of Instruments of such Grantor to verify with such Persons, to the Administrative Agent’s
reasonable satisfaction, the existence, amount, terms of, and any other matter relating to, Accounts, Contracts, Instruments, Chattel
Paper, payment intangibles and/or other Receivables that constitute Collateral.
Section 6.02. Authorization
for the Administrative Agent to Take Certain Action.
(a) Each
Grantor hereby irrevocably authorizes the Administrative Agent and appoints the Administrative Agent (and all officers, employees
or agents designated by the Administrative Agent) as its true and lawful attorney in fact (i) at any time and from time to time
in its sole discretion (A) to execute (to the extent necessary under the law of the applicable jurisdiction) on behalf of such
Grantor as debtor and to file financing statements necessary or desirable in the Administrative Agent’s reasonable discretion
to perfect and to maintain the perfection and priority of the Administrative Agent’s security interest in the Collateral,
(B) to file a carbon, photographic or other reproduction of this Security Agreement as a financing statement and to file any amendment
of a financing statement with respect to the Collateral (which would not add new collateral or add a debtor, except as otherwise
provided for herein or in any other Loan Document) in such offices as the Administrative Agent in its reasonable discretion deems
necessary or desirable to perfect and to maintain the perfection and priority of the Administrative Agent’s security interest
in the Collateral and (C) during the continuation of an Event of Default after prior written notice to the US Borrower, but subject
to the last paragraph of Section 7.01 of the ABL Credit Agreement, in the sole discretion of the Administrative Agent (in
the name of such Grantor or otherwise) to contact and enter into one or more agreements with the issuers of uncertificated securities
that constitute Pledged Collateral or with securities intermediaries holding Pledged Collateral as may be necessary or advisable
to give the Administrative Agent Control over such Pledged Collateral in accordance with the terms hereof (including, without limitation,
Section 2.01(c) of this Security Agreement) and (ii) during the continuation of an Event of Default, in the sole discretion
of the Administrative Agent (in the name of such Grantor or otherwise) after prior written notice to the US Borrower, (A) to endorse
and collect any cash proceeds of the Collateral and to apply the proceeds of any Collateral received by the Administrative Agent
to the Secured Obligations as provided herein or in the ABL Credit Agreement or any other Loan Document, subject to the terms of
the ABL Intercreditor Agreement (and any other Applicable Intercreditor Agreement), (B) to demand payment or enforce payment of
any Receivable in the name of the Administrative Agent or such Grantor and to endorse any check, draft and/or any other instrument
for the payment of money relating to any such Receivable, (C) to sign such Grantor’s name on any invoice or bill of lading
relating to any Receivable, any draft against any Account Debtor of such Grantor, and/or any assignment and/or verification of
any Receivable, (D) to exercise all of any Grantor’s rights and remedies with respect to the collection of any Receivable
and any other Collateral, (E) to settle, adjust, compromise, extend or renew any Receivable, (F) to settle, adjust or compromise
any legal proceedings brought to collect any Receivable, (G) to prepare, file and sign such Grantor’s name on a proof of
claim in bankruptcy or similar document against any Account Debtor of such Grantor, (H) to prepare, file and sign such Grantor’s
name on any notice of Lien, assignment or satisfaction of Lien or similar document in connection with any Receivable, (I) to change
the address for delivery of mail addressed to such Grantor to such address as the Administrative Agent may designate and to receive,
open and dispose of all mail addressed to such Grantor (provided copies of such mail are provided to such Grantor), (J) to discharge
past due taxes, assessments, charges, fees or Liens on the Collateral (except for Permitted Liens), (K) to make, settle and adjust
claims in respect of Collateral under policies of insurance and endorse the name of such Grantor on any check, draft, instrument
or other item of payment for the proceeds of such policies of insurance, and make all determinations and decisions with respect
thereto (L) to obtain or maintain the policies of insurance of the types referred to in Section 5.05 of the ABL Credit Agreement
or to pay any premium in whole or in part relating thereto and (M) to do all other acts and things or institute any proceedings
which the Administrative Agent may reasonably deem to be necessary (pursuant to this Security Agreement and the other Loan Documents
and in accordance with applicable law) to carry out the terms of this Security Agreement and to protect the interests of the Secured
Parties; and, when and to the extent required pursuant to Section 9.03(a) of the ABL Credit Agreement, such Grantor agrees
to reimburse the Administrative Agent for any payment made in connection with this paragraph or any expense (including reasonable
and documented attorneys’ fees, court costs and out of pocket expenses) and other charges related thereto incurred by the
Administrative Agent in connection with any of the foregoing (it being understood that any such sums shall constitute additional
Secured Obligations); provided that, this authorization shall not relieve such Grantor of any of its obligations under this Security
Agreement or under the ABL Credit Agreement.
(b) All
such acts of such attorney or designee are hereby ratified and approved by each Grantor. The powers conferred on the Administrative
Agent, for the benefit of the Administrative Agent and Secured Parties, under this Section 6.02 are solely to protect the Administrative
Agent’s interests in the Collateral and shall not impose any duty upon the Administrative Agent or any Secured Party to exercise
any such powers.
Section 6.03. PROXY.
EACH GRANTOR HEREBY IRREVOCABLY (UNTIL THE TERMINATION DATE) CONSTITUTES AND APPOINTS THE ADMINISTRATIVE AGENT AS ITS PROXY AND
ATTORNEY IN FACT (AS SET FORTH IN SECTION 6.02 ABOVE) WITH RESPECT TO THE PLEDGED COLLATERAL, INCLUDING, DURING THE CONTINUATION
OF AN EVENT OF DEFAULT, BUT SUBJECT TO THE LAST PARAGRAPH OF SECTION 7.01 OF THE ABL CREDIT AGREEMENT, AND SUBJECT TO ANY
NOTICE REQUIREMENTS AS SET FORTH HEREIN, THE RIGHT TO VOTE SUCH PLEDGED COLLATERAL, WITH FULL POWER OF SUBSTITUTION TO DO SO. IN
ADDITION TO THE RIGHT TO VOTE ANY SUCH PLEDGED COLLATERAL, THE APPOINTMENT OF THE ADMINISTRATIVE AGENT AS PROXY AND ATTORNEY IN
FACT SHALL, DURING THE CONTINUATION OF AN EVENT OF DEFAULT AND SUBJECT TO ANY NOTICE REQUIREMENTS AS SET FORTH HEREIN, INCLUDE
THE RIGHT TO EXERCISE ALL OTHER RIGHTS, POWERS, PRIVILEGES AND REMEDIES TO WHICH A HOLDER OF SUCH PLEDGED COLLATERAL WOULD BE ENTITLED
(INCLUDING GIVING OR WITHHOLDING WRITTEN CONSENTS OF SHAREHOLDERS, CALLING SPECIAL MEETINGS OF SHAREHOLDERS AND VOTING AT SUCH
MEETINGS). SUCH PROXY SHALL BE EFFECTIVE, AUTOMATICALLY AND WITHOUT THE NECESSITY OF ANY ACTION (INCLUDING ANY TRANSFER OF ANY
SUCH PLEDGED COLLATERAL ON THE RECORD BOOKS OF THE ISSUER THEREOF) BY ANY PERSON (INCLUDING THE ISSUER OF SUCH PLEDGED COLLATERAL
OR ANY OFFICER OR ADMINISTRATIVE AGENT THEREOF), IN EACH CASE ONLY WHEN AN EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING AND
UPON ONE BUSINESS DAYS’ PRIOR WRITTEN NOTICE TO THE US BORROWER.
Section 6.04. NATURE
OF APPOINTMENT; LIMITATION OF DUTY. THE APPOINTMENT OF THE ADMINISTRATIVE AGENT AS PROXY AND ATTORNEY IN FACT IN THIS ARTICLE
6 IS COUPLED WITH AN INTEREST AND SHALL BE IRREVOCABLE UNTIL THE DATE ON WHICH THIS SECURITY AGREEMENT IS TERMINATED IN ACCORDANCE
WITH SECTION 7.12. NOTWITHSTANDING ANYTHING CONTAINED HEREIN, NEITHER THE ADMINISTRATIVE AGENT, NOR ANY SECURED PARTY,
NOR ANY OF THEIR RESPECTIVE AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR REPRESENTATIVES SHALL HAVE ANY DUTY TO EXERCISE
ANY RIGHT OR POWER GRANTED HEREUNDER OR OTHERWISE OR TO PRESERVE THE SAME AND SHALL NOT BE LIABLE FOR ANY FAILURE TO DO SO OR
FOR ANY DELAY IN DOING SO, EXCEPT TO THE EXTENT SUCH DAMAGES ARE ATTRIBUTABLE TO THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF
SUCH PERSON AS FINALLY DETERMINED BY A COURT OF COMPETENT JURISDICTION IN A FINAL AND NON APPEALABLE DECISION SUBJECT TO SECTION
7.20 HEREOF; PROVIDED, THAT THE FOREGOING EXCEPTION SHALL NOT BE CONSTRUED TO OBLIGATE THE ADMINISTRATIVE AGENT TO
TAKE OR REFRAIN FROM TAKING ANY ACTION WITH RESPECT TO THE COLLATERAL.
ARTICLE 7
General Provisions
Section 7.01. Waivers.
To the maximum extent permitted by applicable Requirements of Law, each Grantor hereby waives notice of the time and place of any
judicial hearing in connection with the Administrative Agent’s taking possession of the Collateral or of any public sale
or the time after which any private sale or other disposition of all or any part of the Collateral may be made, including without
limitation, any and all prior notice and hearing for any prejudgment remedy or remedies. To the extent such notice may not be waived
under applicable Requirements of Law, any notice made shall be deemed reasonable if sent to any Grantor, addressed as set forth
in Article 8, at least 10 days prior to (a) the date of any such public sale or (b) the time after which any such private
Disposition may be made. To the maximum extent permitted by applicable Requirements of Law, each Grantor waives all claims, damages
and demands against the Administrative Agent arising out of the repossession, retention or sale of the Collateral, except those
arising out of the bad faith, the gross negligence or willful misconduct of the Administrative Agent as determined by a court of
competent jurisdiction in a final and non appealable judgment. To the extent it may lawfully do so, each Grantor absolutely and
irrevocably waives and relinquishes the benefit and advantage of, and covenants not to assert against the Administrative Agent,
any valuation, stay (other than an automatic stay under any applicable Debtor Relief Law), appraisal, extension, moratorium, redemption
or similar law and any and all rights or defenses it may have as a surety now or hereafter existing which, but for this provision,
might be applicable to the sale of any Collateral made under the judgment, order or decree of any court, or privately under the
power of sale conferred by this Security Agreement, or otherwise. Except as otherwise specifically provided herein, each Grantor
hereby waives presentment, demand, protest, any notice (to the maximum extent permitted by applicable Requirements of Law) of any
kind or all other requirements as to the time, place and terms of sale in connection with this Security Agreement or any Collateral.
Section 7.02. Limitation
on the Administrative Agent’s and Secured Party’s Duty with Respect to the Collateral. The Administrative Agent
shall not have any obligation to clean or otherwise prepare the Collateral for sale. The Administrative Agent shall use reasonable
care with respect to the Collateral in its possession; provided that the Administrative Agent shall be deemed to have exercised
reasonable care in the custody and preservation of any Collateral in its possession if such Collateral is accorded treatment substantially
equal to which it accords its own property. Neither the Administrative Agent nor any Secured Party shall have any other duty as
to any Collateral in its possession or control or in the possession or control of any agent or nominee of the Administrative Agent
or of such Secured Party, or any income thereon or as to the preservation of rights against prior parties or any other rights pertaining
thereto. To the extent that applicable Requirements of Law impose duties on the Administrative Agent to exercise remedies in a
commercially reasonable manner, each Grantor acknowledges and agrees that it would be commercially reasonable for the Administrative
Agent, subject to Section 7.06, (a) to fail to incur expenses to prepare Collateral for Disposition or otherwise to transform raw
material or work in process into finished goods or other finished products for Disposition,
(b) to
fail to obtain third party consents for access to Collateral to be Disposed of (unless expressly required under any applicable
agreement), or to obtain or, if not required by any other Requirement of Law, to fail to obtain governmental or third party consents
for the collection or Disposition of Collateral to be collected or Disposed of, (c) to fail to exercise collection remedies against
Account Debtors or other Persons obligated on Collateral or to remove Liens on or any adverse claims against Collateral, (d) to
exercise collection remedies against Account Debtors and other Persons obligated on Collateral directly or through the use of collection
agencies and other collection specialists, (e) to advertise Dispositions of Collateral through publications or media of general
circulation, whether or not the Collateral is of a specialized nature, (f) to contact other Persons, whether or not in the same
business as any Grantor, for expressions of interest in acquiring all or any portion of such Collateral, (g) to hire one or more
professional auctioneers to assist in the Disposition of Collateral, whether or not the Collateral is of a specialized nature,
(h) to Dispose of Collateral by utilizing internet sites that provide for the auction of assets of the types included in the Collateral
or that have the reasonable capacity of doing so, or that match buyers and sellers of assets, (i) to Dispose of assets in wholesale
rather than retail markets, (j) to disclaim Disposition warranties, such as title, possession or quiet enjoyment, (k) to purchase
insurance or credit enhancements (which, subject to Section 9.03 of the ABL Credit Agreement, shall be at the cost of the
Grantors) to insure the Administrative Agent against risks of loss in connection with any collection or Disposition of Collateral
or to provide to the Administrative Agent a guaranteed return from the collection or Disposition of Collateral or (l) to the extent
deemed appropriate by the Administrative Agent, to obtain the services of other brokers, investment bankers, consultants and other
professionals to assist the Administrative Agent in the collection or Disposition of any of the Collateral. Each Grantor acknowledges
that the purpose of this Section 7.02 is to provide non exhaustive indications of what actions or omissions by the Administrative
Agent would be commercially reasonable in the Administrative Agent’s exercise of remedies with respect to the Collateral
and that other actions or omissions by the Administrative Agent shall not be deemed commercially unreasonable solely on account
of not being indicated in this Section 7.02. Without limitation upon the foregoing, nothing contained in this Section
7.02 shall be construed to grant any rights to any Grantor or to impose any duties on the Administrative Agent that would not
have been granted or imposed by this Security Agreement or by applicable law in the absence of this Section 7.02.
Section 7.03. Compromises
and Collection of Collateral. Each Grantor and the Administrative Agent recognize that setoffs, counterclaims, defenses and other
claims may be asserted by obligors with respect to certain of the Receivables, that certain of the Receivables may be or become
uncollectible in whole or in part and that the expense and probability of success in litigating a disputed Receivable may exceed
the amount that reasonably may be expected to be recovered with respect to any Receivable. In view of the foregoing, each Grantor
agrees that the Administrative Agent may at any time and from time to time, if an Event of Default has occurred and is continuing
and upon prior written notice to the relevant Grantor, compromise with the obligor on any Receivable, accept in full payment of
any Receivable such amount as the Administrative Agent in its sole discretion shall determine or abandon any Receivable, and any
such action by the Administrative Agent shall be commercially reasonable so long as the Administrative Agent acts in good faith
based on information known to it at the time it takes any such action.
Section 7.04. Administrative
Agent Performance of Debtor Obligations. Without having any obligation to do so, the Administrative Agent may, at any time
when an Event of Default has occurred and is continuing, but subject to the last paragraph of Section 7.01 of the ABL Credit
Agreement, and upon prior written notice to the US Borrower, perform or pay any obligation which any Grantor has agreed to perform
or pay under this Security Agreement and which obligation is due and unpaid and not being contested by such Grantor in good faith,
and such Grantor shall reimburse the Administrative Agent for any amounts paid by the Administrative Agent pursuant to this Section
7.04 as a Secured Obligation payable in accordance with Section 9.03(a) of the ABL Credit Agreement.
Section 7.05. No
Waiver; Amendments; Cumulative Remedies. No delay or omission of the Administrative Agent (subject to the provisions of Article
8 of the ABL Credit Agreement) to exercise any right or remedy granted under this Security Agreement shall impair such right
or remedy or be construed to be a waiver of any Default or an acquiescence therein, and no single or partial exercise of any such
right or remedy shall preclude any other or further exercise thereof or the exercise of any other right or remedy. No waiver, amendment
or other variation of the terms, conditions or provisions of this Security Agreement whatsoever shall be valid unless in writing
signed by the Grantors and the Administrative Agent with the concurrence or at the direction of the Lenders to the extent required
under Section 9.02 of the ABL Credit Agreement and then only to the extent in such writing specifically set forth. All rights
and remedies contained in this Security Agreement or afforded by law shall be cumulative and all shall be available to the Administrative
Agent until the Termination Date.
Section 7.06. Limitation
by Law; Severability of Provisions. All rights, remedies and powers provided in this Security Agreement may be exercised only
to the extent that the exercise thereof does not violate any applicable Requirements of Law, and all of the provisions of this
Security Agreement are intended to be subject to all applicable Requirements of Law that may be controlling and to be limited
to the extent necessary so that such provisions do not render this Security Agreement invalid, unenforceable or not entitled to
be recorded or registered, in whole or in part. To the extent permitted by law, any provision of this Security Agreement held
to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such
invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions
of this Security Agreement; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such
provision in any other jurisdiction. If the exercise of rights or remedies with respect to certain Collateral and the enforcement
of any security interests therein require any consents, authorizations approvals or licenses under any Requirement of Law, no
such actions shall be taken unless and until all requisite consents, authorizations approvals or licenses have been obtained.
Section 7.07. Security
Interest Absolute. All rights of the Administrative Agent hereunder, the security interests granted hereunder and all obligations
of each Grantor hereunder shall be absolute and unconditional irrespective of (a) any lack of validity or enforceability of the
ABL Credit Agreement, any other Loan Document, any agreement with respect to any of the Secured Obligations or any other agreement
or instrument relating to any of the foregoing, (b) any change in the time, manner or place of payment of, or in any other term
of, all or any of the Secured Obligations, or any other amendment or waiver of or any consent to any departure from the ABL Credit
Agreement, any other Loan Document or any other agreement or instrument relating to the foregoing, (c) any exchange, release or
non perfection of any Lien on any Collateral, or any release or amendment or waiver of or consent under or departure from any guaranty,
securing or guaranteeing all or any of the Secured Obligations, (d) any bankruptcy, insolvency, reorganization, arrangement, readjustment,
composition, liquidation or the like of any Grantor, (e) any exercise or non exercise, or any waiver of, any right, remedy, power
or privilege under or in respect of this Security Agreement or any other Loan Document or (f) any other circumstance that might
otherwise constitute a defense available to, or a discharge of, any Grantor in respect of the Secured Obligations or this Security
Agreement (other than a termination of any Lien contemplated by Section 7.12 or the occurrence of the Termination Date).
Section 7.08. Benefit
of Security Agreement. The terms and provisions of this Security Agreement shall be binding upon and inure to the benefit of
each Grantor, the Administrative Agent and the Secured Parties and their respective successors and permitted assigns (including
all Persons who become bound as a debtor to this Security Agreement). No sales of participations, assignments, transfers, or other
dispositions of any agreement governing the Secured Obligations or any portion thereof or interest therein shall in any manner
impair the Lien granted to the Administrative Agent hereunder for the benefit of the Administrative Agent and the Secured Parties.
Section 7.09. [RESERVED]
Section 7.10. Additional
Subsidiaries. Each Person required to become a Loan Party pursuant to and in accordance with Section 5.12(a) of the
ABL Credit Agreement shall, within the time periods specified in Section 5.12(a) of the ABL Credit Agreement, execute an
instrument in the form of Exhibit D. Upon the execution and delivery by the Administrative Agent and any Restricted Subsidiary
of an instrument in the form of Exhibit D in accordance with Section 5.12(a) of the ABL Credit Agreement, such Restricted
Subsidiary shall become a Grantor hereunder with the same force and effect as if such Restricted Subsidiary was originally named
as a Grantor herein. The execution and delivery of any such instrument shall not require the consent of any other Grantor hereunder.
The rights and obligations of each Grantor hereunder shall remain in full force and effect notwithstanding the addition of any
new Grantor as a party to this Security Agreement.
Section 7.11. Headings.
The titles of and section headings in this Security Agreement are for convenience of reference only, and shall not govern the interpretation
of any of the terms and provisions of this Security Agreement.
Section 7.12. Termination
or Release.
(a) This
Security Agreement shall continue in effect until the Termination Date, and the Liens granted hereunder shall automatically be
released, in whole or in part, in the circumstances described in the ABL Credit Agreement, including Article 8 thereof.
(b) In
connection with any termination or release pursuant to paragraph (a) above, the Administrative Agent shall promptly execute
(if applicable) and deliver to any Grantor, at such Grantor’s expense, all UCC termination statements and similar documents
that such Grantor shall reasonably request to evidence and/or effectuate such termination or release and deliver all applicable
Pledged Collateral. Any execution and delivery of documents pursuant to this Section 7.12 shall be without recourse to or
representation or warranty by the Administrative Agent or any Secured Party. The US Borrower shall reimburse the Administrative
Agent for all reasonable and documented costs and out of pocket expenses, including the fees and expenses of one outside counsel
(and, if necessary, of one local counsel in any relevant jurisdiction), incurred by it in connection with any action contemplated
by this Section 7.12 pursuant to and to the extent required by Section 9.03(a) of the ABL Credit Agreement.
(c) The
Administrative Agent shall have no liability whatsoever to any other Secured Party as the result of any release of Collateral by
it in accordance with (or which the Administrative Agent in good faith believes to be in accordance with) the terms of this Section
7.12.
Section 7.13. Entire
Agreement. This Security Agreement, together with the other Loan Documents and the ABL Intercreditor Agreement (and any other
Applicable Intercreditor Agreement), embodies the entire agreement and understanding between each Grantor and the Administrative
Agent relating to the Collateral and supersedes all prior agreements and understandings between any Grantor and the Administrative
Agent relating to the Collateral.
Section 7.14. CHOICE
OF LAW. THIS SECURITY AGREEMENT AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS SECURITY AGREEMENT,
WHETHER IN TORT, CONTRACT (AT LAW OR IN EQUITY) OR OTHERWISE, SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.
Section 7.15. CONSENT
TO JURISDICTION; CONSENT TO SERVICE OF PROCESS.
(a) EACH
PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION (SUBJECT
TO THE LAST SENTENCE OF THIS CLAUSE (A)) OF ANY U.S. FEDERAL OR NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN, IN THE
CITY OF NEW YORK (OR ANY APPELLATE COURT THEREFROM) OVER ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS SECURITY
AGREEMENT AND AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING SHALL (EXCEPT AS PERMITTED BELOW) BE HEARD AND
DETERMINED IN SUCH NEW YORK STATE OR, TO THE EXTENT PERMITTED BY APPLICABLE REQUIREMENTS OF LAW, IN SUCH FEDERAL COURT. EACH PARTY
HERETO AGREES THAT SERVICE OF ANY PROCESS, SUMMONS, NOTICE OR DOCUMENTS BY REGISTERED MAIL ADDRESSED TO SUCH PERSON SHALL BE EFFECTIVE
SERVICE OF PROCESS AGAINST SUCH PERSON FOR ANY SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT. EACH PARTY HERETO AGREES THAT
A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER
MANNER PROVIDED BY APPLICABLE REQUIREMENTS OF LAW. EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST
EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT,
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS SECURITY AGREEMENT IN ANY SUCH COURT. EACH PARTY HERETO HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE REQUIREMENTS OF LAW, ANY CLAIM OR DEFENSE OF AN INCONVENIENT FORUM TO THE
MAINTENANCE OF SUCH ACTION, SUIT OR PROCEEDING IN ANY SUCH COURT. EACH PARTY HERETO AGREES THAT THE ADMINISTRATIVE AGENT AND SECURED
PARTIES RETAIN THE RIGHT TO BRING PROCEEDINGS AGAINST ANY GRANTOR IN THE COURTS OF ANY OTHER JURISDICTION SOLELY IN CONNECTION
WITH THE EXERCISE OF ANY RIGHTS IN RESPECT OF THE COLLATERAL UNDER THIS SECURITY AGREEMENT.
(b) TO
THE EXTENT PERMITTED BY APPLICABLE REQUIREMENTS OF LAW, EACH PARTY TO THIS SECURITY AGREEMENT HEREBY IRREVOCABLY WAIVES PERSONAL
SERVICE OF ANY AND ALL PROCESS UPON IT AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY REGISTERED MAIL (OR ANY SUBSTANTIALLY
SIMILAR FORM OF MAIL) DIRECTED TO IT AT ITS ADDRESS FOR NOTICES AS PROVIDED FOR IN SECTION 9.01 OF THE ABL CREDIT AGREEMENT.
EACH PARTY TO THIS SECURITY AGREEMENT HEREBY WAIVES ANY OBJECTION TO SUCH SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVES AND
AGREES NOT TO PLEAD OR CLAIM IN ANY ACTION OR PROCEEDING COMMENCED HEREUNDER THAT SERVICE OF PROCESS WAS INVALID AND INEFFECTIVE.
NOTHING IN THIS SECURITY AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY TO THIS SECURITY AGREEMENT TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY APPLICABLE REQUIREMENTS OF LAW.
Section 7.16. WAIVER
OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE REQUIREMENTS OF LAW,
ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY SUIT, ACTION, LEGAL PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT
OR ANY OTHER THEORY) DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS SECURITY AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER
PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE
THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS SECURITY AGREEMENT
BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
Section 7.17. Indemnity.
Each Grantor hereby agrees to indemnify the Indemnitees, as, and to the extent, set forth in Section 9.03 of the ABL Credit
Agreement.
Section 7.18. Counterparts.
This Security Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which
shall constitute an original, but all of which when taken together shall constitute a single contract. Delivery of an executed
counterpart of a signature page of this Security Agreement by facsimile or by email as a “.pdf’ or “.tif’
attachment or other electronic transmission shall be effective as delivery of a manually executed counterpart of this Security
Agreement.
Section 7.19. Waiver
of Consequential Damages, Etc. To the extent permitted by applicable law, none of the Grantors or Secured Parties shall assert,
and each hereby waives, any claim against each other or any Related Party thereof, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of,
this Security Agreement or any agreement or instrument contemplated hereby, except, in the case of any claim by any Indemnitee
against any of the Grantors, to the extent such damages would otherwise be subject to indemnification pursuant to the terms of
Section 7.17.
Section 7.20. Successors
and Assigns. Whenever in this Security Agreement any party hereto is referred to, such reference shall be deemed to include
the successors and permitted assigns of such party and all covenants, promises and agreements by or on behalf of any Grantor or
the Administrative Agent in this Security Agreement shall bind and inure to the benefit of their respective successors and permitted
assigns. Except in a transaction expressly permitted under the ABL Credit Agreement, no Grantor may assign any of its rights or
obligations hereunder without the written consent of the Administrative Agent.
Section 7.21. Survival
of Agreement. Without limiting any provision of the ABL Credit Agreement or Section 7.17 hereof, all covenants, agreements,
indemnities, representations and warranties made by the Grantors in the Loan Documents and in the certificates or other instruments
delivered in connection with or pursuant to this Security Agreement or any other Loan Document shall be considered to have been
relied upon by the Lenders and shall survive the execution and delivery of the Loan Documents and the making of any Loans, regardless
of any investigation made by any such Lender or on its behalf and notwithstanding that the Administrative Agent or any Lender
may have had notice or knowledge of any Default or Event of Default or incorrect representation or warranty at the time any credit
is extended under the ABL Credit Agreement, and shall continue in full force and effect until the Termination Date, or with respect
to any individual Grantor until such Grantor is otherwise released from its obligations under this Security Agreement in accordance
with the terms hereof and the ABL Credit Agreement.
ARTICLE 8
Notices
Section 8.01. Sending
Notices. Any notice required or permitted to be given under this Security Agreement shall be delivered in accordance with Section
9.01 of the ABL Credit Agreement (it being understood and agreed that references in such Section to “herein,” “hereunder”
and other similar terms shall be deemed to be references to this Security Agreement).
Section 8.02. Change
in Address for Notices. The Administrative Agent, any Grantor and any Lender may change the address or facsimile number for
service of notice upon it by a notice in writing to the other parties hereto.
ARTICLE 9
The Administrative Agent
Bank of America, N.A.
has been appointed Administrative Agent for the Lenders hereunder pursuant to Article 8 of the ABL Credit Agreement. It
is expressly understood and agreed by the parties to this Security Agreement that any authority conferred upon the Administrative
Agent hereunder is subject to the terms of the delegation of authority made by the Lenders to the Administrative Agent pursuant
to the ABL Credit Agreement, and that the Administrative Agent has agreed to act (and any successor Administrative Agent shall
act) as such hereunder only on the express conditions contained in such Article 8. Any successor Administrative Agent appointed
pursuant to Article 8 of the ABL Credit Agreement shall be entitled to all the rights, interests and benefits of the Administrative
Agent hereunder.
By accepting the benefits
of this Security Agreement and each other Loan Document, each Secured Party expressly acknowledges and agrees that this Security
Agreement and each other Loan Document may be enforced only by the action of the Administrative Agent, and that such Secured Party
shall not have any right individually to seek to enforce or to enforce this Security Agreement or to realize upon the security
to be granted hereby, it being understood and agreed that such rights and remedies may be exercised by the Administrative Agent
for the benefit of the Secured Parties upon the terms of this Security Agreement and the other Loan Documents.
The Administrative
Agent may rely on advice of counsel as to whether any or all UCC financing statements of the Grantors need to be amended as a result
of any of the changes described in Section 5.01(i) of the ABL Credit Agreement. If any Grantor fails to provide information
to the Administrative
Agent about such changes
on a timely basis, the Administrative Agent shall not be liable or responsible to any Secured Party for any failure to maintain
a perfected security interest in such Grantor’s property constituting Collateral, for which the Administrative Agent needed
to have information relating to such changes. The Administrative Agent shall have no duty to inquire about such changes if any
Grantor does not inform the Administrative Agent of such changes, the Secured Parties acknowledging and agreeing that it would
not be feasible or practical for the Administrative Agent to search for information on such changes if such information is not
provided by any Grantor.
ARTICLE 10
Intercreditor Agreements
Section 10.01. ABL
Intercreditor Agreement.
(a) Notwithstanding
anything herein to the contrary, the Liens granted to the Administrative Agent under this Security Agreement and the exercise of
the rights and remedies of the Administrative Agent hereunder and under any other Collateral Document are subject to the provisions
of the ABL Intercreditor Agreement. In the event of any conflict between the terms of the ABL Intercreditor Agreement and this
Security Agreement or any other Collateral Document, the terms of the ABL Intercreditor Agreement shall govern and control.
(b) In
accordance with the terms of the ABL Intercreditor Agreement, all Term Priority Collateral delivered to the First Lien Agent shall
be held by the First Lien Agent as gratuitous bailee for the Administrative Agent and the Secured Parties solely for the purpose
of perfecting the security interest granted under this Security Agreement. Notwithstanding anything herein to the contrary, prior
to the Discharge of Term Obligations, to the extent any Grantor is required hereunder to deliver Term Priority Collateral to the
Administrative Agent and is unable to do so as a result of having previously delivered such Term Priority Collateral to the First
Lien Agent in accordance with the terms of the First Lien Loan Documents, such Grantor’s obligations hereunder with respect
to such delivery shall be deemed satisfied by the delivery to the First Lien Agent, acting as gratuitous bailee of the Administrative
Agent and the Secured Parties.
(c) Furthermore,
at all times prior to the Discharge of Term Obligations, the Administrative Agent is authorized by the parties hereto to effect
transfers of Term Priority Collateral at any time in its possession (and any “control” or similar agreements with respect
to Term Priority Collateral) to the First Lien Agent.
(d) Notwithstanding
anything to the contrary herein but subject to the ABL Intercreditor Agreement, in the event the First Lien Loan Documents provide
for the grant of a security interest or pledge over the assets of any Grantor and such assets do not otherwise constitute Collateral
under this Security Agreement or any other Loan Document, such Grantor shall (i) promptly grant a security interest in or pledge
such assets to secure the Secured Obligations, (ii) promptly take any actions necessary to perfect such security interest or pledge
to the extent set forth in the First Lien Loan Documents and (iii) take all other steps reasonably requested by the Administrative
Agent in connection with the foregoing.
(e) Nothing
contained in the ABL Intercreditor Agreement shall be deemed to modify any of the provisions of this Security Agreement, which,
as among the Grantors and the Administrative Agent shall remain in full force and effect in accordance with its terms.
[Signature Pages Follow]
IN WITNESS WHEREOF,
each Grantor and the Administrative Agent have executed this Security Agreement as of the date first above written.
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GRANTORS
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HAYWARD
ACQUISITION CORP.
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By:
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Name:
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Title:
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HAYWARD
INTERMEDIATE, INC.
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By:
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Name:
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Title:
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HAYWARD
INDUSTRIES, INC.
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By:
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Name:
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Title:
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HAYWARD
INDUSTRIAL PRODUCTS, INC.
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By:
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Name:
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Title:
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GOLDLINE
PROPERTIES LLC
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By:
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Name:
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Title:
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Signature
Page to US ABL Pledge and Security Agreement
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HAYWARD/WRIGHT
AUSTIN, INC.
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By:
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Name:
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Title:
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WEBSTER
PUMPS, INC.
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By:
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Name:
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Title:
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Signature
Page to US ABL Pledge and Security Agreement
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BANK
OF AMERICA, N.A.,
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as
Administrative Agent
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By:
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Name:
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Title:
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Signature
Page to US ABL Pledge and Security Agreement
EXHIBIT
A
FORM
OF ABL COPYRIGHT SECURITY AGREEMENT
ABL COPYRIGHT SECURITY
AGREEMENT dated as of [●], 20[●] (this “Copyright Security Agreement”), by and [between][among]
[●], a [●] ([each, a][the] “Grantor”) and Bank of America, N.A., as administrative agent and collateral
agent (together with its successors and permitted assigns in such capacities, the “Administrative Agent”) for
the Secured Parties (as defined in the ABL Credit Agreement).
Reference is made to
that certain ABL Credit Agreement, dated as of August 4, 2017 (as amended, restated, amended and restated, supplemented or otherwise
modified from time to time, the “ABL Credit Agreement”), by and among Hayward Industries, Inc., a New Jersey
corporation (as survivor of the Merger (as defined in the ABL Credit Agreement) with Hayward Acquisition Corp., a New Jersey corporation)
(the “US Borrower”), Hayward Pool Products Canada, Inc. / Produits De Piscines Hayward Canada, Inc., a Canadian
federal corporation (the “Canadian Borrower” and, together with the US Borrower, the “Borrowers”),
Hayward Intermediate, Inc., a Delaware corporation (“Holdings”), the Lenders from time to time party thereto
and the Administrative Agent.
Reference
is also made [ to that certain Joinder No. [●] dated as of [●], 20[●], by [and among ][●][and [●]
]and acknowledged and agreed by the Administrative Agent,]1 to that certain US ABL Pledge and Security Agreement,
dated as of August 4, 2017 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the
“Security Agreement”), by and among the US Borrower, Holdings, the other Grantors (as defined therein) and the
Administrative Agent for the Secured Parties.
The Lenders (as defined
in the ABL Credit Agreement) have extended credit to the Borrowers subject to the terms and conditions set forth in the ABL Credit
Agreement. Consistent with the requirements set forth in Sections 4.01 and 5.12 of the ABL Credit Agreement and Section
4.03(c) of the Security Agreement, the parties hereto agree as follows:
SECTION 1. Terms.
Capitalized terms used herein and not otherwise defined herein have the meanings specified in the Security Agreement.
SECTION 2. Grant
of Security Interest. As security for the prompt and complete payment or performance, as the case may be, in full of the Secured
Obligations, [each][the] Grantor, pursuant to the Security Agreement, did and hereby does pledge, collaterally assign, mortgage,
transfer and grant to the Administrative Agent, its successors and permitted assigns, on behalf of and for the benefit of the Secured
Parties, a continuing security interest in all of its right, title and interest in, to and under all of the following assets, whether
now owned by or owing to, or hereafter acquired by or arising in favor of [such][the] Grantor, and regardless of where located
(collectively, the “Copyright Collateral”):
(a) all copyrights,
rights and interests in copyrights, works protectable by copyright whether published or unpublished, registrations and copyright
applications (including but not limited to the registrations and applications set forth on Schedule I hereto); (b) all renewals
of any of the foregoing; (c) all income, royalties, damages, and payments now or hereafter due and/or payable under any of the
foregoing, including, without limitation, damages or payments for past, present or future infringements for any of the foregoing;
(d) the right to sue for past, present, and future infringements of any of the foregoing; and (e) all rights corresponding to any
of the foregoing.
1
To be used after a Joinder by a new Restricted Subsidiary Grantor.
SECTION 3. Security
Agreement. The security interests granted to the Administrative Agent herein are granted in furtherance, and not in limitation
of, the security interests granted to the Administrative Agent pursuant to the Security Agreement. [Each][The] Grantor hereby acknowledges
and affirms that the rights and remedies of the Administrative Agent with respect to the Copyright Collateral are more fully set
forth in the Security Agreement, the terms and provisions of which are hereby incorporated herein by reference as if fully set
forth herein. In the event of any conflict between the terms of this Copyright Security Agreement and the Security Agreement, the
terms of the Security Agreement shall govern.
SECTION 4. Governing
Law. This Copyright Security Agreement shall be governed by, and construed in accordance with, the laws of the State of New
York.
SECTION 5. Counterparts.
This Copyright Security Agreement may be executed in one or more counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but
one and the same instrument.
[Signature Pages Follow]
IN WITNESS WHEREOF,
the parties hereto have duly executed this Copyright Security Agreement as of the day and year first above written.
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BANK
OF AMERICA, N.A.,
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as
Administrative Agent
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By:
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Name:
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Title:
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SCHEDULE I
COPYRIGHTS
COPYRIGHTS
REGISTERED
OWNER
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REGISTRATION
NUMBER
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REGISTRATION
DATE
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TITLE
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COPYRIGHT APPLICATIONS
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APPLICANT
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APPLICANT
NUMBER
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FILING
DATE
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TITLE
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EXCLUSIVE COPYRIGHT LICENSES
ANNEX
A TO ABL COPYRIGHT SECURITY AGREEMENT
FORM
OF ABL COPYRIGHT SECURITY AGREEMENT SUPPLEMENT
ABL COPYRIGHT SECURITY
AGREEMENT SUPPLEMENT dated as of [●], 20[●] (this “Copyright Security Agreement Supplement”), by
and [between][among] [●], a [●] ([each, a][the] “Grantor”) and Bank of America, N.A., as administrative
agent and collateral agent (together with its successors and permitted assigns in such capacities, the “Administrative
Agent”) for the Secured Parties (as defined in the ABL Credit Agreement).
Reference is made to
that certain ABL Credit Agreement, dated as of August 4, 2017 (as amended, restated, amended and restated, supplemented or otherwise
modified from time to time, the “ABL Credit Agreement”), by and among Hayward Industries, Inc., a New Jersey
corporation (as survivor of the Merger (as defined in the ABL Credit Agreement) with Hayward Acquisition Corp., a New Jersey corporation)
(the “US Borrower”), Hayward Pool Products Canada, Inc. / Produits De Piscines Hayward Canada, Inc., a Canadian
federal corporation (the “Canadian Borrower” and, together with the US Borrower, the “Borrowers”),
Hayward Intermediate, Inc., a Delaware corporation (“Holdings”), the Lenders from time to time party thereto
and the Administrative Agent.
Reference is also made
to that certain US ABL Pledge and Security Agreement, dated as of August 4, 2017 (as amended, restated, amended and restated, supplemented
or otherwise modified from time to time, the “Security Agreement”), by and among the US Borrower, Holdings,
the other Grantors (as defined therein) from time to time party thereto and the Administrative Agent for the Secured Parties under
and as defined in the ABL Credit Agreement.
Reference is also made
to that certain ABL Copyright Security Agreement, dated as of [●], 20[●] (as amended, restated, amended and restated,
supplemented or otherwise modified from time to time and in effect on the date hereof, the “Copyright Security Agreement”)
by and [between][among] the Grantor[s] thereto and the Administrative Agent for the Secured Parties (as defined in the ABL Credit
Agreement).
The Lenders (as defined
in the ABL Credit Agreement) have extended credit to the Borrowers subject to the terms and conditions set forth in the ABL Credit
Agreement. Under the terms of the Security Agreement, [each] [the] Grantor has granted to the Administrative Agent for the benefit
of the Secured Parties a security interest in the Additional Copyright Collateral (as defined below) and has agreed, consistent
with the requirements of Section 4.03(c) of the Security Agreement, to execute this Copyright Security Agreement Supplement.
Now, therefore, the parties hereto agree as follows:
SECTION 1. Terms.
Capitalized terms used in this Copyright Security Agreement Supplement and not otherwise defined herein have the meanings specified
in the Security Agreement.
SECTION 2. Grant
of Security Interest. As security for the prompt and complete payment or performance, as the case may be, in full of the Secured
Obligations, [each][the] Grantor, pursuant to the Security Agreement, did and hereby does pledge, collaterally assign, mortgage,
transfer and grant to the Administrative Agent, its successors and permitted assigns, on behalf of and for the benefit of the Secured
Parties, a continuing security interest in all of its right, title and interest in, to and under all of the following assets, whether
now owned by or owing to, or hereafter acquired by or arising in favor of [such][the] Grantor, and regardless of where located
(collectively, the “Additional Copyright Collateral”):
(a) all
copyrights, rights and interests in copyrights, works protectable by copyright whether published or unpublished, registrations
and copyright applications (including but not limited to the registrations and applications set forth on Schedule I hereto); (b)
all renewals of any of the foregoing; (c) all income, royalties, damages, and payments now or hereafter due and/or payable under
any of the foregoing, including, without limitation, damages or payments for past, present or future infringements for any of the
foregoing; (d) the right to sue for past, present, and future infringements of any of the foregoing; and (e) all rights corresponding
to any of the foregoing.
SECTION 3. Security
Agreement. The security interests granted to the Administrative Agent herein are granted in furtherance, and not in limitation
of, the security interests granted to the Administrative Agent pursuant to the Security Agreement. [Each][The] Grantor hereby acknowledges
and affirms that the rights and remedies of the Administrative Agent with respect to the Additional Copyright Collateral are more
fully set forth in the Security Agreement, the terms and provisions of which are hereby incorporated herein by reference as if
fully set forth herein. In the event of any conflict between the terms of this Copyright Security Agreement Supplement and the
Security Agreement, the terms of the Security Agreement shall govern.
SECTION 4. Governing
Law. This Copyright Security Agreement Supplement shall be governed by, and construed in accordance with, the laws of the
State of New York.
SECTION 5. Counterparts.
This Copyright Security Agreement Supplement may be executed in one or more counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall
constitute but one and the same instrument.
[Signature Pages Follow]
IN WITNESS WHEREOF,
the parties hereto have duly executed this Copyright Security Agreement Supplement as of the day and year first above written.
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BANK OF AMERICA, N.A.,
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as Administrative Agent
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By:
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Name:
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Title:
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SCHEDULE I
COPYRIGHTS
REGISTERED
OWNER
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REGISTRATION
NUMBER
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REGISTRATION
DATE
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TITLE
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COPYRIGHT APPLICATIONS
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APPLICANT
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APPLICANT
NUMBER
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FILING
DATE
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TITLE
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EXCLUSIVE COPYRIGHT LICENSES
EXHIBIT B
FORM OF ABL PATENT SECURITY AGREEMENT
ABL PATENT SECURITY
AGREEMENT dated as of [●], 20[●] (this “Patent Security Agreement”), by and [between][among] [●],
a [●] ([each, a][the] “Grantor”) and Bank of America, N.A., as administrative agent and collateral agent
(together with its successors and permitted assigns in such capacities, the “Administrative Agent”) for the
Secured Parties (as defined in the ABL Credit Agreement).
Reference is made to
that certain ABL Credit Agreement, dated as of August 4, 2017 (as amended, restated, amended and restated, supplemented or otherwise
modified from time to time, the “ABL Credit Agreement”), by and among Hayward Industries, Inc., a New Jersey
corporation (as survivor of the Merger (as defined in the ABL Credit Agreement) with Hayward Acquisition Corp., a New Jersey corporation)
(the “US Borrower”), Hayward Pool Products Canada, Inc. / Produits De Piscines Hayward Canada, Inc., a Canadian
federal corporation (the “Canadian Borrower” and, together with the US Borrower, the “Borrowers”),
Hayward Intermediate, Inc., a Delaware corporation (“Holdings”), the Lenders from time to time party thereto
and Bank of America, N.A., in its capacities as administrative agent and collateral agent (together with its successors and permitted
assigns in such capacities, the “Administrative Agent”).
Reference
is also made [ to that certain Joinder No. [●] dated as of [●], 20[●], by [and among ][●][and [●]
]and acknowledged and agreed by the Administrative Agent,]1 to that certain US ABL Pledge and Security Agreement,
dated as of August 4, 2017 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the
“Security Agreement”), by and among the US Borrower, Holdings, the other Grantors (as defined therein) from
time to time party thereto and the Administrative Agent for the Secured Parties under and as defined in the ABL Credit Agreement.
The Lenders (as defined
in the ABL Credit Agreement) have extended credit to the Borrowers subject to the terms and conditions set forth in the ABL Credit
Agreement. Consistent with the requirements set forth in Sections 4.01 and 5.12 of the ABL Credit Agreement and Section
4.03(c) of the Security Agreement, the parties hereto agree as follows:
SECTION 1. Terms.
Capitalized terms used herein and not otherwise defined herein have the meanings specified in the Security Agreement.
SECTION 2. Grant
of Security Interest. As security for the prompt and complete payment or performance, as the case may be, in full of the Secured
Obligations, [each][the] Grantor, pursuant to the Security Agreement, did and hereby does pledge, collaterally assign, mortgage,
transfer and grant to the Administrative Agent, its successors and permitted assigns, on behalf of and for the benefit of the Secured
Parties, a continuing security interest in all of its right, title and interest in, to and under all of the following assets, whether
now owned by or owing to, or hereafter acquired by or arising in favor of [such][the] Grantor, and regardless of where located
(collectively, the “Patent Collateral”):
(a) any
and all patents and patent applications (including but not limited to the patents and patent applications listed on Schedule
I hereto); (b) all inventions described and claimed therein; (c) all reissues, divisions, continuations, renewals, extensions
and continuations in part thereof; (d) all income, royalties, damages, claims, and payments now or hereafter due or payable under
and with respect thereto, including, without limitation, damages and payments for past, present and future infringements thereof;
(e) all rights to sue for past, present, and future infringements thereof; and (f) all rights corresponding to any of the foregoing,
in each case, excluding any Excluded Assets.
SECTION 3. Security
Agreement. The security interests granted to the Administrative Agent herein are granted in furtherance, and not in limitation
of, the security interests granted to the Administrative Agent pursuant to the Security Agreement. [Each][The] Grantor hereby acknowledges
and affirms that the rights and remedies of the Administrative Agent with respect to the Patent Collateral are more fully set forth
in the Security Agreement, the terms and provisions of which are hereby incorporated herein by reference as if fully set forth
herein. In the event of any conflict between the terms of this Patent Security Agreement and the Security Agreement, the terms
of the Security Agreement shall govern.
SECTION 4. Governing
Law. This Patent Security Agreement shall be governed by, and construed in accordance with, the laws of the State of New York.
SECTION 5. Counterparts.
This Patent Security Agreement may be executed in one or more counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but
one and the same instrument.
1
To be used after a Joinder by a new Restricted Subsidiary Grantor.
[Signature Pages Follow]
IN WITNESS WHEREOF,
the parties hereto have duly executed this Patent Security Agreement as of the day and year first above written.
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BANK OF AMERICA, N.A.,
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as Administrative Agent
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By:
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Name:
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Title:
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SCHEDULE I
PATENTS
REGISTERED
OWNER
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PATENT NO.
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ISSUE DATE
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TITLE
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PATENT APPLICATIONS
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APPLICANT
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APPLICATION NO.
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FILING DATE
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TITLE
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ANNEX A TO ABL PATENT SECURITY AGREEMENT
FORM OF ABL PATENT SECURITY AGREEMENT
SUPPLEMENT
ABL PATENT SECURITY
AGREEMENT SUPPLEMENT dated as of [●], 20[●] (this “Patent Security Agreement Supplement”), by and
[between][among] [●], a [●] ([each, a][the] “Grantor”) and Bank of America, N.A., as administrative agent
and collateral agent (together with its successors and permitted assigns in such capacities, the “Administrative Agent”)
for the Secured Parties (as defined in the ABL Credit Agreement).
Reference is made to
that certain ABL Credit Agreement, dated as of August 4, 2017 (as amended, restated, amended and restated, supplemented or otherwise
modified from time to time, the “ABL Credit Agreement”), by and among Hayward Industries, Inc., a New Jersey
corporation (as survivor of the Merger (as defined in the ABL Credit Agreement) with Hayward Acquisition Corp., a New Jersey corporation)
(the “US Borrower”), Hayward Pool Products Canada, Inc. / Produits De Piscines Hayward Canada, Inc., a Canadian
federal corporation (the “Canadian Borrower” and, together with the US Borrower, the “Borrowers”),
Hayward Intermediate, Inc., a Delaware corporation (“Holdings”), the Lenders from time to time party thereto
and the Administrative Agent.
Reference is also made
to that certain US ABL Pledge and Security Agreement, dated as of August 4, 2017 (as amended, restated, amended and restated, supplemented
or otherwise modified from time to time, the “Security Agreement”), by and among the US Borrower, Holdings,
the other Grantors (as defined therein) and the Administrative Agent for the Secured Parties.
Reference is also made
to that certain ABL Patent Security Agreement, dated as of [●], 20[●] (as amended, restated, amended and restated,
supplemented or otherwise modified from time to time and in effect on the date hereof, the “Patent Security Agreement”)
by and [between][among] the Grantor[s] thereto and the Administrative Agent for the Secured Parties.
The Lenders (as defined
in the ABL Credit Agreement) have extended credit to the Borrowers subject to the terms and conditions set forth in the ABL Credit
Agreement. Under the terms of the Security Agreement, [each] [the] Grantor has granted to the Administrative Agent for the benefit
of the Secured Parties a security interest in the Additional Patent Collateral (as defined below) and has agreed, consistent with
the requirements of Section 4.03(c) of the Security Agreement, to execute this Patent Security Agreement Supplement. Now,
therefore, the parties hereto agree as follows:
SECTION 1. Terms.
Capitalized terms used in this Patent Security Agreement Supplement and not otherwise defined herein have the meanings specified
in the Security Agreement.
SECTION 2. Grant
of Security Interest. As security for the prompt and complete payment or performance, as the case may be, in full of the Secured
Obligations, [each][the] Grantor, pursuant to the Security Agreement, did and hereby does pledge, collaterally assign, mortgage,
transfer and grant to the Administrative Agent, its successors and permitted assigns, on behalf of and for the benefit of the Secured
Parties, a continuing security interest in all of its right, title and interest in, to and under all of the following assets, whether
now owned by or owing to, or hereafter acquired by or arising in favor of [such][the] Grantor, and regardless of where located
(collectively, the “Additional Patent Collateral”):
(a) any
and all patents and patent applications (including but not limited to the patents and patent applications listed on Schedule
I hereto); (b) all inventions described and claimed therein; (c) all reissues, divisions, continuations, renewals, extensions
and continuations in part thereof; (d) all income, royalties, damages, claims, and payments now or hereafter due or payable under
and with respect thereto, including, without limitation, damages and payments for past, present and future infringements thereof;
(e) all rights to sue for past, present, and future infringements thereof; and (f) all rights corresponding to any of the foregoing,
in each case, excluding any Excluded Assets.
SECTION 3. Security
Agreement. The security interests granted to the Administrative Agent herein are granted in furtherance, and not in limitation
of, the security interests granted to the Administrative Agent pursuant to the Security Agreement. [Each][The] Grantor hereby acknowledges
and affirms that the rights and remedies of the Administrative Agent with respect to the Additional Patent Collateral are more
fully set forth in the Security Agreement, the terms and provisions of which are hereby incorporated herein by reference as if
fully set forth herein. In the event of any conflict between the terms of this Patent Security Agreement Supplement and the Security
Agreement, the terms of the Security Agreement shall govern.
SECTION 4. Governing
Law. This Patent Security Agreement Supplement shall be governed by, and construed in accordance with, the laws of the State
of New York.
SECTION 5. Counterparts.
This Patent Security Agreement Supplement may be executed in one or more counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall
constitute but one and the same instrument.
[Signature Pages Follow]
IN WITNESS WHEREOF,
the parties hereto have duly executed this Patent Security Agreement Supplement as of the day and year first above written.
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BANK OF AMERICA, N.A.,
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as Administrative Agent
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By:
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Name:
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Title:
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SCHEDULE I
PATENTS
REGISTERED
OWNER
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PATENT NO.
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ISSUE DATE
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TITLE
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PATENT APPLICATIONS
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APPLICANT
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APPLICATION NO.
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FILING DATE
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TITLE
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EXHIBIT C
FORM OF ABL TRADEMARK SECURITY AGREEMENT
ABL TRADEMARK SECURITY
AGREEMENT dated as of [●], 20[●] (this “Trademark Security Agreement”), by and [between][among]
[●], a [●] ([each, a][the] “Grantor”) and Bank of America, N.A., as administrative agent and collateral
agent (together with its successors and permitted assigns in such capacities, the “Administrative Agent”) for
the Secured Parties (as defined in the ABL Credit Agreement).
Reference is made to
that certain ABL Credit Agreement, dated as of August 4, 2017 (as amended, restated, amended and restated, supplemented or otherwise
modified from time to time, the “ABL Credit Agreement”), by and among Hayward Industries, Inc., a New Jersey
corporation (as survivor of the Merger (as defined in the ABL Credit Agreement) with Hayward Acquisition Corp., a New Jersey corporation)
(the “US Borrower”), Hayward Pool Products Canada, Inc. / Produits De Piscines Hayward Canada, Inc., a Canadian
federal corporation (the “Canadian Borrower” and, together with the US Borrower, the “Borrowers”),
Hayward Intermediate, Inc., a Delaware corporation (“Holdings”), the Lenders from time to time party thereto
and the Administrative Agent.
Reference
is also made [ to that certain Joinder No. [●] dated as of [●], 20[●], by [and among ][●][and [●]
]and acknowledged and agreed by the Administrative Agent,]1 to that certain US ABL Pledge and Security Agreement,
dated as of August 4, 2017 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the
“Security Agreement”), by and among the US Borrower, Holdings, the other Grantors (as defined therein) and the
Administrative Agent for the Secured Parties.
The Lenders (as defined
in the ABL Credit Agreement) have extended credit to the Borrowers subject to the terms and conditions set forth in the ABL Credit
Agreement. Consistent with the requirements set forth in Sections 4.01 and 5.12 of the ABL Credit Agreement and Section
4.03(c) of the Security Agreement, the parties hereto agree as follows:
SECTION 1. Terms.
Capitalized terms used herein and not otherwise defined herein have the meanings specified in the Security Agreement.
SECTION 2. Grant
of Security Interest. As security for the prompt and complete payment or performance, as the case may be, in full of the Secured
Obligations, [each][the] Grantor, pursuant to the Security Agreement, did and hereby does pledge, collaterally assign, mortgage,
transfer and grant to the Administrative Agent, its successors and permitted assigns, on behalf of and for the benefit of the Secured
Parties, a continuing security interest in all of its right, title and interest in, to and under all of the following assets, whether
now owned by or owing to, or hereafter acquired by or arising in favor of [such][the] Grantor, and regardless of where located
(collectively, the “Trademark Collateral”):
(a) all
trademarks (including service marks), common law marks, trade names, trade dress, domain names and logos, slogans and other indicia
of origin under the laws of any jurisdiction in the world, and the registrations and applications for registration thereof (including
but not limited to the registrations and applications listed on Schedule I hereto); and the goodwill of the business connected
with the use of and symbolized by the foregoing; (b) all renewals of the foregoing; (c) all income, royalties, damages, and payments
now or hereafter due or payable with respect thereto, including, without limitation, damages, claims and payments for past, present
and future infringements or dilutions thereof; (d) all rights to sue for past, present, and future infringements or dilutions of
any of the foregoing, including the right to settle suits involving claims and demands for royalties owing; and (e) all rights
corresponding to any of the foregoing. Notwithstanding anything herein to the contrary, in no event shall the Trademark Collateral
include (i) any foreign IP Rights and any intent to use Trademark application prior to the filing of a “Statement of Use”
or an “Amendment to Allege Use” with respect thereto, only to the extent, if any, that, and solely during the period,
if any, in which, the grant of a security interest therein would impair the validity or enforceability of such intent to use Trademark
application or any registration issuing therefrom under applicable law, or (ii) any other Excluded Assets.
1
To be used after a Joinder by a new Restricted Subsidiary Grantor.
SECTION 3. Security
Agreement. The security interests granted to the Administrative Agent herein are granted in furtherance, and not in limitation
of, the security interests granted to the Administrative Agent pursuant to the Security Agreement. [Each][The] Grantor hereby acknowledges
and affirms that the rights and remedies of the Administrative Agent with respect to the Trademark Collateral are more fully set
forth in the Security Agreement, the terms and provisions of which are hereby incorporated herein by reference as if fully set
forth herein. In the event of any conflict between the terms of this Trademark Security Agreement and the Security Agreement, the
terms of the Security Agreement shall govern.
SECTION 4. Governing
Law. This Trademark Security Agreement shall be governed by, and construed in accordance with, the laws of the State of New
York.
SECTION 5. Counterparts.
This Trademark Security Agreement may be executed in one or more counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but
one and the same instrument.
[Signature Pages Follow]
IN WITNESS WHEREOF,
the parties hereto have duly executed this Trademark Security Agreement as of the day and year first above written.
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BANK OF AMERICA, N.A.,
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as Administrative Agent
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By:
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Name:
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Title:
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SCHEDULE I
TRADEMARKS
REGISTERED
OWNER
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REGISTRATION
NUMBER
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REGISTRATION
DATE
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TRADEMARK
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TRADEMARK APPLICATIONS
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APPLICANT
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APPLICATION NO.
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FILING DATE
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TRADEMARK
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ANNEX
A TO ABL TRADEMARK SECURITY AGREEMENT
FORM
OF ABL TRADEMARK SECURITY AGREEMENT SUPPLEMENT
ABL TRADEMARK SECURITY
AGREEMENT SUPPLEMENT dated as of [●], 20[●] (this “Trademark Security Agreement Supplement”), by
and [between][among] [●], a [●] ([each, a][the] “Grantor”) and Bank of America, N.A., as administrative
agent and collateral agent (together with its successors and permitted assigns in such capacities, the “Administrative
Agent”) for the Secured Parties (as defined in the ABL Credit Agreement).
Reference is made to
that certain ABL Credit Agreement, dated as of August 4, 2017 (as amended, restated, amended and restated, supplemented or otherwise
modified from time to time, the “ABL Credit Agreement”), by and among Hayward Industries, Inc., a New Jersey
corporation (as survivor of the Merger (as defined in the ABL Credit Agreement) with Hayward Acquisition Corp., a New Jersey corporation)
(the “US Borrower”), Hayward Pool Products Canada, Inc. / Produits De Piscines Hayward Canada, Inc., a Canadian
federal corporation (the “Canadian Borrower” and, together with the US Borrower, the “Borrowers”),
Hayward Intermediate, Inc., a Delaware corporation (“Holdings”), the Lenders from time to time party thereto
the Administrative Agent.
Reference is also made
to that certain US ABL Pledge and Security Agreement, dated as of August 4, 2017 (as amended, restated, amended and restated, supplemented
or otherwise modified from time to time, the “Security Agreement”), by and among the US Borrower, Holdings,
the other Grantors (as defined therein) and the Administrative Agent for the Secured Parties.
Reference is also made
to that certain ABL Trademark Security Agreement, dated as of [●], 20[●] (as amended, restated, amended and restated,
supplemented or otherwise modified from time to time and in effect on the date hereof, the “Trademark Security Agreement”)
by and [between] [among] the Grantor[s] thereto and the Administrative Agent for the Secured Parties.
The Lenders (as defined
in the ABL Credit Agreement) have extended credit to the Borrowers subject to the terms and conditions set forth in the ABL Credit
Agreement. Under the terms of the Security Agreement, [each] [the] Grantor has granted to the Administrative Agent for the benefit
of the Secured Parties a security interest in the Additional Trademark Collateral (as defined below) and has agreed, consistent
with the requirements of Section 4.03(c) of the Security Agreement, to execute this Trademark Security Agreement Supplement.
Now, therefore, the parties hereto agree as follows:
SECTION 1. Terms.
Capitalized terms used in this Trademark Security Agreement Supplement and not otherwise defined herein have the meanings specified
in the Security Agreement.
SECTION 2. Grant
of Security Interest. As security for the prompt and complete payment or performance, as the case may be, in full of the Secured
Obligations, [each][the] Grantor, pursuant to the Security Agreement, did and hereby does pledge, collaterally assign, mortgage,
transfer and grant to the Administrative Agent, its successors and permitted assigns, on behalf of and for the ratable benefit
of the Secured Parties, a continuing security interest in all of its right, title or interest in, to or under all of the following
assets, whether now owned or at any time hereafter acquired by or arising in favor of the [such][the] Grantor and regardless of
where located (collectively, the “Additional Trademark Collateral”):
(a) all
trademarks (including service marks), common law marks, trade names, trade dress, domain names and logos, slogans and other indicia
of origin under the laws of any jurisdiction in the world, and the registrations and applications for registration thereof (including
but not limited to the registrations and applications listed on Schedule I hereto); and the goodwill of the business connected
with the use of and symbolized by the foregoing; (b) all renewals of the foregoing; (c) all income, royalties, damages, and payments
now or hereafter due or payable with respect thereto, including, without limitation, damages, claims and payments for past, present
and future infringements or dilutions thereof; (d) all rights to sue for past, present, and future infringements or dilutions of
any of the foregoing, including the right to settle suits involving claims and demands for royalties owing; and (e) all rights
corresponding to any of the foregoing. Notwithstanding anything herein to the contrary, in no event shall the Additional Trademark
Collateral include (i) any foreign IP Rights and any intent to use Trademark application prior to the filing of a “Statement
of Use” or an “Amendment to Allege Use” with respect thereto, only to the extent, if any, that, and solely during
the period, if any, in which, the grant of a security interest therein would impair the validity or enforceability of such intent
to use Trademark application or any registration issuing therefrom under applicable law, or (ii) any other Excluded Assets.
SECTION 3. Security
Agreement. The security interests granted to the Administrative Agent herein are granted in furtherance, and not in limitation
of, the security interests granted to the Administrative Agent pursuant to the Security Agreement. [Each][The] Grantor hereby acknowledges
and affirms that the rights and remedies of the Administrative Agent with respect to the Additional Trademark Collateral are more
fully set forth in the Security Agreement, the terms and provisions of which are hereby incorporated herein by reference as if
fully set forth herein. In the event of any conflict between the terms of this Trademark Security Agreement Supplement and the
Security Agreement, the terms of the Security Agreement shall govern.
SECTION 4. Governing
Law. This Trademark Security Agreement Supplement shall be governed by, and construed in accordance with, the laws of the State
of New York.
SECTION 5. Counterparts.
This Trademark Security Agreement Supplement may be executed in one or more counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall
constitute but one and the same instrument.
[Signature Pages Follow]
IN WITNESS WHEREOF,
the parties hereto have duly executed this Trademark Security Agreement Supplement as of the day and year first above written.
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BANK OF AMERICA, N.A.,
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as Administrative Agent
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By:
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Name:
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Title:
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SCHEDULE I
TRADEMARKS
REGISTERED
OWNER
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REGISTRATION
NUMBER
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REGISTRATION
DATE
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TRADEMARK
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TRADEMARK APPLICATIONS
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APPLICANT
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APPLICATION NO.
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FILING DATE
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TRADEMARK
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EXHIBIT D
FORM OF US ABL PLEDGE AND SECURITY
AGREEMENT JOINDER
JOINDER NO. [●]
dated as of [●] (this “Joinder”), to the US ABL Pledge and Security Agreement, dated as of August 4, 2017
(as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Security Agreement”),
by and among Hayward Industries, Inc., a New Jersey corporation (as survivor of the Merger (as defined in the ABL Credit Agreement)
with Hayward Acquisition Corp., a New Jersey corporation) (the “US Borrower”), Hayward Intermediate, Inc., a
Delaware corporation (“Holdings”), the other Grantors (as defined in the Security Agreement) and Bank of America,
N.A., in its capacities as administrative agent and collateral agent (together with its successors and permitted assigns in such
capacities, the “Administrative Agent”) for the Secured Parties.
A. Reference
is made to that certain ABL Credit Agreement dated as of August 4, 2017, (as amended, restated, amended and restated, supplemented
or otherwise modified from time to time, the “ABL Credit Agreement”), by and among, inter alios, the
US Borrower, the Canadian Borrower, Holdings, the Lenders from time to time party thereto and the Administrative Agent.
B. Capitalized
terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the ABL Credit Agreement or
the Security Agreement, as applicable.
C. [The][Each]
undersigned Restricted Subsidiary ([each a][the] “New Subsidiary”) is executing this Joinder in accordance with
Section 7.10 of the Security Agreement and Section 5.12 of the ABL Credit Agreement, each of which require that each
additional Domestic Subsidiary of the US Borrower becomes a Grantor under the Security Agreement by executing and delivering an
instrument in the form of this Joinder in order to induce the Lenders to make additional Loans and as consideration for Loans previously
made.
Accordingly, the Administrative
Agent and [each][the] New Subsidiary agree as follows:
SECTION 1. In accordance
with Section 7.10 of the Security Agreement, [the][each] New Subsidiary by its signature below becomes a Grantor under the
Security Agreement with the same force and effect as if originally named therein as a Grantor, and [the][each] New Subsidiary hereby
(a) agrees to all the terms and provisions of the Security Agreement applicable to it as a Grantor thereunder and (b) represents
and warrants as of the date hereof that the applicable representations and warranties made by it as a Grantor thereunder on the
date hereof that are qualified as to materiality are true and correct in all respects on and as of the date hereof and those that
are not so qualified are true and correct in all material respects on and as of the date hereof; it being understood and agreed
that any representation or warranty that expressly relates to an earlier date shall be deemed to refer to the date hereof. In furtherance
of the foregoing, [the][each] New Subsidiary, as security for the payment and performance in full of the Secured Obligations, hereby
pledges, collaterally assigns, mortgages, transfers and grants to the Administrative Agent, its successors and permitted assigns,
for the benefit of the Secured Parties, their successors and permitted assigns, a security interest in and Lien on all of [the][each]
New Subsidiary’s right, title and interest in and to the Collateral of [the][each] New Subsidiary to the extent provided
in Section 2.01 of the Security Agreement. Upon the effectiveness of this Joinder, each reference to a “Grantor”
and “Subsidiary Guarantor” in the Security Agreement shall be deemed to include [the][each] New Subsidiary. The Security
Agreement is hereby incorporated herein by reference.
SECTION 2. [The][Each]
New Subsidiary represents and warrants to the Administrative Agent and the other Secured Parties that this Joinder has been duly
authorized, executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance
with its terms, subject to the Legal Reservations.
SECTION 3. This
Joinder may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute
an original, but all of which when taken together shall constitute a single contract. This Joinder shall become effective when
the Administrative Agent shall have received a counterpart of this Joinder that bears the signature of [the][each] New Subsidiary
and the Administrative Agent has executed a counterpart hereof. Delivery of an executed signature page to this Joinder by facsimile
transmission or by email as a “.pdf’ or “.tiff’ attachment shall be as effective as delivery of a manually
signed counterpart of this Joinder.
SECTION 4. Attached
hereto is a duly prepared, completed and executed Perfection Certificate with respect to [the][each] New Subsidiary, and [the][each]
New Subsidiary hereby represents and warrants that the information set forth therein is correct and complete in all material respects
as of the date hereof.
SECTION 5. Except
as expressly supplemented hereby, the Security Agreement shall remain in full force and effect.
SECTION 6. THIS
JOINDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 7. In case
any one or more of the provisions contained in this Joinder is invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein and in the Security Agreement shall not in any way be
affected or impaired thereby (it being understood that the invalidity of a particular provision in a particular jurisdiction shall
not in and of itself affect the validity of such provision in any other jurisdiction). The parties hereto shall endeavor in good
faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable provisions.
SECTION 8. All communications
and notices hereunder shall be in writing and given as provided in Section 8.01 of the Security Agreement.
SECTION 9. [The][Each]
New Subsidiary agrees to reimburse the Administrative Agent for its expenses in connection with this Joinder, including the fees,
other charges and disbursements of counsel in accordance with Section 9.03(a) of the ABL Credit Agreement.
SECTION 10. This
Joinder shall constitute a Loan Document, under and as defined in, the ABL Credit Agreement.
[Signature pages follow]
IN WITNESS WHEREOF,
[the][each] New Subsidiary has duly executed this Joinder to the Security Agreement, and the Administrative Agent, for the benefit
of the Secured Parties, has caused the same to be accepted, as of the day and year first above written.
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[NAME OF NEW SUBSIDIARY]
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By:
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Name:
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Title:
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ACKNOWLEDGED AND ACCEPTED:
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BANK OF AMERICA, N.A.,
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as Administrative Agent
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By:
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Name:
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Title:
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EXHIBIT J-1
[FORM OF]
U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Lenders That Are Not Partnerships
For U.S. Federal Income Tax Purposes)
Reference is hereby
made to that certain ABL Credit Agreement dated as of August 4, 2017 (as amended, restated, amended and restated, supplemented
or otherwise modified and in effect on the date hereof, the “Credit Agreement”), by and among Hayward Industries,
Inc., a New Jersey corporation (as survivor of the Merger (as defined in the Credit Agreement) with Hayward Acquisition Corp.,
a New Jersey corporation) (the “US Borrower”), Hayward Pool Products Canada, Inc. / Produits De Piscines Hayward
Canada, Inc., a Canadian federal corporation (the “Canadian Borrower”), Hayward Intermediate, Inc., a Delaware
corporation (“Holdings”), the Lenders from time to time party thereto including, Bank of America, N.A. in its
capacities as administrative agent and collateral agent (the “Administrative Agent”).
Pursuant to the provisions
of Section 2.17(f)(ii)(B)(3) of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and
beneficial owner of the Revolving Loan(s) (as well as any Promissory Notes evidencing such Revolving Loan(s)) in respect of which
it is providing this certificate, (ii) it is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (iii)
it is not a “10 percent shareholder” of the US Borrower within the meaning of Section 881(c)(3)(B) of the Code and
(iv) it is not a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code.
The undersigned has
furnished the US Borrower and the Administrative Agent with a duly executed certificate of its non U.S. person status on IRS Form
W 8BEN or IRS Form W 8BEN E, as applicable.
By executing this certificate,
the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform
each of the US Borrower and the Administrative Agent, and (2) the undersigned shall have at all times furnished each of the US
Borrower and the Administrative Agent with a properly completed and currently effective certificate in either the calendar year
in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.
Unless otherwise defined
herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.
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[NAME OF LENDER]
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By:
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Name:
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Title:
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Date: [●] [●], 20[●]
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EXHIBIT J-2
[FORM OF]
U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Participants That Are Not Partnerships
For U.S. Federal Income Tax Purposes)
Reference is hereby
made to that certain ABL Credit Agreement dated as of August 4, 2017 (as amended, restated, amended and restated, supplemented
or otherwise modified and in effect on the date hereof, the “Credit Agreement”), by and among Hayward Industries,
Inc., a New Jersey corporation (as survivor of the Merger (as defined in the Credit Agreement) with Hayward Acquisition Corp.,
a New Jersey corporation) (the “US Borrower”), Hayward Pool Products Canada, Inc. / Produits De Piscines Hayward
Canada, Inc., a Canadian federal corporation (the “Canadian Borrower”), Hayward Intermediate, Inc., a Delaware corporation
(“Holdings”), the Lenders from time to time party thereto including, Bank of America, N.A. in its capacities
as administrative agent and collateral agent (the “Administrative Agent”).
Pursuant to the provisions
of Section 2.17(f)(ii)(B)(4) of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and
beneficial owner of the participation in respect of which it is providing this certificate, (ii) it is not a “bank”
within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a “10 percent shareholder” of the US Borrower
within the meaning of Section 881(c)(3)(B) of the Code and (iv) it is not a “controlled foreign corporation” described
in Section 881(c)(3)(C) of the Code.
The undersigned has
furnished its participating Lender with a duly executed certificate of its non U.S. person status on IRS Form W 8BEN or IRS Form
W 8BEN E, as applicable. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate
changes, the undersigned shall promptly so inform such Lender in writing, and (2) the undersigned shall have at all times furnished
such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is
to be made to the undersigned, or in either of the two calendar years preceding such payments.
Unless otherwise defined
herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.
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[NAME OF PARTICIPANT]
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By:
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Name:
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Title:
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Date: [●] [●], 20[●]
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EXHIBIT J-3
[FORM OF]
U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Participants That Are Partnerships
For U.S. Federal Income Tax Purposes)
Reference is hereby
made to that certain ABL Credit Agreement dated as of August 4, 2017 (as amended, restated, amended and restated, supplemented
or otherwise modified and in effect on the date hereof, the “Credit Agreement”), by and among Hayward Industries,
Inc., a New Jersey corporation (as survivor of the Merger (as defined in the Credit Agreement) with Hayward Acquisition Corp.,
a New Jersey corporation) (the “US Borrower”), Hayward Pool Products Canada, Inc. / Produits De Piscines Hayward
Canada, Inc., a Canadian federal corporation (the “Canadian Borrower”), Hayward Intermediate, Inc., a Delaware
corporation (“Holdings”), the Lenders from time to time party thereto including, Bank of America, N.A. in its
capacities as administrative agent and collateral agent (the “Administrative Agent”).
Pursuant to the provisions
of Section 2.17(f)(ii)(B)(4) of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner
of the participation in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the
sole beneficial owners of such participation, (iii) with respect to such participation, neither the undersigned nor any of its
direct or indirect partners/members is a “bank” extending credit pursuant to a loan agreement entered into in the ordinary
course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members
is a “10 percent shareholder” of the US Borrower within the meaning of Section 881(c)(3)(B) of the Code and (v) none
of its direct or indirect partners/members is a “controlled foreign corporation” described in Section 881(c)(3)(C)
of the Code.
The undersigned has
furnished its participating Lender with a duly executed IRS Form W 8IMY accompanied by one of the following forms from each of
its partners/members that is claiming the portfolio interest exemption: (i) an IRS Form W 8BEN or IRS Form W 8BEN E, as applicable,
or (ii) an IRS Form W 8IMY accompanied by an IRS Form W 8BEN or IRS Form W 8BEN E, as applicable, from each of such partner’s/member’s
beneficial owners that is claiming the portfolio interest exemption.
By executing this certificate,
the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform
such Lender and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective
certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar
years preceding such payments.
Unless otherwise defined
herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.
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[NAME OF PARTICIPANT]
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By:
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Name:
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Title:
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Date: [●] [●], 20[●]
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EXHIBIT J-4
[FORM OF]
U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Lenders That Are Partnerships
For U.S. Federal Income Tax Purposes)
Reference is hereby
made to that certain ABL Credit Agreement dated as of August 4, 2017 (as amended, restated, amended and restated, supplemented
or otherwise modified and in effect on the date hereof, the “Credit Agreement”), by and among Hayward Industries,
Inc., a New Jersey corporation (as survivor of the Merger (as defined in the Credit Agreement) with Hayward Acquisition Corp.,
a New Jersey corporation) (the “US Borrower”), Hayward Pool Products Canada, Inc. / Produits De Piscines Hayward
Canada, Inc., a Canadian federal corporation (the “Canadian Borrower”), Hayward Intermediate, Inc., a Delaware
corporation (“Holdings”), the Lenders from time to time party thereto including, Bank of America, N.A. in its
capacities as administrative agent and collateral agent (the “Administrative Agent”).
Pursuant to the provisions
of Section 2.17(f)(ii)(B)(4) of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner
of the Revolving Loan(s) (as well as any Promissory Note(s) evidencing such Revolving Loan(s)) in respect of which it is providing
this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such Revolving Loan(s) (as well
as any Promissory Note(s) evidencing such Revolving Loan(s)), (iii) with respect to the extension of credit pursuant to this Credit
Agreement or any other Loan Document, neither the undersigned nor any of its direct or indirect partners/members is a “bank”
extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of
Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members is a “10 percent shareholder”
of the US Borrower within the meaning of Section 881(c)(3)(B) of the Code and (v) none of its direct or indirect partners/members
is a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code.
The undersigned has
furnished the US Borrower and the Administrative Agent with a duly executed IRS Form W 8IMY accompanied by one of the following
forms from each of its partners/members that is claiming the portfolio interest exemption: (i) an IRS Form W 8BEN or IRS Form W
8BEN E, as applicable, or (ii) an IRS Form W 8IMY accompanied by an IRS Form W 8BEN or IRS Form W 8BENE, as applicable, from each
of such partner’s/member’s beneficial owners that is claiming the portfolio interest exemption. By executing this certificate,
the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform
the US Borrower and the Administrative Agent, and (2) the undersigned shall have at all times furnished the US Borrower and the
Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment
is to be made to the undersigned, or in either of the two calendar years preceding such payments.
Unless otherwise defined
herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.
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[NAME OF LENDER]
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By:
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Name:
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Title:
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Date: [●] [●], 20[●]
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EXHIBIT K
[FORM OF]
SOLVENCY CERTIFICATE
[●] [●], 20[●]
This Solvency Certificate
is being executed and delivered pursuant to Section 4.01(h) of that certain ABL Credit Agreement, dated as of the date hereof
(the “Credit Agreement”; the terms defined therein being used herein as therein defined), by and among HAYWARD
INDUSTRIES, INC., a New Jersey corporation (as survivor of the Merger (as defined in the Credit Agreement) with HAYWARD ACQUISITION
CORP., a New Jersey corporation) (the “US Borrower”), HAYWARD POOL PRODUCTS CANADA, INC. / PRODUITS DE PISCINES
HAYWARD CANADA, INC., a Canadian federal corporation (the “Canadian Borrower”), HAYWARD INTERMEDIATE, INC.,
a Delaware corporation (“Holdings”), the Lenders from time to time party thereto including, BANK OF AMERICA,
N.A. in its capacities as administrative agent and collateral agent (the “Administrative Agent”).
I, [●], the [Chief
Financial Officer/equivalent officer] of the US Borrower, in such capacity and not in an individual capacity, hereby certify as
follows:
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1.
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I am generally familiar with the businesses and assets of the US Borrower and its Restricted Subsidiaries,
taken as a whole, and am duly authorized to execute this Solvency Certificate on behalf of the US Borrower pursuant to the Credit
Agreement; and
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2.
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As of the date hereof and after giving effect to the Transactions and the incurrence of the indebtedness
and obligations being incurred in connection with the Credit Agreement and the Transactions, that, (i) the sum of the debt (including
contingent liabilities) of the US Borrower and its Restricted Subsidiaries, taken as a whole, does not exceed the fair value of
the assets of the US Borrower and its Restricted Subsidiaries, taken as a whole; (ii) the present fair saleable value of the assets
of the US Borrower and its Restricted Subsidiaries, taken as a whole, is not less than the amount that will be required to pay
the probable liabilities of the US Borrower and its Restricted Subsidiaries, taken as a whole, on their debts as they become absolute
and matured; (iii) the capital of the US Borrower and its Restricted Subsidiaries, taken as a whole, is not unreasonably small
in relation to the business of the US Borrower and its Restricted Subsidiaries, taken as a whole, contemplated as of the date hereof;
and (iv) the US Borrower and its Restricted Subsidiaries, taken as a whole, do not intend to incur, or believe that they will incur,
debts (including current obligations and contingent liabilities) beyond their ability to pay such debts as they mature in the ordinary
course of business. For the purposes hereof, 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 Standards No. 5).
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[Signature Page Follows]
IN WITNESS WHEREOF,
I have executed this Solvency Certificate on the date first above written.
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HAYWARD INDUSTRIES, INC.
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By:
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Name:
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Title:
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[Signature Page to Solvency Certificate]
EXHIBIT L
[FORM OF]
US AND CANADIAN BORROWING BASE CERTIFICATE
[ATTACHED]
FORM OF BORROWING BASE CERTIFICATE1
HAYWARD INDUSTRIES, INC.
Borrowing Base Certificate
As of
Bank of America, N.A.,
as Administrative Agent and Collateral Agent
under the Credit Agreement referred to below
Four Penn Center 1600 JFK Blvd.
Philadelphia, PA 19103
Reference is made to the ABL CREDIT AGREEMENT,
dated as of August 4, 2017 (the “Credit Agreement”), by and among Hayward Industries, Inc., a New Jersey corporation
(as survivor of the Merger (as defined in the Credit Agreement) with Hayward Acquisition Corp., a New Jersey corporation) (the
“US Borrower”), Hayward Pool Products Canada, Inc. / Produits De Piscines Hayward Canada, Inc., a Canadian federal
corporation (the “Canadian Borrower”), Hayward Intermediate, Inc., a Delaware corporation (“Holdings”),
the Lenders from time to time party thereto including, Bank of America, N.A. in its capacities as administrative agent and collateral
agent (the “Administrative Agent”). Terms defined in the Credit Agreement are used herein as therein defined.
Borrowing Base Certificate as of
prepared pursuant to and in accordance with the Credit Agreement and further certifies that (i) the calculation of the Borrowing
Base as of is true and correct, (ii)
all Accounts included in the calculation of Eligible Accounts satisfy the applicable requirements included in the definition of
“Eligible Accounts” and (iii) all Inventory included in the calculation of Eligible Inventory satisfy the applicable
requirements included in the definition of “Eligible Inventory,” in each case, in all material respects.
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[HAYWARD INDUSTRIES, INC., as US Borrower
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By:
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Name:
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Title:
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[HAYWARD POOL PRODUCTS CANADA, INC., as Canadian Borrower
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By:
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Name:
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Title:
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1 It is understood and agreed
that this form of Borrowing Base Certificate presents the US Borrowing Base and Canadian Borrowing Base on a combined basis for
convenience only and that the US Borrower and the Canadian Borrower shall be permitted to modify this form of Borrowing Base Certificate
as necessary to present each Borrowing Base on a standalone basis and, with the reasonable consent of the Administrative Agent,
to make any other changes to the form of Borrowing Base Certificate.
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Borrowing
Base Number: 001
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Borrowing
Base Date: xx/xx/xxxx
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Borrowing
Base Certificate
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Loan
Number
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AAA00
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AAA01
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AAA02
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AAA03
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Client
Name
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US
Pools
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Flow
Control
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Hayward
Canada
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Other
AR
|
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Beginning
AR Balance (AR balance from Prior BBC)
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-
|
-
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-
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-
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-
|
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|
|
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Sales
(+)
|
-
|
|
|
|
|
|
|
|
|
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|
Credit
Memos ( )
|
-
|
|
|
|
|
|
|
|
|
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|
Adjustments
(+)
|
-
|
|
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|
|
|
|
|
|
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Adjustments
( )
|
-
|
|
|
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|
|
|
|
|
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Net
Collections Includes Non A/R Cash ( )
|
-
|
|
|
|
|
|
|
|
|
|
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|
Discounts
( )
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Non
A/R Cash (+)
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Unapplied
Cash ( )
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Gross
Accounts Receivable
|
-
|
-
|
-
|
-
|
-
|
|
|
|
|
|
|
|
Ineligible
A/R
|
|
|
|
|
|
|
|
|
|
|
|
|
Past
due
|
-
|
-
|
-
|
-
|
-
|
|
|
|
|
|
|
|
Aged
Credits
|
-
|
-
|
-
|
-
|
-
|
|
|
|
|
|
|
|
Cross
Aged
|
-
|
-
|
-
|
-
|
-
|
|
|
|
|
|
|
|
Contra
|
-
|
-
|
-
|
-
|
-
|
|
|
|
|
|
|
|
Debit
Memo & Chargeback
|
-
|
-
|
-
|
-
|
-
|
|
|
|
|
|
|
|
Finance
Charge
|
-
|
-
|
-
|
-
|
-
|
|
|
|
|
|
|
|
Concentration
|
-
|
-
|
-
|
-
|
-
|
|
|
|
|
|
|
|
Bankruptcy/Credit
Hold
|
-
|
-
|
-
|
-
|
-
|
|
|
|
|
|
|
|
COD/Cash
|
-
|
-
|
-
|
-
|
-
|
|
|
|
|
|
|
|
Foreign
|
-
|
-
|
-
|
-
|
-
|
|
|
|
|
|
|
|
Government
|
-
|
-
|
-
|
-
|
-
|
|
|
|
|
|
|
|
Intercompany
|
-
|
-
|
-
|
-
|
-
|
|
|
|
|
|
|
|
Warranty
|
-
|
-
|
-
|
-
|
-
|
|
|
|
|
|
|
|
Direct
Rebates
|
-
|
-
|
-
|
-
|
-
|
|
|
|
|
|
|
|
Other
Distributors Rebate
|
-
|
-
|
-
|
-
|
-
|
|
|
|
|
|
|
|
Canada
Incentive Rebate
|
-
|
-
|
-
|
-
|
-
|
|
|
|
|
|
|
|
Unapplied
Cash
|
-
|
-
|
-
|
-
|
-
|
|
|
|
|
|
|
|
Ecostar
Rework
|
-
|
-
|
-
|
-
|
-
|
|
|
|
|
|
|
|
Total
Ineligible A/R
|
-
|
-
|
-
|
-
|
-
|
|
|
|
|
|
|
|
Net
Eligible A/R
|
-
|
-
|
-
|
-
|
-
|
|
|
|
|
|
|
|
Advance
Rate
|
0%
|
85%
|
85%
|
85%
|
|
|
|
|
|
|
|
|
Eligible
A/R @ Adv %
|
-
|
-
|
-
|
-
|
-
|
|
|
|
|
|
|
|
Less: Dilution
Reserve
|
-
|
-
|
-
|
-
|
-
|
|
|
|
|
|
|
|
Less: Other
Reserve
|
-
|
-
|
-
|
-
|
-
|
|
|
|
|
|
|
|
Eligible
A/R @ Adv %, net of Reserves
|
-
|
-
|
-
|
-
|
-
|
|
|
|
|
|
|
|
Sub
Limit
|
-
|
-
|
-
|
-
|
-
|
|
|
|
|
|
|
|
A/R
Availability
|
-
|
-
|
-
|
-
|
-
|
|
|
|
|
|
|
|
|
Borrowing Base Number: 001
|
|
|
|
Borrowing Base Date: xx/xx/xxxx
|
|
|
Borrowing Base Certificate
|
0.0% Effective Advance Rate
|
|
|
Loan
Number
|
AAA05
|
AAA06
|
AAA07
|
AAA08
|
AAA09
|
AAA10
|
AAA11
|
AAA12
|
AAA13
|
|
|
Client
Name
|
05/03/17
|
US
Pool RM
|
US
Pool WIP
|
US
Pool FG
|
Flow
Control RM
|
Flow
Control WIP
|
Flow
Control FG
|
Canada
RM
|
Canada
WIP
|
Canada
FG
|
|
|
Gross
Inventory Balance
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
|
In
Transit Inventory
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
|
Total
Gross Inventory
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
|
Ineligible
Inventory
|
|
|
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
|
Unexplained
Variance in Reconciliation
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
|
In
transit Inventory
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
|
Outside
Processors
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
|
Overissues
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
|
Supplies/Packaging
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
|
Intransit
Patckaging
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
|
Labels
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
|
Intransit
Labels
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
|
Intercompany
Profits
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
|
Lower
of Cost or Market Reserve
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
|
Slow Moving/Obsolete Inventory/Unmerchantable
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
|
Capitalized
Variances
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
|
Vendor
Purchase Rebates
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
|
Total
Ineligible Inventory
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
|
Net
Eligible Inventory
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
|
Advance
Rates
|
0%
|
70%
|
70%
|
70%
|
70%
|
70%
|
70%
|
70%
|
70%
|
70%
|
|
|
Eligible
Inventory @ Adv %
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
|
Less: Rents
and Fees on Leased Inv. Locations
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Less: AP
to Outside Processors
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Less: Other
Reserves
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Eligible
Inventory @ Adv Rates <A>
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
|
Gross
Inventory
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
|
Less: Inventory
Not Appraised
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
|
Appraised
Inventory
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
|
Net
Orderly Liquidation Value (NOLV) %
|
87.60%
|
18.40%
|
0.00%
|
96.20%
|
18.40%
|
0.00%
|
96.20%
|
18.40%
|
0.00%
|
96.20%
|
|
|
NOLV
% at lower rate ——————> 85%
|
74.50%
|
15.64%
|
0.00%
|
81.77%
|
15.64%
|
0.00%
|
81.77%
|
15.64%
|
0.00%
|
81.77%
|
|
|
Availability
based on Appraisal <B>
|
|
|
|
|
|
|
|
|
|
|
|
|
Lower
of <A> or <B> Individually by Inv Category
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
|
Individual
Sublimit
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
|
Inventory
Availability before the Subline
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
|
Inventory
Subline
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Net
Inventory Availability
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
0.0% Effective Advance Rate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rent
Reserve
|
-
|
|
|
|
|
|
|
|
|
|
|
Royalty
Reserve
|
-
|
|
|
|
|
|
|
|
|
|
|
WEPPA
Reserve
|
-
|
|
|
|
|
|
|
|
|
|
|
HST/QST/GST
Reserve
|
-
|
|
|
|
|
|
|
|
|
|
|
Total
Reserves
|
-
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Gross
Availability
|
-
|
|
|
|
|
|
|
|
|
|
|
Line
Amount
|
250,000
|
|
|
|
|
|
|
|
|
|
|
ADJUSTED
GROSS AVAILABILITY
|
-
|
|
|
|
|
|
|
|
|
|
|
Suppressed
Availability
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revolving
Loan Balance
|
|
|
|
|
|
|
|
|
|
|
|
Letters
of Credit
|
-
|
|
|
|
|
|
|
|
|
|
|
AP
Amount to Vendors with Lien/Security Interests
|
|
|
|
|
|
|
|
|
|
|
|
Availability
Block
|
|
|
|
|
|
|
|
|
|
|
|
Loan
Exposures
|
-
|
|
|
|
|
|
|
|
|
|
|
NET
AVAILABILITY / (SHORTFALL)
|
-
|
|
|
|
|
|
|
|
|
|
The undersigned
represents and warrants that:
(A) The information
provided above and in the accompanying supporting documentation is true, complete and correct, and complies fully with the conditions,
terms and covenants of the credit agreement dated ______________ as amended to the date (the “Agreement”) between
the undersigned and Bank of America (the “Bank”).
(B) Since the date
of the last financial statement or certification furnished to the Bank:
(a) There has been
no material adverse change in the financial condition or operations of the undersigned; and
(b) There is no event
which is, or with notice or lapse of time or both would be, a default under the Agreement
Client Name
By: ________________________________________ Date
_______________________
(Signature
& Title)
If this document is
being transmitted electronically, the Borrower acknowledges that by entering the name of its duly authorized officer on the Certificate,
that officer has reviewed the Certificate and affirmed the representations, warranties and certifications referenced above.
EXHIBIT M
[FORM OF]
HEDGE AGREEMENT DESIGNATION NOTICE
[attached]
[FORM OF]
HEDGE AGREEMENT DESIGNATION NOTICE
Bank of America, N.A.
Four Penn Center 1600 JFK Blvd.
Philadelphia, PA 19103
Attn: Christy Bowen
Facsimile: 267 675 0175
Email: Christy.kuklinski@baml.com
[●] [●], 20[●]
Ladies and Gentlemen:
Reference is hereby made to that certain
ABL Credit Agreement dated as of August 4, 2017 (as amended, restated, amended and restated, supplemented or otherwise modified
and in effect on the date hereof, the “Credit Agreement”), by and among Hayward Industries, Inc., a New Jersey
corporation (as survivor of the Merger (as defined in the Credit Agreement) with Hayward Acquisition Corp., a New Jersey corporation)
(the “US Borrower”), Hayward Pool Products Canada, Inc. / Produits De Piscines Hayward Canada, Inc., a Canadian
federal corporation (the “Canadian Borrower”), Hayward Intermediate, Inc., a Delaware corporation (“Holdings”),
the Lenders from time to time party thereto including, Bank of America, N.A. in its capacities as administrative agent and collateral
agent (the “Administrative Agent”). Terms defined in the Credit Agreement are used herein with the same meanings
unless otherwise defined herein.
The
undersigned hereby gives you notice pursuant to the Credit Agreement of the existence of a [Canadian Secured Hedging Obligation][US
Secured Hedging Obligation] pursuant to [ ]1
and the maximum amount of obligations of the undersigned that may arise thereunder is $[ ].
[Signature Page Follows]
1 Describe
Hedging Agreement
1 Name of
applicable Loan Party.
EXHIBIT N
[FORM OF]
ABL INTERCREDITOR AGREEMENT
[attached]
Execution Version
ABL INTERCREDITOR
AGREEMENT
THIS ABL INTERCREDITOR
AGREEMENT (as amended, restated, amended and restated, extended, supplemented or otherwise modified from time to time pursuant
to the terms hereof, this “Agreement”) is entered into as of August 4, 2017 between (x) BANK OF AMERICA,
N.A. (“Bank of America”), in its capacities as administrative agent and collateral agent (Bank of America,
together with its successors and assigns in such capacities, the “ABL Agent”) for (i) the financial institutions,
lenders and investors party from time to time to any ABL Credit Agreement (as defined below) (including any swingline lenders or
letter of credit issuers under the ABL Credit Agreement) (such financial institutions, lenders and investors, together with their
respective successors, assigns and transferees, the “ABL Lenders”), (ii) any ABL Cash Management Affiliates
(as defined below) and (iii) any ABL Hedging Banks (as defined below) (such ABL Cash Management Affiliates and ABL Hedging Banks,
together with the ABL Agent, the ABL Lenders and any other Secured Parties under, and as defined in, any ABL Credit Agreement,
the “ABL Secured Parties”), (y) Bank of America, in its capacities as administrative agent and collateral
agent (Bank of America, together with its successors and assigns in such capacities, the “First Lien Term Agent”)
for (i) the financial institutions, lenders and investors party from time to time to any First Lien Term Credit Agreement (as defined
below) (including, if applicable, any letter of credit issuers under the First Lien Term Credit Agreement) (such financial institutions,
lenders and investors, together with their respective successors, assigns and transferees, the “First Lien Term Lenders”),
(ii) any Term Cash Management Affiliates (as defined below) and (iii) any Term Hedging Affiliates (as defined below) (such Term
Cash Management Affiliates and Term Hedging Affiliates, together with the First Lien Term Agent and the First Lien Term Lenders
and any other Secured Parties under, and as defined in, any First Lien Term Credit Agreement, the “First Lien Term
Secured Parties”) and (z) Bank of America, in its capacities as administrative agent and collateral agent (Bank of
America, together with its successors and assigns in such capacities, the “Second Lien Term Agent” and,
together with the First Lien Term Agent, collectively, the “Term Agents”) for the financial institutions,
lenders and investors party from time to time to the Second Lien Term Credit Agreement (as defined below) (such financial institutions,
lenders and investors, together with their respective successors, assigns and transferees, the “Second Lien Term Lenders”
and, together with the First Lien Term Lenders, collectively, the “Term Lenders”) (the Second Lien Term
Agent, the Second Lien Term Lenders and any other Secured Parties under, and as defined in, any Second Lien Term Credit Agreement,
the “Second Lien Term Secured Parties” and, together with the First Lien Term Secured Parties, collectively, the “Term
Secured Parties”), and acknowledged and agreed to by the Initial Borrower, the Borrower, Holdings and the other ABL Guarantors
(as such terms are defined below).
RECITALS
A. Pursuant
to that certain ABL Credit Agreement dated as of the date hereof by and among, inter alia, HAYWARD INTERMEDIATE, INC., a Delaware
corporation (“Holdings”), HAYWARD ACQUISITION CORP., a New Jersey corporation (the “Initial
Borrower”, to be merged on the Closing Date with and into HAYWARD INDUSTRIES, INC., a New Jersey corporation (the
“Borrower”), with the Borrower as survivor of such merger), HAYWARD POOL PRODUCTS CANADA, INC. / Produits
De Piscines Hayward Canada, Inc., a Canadian federal corporation (the “Canadian Borrower”), the ABL Lenders
and the ABL Agent (the “ABL Credit Agreement”), the ABL Lenders have agreed to make certain loans and
other financial accommodations to or for the benefit of the Borrower and the Canadian Borrower.
B. Pursuant
to that certain US Loan Guaranty dated as of the date hereof (as the same may be amended, restated, amended and restated, extended,
supplemented and/or otherwise modified from time to time, the “ABL Guaranty”) by each of the ABL Guarantors
(as hereinafter defined) in favor of the ABL Agent, for the benefit of the ABL Secured Parties, the ABL Guarantors have agreed
to guarantee, inter alia, the payment and performance of the obligations under the ABL Documents (as hereinafter defined).
C. As
a condition to the effectiveness of the ABL Credit Agreement and to secure the obligations of the Borrower and the ABL Guarantors
(the Borrower and the ABL Guarantors, collectively, the “ABL Credit Parties”) under and in connection
with the ABL Documents, the ABL Credit Parties on the Closing Date have granted to the ABL Agent (for the benefit of the ABL Secured
Parties) Liens on the Collateral.
D. Pursuant
to that certain First Lien Credit Agreement dated as of the date hereof by and among Holdings, the Borrower, the First Lien Term
Lenders and the First Lien Term Agent (the “First Lien Term Credit Agreement”), the First Lien Term Lenders
have agreed to make certain loans to the Borrower.
E. Pursuant
to that certain Second Lien Credit Agreement dated as of the date hereof by and among Holdings, the Borrower, the Second Lien Term
Lenders and the Second Lien Term Agent (the “Second Lien Term Credit Agreement”), the Second Lien Term
Lenders have agreed to make certain loans to the Borrower.
F. Pursuant
to that certain first lien Guaranty Agreement and that certain second lien Guaranty Agreement, each dated as of the date hereof
(as the same may be amended, restated, amended and restated, extended, supplemented and/or otherwise modified from time to time,
each a “Term Guaranty”) by each of the Term Guarantors (as hereinafter defined) in favor of the relevant
Term Agent, for the benefit of the relevant Term Secured Parties represented by such Term Agent, the Term Guarantors have agreed
to guarantee, inter alia, the payment and performance of the obligations under each applicable Term Document (as hereinafter defined).
G. As
a condition to the effectiveness of the Term Credit Agreements and to secure the obligations of the Borrower and the Term Guarantors
(the Borrower and the Term Guarantors, collectively, the “Term Credit Parties”) under and in connection
with the Term Documents, the Term Credit Parties on the Closing Date have granted to the relevant Term Agent (in each case, for
the benefit of the relevant Term Secured Parties represented by such Term Agent) Liens on the Collateral.
H. Each
of the ABL Agent (on behalf of the ABL Secured Parties) and each of the Term Agents (in each case, on behalf of the relevant Term
Secured Parties represented by such Term Agent) and, by their acknowledgment hereof, the ABL Credit Parties and the Term Credit
Parties, desire to agree to the relative priority of Liens on the Collateral and certain other rights, priorities and interests
as provided herein.
NOW
THEREFORE, in consideration of the foregoing and for other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto agree as follows:
ARTICLE
1
DEFINITIONS
Section
1.1 UCC Definitions. Unless otherwise defined herein (or defined in reference to a Credit Document), all terms
which are defined in the Uniform Commercial Code are used herein as so defined, including the following: Account, Chattel Paper,
Commercial Tort Claim, Commodity Account, Commodity Contract, Deposit Account, Document, Electronic Chattel Paper, Financial Asset,
Fixtures, General Intangible, Instrument, Inventory, Investment Property, Letter of Credit Right, Money, Payment Intangible, Promissory
Note, Records, Securities Account, Security Entitlement, Supporting Obligation and Tangible Chattel Paper.
Section
1.2 Other Definitions. Subject to Section 1.1 hereof, as used in this Agreement, the following terms
shall have the meanings set forth below:
“ABL Agent”
shall have the meaning assigned to that term in the introduction to this Agreement and shall include any successor thereto as well
as any Person designated as the “Agent”, “Administrative Agent”, “Collateral Agent”, “Trustee”
or “Collateral Trustee” or similar term under any ABL Credit Agreement.
“ABL Bankruptcy
Sale” shall have the meaning set forth in Section 6.4 hereof.
“ABL Cash
Management Affiliate” shall mean any ABL Cash Management Bank (together with its respective successors, assigns and
transferees) that is owed ABL Cash Management Obligations by any ABL Credit Party or any Restricted Subsidiary, as applicable,
which ABL Cash Management Obligations are secured by Liens granted under one or more ABL Collateral Documents.
“ABL Cash
Management Agreement” shall mean any agreement to provide Cash Management Services between any ABL Cash Management
Bank and any ABL Credit Party (or any Restricted Subsidiary of any ABL Credit Party).
“ABL Cash
Management Bank” shall have the meaning assigned to the term “Secured Banking Services Provider” in any
ABL Credit Agreement.
“ABL Cash
Management Obligations” shall mean obligations owed by any ABL Credit Party or any Restricted Subsidiary, as applicable,
to any ABL Cash Management Bank in respect of or in connection with any Cash Management Services and pursuant to an ABL Cash Management
Agreement.
“ABL Collateral
Documents” shall mean all “Collateral Documents” (as defined in any ABL Credit Agreement) or similar
term, executed and delivered by one or more of the ABL Credit Parties, and all other security agreements, mortgages, deeds of trust
and other collateral documents executed and delivered by any ABL Credit Party in connection with any ABL Credit Agreement (in each
case, other than any such “Collateral Document” or similar term, other security agreement, mortgage, deed of trust
or other collateral document to the extent relating to any ABL Exclusive Credit Party or any ABL Exclusive Collateral), in each
case as the same may be amended, restated, amended and restated, extended, supplemented or otherwise modified from time to time.
“ABL Credit
Agreement” shall mean the ABL Credit Agreement dated as of the date hereof (as such agreement may be amended, restated,
amended and restated, supplemented or otherwise modified from time to time or refunded, refinanced, restructured, replaced, renewed,
repaid, increased or extended from time to time (whether in whole or in part, whether with the original administrative agent and
lenders or other agents and lenders or otherwise, and whether provided under the original credit agreement or one or more other
credit agreements, indentures, financing agreements or otherwise, including any agreement extending the maturity thereof, otherwise
restructuring all or any portion of the Indebtedness thereunder, increasing the amount loaned or issued thereunder, altering the
maturity thereof or providing for other Indebtedness), in each case as and to the extent permitted by this Agreement, unless such
agreement, instrument or document expressly provides that it is not intended to be and is not an ABL Credit Agreement).
“ABL Credit
Parties” shall have the meaning assigned to that term in the recitals to this Agreement.
“ABL Deposit
and Securities Accounts” shall mean all Deposit Accounts, Securities Accounts, collection accounts and lockbox accounts
(and all related lockboxes) of the ABL Credit Parties (other than the Term Loan Priority Accounts).
“ABL DIP
Financing” shall have the meaning set forth in Section 6.1(a) hereof.
“ABL Documents”
shall mean any ABL Credit Agreement, any ABL Guaranty, any ABL Collateral Document, any ABL Cash Management Agreement between any
ABL Credit Party and any ABL Cash Management Affiliate, any ABL Hedging Agreement between any ABL Credit Party and any ABL Hedging
Bank, any other ancillary agreement executed and delivered by an ABL Credit Party as to which any ABL Secured Party is a party
or a beneficiary and all other agreements, instruments, documents and certificates, now or hereafter executed by or on behalf of
any ABL Credit Party, and delivered to the ABL Agent or any other ABL Secured Party in connection with any of the foregoing or
any ABL Credit Agreement, in each case as the same may be amended, restated, amended and restated, extended, supplemented or otherwise
modified from time to time.
“ABL Exclusive
Collateral” shall have the meaning assigned to that term in the definition of “ABL Priority Collateral”.
“ABL Exclusive
Credit Parties” shall mean the collective reference to (x) each “Guarantor” (as defined in the ABL Credit
Agreement) and (y) each borrower under any ABL Credit Agreement that, in the case of each of the foregoing clauses (x) and (y),
does not also guarantee any Term Obligations or become a borrower under any Term Credit Agreement. For the avoidance of doubt,
any Canadian Loan Party is an ABL Exclusive Credit Party.
“ABL Guarantors”
shall mean the collective reference to Holdings and all “Subsidiary Guarantors” under and as defined in any ABL Credit
Agreement other than any ABL Exclusive Credit Party.
“ABL Guaranty”
shall have the meaning assigned to that term in the recitals to this Agreement and shall also include any other guaranty made by
any ABL Guarantor guaranteeing, inter alia, the payment and performance of any ABL Obligations.
“ABL Hedging
Agreement” means any “Hedge Agreement” as defined in the ABL Credit Agreement.
“ABL Hedging
Bank” shall mean any counterparty (together with its respective successors, assigns and transferees) that has entered
into an ABL Hedging Agreement with an ABL Credit Party with the obligations of such ABL Credit Party thereunder being secured by
Liens granted under one or more ABL Collateral Documents.
“ABL Joint
Collateral” shall have the meaning set forth in Section 3.6(a) hereof.
“ABL Lenders”
shall have the meaning assigned to that term in the introduction to this Agreement, and shall include any Person designated as
a “Lender” or similar term under any ABL Credit Agreement.
“ABL Obligations”
shall mean any and all obligations of every nature of each ABL Credit Party from time to time owed to the ABL Secured Parties,
or any of them, under, in connection with, or evidenced or secured by any ABL Document, including, without limitation, all “Obligations”
(as defined in any ABL Credit Agreement) or similar term, and whether for principal, interest, fees, expenses (including interest,
fees, or expenses which, but for the filing of a petition in bankruptcy with respect to such ABL Credit Party, would have accrued
on any ABL Obligation, whether or not a claim is allowed against such ABL Credit Party for such interest, fees, or expenses in
the related bankruptcy proceeding), reimbursement of amounts drawn under letters of credit, payments for early termination of ABL
Secured Hedging Obligations, indemnification or otherwise, and all other amounts owing or due from any ABL Credit Party under the
terms of any ABL Document.
“ABL Priority
Collateral” shall mean all Collateral (including, for the avoidance of doubt, any such assets that, but for the application
of Section 552 of the Bankruptcy Code or similar provision in any foreign Debtor Relief Laws, would constitute Collateral) consisting
of the following:
(1) all
Accounts and other Receivables, other than Accounts and other Receivables which constitute identifiable proceeds of Term Priority
Collateral;
(2) cash,
Money, cash equivalents and tax refunds (other than, in each case, to the extent constituting proceeds of Term Priority Collateral);
(3) all
(x) Deposit Accounts (other than Term Loan Priority Accounts) and Money and all cash, checks, other negotiable instruments, funds
and other evidences of payments properly held therein, including intercompany indebtedness between or among the ABL Credit Parties
or their Affiliates, to the extent owing in respect of ABL Priority Collateral, (y) Securities Accounts (other than Term Loan Priority
Accounts), Security Entitlements and Securities credited to such a Securities Account (in each case, other than Equity Interests
or Instruments evidencing indebtedness to the extent such indebtedness is not relating to, evidencing or owing in respect of, ABL
Priority Collateral (provided that to the extent such Instruments also relate to Term Priority Collateral then only the
portion thereof relating to ABL Priority Collateral shall be included in ABL Priority Collateral)) and (z) Commodity Accounts (other
than Term Loan Priority Accounts) and Commodity Contracts credited thereto, and, in each case, all cash, Money, cash equivalents,
checks and other property properly held therein or credited thereto (other than Equity Interests or Instruments evidencing indebtedness
to the extent such indebtedness is not relating to, evidencing or owing in respect of, ABL Priority Collateral (provided
that to the extent such Instruments also relate to Term Priority Collateral then only the portion thereof relating to ABL Priority
Collateral shall be included in ABL Priority Collateral)); provided, however, that, subject to the last sentence
of Section 4.1(a), to the extent that identifiable proceeds of Term Priority Collateral are deposited in any such Deposit
Accounts, Securities Accounts or Commodities Accounts, such identifiable proceeds shall be treated as Term Priority Collateral;
(4) all
Inventory;
(5) to
the extent relating to, evidencing or governing (x) any of the items referred to in the preceding clauses (1) through (4) constituting
ABL Priority Collateral, all Documents, Instruments (including Promissory Notes), Chattel Paper (including Tangible Chattel Paper
and Electronic Chattel Paper), Investment Property and Commercial Tort Claims or (y) any other ABL Priority Collateral, General
Intangibles (including all rights under contracts but excluding any Intellectual Property and Equity Interests); provided
that, to the extent any of the foregoing also relates to Term Priority Collateral, only that portion related to the items referred
to in the preceding clauses (1) through (4) shall be included in the ABL Priority Collateral;
(6) to
the extent relating to any of the items referred to in the preceding clauses (1) through (5) constituting ABL Priority Collateral,
all Supporting Obligations, letters of credit and Letter-of-Credit Rights; provided that, to the extent any of the foregoing
also relates to Term Priority Collateral only that portion related to the items referred to in the preceding clauses (1) through
(5) shall be included in the ABL Priority Collateral;
(7) all
books and Records relating to any of the items referred to in the preceding clauses (1) through (6) constituting ABL Priority Collateral
(including all books, databases, customer lists, engineer drawings, and Records, whether tangible or electronic, which contain
any information relating to any of the items referred to in the preceding clauses (1) through (6) constituting ABL Priority Collateral
but, in each case, excluding any Intellectual Property); and
(8) all
collateral security and guarantees with respect to any of the items referred to in the preceding clauses (1) through (7) constituting
ABL Priority Collateral and all cash, Money, cash equivalents, insurance proceeds, Instruments, Securities and Financial Assets
(other than Equity Interests) received as Proceeds of, and any other Proceeds of, any of the items referred to in the preceding
clauses (1) through (7) and this clause (8) constituting ABL Priority Collateral (“ABL Priority Proceeds”);
provided, that in no case shall ABL Priority Collateral include Equipment, Intellectual Property or Real Property owned
or leased by any Term Credit Party.
For the avoidance of
doubt, it is understood and agreed that “ABL Priority Collateral” shall include any Collateral consisting of assets
or property of any ABL Exclusive Credit Party and any Proceeds thereof which would not otherwise constitute ABL Priority Collateral
or Term Priority Collateral (such assets and property, the “ABL Exclusive Collateral”).
“ABL Priority
Proceeds” shall have the meaning assigned to that term in the definition of “ABL Priority Collateral”.
“ABL Recovery”
shall have the meaning set forth in Section 5.3(a) hereof.
“ABL Secured
Hedging Obligations” shall mean obligations owed by any ABL Credit Party to any ABL Hedging Bank in respect of or
in connection with any ABL Hedging Agreement.
“ABL Secured
Parties” shall have the meaning assigned to that term in the introduction to this Agreement.
“Affiliate”
shall mean, as applied to any Person, any other Person directly or indirectly Controlling, Controlled by, or under common Control
with, that Person.
“Agent”
shall mean the ABL Agent or a Term Agent (and collectively, the “Agents”).
“Agreement”
shall have the meaning assigned to that term in the introduction to this Agreement.
“Asset
Sale Proceeds Pledged Account” shall mean any account held at, and subject to the sole dominion and control of any
Term Agent in which the proceeds from any disposition of Term Priority Collateral is held pending reinvestment pursuant to any
Term Credit Agreement.
“Bankruptcy
Code” shall mean Title 11 of the United States Code, as now or hereafter in effect or any successor thereto.
“Borrower”
shall have the meaning assigned to that term in the Recitals of this Agreement.
“Business
Day” shall mean any day that is not a Saturday, Sunday or other day on which commercial banks in New York, New York
are authorized or required by law to remain closed (or are in fact closed).
“Canadian
Loan Party” shall have the meaning provided in the ABL Credit Agreement.
“Cash Management
Services” means any one or more of the following types of services or facilities: commercial credit cards, stored
value cards, purchasing cards, treasury management services, netting services, overdraft protections, check drawing services, automated
payment services (including depository, overdraft, controlled disbursement, ACH transactions, return items and interstate depository
network services), employee credit card programs, cash pooling services and any arrangements or services similar to any of the
foregoing and/or otherwise in connection with Cash (as defined in the First Lien Term Credit Agreement) management and Deposit
Accounts (as defined in the First Lien Term Credit Agreement).
“Closing
Date” shall mean August 4, 2017.
“Collateral”
shall mean all Property now owned or hereafter acquired by the Borrower or any Guarantor in or upon which a Lien is granted or
purported to be granted to any ABL Agent or any Term Agent under any of the ABL Collateral Documents or the Term Collateral Documents,
together with all rents, issues, profits, products and Proceeds thereof.
“Control”
means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled”
have meanings correlative thereto.
“Control
Collateral” shall mean any Collateral consisting of any Certificated Security (as defined in Section 8 102 of the
Uniform Commercial Code), Investment Property, Deposit Account, Securities Account, Instruments and any other Collateral as to
which a Lien may be perfected through possession or control by the secured party or any agent therefor.
“Controlling
Term Agent” shall mean (i) at any time prior to the Discharge of First Lien Term Obligations, the “Designated
First Priority Representative” (as such term is defined in the Term Loan Intercreditor Agreement) and (ii) after the Discharge
of First Lien Term Obligations has occurred and the ABL Agent has received written notice thereof from the Borrower and the “Designated
Second Priority Representative” (as such term is defined in the Term Loan Intercreditor Agreement), such Designated Second
Priority Representative.
“Copyright
Licenses” shall mean any written agreement, now or hereafter in effect, naming any Credit Party as licensor and granting
any right to any third party under any Copyright now or hereafter owned by such Credit Party or that such Credit Party otherwise
has the right to license, or naming any Credit Party as a licensee and granting any right to such Credit Party under any Copyright
now or hereafter owned by any third party, and all rights of such Credit Party under any such agreement.
“Copyrights”
shall mean the following: (a) all copyrights, rights and interests in copyrights, works protectable by copyright whether published
or unpublished, copyright registrations and copyright applications; (b) all renewals of any of the foregoing; (c) all income, royalties,
damages, and payments now or hereafter due and/or payable under any of the foregoing, including, without limitation, damages or
payments for past, present or future infringements for any of the foregoing; (d) the right to sue for past, present, and future
infringements of any of the foregoing; and (e) all rights corresponding to any of the foregoing.
“Credit
Documents” shall mean the ABL Documents and the Term Documents.
“Credit
Parties” shall mean the ABL Credit Parties and the Term Credit Parties.
“Debtor
Relief Laws” shall mean the Bankruptcy Code of the United States, the Companies’ Creditor Arrangement Act (Canada),
the Bankruptcy and Insolvency Act (Canada), the Winding up and Restructuring Act (Canada) and all other liquidation, conservatorship,
bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar
debtor relief Laws of the United States, Canada or other applicable jurisdictions from time to time in effect and affecting the
rights of creditors generally.
“Discharge
of ABL Obligations” shall mean the time at which all the ABL Obligations (other than contingent indemnification and
reimbursement obligations as to which no claim has been asserted by the Person entitled thereto) have been paid in full in cash,
all Letters of Credit (as defined in any ABL Credit Agreement) have expired or been terminated (other than Letters of Credit for
which other arrangements reasonably satisfactory to the ABL Agent and each applicable Issuing Bank (or similar term) (as defined
in any ABL Credit Agreement) have been made), all Commitments (as defined in the ABL Credit Agreement) have been terminated and,
with respect to any Hedging Obligations (as defined in the ABL Credit Agreement) and Banking Services Obligations (as defined in
any ABL Credit Agreement), such Hedging Obligations and Banking Services Obligations have either been paid in full, cash collateralized
on terms reasonably satisfactory to each applicable counterparty (or other arrangements reasonably satisfactory to the applicable
counterparty shall have been made) or are no longer secured by the Collateral pursuant to the terms of any ABL Credit Agreement.
“Discharge
of First Lien Term Obligations” shall mean the time at which all the First Lien Term Obligations (other than contingent
indemnification and reimbursement obligations as to which no claim has been asserted by the Person entitled thereto) have been
paid in full in cash and all Commitments (as defined in any First Lien Term Credit Agreement) have been terminated, and, with respect
to any First Lien Term Obligations in respect of Hedge Agreements (as defined in any First Lien Term Credit Agreement) and in respect
of Banking Services (as defined in any First Lien Term Credit Agreement), such First Lien Term Obligations have either been paid
in full, cash collateralized on terms reasonably satisfactory to each applicable counterparty (or other arrangements reasonably
satisfactory to the applicable counterparty shall have been made) or are no longer secured by the Collateral pursuant to the terms
of any First Lien Term Credit Agreement.
“Discharge
of Second Lien Term Obligations” shall mean the time at which all the Second Lien Term Obligations (other than contingent
indemnification and reimbursement obligations as to which no claim has been asserted by the Person entitled thereto) have been
paid in full in cash and all Commitments (as defined in each Second Lien Term Credit Agreement) have been terminated.
“Discharge
of Term Obligations” shall mean the time at which both the Discharge of First Lien Term Obligations and Discharge of
Second Lien Term Obligations shall have occurred.
“Domain Names”
shall mean all Internet domain names and associated URL addresses in or to which any Credit Party now or hereafter has any right,
title or interest.
“Enforcement
Notice” shall mean a written notice delivered by either the ABL Agent to the Controlling Term Agent, or by the Controlling
Term Agent to the ABL Agent, announcing that it intends to commence an Exercise of Any Secured Creditor Remedies.
“Equipment”
shall mean (x) any “equipment” as such term is defined in Article 9 of the Uniform Commercial Code, and in any event,
shall include, but shall not be limited to, all machinery, equipment, furnishings, appliances, furniture, fixtures, tools, and
vehicles now or hereafter owned by any Credit Party in each case, regardless of whether characterized as equipment under the Uniform
Commercial Code (but excluding any such items which constitute Inventory), and (y) any and all additions, substitutions and replacements
of any of the foregoing and all accessions thereto, wherever located, whether or not at any time of determination incorporated
or installed therein or attached thereto, and all replacements therefor, together with all attachments, components, parts, equipment
and accessories installed thereon or affixed thereto.
“Equity Interest”
shall mean any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation,
any and all equivalent ownership interests in a Person (other than a corporation), including partnership interests and membership
interests, and any and all warrants, rights or options to purchase or other arrangements or rights to acquire any of the foregoing,
but excluding for the avoidance of doubt any Indebtedness convertible into or exchangeable for any of the foregoing.
“Event
of Default” shall mean an “Event of Default” or similar term under and as defined in any ABL Credit Agreement
or any Term Credit Agreement, as applicable.
“Exercise
of Any Secured Creditor Remedies” or “Exercise Any Secured Creditor Remedies” or “Exercise
of Secured Creditor Remedies” or similar phrase shall mean, except as otherwise provided in the final sentence of
this definition:
(a) the
taking by any Secured Party of any action to enforce or realize upon any Lien (including any judgment lien), including the institution
of any foreclosure proceedings, action, exercise of a power of sale or the noticing of any public or private sale pursuant to Article
9 of the Uniform Commercial Code or other applicable law;
(b) the
exercise by any Secured Party of any right or remedy provided to a secured creditor on account of a Lien under any of the Credit
Documents, under applicable law, in an Insolvency Proceeding or otherwise, including the election to retain any of the Collateral
in satisfaction of a Lien;
(c) the
taking of any action by any Secured Party or the exercise of any right or remedy by any Secured Party in respect of the collection
on, set off against, marshaling of, injunction respecting or foreclosure or power of sale on the Collateral or the Proceeds thereof;
(d) the
appointment on the application of a Secured Party, of a liquidator, trustee in bankruptcy, receiver, receiver and manager or interim
receiver of all or part of the Collateral;
(e) the
sale, lease, license or other disposition of all or any portion of the Collateral by private or public sale conducted by any Secured
Party or any other means at the direction of any Secured Party permissible under applicable law;
(f) the
exercise of any other right of a secured creditor under Part 6 of Article 9 of the Uniform Commercial Code or under provisions
of similar effect under other applicable law; and
(g) the exercise
by any Secured Party of any voting rights relating to any Equity Interest included in the Collateral.
For the avoidance of doubt, none of the
following shall be deemed to constitute an Exercise of Any Secured Creditor Remedies or an Exercise of Secured Creditor Remedies:
(i) the filing of a proof of claim or voting with respect to such claim in any Insolvency Proceeding or the seeking of adequate
protection (subject to Section 6.3), in each instance in a manner otherwise consistent with the terms and conditions of
this Agreement, (ii) the exercise of rights with respect to the ABL Priority Collateral by the ABL Agent upon the occurrence of
a Cash Dominion Period (as defined in any ABL Credit Agreement) of the type provided in the ABL Credit Agreement as in effect on
the Closing Date, including, without limitation, the notification of account debtors, depository institutions or any other Person
to deliver proceeds of ABL Priority Collateral to the ABL Agent, (iii) the consent by the ABL Agent to a going out of business
sale or other disposition by any Credit Party of any of the ABL Priority Collateral (other than after the occurrence of an Event
of Default), (iv) the consent of the Controlling Term Agent to disposition by any Credit Party of any of the Term Priority Collateral
(other than after the occurrence of an Event of Default), (v) the reduction of advance rates or sub limits by the ABL Agent and
the ABL Lenders, (vi) the change in eligibility criteria for components of the borrowing base under the ABL Credit Agreement by
the ABL Agent and the ABL Lenders or (vii) the imposition of Availability Reserves (as defined in the ABL Credit Agreement) by
the ABL Agent.
“First
Lien Term Agent” shall have the meaning assigned to that term in the introduction to this Agreement.
“First
Lien Term Credit Agreement” (i) shall mean the First Lien Term Credit Agreement referred to in the recitals to this
Agreement (as such agreement may be amended, restated, amended and restated, supplemented or otherwise modified from time to time
or refunded, refinanced, restructured, replaced, renewed, repaid, increased or extended from time to time (whether in whole or
in part, whether with the original administrative agent and lenders or other agents and lenders or otherwise, and whether provided
under the original credit agreement or one or more other credit agreements, indentures, financing agreements or otherwise, including
any agreement extending the maturity thereof, otherwise restructuring all or any portion of the Indebtedness thereunder, increasing
the amount loaned or issued thereunder, altering the maturity thereof or providing for other Indebtedness), in each case as and
to the extent permitted by this Agreement, unless such agreement, instrument or document expressly provides that it is not intended
to be and is not a First Lien Term Credit Agreement) and (ii) shall include any one or more other agreements, indentures or facilities
relating to additional First Lien Term Obligations joined to this Agreement pursuant to Section 7.20 hereof.
“First
Lien Term Credit Agreement Obligations” shall have the meaning assigned to that term in the definition of “First
Lien Term Obligations”.
“First
Lien Term Documents” shall mean any First Lien Term Credit Agreement, any Term Guaranty relating to the First Lien
Term Obligations, any Term Collateral Document relating to the First Lien Term Obligations, any Cash Management Services between
any Term Credit Party and any Term Cash Management Affiliate, any Term Hedging Agreement between any Term Credit Party and any
Term Hedging Affiliate, any other ancillary agreement executed and delivered by a Term Credit Party as to which any First Lien
Term Secured Party is a party or a beneficiary relating to the First Lien Term Obligations and all other agreements, instruments,
documents and certificates, now or hereafter executed by or on behalf of any Term Credit Party, and delivered to the First Lien
Term Agent or any other First Lien Term Secured Party, in connection with any of the foregoing or any First Lien Term Credit Agreement,
in each case as the same may be amended, restated, amended and restated, extended, supplemented or otherwise modified from time
to time.
“First
Lien Term Lender” shall have the meaning assigned to that term in the introduction to this Agreement, and shall include
any Person that is a “Lender” or similar term under any First Lien Term Credit Agreement.
“First
Lien Term Obligations” shall mean (i) any and all obligations of every nature of each Term Credit Party from time
to time owed to the First Lien Term Secured Parties, or any of them, under, in connection with, or evidenced or secured by any
First Lien Term Document, including, without limitation, all “Obligations” (as defined in the First Lien Term Credit
Agreement) or similar term, and whether for principal, interest, fees, expenses (including interest, fees, or expenses which, but
for the filing of a petition in bankruptcy with respect to such Term Credit Party, would have accrued on any First Lien Term Obligation,
whether or not a claim is allowed against such Term Credit Party for such interest, fees, or expenses in the related bankruptcy
proceeding), payments for early termination of Term Secured Hedging Obligations, indemnification or otherwise, and all other amounts
owing or due from any Term Credit Party under the terms of any First Lien Term Document, as amended, restated, modified, renewed,
refunded, replaced or refinanced in whole or in part from time to time (the “First Lien Term Credit Agreement Obligations”)
and (ii) all Other First Lien Term Obligations.
“First
Lien Term Secured Parties” shall have the meaning assigned to that term in the introduction to this Agreement and
shall include all other Persons holdings First Lien Term Obligations.
“Governmental
Authority” means any federal, state, provincial, municipal, national or other government, governmental department,
commission, board, bureau, court, agency or instrumentality or political subdivision thereof or any entity or officer exercising
executive, legislative, judicial, regulatory or administrative functions of or pertaining to any government or any court, in each
case whether associated with a state or locality of the U.S., the U.S., or a foreign government or any other political subdivision
thereof, including central banks and supra national bodies.
“Guarantor”
shall mean any of the ABL Guarantors or Term Guarantors.
“Holdings”
shall have the meaning assigned to that term in the recitals to this Agreement.
“Indebtedness”
shall have the meaning provided in the ABL Credit Agreement and the Term Credit Agreements as in effect on the date hereof.
“Insolvency
Proceeding” shall mean (a) any case, action or proceeding before any court or other Governmental Authority relating
to bankruptcy, reorganization, insolvency, liquidation, receivership, dissolution, arrangement (pursuant to any corporate statutes)
winding up or relief of debtors, or (b) any general assignment for the benefit of creditors, composition, marshalling of assets
for creditors or other similar arrangement in respect of a Person’s creditors generally or any substantial portion of a Person’s
creditors; in each case covered by clauses (a) and (b) undertaken under any Debtor Relief Laws.
“Intellectual
Property” shall mean all intellectual and similar property of every kind and nature now owned, licensed or hereafter
acquired by any Credit Party that is subject to a security interest under any ABL Documents and any Term Documents, including inventions,
designs, Patents, Copyrights, Licenses, Trademarks, Domain Names, trade secrets, confidential or proprietary technical and business
information, know how, show how or other data or information, software, databases, all other proprietary information and all embodiments
or fixations thereof and related documentation and registrations and all additions, improvements and accessions to, and books and
records describing or used in connection with, any of the foregoing.
“Lenders”
means, collectively, all of the ABL Lenders and the Term Lenders.
“License”
shall mean any Patent License, Trademark License, Copyright License, or other license or sublicense agreement granting rights under
Intellectual Property to which any Credit Party is a party.
“Lien”
shall mean any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge,
or preference, priority or other security interest or preferential arrangement of any kind or nature whatsoever (including any
conditional sale or other title retention agreement, any easement, right of way or other encumbrance on title to real property,
and any Capital Lease having substantially the same economic effect as any of the foregoing), in each case, in the nature of security;
provided that in no event shall an operating lease in and of itself be deemed to constitute a Lien on any asset.
“Lien Priority”
shall mean with respect to any Lien of the ABL Secured Parties or the Term Secured Parties in the Collateral, the order of priority
of such Lien as specified in Section 2.1 hereof.
“Other
First Lien Term Obligations” means (a) if the Pari Passu Intercreditor Agreement (as defined in the First Lien Term
Credit Agreement) has been entered into, all “Additional Pari Obligations” (as defined in such Pari Passu Intercreditor
Agreement), (b) if the Term Loan Intercreditor Agreement has been entered into, all other obligations in connection with, or evidenced
or secured by, “Additional First Priority Debt” (as defined in the Term Loan Intercreditor Agreement) and (c) in any
event, any indebtedness or obligations (other than First Lien Term Credit Agreement Obligations) of the Loan Parties (as defined
in the Term Loan Intercreditor Agreement) that are to be secured with a Lien pari passu with the Liens on the Collateral securing
the First Lien Term Credit Agreement Obligations and are designated by the Borrower as First Lien Term Obligations hereunder; provided,
however, that with respect to this clause (c), the requirements set forth in Section 7.20 shall have been satisfied.
“Other
Liabilities” means ABL Cash Management Obligations and ABL Secured Hedging Obligations.
“Other
Second Lien Term Obligations” means (a) if the Pari Passu Intercreditor Agreement (as defined in the Second Lien
Term Credit Agreement) has been entered into, all “Additional Pari Obligations” as defined in such Pari Passu Intercreditor
Agreement, (b) if the Term Loan Intercreditor Agreement has been entered into, all other obligations in connection with, or evidenced
or secured by, “Additional Second Priority Debt” as defined in the Term Loan Intercreditor Agreement and (c) in any
event, any indebtedness or obligations (other than Second Lien Term Credit Agreement Obligations) of the Loan Parties (as defined
in the Term Loan Intercreditor Agreement) that are to be secured with a Lien pari passu with the Liens on the Collateral securing
the Second Lien Term Credit Agreement Obligations and are designated by the Borrower as Second Lien Term Obligations hereunder;
provided, however, that with respect to this clause (c), the requirements set forth in Section 7.20 shall have been satisfied.
“Party”
shall mean the ABL Agent, the First Lien Term Agent or the Second Lien Term Agent (and collectively, the “Parties”).
“Patent
License” shall mean any written agreement, now or hereafter in effect, naming any Credit Party as licensor and granting
to any third party any right to develop, commercialize, import, make, have made, offer for sale, use or sell any invention on which
a Patent, now or hereafter owned by such Credit Party or that such Credit Party otherwise has the right to license, is in existence,
or naming any Credit Party as licensee and granting to such Credit Party any such right with respect to any invention on which
a Patent, now or hereafter owned by any third party, is in existence, and all rights of such Credit Party under any such agreement.
“Patents”
shall mean the following: (a) any and all patents and patent applications; (b) all inventions described and claimed therein; (c)
all reissues, divisions, continuations, renewals, extensions and continuations in part thereof; (d) all income, royalties, damages,
claims, and payments now or hereafter due or payable under and with respect thereto, including, without limitation, damages and
payments for past, present and future infringements thereof; (e) all rights to sue for past, present, and future infringements
thereof; and (f) all rights corresponding to any of the foregoing.
“Person”
shall mean any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership,
Governmental Authority or any other entity.
“Priority
Collateral” shall mean the ABL Priority Collateral or the Term Priority Collateral, as applicable.
“Proceeds”
shall mean (a) all “proceeds,” as defined in Article 9 of the Uniform Commercial Code, with respect to the Collateral,
and (b) whatever is recoverable or recovered when any Collateral is sold, exchanged, collected, or disposed of, whether voluntarily
or involuntarily.
“Property”
shall mean any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible.
“Real Property”
shall mean any right, title or interest in and to real property, including any fee interest, leasehold interest, easement, or license
and any other right to use or occupy real property.
“Receivables”
shall mean all of the following now owned or hereafter arising or acquired assets of any ABL Credit Party: (a) all amounts at any
time payable to any ABL Credit Party in respect of the sale or other Disposition of any Account; (b) all interest, fees, late charges,
penalties, collection fees, and other amounts due or to become due or otherwise payable in connection with any Account; (c) all
credit card receivables and other payment intangibles; and (d) all other contract rights, chattel paper, instruments, or other
forms of rights to payment, in each case arising from the sale, lease, or other Disposition of Inventory, the licensing of Inventory,
the rendition of services, or otherwise related to any Accounts or Inventory of an ABL Credit Party (including, choses in action,
causes of action, or other rights and claims against carriers or shippers, rights to indemnification, and identifiable proceeds
thereof, casualty or similar types of insurance, in each case relating to ABL Priority Collateral and identifiable proceeds thereof).
“Restricted
Subsidiary” means (a) with respect to ABL Credit Parties, any “Restricted Subsidiary” under and as defined
in any ABL Credit Agreement and (b) with respect to the Term Credit Parties, any “Restricted Subsidiary” under and
as defined in any Term Credit Agreement.
“Second
Lien Term Agent” shall have the meaning assigned to that term in the introduction to this Agreement.
“Second
Lien Term Credit Agreement” (i) shall mean the Second Lien Term Credit Agreement referred to in the recitals to this
Agreement (as such agreement may be amended, restated, amended and restated, supplemented or otherwise modified from time to time
or refunded, refinanced, restructured, replaced, renewed, repaid, increased or extended from time to time (whether in whole or
in part, whether with the original administrative agent and lenders or other agents and lenders or otherwise, and whether provided
under the original credit agreement or one or more other credit agreements, indentures, financing agreements or otherwise, including
any agreement extending the maturity thereof, otherwise restructuring all or any portion of the Indebtedness thereunder, increasing
the amount loaned or issued thereunder, altering the maturity thereof or providing for other Indebtedness), in each case as and
to the extent permitted by this Agreement, unless such agreement, instrument or document expressly provides that it is not intended
to be and is not a Second Lien Term Credit Agreement) and (ii) shall include any one or more other agreements, indentures or facilities
relating to additional Second Lien Term Obligations joined to this Agreement pursuant to Section 7.20 hereof.
“Second
Lien Term Credit Agreement Obligations” shall have the meaning assigned to that term in the definition of “Second
Lien Term Obligations”.
“Second
Lien Term Documents” shall mean any Second Lien Term Credit Agreement, any Term Guaranty relating to the Second Lien
Term Obligations, any Term Collateral Document relating to the Second Lien Term Obligations, any other ancillary agreement executed
and delivered by a Term Credit Party as to which any Second Lien Term Secured Party is a party or a beneficiary relating to the
Second Lien Term Obligations and all other agreements, instruments, documents and certificates, now or hereafter executed by or
on behalf of any Term Credit Party, and delivered to the Second Lien Term Agent or any other Second Lien Term Secured Party, in
connection with any of the foregoing or any Second Lien Term Credit Agreement, in each case as the same may be amended, restated,
amended and restated, extended, supplemented or otherwise modified from time to time.
“Second
Lien Term Lender” shall have the meaning assigned to that term in the introduction to this Agreement, and shall include
any Person that is a “Lender” or similar term under any Second Lien Term Credit Agreement.
“Second
Lien Term Obligations” (i) shall mean any and all obligations of every nature of each Term Credit Party from time
to time owed to the Second Lien Term Secured Parties, or any of them, under, in connection with, or evidenced or secured by any
Second Lien Term Document, including, without limitation, all “Obligations” (as defined in the Second Lien Term Credit
Agreement) or similar term, and whether for principal, interest, fees, expenses (including interest, fees, or expenses which, but
for the filing of a petition in bankruptcy with respect to such Term Credit Party, would have accrued on any Second Lien Term Obligation,
whether or not a claim is allowed against such Term Credit Party for such interest, fees, or expenses in the related bankruptcy
proceeding) indemnification or otherwise, and all other amounts owing or due from any Term Credit Party under the terms of any
Second Lien Term Document, as amended, restated, modified, renewed, refunded, replaced or refinanced in whole or in part from time
to time (the “Second Lien Term Credit Agreement Obligations”) and (ii) all Other Second Lien Term Obligations.
“Second
Lien Term Secured Parties” shall have the meaning assigned to that term in the introduction to this Agreement and
all other Persons holdings Second Lien Term Obligations.
“Secured
Parties” shall mean the ABL Secured Parties and the Term Secured Parties.
“Subsidiary”
shall mean, with respect to any Person, any corporation, partnership, limited liability company, association, joint venture or
other business entity of which more than 50% of the total voting power of stock or other ownership interests entitled (without
regard to the occurrence of any contingency) to vote in the election of the Person or Persons (whether directors, trustees or other
Persons performing similar functions) having the power to direct or cause the direction of the management and policies thereof
is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other subsidiaries of such Person
or a combination thereof, in each case to the extent such entity’s financial results are required to be included in such
Person’s consolidated financial statements under GAAP; provided that in determining the percentage of ownership interests
of any Person controlled by another Person, no ownership interests in the nature of a “qualifying share” of the former
Person shall be deemed to be outstanding. Unless otherwise specified, “subsidiary” shall mean any subsidiary of the
Borrower.
“Term Agents”
shall have the meaning assigned to that term in the introduction to this Agreement and shall include any successor thereto as well
as any Person designated as the “Agent”, “Administrative Agent”, “Collateral Agent”, “Trustee”,
“Collateral Trustee” or similar term under any Term Credit Agreement that become party to this Agreement.
“Term Arranger”
means any Person that has acted as an arranger, bookrunner or in a similar role under any Term Document.
“Term Bankruptcy
Sale” shall have the meaning set forth in Section 6.4 hereof.
“Term Cash
Management Affiliate” shall mean any Term Cash Management Bank (together with its respective successors, assigns
and transferees) that is owed Term Cash Management Obligations by any Term Credit Party and which Term Cash Management Obligations
are secured by Liens granted under one or more Term Collateral Documents under the First Lien Term Credit Agreement.
“Term Cash
Management Agreement” shall mean any agreement entered into between a Term Credit Party and a Term Cash Management
Bank in connection with Cash Management Services.
“Term Cash
Management Bank” shall mean any Term Agent, Term Arranger or Term Lender or any of their respective Affiliates that
has entered into a Term Cash Management Agreement.
“Term Cash
Management Obligations” means, in connection with any First Lien Term Credit Agreement, obligations owed by any Term
Credit Party to any Term Cash Management Bank in respect of or in connection with any Cash Management Services pursuant to any
Term Cash Management Agreement.
“Term Cash
Proceeds Notice” shall mean a written notice delivered by the relevant Term Agent to the ABL Agent (a) stating that
an Event of Default has occurred and is continuing under any Term Document and specifying the relevant Event of Default and (b)
stating that certain cash proceeds which may be deposited in an ABL Deposit and Securities Account constitute Term Priority Collateral,
and reasonably identifying the amount of such proceeds and specifying the origin thereof.
“Term Collateral
Documents” shall mean all “Collateral Documents” (as defined in any Term Credit Agreement) or similar
term, executed and delivered by one or more Term Credit Parties, and all other security agreements, mortgages, deeds of trust and
other collateral documents executed and delivered by any Term Credit Party in connection with any Term Credit Agreement (in each
case, other than any “Collateral Document” (as defined in any Term Credit Agreement) or similar term, security agreement,
mortgage, deed of trust or other collateral document to the extent relating to any Term Exclusive Credit Party or any Term Exclusive
Collateral), in each case as the same may be amended, restated, amended and restated, extended, supplemented or otherwise modified
from time to time.
“Term Credit
Agreements” shall mean any First Lien Term Credit Agreement and any Second Lien Term Credit Agreement and shall include
any one or more other agreements, indentures or facilities (i) extending the maturity of, consolidating, restructuring, refunding,
replacing or refinancing all or any portion of the Term Obligations, whether by the same or any other agent, trustee, lender, group
of lenders, creditor or group of creditors and whether or not increasing the amount of any Indebtedness that may be incurred or
issued thereunder and (ii) relating to additional Term Obligations joined to this Agreement pursuant to Section 7.20 hereof.
“Term Credit
Parties” shall have the meaning assigned to that term in the recitals to this Agreement.
“Term DIP
Financing” shall have the meaning set forth in Section 6.1(b) hereof.
“Term Documents”
shall mean any Term Credit Agreement, any Term Guaranty, any Term Collateral Document, the Term Loan Intercreditor Agreement, any
Cash Management Services between any Term Credit Party and any Term Cash Management Affiliate, any Term Hedging Agreements between
any Term Credit Party and any Term Hedging Affiliate, any other ancillary agreement executed and delivered by a Term Credit Party
as to which any Term Secured Party is a party or a beneficiary and all other agreements, instruments, documents and certificates,
now or hereafter executed by or on behalf of any Term Credit Party, and delivered to the relevant Term Agent or any other Term
Secured Party in connection with any of the foregoing or any Term Credit Agreement, in each case as the same may be amended, restated,
amended and restated, extended, supplemented or otherwise modified from time to time.
“Term Exclusive
Collateral” shall have the meaning assigned to that term in the definition of “Term Priority Collateral”.
“Term Exclusive
Credit Parties” shall mean the collective reference to (x) each “Guarantor” (as defined in any Term Credit
Agreement) and (y) each borrower under any Term Credit Agreement that, in the case of each of the foregoing clauses (x) and (y),
does not also guarantee any ABL Obligations or become a borrower under any ABL Credit Agreement.
“Term Guarantors”
shall mean the collective reference to Holdings and all “Subsidiary Guarantors” under and as defined in the Term Credit
Agreements, in each case, other than any Term Exclusive Credit Party.
“Term Guaranty”
shall have the meaning assigned to that term in the recitals to this Agreement and shall also include any other guaranty made by
a Term Guarantor guaranteeing, inter alia, the payment and performance of any Term Obligations.
“Term Hedging
Bank” shall mean any Term Agent, Term Arranger or Term Lender or any of their respective Affiliates that has entered
into a Term Hedging Agreement.
“Term Hedging
Affiliate” shall mean any Term Hedging Bank (together with its respective successors, assigns and transferees) that
has entered into a Term Hedging Agreement with any Term Credit Party with the obligations of such Term Credit Party thereunder
being secured by Liens granted under one or more Term Collateral Documents under the First Lien Term Credit Agreement.
“Term Hedging
Agreement” shall mean any agreement entered into between a Term Credit Party and a Term Hedging Bank in connection
with Secured Hedging Obligations under, and as defined in, the First Lien Term Credit Agreement.
“Term Lenders”
shall have the meaning assigned to that term in the introduction to this Agreement, and shall include any Person designated as
a “Lender” or similar term under any Term Credit Agreement.
“Term Loan
Intercreditor Agreement” shall mean the Term Intercreditor Agreement, dated as of the date hereof, by and among the
First Lien Term Agent for the First Lien Term Secured Parties, the Second Lien Term Agent for the Second Lien Term Secured Parties,
Holdings, the Borrower and the other Term Credit Parties party thereto, as amended, restated, amended and restated, extended, supplemented
or otherwise modified.
“Term Loan
Priority Accounts” means the Asset Sale Proceeds Pledged Account and any Deposit Accounts, Securities Accounts or
Commodity Accounts, in each case that contain solely Term Priority Collateral or identifiable proceeds of the Term Priority Collateral
(it being understood that any property in such Deposit Accounts, Securities Accounts or Commodities Accounts which is not Term
Priority Collateral or identifiable proceeds of Term Priority Collateral shall not be Term Priority Collateral solely by virtue
of being on deposit in any such Deposit Account, Securities Account or Commodity Account).
“Term Obligations”
shall mean collectively the First Lien Term Obligations and the Second Lien Term Obligations.
“Term Priority
Collateral” shall mean all Collateral (including, for the avoidance of doubt, any such assets that, but for the application
of Section 552 of the Bankruptcy Code or any similar provision in any foreign Debtor Relief Laws, would constitute Collateral)
consisting of the following:
(1) all
Equipment, Fixtures, Real Property, Intellectual Property, intercompany indebtedness between or among the Credit Parties or their
Affiliates, except to the extent constituting ABL Priority Collateral, and Investment Property (other than any Investment Property
that constitutes ABL Priority Collateral);
(2) except
to the extent constituting ABL Priority Collateral, all Instruments, Documents and General Intangibles (including contract rights);
(3) Term
Loan Priority Accounts;
(4) all
other Collateral, other than the ABL Priority Collateral; and
(5) all
collateral security and guarantees with respect to any of the foregoing, items referred to in the preceding clauses (1) through
(4) constituting Term Priority Collateral and all cash, Money, cash equivalents, insurance proceeds, Instruments, Securities and
Financial Assets received as Proceeds of, and any other Proceeds of, any of the foregoing items referred to in the preceding clauses
(1) through (4) and this clause (5) constituting Term Priority Collateral, other than the ABL Priority Collateral (“Term
Priority Proceeds”).
For the avoidance of
doubt, it is understood and agreed that “Term Priority Collateral” shall include any Collateral consisting of assets
or property of any Term Exclusive Credit Party and any Proceeds thereof which would not otherwise constitute Term Priority Collateral
or ABL Priority Collateral (such assets and property, the “Term Exclusive Collateral”).
“Term Priority
Proceeds” shall have the meaning assigned to that term in the definition of “Term Priority Collateral”.
“Term Recovery”
shall have the meaning set forth in Section 5.3(b) hereof.
“Term Secured
Hedging Obligations” shall mean, in connection with the First Lien Term Credit Agreement, obligations owed by any
Term Credit Party to any Term Hedging Bank in respect of or in connection with any Term Hedging Agreement.
“Term Secured
Parties” shall have the meaning assigned to that term in the introduction to this Agreement.
“Trademark
License” shall mean any written agreement, now or hereafter in effect, granting to any third party any right to use
any Trademark now or hereafter owned by any Credit Party or that any Credit Party otherwise has the right to license to a third
party, or granting to any Credit Party any right to use any Trademark now or hereafter owned by any third party, and all rights
of any Credit Party under any such agreement (not including vendor or distribution agreements that allow incidental use of intellectual
property rights in connection with the sale or distribution of such products or services).
“Trademarks”
shall mean the following: (a) all trademarks (including service marks), common law marks, trade names, trade dress, domain names
and logos, slogans and other indicia of origin under the laws of any jurisdiction in the world, and the registrations and applications
for registration thereof and the goodwill of the business connected to the use of and symbolized by the foregoing; (b) all renewals
of the foregoing; (c) all income, royalties, damages, and payments now or hereafter due or payable with respect thereto, including,
without limitation, damages, claims and payments for past, present and future infringements or dilutions thereof; (d) all rights
to sue for past, present, and future infringements or dilutions of any of the foregoing, including the right to settle suits involving
claims and demands for royalties owing; and (e) all rights corresponding to any of the foregoing.
“Uniform
Commercial Code” or “UCC” shall mean the Uniform Commercial Code as in effect from time
to time in the State of New York; provided that, if by reason of mandatory provisions of law, perfection, or the effect
of perfection or non perfection or the priority of a security interest in any Collateral or the availability of any remedy hereunder
is governed by the Uniform Commercial Code as in effect in a jurisdiction other than New York, “Uniform Commercial Code”
means the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such
perfection or effect of perfection or non perfection or priority or availability of such remedy, as the case may be.
“Use Period”
means the period commencing on the date that the ABL Agent or an agent acting on its behalf (or an ABL Credit Party acting with
the consent of the ABL Agent) commences the liquidation and sale of the ABL Priority Collateral in a manner as provided in Section
3.6 hereof (having theretofore furnished the Controlling Term Agent with an Enforcement Notice) and ending 180 days thereafter.
If any stay or other order that prohibits any of the ABL Agent, the other ABL Secured Parties or any ABL Credit Party (with the
consent of the ABL Agent) from commencing and continuing to Exercise Any Secured Creditor Remedies or from liquidating and selling
the ABL Priority Collateral has been entered by a court of competent jurisdiction, such 180 day period shall be tolled during the
pendency of any such stay or other order and the Use Period shall be so extended.
Section
1.3 Rules of Construction. Unless the context of this Agreement clearly requires otherwise, references to
the plural include the singular, references to the singular include the plural, the term “including” is not
limiting and shall be deemed to be followed by the phrase “without limitation,” 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 refer to this Agreement as a whole and not to any particular provision of this Agreement. Article, section,
subsection, clause, schedule and exhibit references herein are to this Agreement unless otherwise specified. Any reference in
this Agreement to any agreement, instrument, or document shall include all alterations, amendments, changes, restatements,
extensions, modifications, renewals, replacements, substitutions, joinders, and supplements thereto and thereof, as
applicable (subject to any restrictions on such alterations, amendments, changes, restatements, extensions, modifications,
renewals, replacements, substitutions, joinders, and supplements set forth herein). Any reference herein to any Person shall
be construed to include such Person’s successors and assigns. Any reference herein to the repayment in full of an
obligation shall mean the payment in full in cash of such obligation, or in such other manner as may be approved in writing
by the requisite holders or representatives in respect of such obligation.
ARTICLE
2
LIEN PRIORITY
Section
2.1 Priority of Liens.
(a) Subject
to the order of application of proceeds set forth in sub clauses (b) and (c) of Section 4.1 hereof, notwithstanding (i)
the date, time, method, manner, or order of grant, attachment or perfection (including any defect or deficiency or alleged defect
or deficiency in any of the foregoing) of any Liens granted to the ABL Secured Parties in respect of all or any portion of the
Collateral or of any Liens granted to the Term Secured Parties in respect of all or any portion of the Collateral and regardless
of how any such Lien was acquired (whether by grant, statute, operation of law, subrogation or otherwise), (ii) the order or time
of filing or recordation of any document or instrument for perfecting the Liens in favor of the ABL Agent or any Term Agent (or
ABL Secured Parties or Term Secured Parties) in any Collateral, (iii) any provision of the Uniform Commercial Code, Debtor Relief
Laws or any other applicable law, or of the ABL Documents or the Term Documents, (iv) whether the ABL Agent or any Term Agent,
in each case, either directly or through agents, holds possession of, or has control over, all or any part of the Collateral, (v)
the date on which the ABL Obligations or the Term Obligations are advanced or made available to the Credit Parties, (vi) the fact
that any such Liens in favor of the ABL Agent or the ABL Secured Parties or any Term Agent or the Term Secured Parties securing
any of the ABL Obligations or Term Obligations, respectively, are (x) subordinated to any Lien securing any obligation of any Credit
Party other than the Term Obligations or the ABL Obligations, respectively, or (y) otherwise subordinated, voided, avoided, invalidated
or lapsed, or (vii) any other circumstance of any kind or nature whatsoever, the ABL Agent, on behalf of itself and the ABL Secured
Parties, and each of the Term Agents, on behalf of itself and the relevant Term Secured Parties, hereby agree that:
(1) any
Lien in respect of all or any portion of the ABL Priority Collateral now or hereafter held by or on behalf of any Term Agent or
any Term Secured Party that secures all or any portion of the Term Obligations shall in all respects be junior and subordinate
to all Liens granted to the ABL Agent and the ABL Secured Parties in such ABL Priority Collateral to secure all or any portion
of the ABL Obligations;
(2) any
Lien in respect of all or any portion of the ABL Priority Collateral now or hereafter held by or on behalf of the ABL
Agent or any ABL Secured Party that secures all or any portion of the ABL Obligations shall in all respects be senior and
prior to all Liens granted to any Term Agent or any Term Secured Party in such ABL Priority Collateral to secure all or any
portion of the Term Obligations;
(3) any
Lien in respect of all or any portion of the Term Priority Collateral now or hereafter held by or on behalf of the ABL Agent or
any ABL Secured Party that secures all or any portion of the ABL Obligations shall in all respects be junior and subordinate to
all Liens granted to any Term Agent and the Term Secured Parties in such Term Priority Collateral to secure all or any portion
of the Term Obligations; and
(4) any
Lien in respect of all or any portion of the Term Priority Collateral now or hereafter held by or on behalf of any Term Agent or
any Term Secured Party that secures all or any portion of the Term Obligations shall in all respects be senior and prior to all
Liens granted to the ABL Agent or any ABL Secured Party in such Term Priority Collateral to secure all or any portion of the ABL
Obligations.
(b) Notwithstanding
any failure by any ABL Secured Party or Term Secured Party to perfect its security interests in the Collateral or any avoidance,
invalidation, priming or subordination by any third party or court of competent jurisdiction of the security interests in the Collateral
granted to the ABL Secured Parties or the Term Secured Parties (but, for the avoidance of doubt, subject to the order of application
of proceeds set forth in sub clauses (b) and (c) of Section 4.1 hereof), the priority and rights as between the ABL Secured
Parties and the Term Secured Parties with respect to the Collateral shall be as set forth herein.
(c) Each
Term Agent, for and on behalf of itself and the Term Secured Parties represented by such Term Agent, acknowledges and agrees that,
concurrently herewith, the ABL Agent, for the benefit of itself and the ABL Secured Parties, has been, or may be, granted Liens
upon all of the Collateral (other than any Term Exclusive Collateral) in which the Term Agents have been granted Liens and the
Term Agents hereby consent thereto. The ABL Agent, for and on behalf of itself and the ABL Secured Parties, acknowledges and agrees
that, concurrently herewith, each Term Agent, for the benefit of itself and the Term Secured Parties represented by such Term Agent,
has been, or may be, granted Liens upon all of the Collateral (other than any ABL Exclusive Collateral) in which the ABL Agent
has been granted Liens and the ABL Agent hereby consents thereto. The subordination of Liens by the Term Agents and the ABL Agent
in favor of one another as set forth herein shall not be deemed to subordinate any Term Agent’s or the ABL Agent’s
Liens to the Liens of any other Person, nor shall such subordination be affected by the subordination of such Liens to any Lien
of any other Person.
Section
2.2 Waiver of Right to Contest Liens.
(a) Each
Term Agent, for and on behalf of itself and the Term Secured Parties represented by such Term Agent, agrees that it and the Term
Secured Parties represented by it shall not (and hereby waive any right to) take any action to contest or challenge (or assist
or support any other Person in contesting or challenging), directly or indirectly, whether or not in any proceeding (including
in any Insolvency Proceeding), the validity, priority, enforceability, or perfection of the Liens of the ABL Agent and the ABL
Secured Parties in respect of the Collateral, the allowability of the claims asserted by the ABL Secured Parties with respect to
the ABL Obligations in any Insolvency Proceeding, or the provisions of this Agreement. Each Term Agent, for itself and on behalf
of the Term Secured Parties represented by such Term Agent, agrees that neither it nor the Term Secured Parties represented by
it will take any action that would hinder or interfere with any Exercise of Secured Creditor Remedies undertaken by the ABL Agent
or any ABL Secured Party under the ABL Documents with respect to the ABL Priority Collateral. Each Term Agent, for itself and on
behalf of the Term Secured Parties represented by such Term Agent, hereby waives any and all rights it or the Term Secured Parties
represented by it may have as a junior lien creditor or otherwise to contest, protest, object to, or interfere with the manner
in which the ABL Agent or any ABL Lender seeks to enforce its Liens in any ABL Priority Collateral. The foregoing shall not be
construed to prohibit any Term Agent from enforcing the provisions of this Agreement.
(b) The
ABL Agent, for and on behalf of itself and the ABL Secured Parties, agrees that it and they shall not (and hereby waives any right
to) take any action to contest or challenge (or assist or support any other Person in contesting or challenging), directly or indirectly,
whether or not in any proceeding (including in any Insolvency Proceeding), the validity, priority, enforceability, or perfection
of the Liens of the Term Agents or the Term Secured Parties in respect of the Collateral, the allowability of the claims asserted
by the Term Secured Parties with respect to the Term Obligations in any Insolvency Proceeding, or the provisions of this Agreement.
Except to the extent expressly set forth in Section 3.6 of this Agreement, the ABL Agent, for itself and on behalf of the
ABL Secured Parties, agrees that none of the ABL Agent or the ABL Secured Parties will take any action that would hinder or interfere
with any Exercise of Secured Creditor Remedies undertaken by any Term Agent or any Term Secured Party under the Term Documents
with respect to the Term Priority Collateral. The ABL Agent, for itself and on behalf of the ABL Secured Parties, hereby waives
any and all rights it or the ABL Secured Parties may have as a junior lien creditor or otherwise to contest, protest, object to,
or interfere with the manner in which either Term Agent or any Term Secured Party seeks to enforce its Liens in any Term Priority
Collateral. The foregoing shall not be construed to prohibit the ABL Agent from enforcing the provisions of this Agreement.
(c) For
the avoidance of doubt, the assertion of priority rights established under the terms of this Agreement shall not be considered
a challenge to, or contesting of, the Lien priority of any Party prohibited by this Section 2.2.
Section
2.3 Remedies Standstill.
(a) Each
Term Agent, on behalf of itself and the Term Secured Parties represented by such Term Agent, agrees that, from the date hereof
until the date upon which the Discharge of ABL Obligations shall have occurred, no Term Agent nor any Term Secured Party will Exercise
Any Secured Creditor Remedies with respect to any of the ABL Priority Collateral without the written consent of the ABL Agent,
and, subject to Section 3.7, will not take, receive or accept any Proceeds of ABL Priority Collateral, it being understood
and agreed that the temporary deposit of Proceeds of ABL Priority Collateral in a Deposit Account controlled by any Term Agent
shall not constitute a breach of this Agreement so long as such Proceeds are treated in accordance with the provisions of Section
3.7 and Section 4.1(a). From and after the date upon which the Discharge of ABL Obligations shall have occurred (or
prior thereto upon obtaining the written consent of the ABL Agent) and prior to the date upon which the Discharge of Term Obligations
shall have occurred, the Controlling Term Agent on behalf of the Term Secured Parties may Exercise Any Secured Creditor Remedies
under the Term Documents or applicable law as to any ABL Priority Collateral; provided, however, that any Exercise of Secured Creditor
Remedies with respect to any Collateral by the Controlling Term Agent or the Term Secured Parties is at all times subject to the
provisions of this Agreement.
(b) The
ABL Agent, on behalf of itself and the ABL Secured Parties, agrees that, from the date hereof until the date upon which the Discharge
of Term Obligations shall have occurred, neither the ABL Agent nor any ABL Secured Party will Exercise Any Secured Creditor Remedies
with respect to the Term Priority Collateral without the written consent of the Controlling Term Agent, and, subject to Section
3.7, will not take, receive or accept any Proceeds of the Term Priority Collateral, it being understood and agreed that the
temporary deposit of Proceeds of Term Priority Collateral in a Deposit Account controlled by the ABL Agent shall not constitute
a breach of this Agreement so long as such Proceeds are treated in accordance with the provisions of Section 3.7 and Section
4.1(a). From and after the date upon which the Discharge of Term Obligations (or prior thereto upon obtaining the written consent
of the Controlling Term Agent) and prior to the date upon which the Discharge of ABL Obligations shall have occurred, the ABL Agent
or any ABL Secured Party may Exercise Any Secured Creditor Remedies under the ABL Documents or applicable law as to any Term Priority
Collateral; provided, however, that any Exercise of Secured Creditor Remedies with respect to any Collateral by the
ABL Agent or the ABL Secured Parties is at all times subject to the provisions of this Agreement.
(c) Notwithstanding
the provisions of Sections 2.3(a), 2.3(b) or any other provision of this Agreement, nothing contained herein shall
be construed to prevent any Agent or any Secured Party from (i) filing a claim or statement of interest with respect to the ABL
Obligations or Term Obligations owed to it in any Insolvency Proceeding commenced by or against any Credit Party, (ii) taking any
action (not adverse to the priority status of the Liens of the other Agents or other Secured Parties on the Collateral in which
such other Agent or other Secured Party has a priority Lien or the rights of the other Agents or any of the other Secured Parties
to Exercise Any Secured Creditor Remedies in respect thereof) in order to create, perfect, preserve or protect (but not enforce)
its Lien on any Collateral, (iii) filing any necessary or appropriate responsive or defensive pleadings in opposition to any motion,
adversary proceeding or other pleading filed by any Person objecting to or otherwise seeking disallowance of the claim or Lien
of such Agent or Secured Party or (iv) voting on any plan of reorganization, proposal or plan of compromise or arrangement or filing
any proof of claim in any Insolvency Proceeding of any Credit Party, in each case under clauses (i) through (iv) above to the extent
not inconsistent with the express terms of this Agreement.
Section
2.4 Exercise of Rights.
(a) No
Other Restrictions. Except as otherwise set forth in this Agreement (including any provisions prohibiting or restricting any
party from taking various actions or making various objections), each Term Secured Party and each ABL Secured Party shall have
any and all rights and remedies it may have as an unsecured creditor or a secured creditor under applicable law, including the
right to the Exercise of Secured Creditor Remedies, in each case to the extent not inconsistent with or contrary to the provisions
of this Agreement; provided, however, that the Exercise of Secured Creditor Remedies with respect to the Collateral
shall be subject to the Lien Priority and to the provisions of this Agreement. The ABL Agent may enforce the provisions of the
ABL Documents, the Term Agents may enforce the provisions of the Term Documents and each may Exercise Any Secured Creditor Remedies,
all in such order and in such manner as each may determine in the exercise of its sole discretion, consistent with the terms of
this Agreement, and mandatory provisions of applicable law and, in the case of the Term Agents, any intercreditor agreement between
the Term Agents; provided, however, that each of the ABL Agent and the Controlling Term Agent agrees to provide to each other (x)
an Enforcement Notice prior to the commencement of an Exercise of Any Secured Creditor Remedies and (y) copies of any notices that
it is required under applicable law to deliver to any Credit Party; provided, further, however, that the ABL
Agent’s failure to provide the Enforcement Notice (other than in connection with Section 3.6 hereof) or any such copies
to any of the Term Agents shall not impair any of the ABL Agent’s rights hereunder or under any of the ABL Documents and
the Controlling Term Agent’s failure to provide the Enforcement Notice or any such copies to the ABL Agent shall not impair
any Term Agent’s rights hereunder or under any of the Term Documents. Each of the Term Agents, each Term Secured Party, the
ABL Agent and each ABL Secured Party agrees that it will not institute any suit or other proceeding or assert in any suit, Insolvency
Proceeding or other proceeding any claim, in the case of each Term Agent and each Term Secured Party, against either the ABL Agent
or any other ABL Secured Party, and in the case of the ABL Agent and each other ABL Secured Party, against any Term Agent or any
other Term Secured Party, seeking damages from or other relief by way of specific performance, instructions or otherwise, with
respect to any action taken or omitted to be taken by such Person with respect to the Collateral which is consistent with the terms
of this Agreement, and none of such Parties shall be liable for any such action taken or omitted to be taken.
In the event any ABL
Secured Party becomes a judgment lien creditor in respect of Term Priority Collateral as a result of its enforcement of its rights
as an unsecured creditor, such judgment lien shall be subordinated to the Liens thereon securing Term Obligations, in each case,
on the same basis as the other Liens on the Term Priority Collateral securing the ABL Obligations are so subordinated to the Term
Obligations under this Agreement. In the event any Term Secured Party becomes a judgment lien creditor in respect of ABL Priority
Collateral as a result of its enforcement of its rights as an unsecured creditor, such judgment lien shall be subordinated to the
Liens thereon securing ABL Obligations, in each case, on the same basis as the other Liens on the ABL Priority Collateral securing
the Term Obligations are so subordinated to such ABL Obligations under this Agreement.
(b) Release
of Liens.
(i) In
the event of (A) any private or public sale of all or any portion of the ABL Priority Collateral in connection with any Exercise
of Secured Creditor Remedies by or with the consent of the ABL Agent, or (B) any sale, transfer or other disposition of all or
any portion of the ABL Priority Collateral (other than in connection with a refinancing as described in Section 5.2(c) hereof),
so long as such sale, transfer or other disposition is then permitted by the ABL Documents or consented to by the requisite ABL
Lenders, each Term Agent agrees, on behalf of itself and the Term Secured Parties represented by such Term Agent, that, so long
as such Term Agent, for the benefit of the relevant Term Secured Parties, shall retain a Lien on the proceeds of such sale, transfer
or other disposition (to the extent that such proceeds are not applied to the ABL Obligations as provided in Section 4.1(b)
hereof), such sale, transfer or other disposition will be free and clear of the Liens on such ABL Priority Collateral (but not
the proceeds thereof) securing the Term Obligations, and each of the Term Agents’ and the Term Secured Parties’ Liens
with respect to the ABL Priority Collateral (but not the proceeds thereof) so sold, transferred, or disposed shall terminate and
be automatically released without further action concurrently with, and to the same extent as, the release of the ABL Secured Parties’
Liens on such ABL Priority Collateral. In furtherance of, and subject to, the foregoing, each of the Term Agents agrees that it
will promptly execute any and all Lien releases or other documents reasonably requested by the ABL Agent in connection therewith.
The Term Agents each hereby appoint the ABL Agent and any officer or duly authorized person of the ABL Agent, with full power of
substitution, as its true and lawful attorney in fact with full irrevocable power of attorney in the place and stead of such Term
Agent and in the name of such Term Agent or in the ABL Agent’s own name, from time to time, in the ABL Agent’s sole
discretion, for the purposes of carrying out the terms of this paragraph, to take any and all appropriate action and to execute
and deliver any and all documents and instruments as may be necessary or desirable to accomplish the purposes of this paragraph,
including any financing statements, endorsements, assignments, releases or other documents or instruments of transfer (which appointment,
being coupled with an interest, is irrevocable).
(ii) In
the event of (A) any private or public sale of all or any portion of the Term Priority Collateral in connection with any Exercise
of Secured Creditor Remedies by or with the consent of the Controlling Term Agent, or (B) any sale, transfer or other disposition
of all or any portion of the Term Priority Collateral (other than in connection with a refinancing as described in Section 5.2(c)
hereof), so long as such sale, transfer or other disposition is then permitted by the Term Documents or consented to by the requisite
Term Lenders, the ABL Agent agrees, on behalf of itself and the ABL Secured Parties, that, so long as the ABL Agent, for the benefit
of the ABL Secured Parties, shall retain a Lien on the proceeds of such sale, transfer or other disposition (to the extent that
such proceeds are not applied to the Term Obligations as provided in Section 4.1(c) hereof), such sale, transfer or disposition
will be free and clear of the Liens on such Term Priority Collateral (but not the proceeds thereof) securing the ABL Obligations
and the ABL Agent’s and the ABL Secured Parties’ Liens with respect to the Term Priority Collateral (but not the proceeds
thereof) so sold, transferred, or disposed shall terminate and be automatically released without further action concurrently with,
and to the same extent as, the release of the Term Secured Parties’ Liens on such Term Priority Collateral. In furtherance
of, and subject to, the foregoing, the ABL Agent agrees that it will promptly execute any and all Lien releases or other documents
reasonably requested by the Controlling Term Agent in connection therewith. The ABL Agent hereby appoints the Controlling Term
Agent and any officer or duly authorized person of the Controlling Term Agent, with full power of substitution, as its true and
lawful attorney in fact with full irrevocable power of attorney in the place and stead of the ABL Agent and in the name of the
ABL Agent or in the Controlling Term Agent’s own name, from time to time, in the Controlling Term Agent’s sole discretion,
for the purposes of carrying out the terms of this paragraph, to take any and all appropriate action and to execute and deliver
any and all documents and instruments as may be necessary or desirable to accomplish the purposes of this paragraph, including
any financing statements, endorsements, assignments, releases or other documents or instruments of transfer (which appointment,
being coupled with an interest, is irrevocable).
Section
2.5 No New Liens.
(a) It
is the anticipation of the parties, that until the date upon which the Discharge of ABL Obligations shall have occurred, no Term
Secured Party shall acquire or hold any consensual Lien on any assets of any Credit Party securing any Term Obligation (other than
any Term Exclusive Collateral) which assets are not also subject to the Lien of the ABL Agent under the ABL Documents. If any Term
Secured Party shall (nonetheless and in breach hereof) acquire or hold any such Lien on any assets of any Credit Party securing
any Term Obligation (other than any Term Exclusive Collateral or any Liens on Real Property) which assets are not also subject
to the Lien of the ABL Agent under the ABL Documents, then the Controlling Term Agent shall, without the need for any further consent
of any other Term Secured Party, the Borrower or any Term Credit Party and notwithstanding anything to the contrary in any other
Term Document, be deemed to also hold and have held such Lien as agent or bailee for the benefit of the ABL Agent as security for
the ABL Obligations (subject to the Lien Priority and other terms hereof) and shall promptly notify the ABL Agent in writing of
the existence of such Lien upon becoming aware thereof.
(b) It
is the anticipation of the parties, that until the date upon which the Discharge of Term Obligations shall have occurred, no ABL
Secured Party shall acquire or hold any consensual Lien on any assets of any Credit Party securing any ABL Obligation (other than
any ABL Exclusive Collateral) which assets are not also subject to the Lien of the Term Agents under the Term Documents. If any
ABL Secured Party shall (nonetheless and in breach hereof) acquire or hold any such Lien on any assets of any Credit Party securing
any ABL Obligation (other than any ABL Exclusive Collateral) which assets are not also subject to the Lien of the Term Agents under
the Term Documents, then the ABL Agent shall, without the need for any further consent of any other ABL Secured Party, the Borrower
or any ABL Credit Party and notwithstanding anything to the contrary in any other ABL Document be deemed to also hold and have
held such Lien as agent or bailee for the benefit of the relevant Term Agents as security for the Term Obligations (subject to
the Lien Priority and other terms hereof) and shall promptly notify the relevant Term Agent in writing of the existence of such
Lien upon becoming aware thereof.
(c) The
Term Secured Parties and ABL Secured Parties agree that any amounts received or distributed to any of them as a result of Liens
granted in contravention of this Section 2.5 shall be subject to Section 3.9.
Section
2.6 Waiver of Marshalling.
(a) Until
the Discharge of ABL Obligations, each Term Agent, on behalf of itself and the Term Secured Parties represented by such Term Agent,
agrees not to assert and hereby waives, to the fullest extent permitted by law, any right to demand, request, plead or otherwise
assert or otherwise claim the benefit of, any marshalling, appraisal, valuation or other similar right that may otherwise be available
under applicable law with respect to the ABL Priority Collateral or any other similar rights a junior secured creditor may have
under applicable law.
(b) Until
the Discharge of Term Obligations, the ABL Agent, on behalf of itself and the ABL Secured Parties, agrees not to assert and hereby
waives, to the fullest extent permitted by law, any right to demand, request, plead or otherwise assert or otherwise claim the
benefit of, any marshalling, appraisal, valuation or other similar right that may otherwise be available under applicable law with
respect to the Term Priority Collateral or any other similar rights a junior secured creditor may have under applicable law.
ARTICLE
3
ACTIONS OF THE PARTIES
Section
3.1 Certain Actions Permitted. The Term Agents and the ABL Agent may make such demands or file such claims
in respect of the Term Obligations or the ABL Obligations, as applicable, as are necessary to prevent the waiver or bar of such
claims under applicable statutes of limitations or other statutes, court orders, or rules of procedure at any time. Nothing in
this Agreement shall prohibit the receipt by any Term Agent or any Term Secured Party of the required payments of interest, principal
and other amounts owed in respect of the Term Obligations so long as such receipt is not the direct or indirect result of the exercise
by such Term Agent or any Term Secured Party of rights or remedies as a secured creditor (including set off) with respect to ABL
Priority Collateral or enforcement in contravention of this Agreement of any Lien held by any of them. Nothing in this Agreement
shall prohibit the receipt by the ABL Agent or any ABL Secured Party of the required payments of interest, principal and other
amounts owed in respect of the ABL Obligations so long as such receipt is not the direct or indirect result of the exercise by
the ABL Agent or any ABL Secured Party of rights or remedies as a secured creditor (including set off) with respect to Term Priority
Collateral or enforcement in contravention of this Agreement of any Lien held by any of them.
Section
3.2 Agent for Perfection. The ABL Agent, for and on behalf of itself and each ABL Secured Party, and each
Term Agent, for and on behalf of itself and each Term Secured Party each agree to hold all Collateral (other than any ABL Exclusive
Collateral or any Term Exclusive Collateral, as applicable) in its possession, custody, or control (including as defined in Sections
9 104, 9 105, 9 106, 9 107 and 8 106 of the UCC and similar provisions of other applicable law) (or in the possession, custody,
or control of agents or bailees for either) as gratuitous bailee for the other (provided that no Term Agent or other Term
Secured Party shall hold any Real Property as gratuitous bailee for any ABL Agent or any other ABL Secured Party) solely for the
purpose of perfecting or maintaining the perfection of the security interest granted to each in such Collateral, subject to the
terms and conditions of this Section 3.2. None of the ABL Agent, the ABL Secured Parties, the Term Agents, or the Term Secured
Parties, as applicable, shall have any obligation whatsoever to the others to assure that the Collateral is genuine or owned by
the Borrower, any other Credit Party, or any other Person or to preserve rights or benefits of any Person. The duties or responsibilities
of the ABL Agent and the Term Agents under this Section 3.2 are and shall be limited solely to holding or maintaining control of
the Control Collateral as gratuitous bailee and/or agent for the other Party for purposes of perfecting the Lien held by the Term
Agents or the ABL Agent, as applicable. The ABL Agent is not and shall not be deemed to be a fiduciary of any kind for the Term
Secured Parties or any other Person. Without limiting the generality of the foregoing, the ABL Secured Parties shall not be obligated
to see to the application of any Proceeds of the Term Priority Collateral deposited into any Deposit Account or be answerable in
any way for the misapplication thereof. The Term Agents are not and shall not be deemed to be fiduciaries of any kind for the ABL
Secured Parties, or any other Person. Without limiting the generality of the foregoing, the Term Secured Parties shall not be obligated
to see to the application of any Proceeds of the ABL Priority Collateral deposited into any Deposit Account or be answerable in
any way for the misapplication thereof. In addition, the Term Agents, on behalf of the relevant Term Secured Parties, hereby agree
and acknowledge that other than with respect to ABL Priority Collateral that may be perfected through the filing of a UCC financing
statement or similar financing statement under other applicable law, the ABL Agent’s Liens may be perfected on certain items
of ABL Priority Collateral with respect to which such Term Agent’s Liens would not be perfected but for the provisions of
this Section 3.2, and such Term Agent, on behalf of the relevant Term Secured Parties, hereby further agrees that the foregoing
described in this sentence shall not be deemed a breach of this Agreement or any Term Document.
Section
3.3 Sharing of Information and Access. In the event that the ABL Agent shall, in the exercise of its rights
under the ABL Collateral Documents or otherwise, receive possession or control of any books and records of any Term Credit Party
which contain information identifying or pertaining to the Term Priority Collateral, the ABL Agent shall, upon request from the
Controlling Term Agent and as promptly as practicable thereafter, either make available to the Controlling Term Agent such books
and records for inspection and duplication or provide to the Controlling Term Agent copies thereof. In the event that any Term
Agent shall, in the exercise of its rights under the Term Collateral Documents or otherwise, receive possession or control of any
books and records of any ABL Credit Party which contain information identifying or pertaining to any of the ABL Priority Collateral,
such Term Agent shall, upon request from the ABL Agent and as promptly as practicable thereafter, either make available to the
ABL Agent such books and records for inspection and duplication or provide the ABL Agent copies thereof.
Section
3.4 Insurance. Proceeds of Collateral include insurance proceeds and, therefore, the Lien Priority shall govern
the ultimate disposition of casualty insurance proceeds. The ABL Agent and the Term Agents shall each be named as additional insured
or loss payee, as applicable, with respect to all insurance policies relating to the Collateral as set forth in the Term Credit
Agreements or the ABL Credit Agreement, as applicable. The ABL Agent shall have the sole and exclusive right, as against the Term
Agents, to adjust settlement of insurance claims in the event of any covered loss, theft or destruction of ABL Priority Collateral.
The Controlling Term Agent shall have the sole and exclusive right, as against the ABL Agent, to adjust settlement of insurance
claims in the event of any covered loss, theft or destruction of Term Priority Collateral. If any insurance claim includes both
ABL Priority Collateral and Term Priority Collateral, the insurer will not settle such claim separately with respect to ABL Priority
Collateral and Term Priority Collateral, and if the Parties are unable after negotiating in good faith to agree on the settlement
for such claim, either Party may apply to a court of competent jurisdiction to make a determination as to the settlement of such
claim, and the court’s determination shall be binding upon the Parties. All proceeds of such insurance shall be remitted
to the ABL Agent or the Controlling Term Agent, as the case may be, and each of the Term Agents and ABL Agent shall cooperate (if
necessary) in a reasonable manner in effecting the payment of insurance proceeds in accordance with Section 4.1 hereof.
Any proceeds of such insurance received by the ABL Agent or the Controlling Agent, as the case may be, in contravention of this
Section 3.4 shall be paid over to the ABL Agent or the Controlling Term Agent, as the case may be, in accordance with Section
3.9 hereof.
Section
3.5 No Additional Rights For the Credit Parties Hereunder. Except as provided in Section 3.6 hereof,
if any ABL Secured Party or Term Secured Party shall enforce its rights or remedies in violation of the terms of this Agreement,
the Credit Parties shall not be entitled to use such violation as a defense to any action by any ABL Secured Party or Term Secured
Party, nor to assert such violation as a counterclaim or basis for set off or recoupment against any ABL Secured Party or Term
Secured Party.
Section
3.6 Inspection and Access Rights. (a) Without limiting any rights the ABL Agent or any other ABL Secured Party
may otherwise have under applicable law or by agreement, in the event of any liquidation of the ABL Priority Collateral (or any
other Exercise of Any Secured Creditor Remedies by the ABL Agent) and whether or not the Term Agents or any other Term Secured
Party has commenced and is continuing to Exercise Any Secured Creditor Remedies, the ABL Agent or any other Person (including any
ABL Credit Party) acting with the consent, or on behalf, of the ABL Agent, shall have the right (i) during the Use Period during
normal business hours on any Business Day, to access ABL Priority Collateral that (A) is stored or located in or on, (B) has become
an accession with respect to (within the meaning of Section 9 335 of the Uniform Commercial Code), or (C) has been commingled with
(within the meaning of Section 9 336 of the Uniform Commercial Code) Term Priority Collateral (collectively, the “ABL
Joint Collateral”), and (ii) during the Use Period, shall have the irrevocable right to use the Term Priority Collateral
(including, without limitation, Equipment, Fixtures, Intellectual Property, General Intangibles and Real Property) on a rent free,
royalty free basis, each of the foregoing solely for the limited purposes of assembling, inspecting, copying or downloading information
stored on, taking actions to perfect its Lien on, completing a production run of Inventory involving, taking possession of, moving,
preparing and advertising for sale, selling (by public auction, private sale or a “going out of business” or similar
sale, whether in bulk, in lots or to customers in the ordinary course of business or otherwise and which sale may include augmented
Inventory of the same type sold in any ABL Credit Party’s business), storing or otherwise dealing with the ABL Priority Collateral,
in each case without the involvement of or interference by any Term Secured Party or liability to any Term Secured Party, but with
reasonable advance notice to each Term Agent and at the sole cost and expense of the ABL Agent or such other Person acting with
the consent, or on behalf, of the ABL Agent; provided, however, that the expiration of the Use Period shall be without
prejudice to the sale or other disposition of the ABL Priority Collateral in accordance with this Agreement and applicable law.
In the event that any ABL Secured Party has commenced and is continuing the Exercise of Any Secured Creditor Remedies with respect
to any ABL Joint Collateral or any other sale or liquidation of the ABL Joint Collateral has been commenced by an ABL Credit Party
(with the consent of the ABL Agent), the Term Agents may not sell, assign or otherwise transfer the related Term Priority Collateral
prior to the expiration of the Use Period, unless the purchaser, assignee or transferee thereof agrees in writing to be bound by
the provisions of this Section 3.6. If the ABL Agent or any other Person acting with the consent, or on behalf, of the ABL
Agent conducts a public auction or private sale of the ABL Priority Collateral at any of the Real Property included within the
Term Priority Collateral, the ABL Agent or such other Person shall use reasonable efforts to hold such auction or sale in a manner
which would not unduly disrupt any Term Agent’s use of such Real Property for the benefit of the Term Secured Parties.
(b) During
the period of actual occupation, use and/or control by the ABL Secured Parties and/or the ABL Agent (or their respective employees,
agents, advisers and representatives) of any Term Priority Collateral, the ABL Secured Parties and the ABL Agent shall be obligated
to repair at their expense any physical damage (but not any diminution in value resulting from ordinary wear and tear) to such
Term Priority Collateral resulting from such occupancy, use or control, and to leave such Term Priority Collateral in substantially
the same condition as it was at the commencement of such occupancy, use or control, ordinary wear and tear excepted. Notwithstanding
the foregoing, in no event shall the ABL Secured Parties or the ABL Agent have any liability to the Term Secured Parties and/or
to the Term Agents pursuant to this Section 3.6 as a result of any condition (including any environmental condition, claim
or liability) on or with respect to the Term Priority Collateral existing prior to the date of the exercise by the ABL Secured
Parties (or the ABL Agent, as the case may be) of their rights under this Section 3.6 and the ABL Secured Parties shall
have no duty or liability to maintain the Term Priority Collateral in a condition or manner better than that in which it was maintained
prior to the use thereof by the ABL Secured Parties, or for any diminution in the value of the Term Priority Collateral that results
from ordinary wear and tear resulting from the use of the Term Priority Collateral by the ABL Secured Parties in the manner and
for the time periods specified under this Section 3.6. Without limiting the rights granted in this Section 3.6, the
ABL Secured Parties and the ABL Agent shall reasonably cooperate with the Controlling Term Agent in connection with any efforts
made by the Controlling Term Agent, on behalf of the Term Secured Parties, to sell the Term Priority Collateral, at the expense
of the Credit Parties.
(c) Other
than as set forth in clauses (ii) and (iii) of Section 3.6(d) below, the ABL Agent and the ABL Secured Parties shall not
be obligated to pay any amounts to the Term Agents or the Term Secured Parties (or any person claiming by, through or under the
Term Secured Parties, including any purchaser of the Term Priority Collateral) or to the ABL Credit Parties, for or in respect
of the use by the ABL Agent and the ABL Secured Parties of the Term Priority Collateral.
(d) The
ABL Secured Parties shall (i) use the Term Priority Collateral in accordance with applicable law; (ii) insure for damage to property
and liability to persons, including property and liability insurance for the benefit of the Term Secured Parties; and (iii) reimburse
the Term Secured Parties for any injury or damage to Persons or property (ordinary wear and tear excepted) caused by the acts or
omissions of Persons under their control (except for those arising from the gross negligence or willful misconduct of any Term
Secured Party); provided, however, that the ABL Secured Parties will not be liable for any diminution in the value
of the Term Priority Collateral caused by the absence of the ABL Priority Collateral therefrom.
(e) The
Term Agents and the other Term Secured Parties shall use commercially reasonable efforts to not hinder or obstruct the ABL Agent
and the other ABL Secured Parties from exercising the rights described in Section 3.6(a) hereof.
(f) Subject
to the terms hereof, the Controlling Term Agent may advertise and conduct public auctions or private sales of the Term Priority
Collateral without notice (except as required by applicable law) to any ABL Secured Party, the involvement of or interference by
any ABL Secured Party or liability to any ABL Secured Party as long as, in the case of an actual sale, the respective purchaser
assumes and agrees to the obligations of the Term Agents and the Term Secured Parties under this Section 3.6.
(g) In
furtherance of the foregoing in this Section 3.6, the Term Agents, in their capacities as secured parties (or as a purchaser,
assignee or transferee, as applicable), and to the extent of its interest therein, hereby grants to the ABL Agent a nonexclusive,
irrevocable, royalty free, worldwide license to use, license or sublicense any and all Intellectual Property now owned or hereafter
acquired by the Credit Parties (except to the extent such grant is prohibited by any rule of law, statute or regulation), included
as part of the Term Priority Collateral (and including in such license access to all media in which any of the licensed items may
be recorded or stored and to all computer software and programs used for the compilation or printout thereof) as is or may be necessary
or advisable in the ABL Agent’s reasonable judgment for the ABL Agent to process, ship, produce, store, supply, lease, complete,
sell, liquidate or otherwise deal with the ABL Priority Collateral, or to collect or otherwise realize upon any Accounts (as defined
in the ABL Credit Agreement) comprising ABL Priority Collateral, in each case solely in connection with any Exercise of Secured
Creditor Remedies; provided that (i) any such license shall terminate upon the sale of the applicable ABL Priority Collateral
and shall not extend or transfer to the purchaser of such ABL Priority Collateral, (ii) the ABL Agent’s use of such Intellectual
Property shall be reasonable and lawful, and (iii) any such license is granted on an “AS IS” basis, without any representation
or warranty whatsoever; provided, further, however, any license granted by the ABL Agent to a third party
shall include reasonable and customary terms and restrictions necessary to preserve the existence, validity and value of the affected
Intellectual Property. The Term Agents (i) acknowledge and consent to the grant to the ABL Agent by the Credit Parties of the license
referred to in Section 5.03 of the US Security Agreement (as defined in the ABL Credit Agreement) and (ii) agree that its Liens
in the Term Priority Collateral shall be subject in all respects to such license. Furthermore, the Term Agents agree that, in connection
with any Exercise of Secured Creditor Remedies conducted by any Term Agent in respect of Term Priority Collateral, (x) any notice
required to be given by such Term Agent in connection with such Exercise of Secured Creditor Remedies shall contain an acknowledgement
of the existence of such license and (y) such Term Agent shall provide written notice to any purchaser, assignee or transferee
pursuant to an Exercise of Secured Creditor Remedies that the applicable assets are subject to such license.
Section
3.7 Tracing of and Priorities in Proceeds. The ABL Agent, for itself and on behalf of the ABL Secured Parties,
and each Term Agent, for itself and on behalf of the Term Secured Parties represented by it, further agrees that prior to an issuance
of any notice of Exercise of Any Secured Creditor Remedies by such Secured Party (unless a bankruptcy or insolvency Event of Default
then exists), any proceeds of Collateral, whether or not deposited under control agreements, which are used by any Credit Party
to acquire other property which is Collateral shall not (solely as between the Agents and the Lenders) be treated as Proceeds of
Collateral for purposes of determining the relative priorities in the Collateral which was so acquired.
Section
3.8 Mixed Collateral Proceeds. Notwithstanding anything to the contrary contained in this Agreement (including
in the definitions of ABL Priority Collateral and Term Priority Collateral), in the event that proceeds of Collateral are received
from (or are otherwise attributable to the value of) a sale or other disposition of Collateral that involves a combination of ABL
Priority Collateral and Term Priority Collateral, the portion of such proceeds that shall be allocated as proceeds of ABL Priority
Collateral for purposes of this Agreement shall be an amount equal to the net book value of such ABL Priority Collateral (except
in the case of Accounts and cash, which amount shall be equal to the face amount of such Accounts and cash). In addition, notwithstanding
anything to the contrary contained in this Agreement (including in the definitions of ABL Priority Collateral and Term Priority
Collateral), to the extent proceeds of Collateral are proceeds received from (or are otherwise attributable to the value of) the
sale or disposition of all or substantially all of the Equity Interests of any of the Subsidiaries of Holdings which is a Credit
Party, or all or substantially all of the assets of any such Subsidiary, such proceeds shall constitute (1) first, in an amount
equal to the face amount of the Accounts and cash (other than to the extent constituting identifiable proceeds of Term Priority
Collateral) and the net book value of the Inventory owned by such Subsidiary at the time of such sale or disposition, ABL Priority
Collateral and (2) second, to the extent in excess of the amounts described in preceding clause (1), Term Priority Collateral.
In the event that amounts are received in respect of Equity Interests of or intercompany loans issued to any Credit Party in an
Insolvency Proceeding, such amounts shall be deemed to be proceeds received from a sale or disposition of ABL Priority Collateral
and Term Priority Collateral and shall be, subject to the last sentence of Section 6.4, allocated as proceeds of ABL Priority Collateral
and Term Priority Collateral in proportion to the ABL Priority Collateral and Term Priority Collateral owned at such time by the
issuer of such Equity Interests.
Section
3.9 Payments Over.
(a) So
long as the Discharge of Term Obligations has not occurred, subject to the provisions of Section 3.7 and Section 4.1(a)
hereof, any Term Priority Collateral or Proceeds thereof not constituting ABL Priority Collateral received by the ABL Agent or
any other ABL Secured Party in connection with the exercise of any right or remedy (including set off) relating to the Term Priority
Collateral in contravention of this Agreement shall be segregated and held in trust and forthwith paid over to the Controlling
Term Agent for the benefit of the Term Secured Parties in the same form as received, with any necessary endorsements or as a court
of competent jurisdiction may otherwise direct. The Controlling Term Agent is hereby authorized to make any such endorsements as
agent for the ABL Agent or any such other ABL Secured Parties. This authorization is coupled with an interest and is irrevocable
until such time as this Agreement is terminated in accordance with its terms.
(b) So
long as the Discharge of ABL Obligations has not occurred, subject to the provisions of Section 3.7, any ABL Priority Collateral
or Proceeds thereof not constituting Term Priority Collateral received by any Term Agent or any Term Secured Parties in connection
with the exercise of any right or remedy (including set off) relating to the ABL Priority Collateral in contravention of this Agreement
shall be segregated and held in trust and forthwith paid over to the ABL Agent for the benefit of the ABL Secured Parties in the
same form as received, with any necessary endorsements or as a court of competent jurisdiction may otherwise direct. The ABL Agent
is hereby authorized to make any such endorsements as agent for the Term Agents or any such Term Secured Parties. This authorization
is coupled with an interest and is irrevocable until such time as this Agreement is terminated in accordance with its terms.
ARTICLE
4
APPLICATION OF PROCEEDS
Section
4.1 Application of Proceeds.
(a) Revolving
Nature of ABL Obligations and Certain Term Obligations. Each Term Agent, for and on behalf of itself and the Term Secured Parties
represented by it, expressly acknowledges and agrees that (i) the ABL Credit Agreement includes a revolving commitment, that in
the ordinary course of business the ABL Agent and the ABL Lenders will apply payments and make advances thereunder, and that no
application of any ABL Priority Collateral or the release of any Lien by the ABL Agent upon any portion of the Collateral in connection
with a permitted disposition by the ABL Credit Parties under any ABL Credit Agreement shall constitute the Exercise of Secured
Creditor Remedies under this Agreement; (ii) the amount of the ABL Obligations that may be outstanding at any time or from time
to time may be increased or reduced and subsequently reborrowed, and that, subject to Section 5.2, the terms of the ABL
Obligations may be modified, extended or amended from time to time, and that the aggregate amount of the ABL Obligations may be
increased, replaced or refinanced, in each event, without notice to or consent by the Term Secured Parties and without affecting
the provisions hereof; and (iii) ABL Priority Collateral received by the ABL Agent may be applied, reversed, reapplied, credited,
or reborrowed, in whole or in part, to the ABL Obligations at any time; provided, however, that from and after the
date on which the ABL Agent (or any ABL Secured Party) or any Term Agent (or any Term Secured Party) commences the Exercise of
Any Secured Creditor Remedies, all amounts received by the ABL Agent or any ABL Lender shall be applied as specified in this Section
4.1. The ABL Agent, for and on behalf of the ABL Secured Parties, expressly acknowledges and agrees that (i) any First Lien
Term Credit Agreement may include a revolving commitment, that in the ordinary course of business the applicable First Lien Term
Agent and applicable First Lien Term Lenders will apply payments and make advances thereunder, and that no application of any Term
Priority Collateral or the release of any Lien by the applicable First Lien Term Agent upon any portion of the Collateral in connection
with a permitted disposition by the Term Credit Parties under any such First Lien Term Credit Agreement shall constitute the Exercise
of Secured Creditor Remedies under this Agreement; (ii) the amount of the First Lien Term Obligations under any facility with respect
to any Incremental Revolving Commitments (as defined in any applicable First Lien Term Credit Agreement), or any other revolving
credit facility under any First Lien Term Credit Agreement, that may be outstanding at any time or from time to time may be increased
or reduced and subsequently reborrowed, and that, subject to Section 5.2, the terms of the First Lien Term Obligations under
any facility with respect to any Incremental Revolving Commitments (as defined in any applicable First Lien Term Credit Agreement),
or any other revolving credit facility under any First Lien Term Credit Agreement, may be modified, extended or amended from time
to time, and that the aggregate amount of the First Lien Term Obligations under any facility with respect to any Incremental Revolving
Commitments (as defined in any applicable First Lien Term Credit Agreement), or any other revolving credit facility under any First
Lien Term Credit Agreement, may be increased, replaced or refinanced, in each event, without notice to or consent by the ABL Secured
Parties and without affecting the provisions hereof; and (iii) all Term Priority Collateral received by the applicable First Lien
Term Agent may be applied, reversed, reapplied, credited, or reborrowed, in whole or in part, to the First Lien Term Obligations
under any facility with respect to any Incremental Revolving Commitments (as defined in any applicable First Lien Term Credit Agreement),
or any other revolving credit facility under any First Lien Term Credit Agreement, at any time; provided, however, that from and
after the date on which any First Lien Term Agent (or any First Lien Term Secured Party) or the ABL Agent (or any ABL Secured Party)
commences the Exercise of Any Secured Creditor Remedies, all amounts received by the First Lien Term Agent or any First Lien Term
Lender shall be applied as specified in this Section 4.1. The Lien Priority shall not be altered or otherwise affected by
any such amendment, modification, supplement, extension, repayment, reborrowing, increase, replacement, renewal, restatement or
refinancing of either the ABL Obligations or the Term Obligations, or any portion thereof. Notwithstanding anything to the contrary
contained in this Agreement, any Term Document or any ABL Document, each Credit Party and each Term Agent, for itself and on behalf
of the Term Secured Parties represented by it, agrees that, until the Discharge of ABL Obligations occurs, (i) only Term Priority
Collateral or proceeds of the Term Priority Collateral shall be deposited in the Term Loan Priority Accounts and (ii) prior to
the receipt of a Term Cash Proceeds Notice, the ABL Secured Parties are hereby permitted to treat all cash, cash equivalents, Money,
collections and payments deposited in any ABL Deposit and Securities Account or otherwise received by any ABL Secured Parties as
ABL Priority Collateral, and no such amounts credited to any such ABL Deposit and Securities Account or received by any ABL Secured
Parties or applied to the ABL Obligations shall be subject to disgorgement or deemed to be held in trust for the benefit of the
Term Secured Parties (and all claims of the Term Agents or any other Term Secured Party to such amounts are hereby waived).
(b) Application
of Proceeds of ABL Priority Collateral. The ABL Agent and each of the Term Agents hereby agree that all ABL Priority Collateral,
ABL Priority Proceeds and all other Proceeds thereof, received by either of them in connection with any Exercise of Secured Creditor
Remedies with respect to the ABL Priority Collateral shall be applied,
first,
to the payment of costs and expenses of the ABL Agent in connection with such Exercise of Secured Creditor Remedies,
second,
to the payment, discharge or cash collateralization of the ABL Obligations in accordance with the ABL Documents until the Discharge
of ABL Obligations shall have occurred,
third,
to the payment of the Term Obligations in accordance with the Term Documents until the Discharge of Term Obligations shall have
occurred (provided that no Proceeds of ABL Exclusive Collateral shall be applied under this clause third), and
fourth,
the balance, if any, to the Credit Parties or as a court of competent jurisdiction may direct.
(c) Application
of Proceeds of Term Priority Collateral. The ABL Agent and each of the Term Agents hereby agree that all Term Priority Collateral,
Term Priority Proceeds and all other Proceeds thereof, received by either of them in connection with any Exercise of Secured Creditor
Remedies with respect to the Term Priority Collateral shall be applied,
first,
to the payment of costs and expenses of each Term Agent in connection with such Exercise of Secured Creditor Remedies,
second,
to the payment, discharge or cash collateralization of the Term Obligations in accordance with the Term Documents until the Discharge
of Term Obligations shall have occurred,
third,
to the payment of the ABL Obligations in accordance with the ABL Documents until the Discharge of ABL Obligations shall have occurred
(provided that no Proceeds of Term Exclusive Collateral shall be applied under this clause third), and
fourth,
the balance, if any, to the Credit Parties or as a court of competent jurisdiction may direct.
(d) Limited
Obligation or Liability. In exercising remedies, whether as a secured creditor or otherwise, the ABL Agent shall have no obligation
or liability to the Term Agents or to any Term Secured Party, and the Term Agents shall have no obligation or liability to the
ABL Agent or any ABL Secured Party, regarding the adequacy of any Proceeds or for any action or omission, except solely for an
action or omission that breaches the express obligations undertaken by each Party under the terms of this Agreement.
(e) Turnover
of Collateral After Discharge. Upon the Discharge of ABL Obligations, the ABL Agent shall deliver to the Controlling Term Agent
or shall execute such documents as the Controlling Term Agent may reasonably request to enable such Term Agent to have control
over any Control Collateral still in the ABL Agent’s possession, custody, or control in the same form as received with any
necessary endorsements, or as a court of competent jurisdiction may otherwise direct. Upon the Discharge of Term Obligations, the
Term Agents shall deliver to the ABL Agent or shall execute such documents as the ABL Agent may reasonably request to enable the
ABL Agent to have control over any Control Collateral still in any Term Agent’s possession, custody or control in the same
form as received with any necessary endorsements, or as a court of competent jurisdiction may otherwise direct.
Section
4.2 Specific Performance. Each of the ABL Agent and each of the Term Agents is hereby authorized to demand specific
performance of this Agreement, whether or not the Borrower or any other Credit Party shall have complied with any of the provisions
of any of the Credit Documents, at any time when the other Party shall have failed to comply with any of the provisions of this
Agreement applicable to it. Each of the ABL Agent, for and on behalf of itself and the ABL Secured Parties, and each of the Term
Agents, for and on behalf of itself and the Term Secured Parties represented by such Term Agent, hereby irrevocably waives any
defense based on the adequacy of a remedy at law that might be asserted as a bar to such remedy of specific performance.
ARTICLE
5
INTERCREDITOR ACKNOWLEDGEMENTS AND WAIVERS
Section
5.1 Notice of Acceptance and Other Waivers.
(a) All
ABL Obligations at any time made or incurred by the Borrower or any other Credit Party shall be deemed to have been made or incurred
in reliance upon this Agreement, and each Term Agent, on behalf of itself and the Term Secured Parties represented by it, hereby
waives notice of acceptance, or proof of reliance by the ABL Agent or any ABL Secured Party of this Agreement, and notice of the
existence, increase, renewal, extension, accrual, creation, or non payment of all or any part of the ABL Obligations. All Term
Obligations at any time made or incurred by the Borrower or any other Credit Party shall be deemed to have been made or incurred
in reliance upon this Agreement, and the ABL Agent, on behalf of itself and the ABL Secured Parties, hereby waives notice of acceptance,
or proof of reliance, by any Term Agent or any Term Secured Party of this Agreement, and notice of the existence, increase, renewal,
extension, accrual, creation, or non payment of all or any part of the Term Obligations.
(b) None
of the ABL Agent, any ABL Secured Party, or any of their respective Affiliates, directors, officers, employees, or agents shall
be liable for failure to demand, collect, or realize upon any of the Collateral or any Proceeds, or for any delay in doing so,
or shall be under any obligation to sell or otherwise dispose of any Collateral or Proceeds thereof or to take any other action
whatsoever with regard to the Collateral or any part or Proceeds thereof, except as specifically provided in this Agreement. If
the ABL Agent or any ABL Secured Party honors (or fails to honor) a request by the Borrower for an extension of credit pursuant
to any ABL Credit Agreement or any of the other ABL Documents, whether the ABL Agent or any ABL Secured Party has knowledge that
the honoring of (or failure to honor) any such request would constitute a default under the terms of any Term Credit Agreement
or any other Term Document or an act, condition, or event that, with the giving of notice or the passage of time, or both, would
constitute such a default, or if the ABL Agent or any ABL Secured Party otherwise should exercise any of its contractual rights
or remedies under any ABL Documents (subject to the express terms and conditions hereof), neither the ABL Agent nor any ABL Secured
Party shall have any liability whatsoever to any Term Agent or any Term Secured Party as a result of such action, omission, or
exercise (so long as any such exercise does not breach the express terms and provisions of this Agreement). The ABL Agent and the
ABL Secured Parties shall be entitled to manage and supervise their loans and extensions of credit under any ABL Credit Agreement
and any of the other ABL Documents as they may, in their sole discretion, deem appropriate, and may manage their loans and extensions
of credit without regard to any rights or interests that any Term Agent or any of the Term Secured Parties have in the Collateral,
except as otherwise expressly set forth in this Agreement. Each Term Agent, on behalf of itself and the Term Secured Parties represented
by it, agrees that neither the ABL Agent nor any ABL Secured Party shall incur any liability as a result of a sale, lease, license,
application, or other disposition of all or any portion of the Collateral or Proceeds thereof, pursuant to the ABL Documents, so
long as such disposition is conducted in accordance with mandatory provisions of applicable law and does not breach the provisions
of this Agreement.
(c) None
of the Term Agents, any Term Secured Party or any of their respective Affiliates, directors, officers, employees, or agents shall
be liable for failure to demand, collect, or realize upon any of the Collateral or any Proceeds, or for any delay in doing so,
or shall be under any obligation to sell or otherwise dispose of any Collateral or Proceeds thereof or to take any other action
whatsoever with regard to the Collateral or any part or Proceeds thereof, except as specifically provided in this Agreement. If
any Term Agent or any Term Secured Party honors (or fails to honor) a request by the Borrower for an extension of credit pursuant
to any Term Credit Agreement or any of the other Term Documents, whether any Term Agent or any Term Secured Party has knowledge
that the honoring of (or failure to honor) any such request would constitute a default under the terms of any ABL Credit Agreement
or any other ABL Document or an act, condition, or event that, with the giving of notice or the passage of time, or both, would
constitute such a default, or if any Term Agent or any Term Secured Party otherwise should exercise any of its contractual rights
or remedies under the Term Documents (subject to the express terms and conditions hereof), neither any Term Agent nor any Term
Secured Party shall have any liability whatsoever to the ABL Agent or any ABL Secured Party as a result of such action, omission,
or exercise (so long as any such exercise does not breach the express terms and provisions of this Agreement). The Term Agents
and the Term Secured Parties shall be entitled to manage and supervise their loans and extensions of credit under the Term Documents
as they may, in their sole discretion, deem appropriate, and may manage their loans and extensions of credit without regard to
any rights or interests that the ABL Agent or any ABL Secured Party has in the Collateral, except as otherwise expressly set forth
in this Agreement. The ABL Agent, on behalf of itself and the ABL Secured Parties, agrees that none of the Term Agents or the Term
Secured Parties shall incur any liability as a result of a sale, lease, license, application, or other disposition of the Collateral
or any part or Proceeds thereof, pursuant to the Term Documents, so long as such disposition is conducted in accordance with mandatory
provisions of applicable law and does not breach the provisions of this Agreement.
Section
5.2 Modifications to ABL Documents and Term Documents.
(a) Each
Term Agent, on behalf of itself and the Term Secured Parties represented by it, hereby agrees that, without affecting the obligations
of the Term Agents and the Term Secured Parties hereunder, the ABL Agent and the ABL Secured Parties may, at any time and from
time to time, in their sole discretion without the consent of or notice to any Term Agent or any Term Secured Party (except to
the extent such notice or consent is required pursuant to the express provisions of this Agreement), and without incurring any
liability to any Term Agent or any Term Secured Party or impairing or releasing the subordination provided for herein, amend, restate,
supplement, replace, refinance, extend, consolidate, restructure, or otherwise modify any of the ABL Documents in any manner whatsoever
(other than in a manner which would contravene the provisions of this Agreement), including, without limitation, to:
(i) change
the manner, place, time, or terms of payment or renew, alter or increase, all or any of the ABL Obligations or otherwise amend,
restate, supplement, or otherwise modify in any manner, or grant any waiver or release with respect to, all or any part of the
ABL Obligations or any of the ABL Documents;
(ii) subject
to Section 2.5 hereof, retain or obtain a Lien on any Property of any Person to secure any of the ABL Obligations, and in
connection therewith to enter into any additional ABL Documents;
(iii) amend,
or grant any waiver, compromise, or release with respect to, or consent to any departure from, any guaranty or other obligations
of any Person obligated in any manner under or in respect of the ABL Obligations;
(iv) release
its Lien on any Collateral or other Property;
(v) exercise
or refrain from exercising any rights against the Borrower, any other Credit Party, or any other Person;
(vi) subject
to Section 2.5 hereof, retain or obtain the primary or secondary obligation of any other Person with respect to any of the
ABL Obligations; and
(vii) otherwise
manage and supervise the ABL Obligations as the ABL Agent shall deem appropriate.
(b) The
ABL Agent, on behalf of itself and the ABL Secured Parties, hereby agrees that, without affecting the obligations of the ABL Agent
and the ABL Secured Parties hereunder, the Term Agents and the Term Secured Parties may, at any time and from time to time, in
their sole discretion without the consent of or notice to the ABL Agent or any ABL Secured Party (except to the extent such notice
or consent is required pursuant to the express provisions of this Agreement), and without incurring any liability to the ABL Agent
or any ABL Secured Party or impairing or releasing the subordination provided for herein, amend, restate, supplement, replace,
refinance, extend, consolidate, restructure, or otherwise modify any of the Term Documents in any manner whatsoever (other than
in a manner which would contravene the provisions of this Agreement), including, without limitation, to:
(i) change
the manner, place, time, or terms of payment or renew, alter or increase, all or any of the Term Obligations or otherwise amend,
restate, supplement, or otherwise modify in any manner, or grant any waiver or release with respect to, all or any part of the
Term Obligations or any of the Term Documents;
(ii) subject
to Section 2.5 hereof, retain or obtain a Lien on any Property of any Person to secure any of the Term Obligations, and
in connection therewith to enter into any additional Term Documents;
(iii) amend,
or grant any waiver, compromise, or release with respect to, or consent to any departure from, any guaranty or other obligations
of any Person obligated in any manner under or in respect of the Term Obligations;
(iv) release
its Lien on any Collateral or other Property;
(v) exercise
or refrain from exercising any rights against the Borrower, any other Credit Party, or any other Person;
(vi) subject
to Section 2.5 hereof, retain or obtain the primary or secondary obligation of any other Person with respect to any of the
Term Obligations; and
(vii) otherwise
manage and supervise the Term Obligations as each Term Agent shall deem appropriate.
(c) The
ABL Obligations and the Term Obligations may be refunded, replaced or refinanced (including (without limitation), by means of any
Refinancing Indebtedness (as defined in the ABL Credit Agreement and each Term Credit Agreement, as applicable)), in whole or in
part, from time to time, in each case, without notice to, or the consent (except to the extent a consent is required to permit
such refinancing transaction under any ABL Document or any Term Document) of the ABL Agent, the ABL Secured Parties, the Term Agents
or the Term Secured Parties, as the case may be, all without affecting the Lien Priorities provided for herein or the other provisions
hereof, provided, however, that the holders of any class or series of such Refinancing Indebtedness (or an authorized
agent or trustee on their behalf) bind themselves in writing to the terms of this Agreement pursuant to such documents or agreements
(including amendments or supplements to this Agreement) as the ABL Agent or any Term Agent, as the case may be, shall reasonably
request and in form and substance reasonably acceptable to the Borrower, the ABL Agent or such Term Agent, as the case may be,
and any such refinancing transaction shall be in accordance with any applicable provisions of both the ABL Documents and the Term
Documents (to the extent such documents survive the refinancing).
Section
5.3 Reinstatement and Continuation of Agreement.
(a) If
the ABL Agent or any ABL Secured Party is required in any Insolvency Proceeding or otherwise to turn over or otherwise pay to the
estate of the Borrower, any other Credit Party, or any other Person any payment made in satisfaction of all or any portion of the
ABL Obligations (an “ABL Recovery”), then the ABL Obligations shall be reinstated to the extent of such
ABL Recovery. If this Agreement shall have been terminated prior to such ABL Recovery, this Agreement shall be reinstated in full
force and effect in the event of such ABL Recovery, and such prior termination shall not diminish, release, discharge, impair,
or otherwise affect the obligations of the Parties from such date of reinstatement. All rights, interests, agreements, and obligations
of the ABL Agent, the Term Agents, the ABL Secured Parties, and the Term Secured Parties under this Agreement shall remain in full
force and effect and shall continue irrespective of the commencement of, or any discharge, confirmation, conversion, or dismissal
of, any Insolvency Proceeding by or against the Borrower or any other Credit Party or any other circumstance which otherwise might
constitute a defense available to, or a discharge of the Borrower or any other Credit Party in respect of the ABL Obligations or
the Term Obligations. No priority or right of the ABL Agent or any ABL Secured Party shall at any time be prejudiced or impaired
in any way by any act or failure to act on the part of the Borrower or any Guarantor or by the noncompliance by any Person with
the terms, provisions, or covenants of any of the ABL Documents, regardless of any knowledge thereof which the ABL Agent or any
ABL Secured Party may have.
(b) If
any Term Agent or any Term Secured Party is required in any Insolvency Proceeding or otherwise to turn over or otherwise pay to
the estate of the Borrower, any other Credit Party, or any other Person any payment made in satisfaction of all or any portion
of the Term Obligations (a “Term Recovery”), then the Term Obligations shall be reinstated to the extent
of such Term Recovery. If this Agreement shall have been terminated prior to such Term Recovery, this Agreement shall be reinstated
in full force and effect in the event of such Term Recovery, and such prior termination shall not diminish, release, discharge,
impair, or otherwise affect the obligations of the Parties from such date of reinstatement. All rights, interests, agreements,
and obligations of the ABL Agent, the Term Agents, the ABL Secured Parties, and the Term Secured Parties under this Agreement shall
remain in full force and effect and shall continue irrespective of the commencement of, or any discharge, confirmation, conversion,
or dismissal of, any Insolvency Proceeding by or against the Borrower or any other Credit Party or any other circumstance which
otherwise might constitute a defense available to, or a discharge of the Borrower or any other Credit Party in respect of the ABL
Obligations or the Term Obligations. No priority or right of any Term Agent or any Term Secured Party shall at any time be prejudiced
or impaired in any way by any act or failure to act on the part of the Borrower or any other Credit Party or by the noncompliance
by any Person with the terms, provisions, or covenants of any of the Term Documents, regardless of any knowledge thereof which
any Term Agent or any Term Secured Party may have.
ARTICLE
6
INSOLVENCY PROCEEDINGS
Section
6.1 DIP Financing.
(a) If
the Borrower or any other Credit Party shall be subject to any Insolvency Proceeding at any time prior to the Discharge of ABL
Obligations, and the ABL Agent or the ABL Secured Parties shall seek to provide the Borrower or any other Credit Party with, or
consent to a third party providing, any financing under Section 364 of the Bankruptcy Code (or any similar provision in or order
made under any foreign Debtor Relief Laws) or consent to any order for the use of cash collateral constituting ABL Priority Collateral
under Section 363 of the Bankruptcy Code (or any similar provision of any foreign Debtor Relief Laws or under a court order in
respect of measures granted with similar effect under any foreign Debtor Relief Laws) (each, an “ABL DIP Financing”),
with such ABL DIP Financing to be secured at least in part by all or any portion of the ABL Priority Collateral (including assets
that, but for the application of Section 552 of the Bankruptcy Code (or any similar provision of any foreign Debtor Relief Laws)
would be ABL Priority Collateral), then each Term Agent, on behalf of itself and the Term Secured Parties represented by such Term
Agent, agrees that it will raise no objection and will not support any objection to such ABL DIP Financing or use of cash collateral
or to the Liens securing the same on the grounds of a failure to provide “adequate protection” for the Liens of the
Term Agents securing the Term Obligations or on any other grounds (and will not request any adequate protection solely as a result
of such ABL DIP Financing or use of cash collateral that is ABL Priority Collateral except as permitted by Section 6.3(c)(i)
hereof), so long as (i) the relevant Term Agent retains its Lien on the Collateral to secure the Term Obligations (in each case,
including Proceeds thereof arising after the commencement of the case under any Debtor Relief Laws) and, as to the Term Priority
Collateral only, such Lien has the same priority as existed prior to the commencement of the case under the subject Debtor Relief
Laws and any Lien on the Term Priority Collateral securing such ABL DIP Financing is junior and subordinate to the Lien of the
Term Agents on the Term Priority Collateral, (ii) all Liens on ABL Priority Collateral securing any such ABL DIP Financing shall
be senior to or on a parity with the Liens of the ABL Agent and the ABL Secured Parties securing the ABL Obligations on ABL Priority
Collateral, (iii) any proceeds of the Term Priority Collateral are applied to the Term Obligations or as otherwise agreed by the
Controlling Term Agent and (iv) the foregoing provisions of this Section 6.1(a) shall not prevent the Term Agents and the
Term Secured Parties from objecting to any provision in any ABL DIP Financing relating to any provision or content of a plan of
reorganization or other plan of similar effect under any Debtor Relief Laws. The Term Agents agree that they shall not, and nor
shall any of the Term Secured Parties, directly or indirectly, provide, offer to provide, or support any debtor in possession financing
or use of cash collateral secured by a Lien on the ABL Priority Collateral senior to or pari passu with the Liens securing the
ABL Obligations. If, in connection with any ABL DIP Financing, any Liens on the ABL Priority Collateral held by the ABL Secured
Parties to secure the ABL Obligations are subject to a surcharge or are subordinated to an administrative priority claim, a professional
fee “carve out,” or fees owed to the United States Trustee, then the Liens on the ABL Priority Collateral of the Term
Secured Parties securing the Term Obligations shall also be subordinated to such interest or claim and shall remain subordinated
to the Liens on the ABL Priority Collateral of the ABL Secured Parties consistent with this Agreement.
(b) If
the Borrower or any other Credit Party shall be subject to any Insolvency Proceeding at any time prior to the Discharge of Term
Obligations, and any Term Agents or any Term Secured Parties shall seek to provide the Borrower or any other Credit Party with,
or consent to a third party providing, any financing under Section 364 of the Bankruptcy Code or consent to any order for the use
of cash collateral constituting Term Priority Collateral under Section 363 of the Bankruptcy Code (or any similar provision of
any foreign Debtor Relief Laws or under a court order in respect of measures granted with similar effect under any foreign Debtor
Relief Laws) (each, a “Term DIP Financing”), with such Term DIP Financing to be secured at least in part
by all or any portion of the Term Priority Collateral (including assets that, but for the application of Section 552 of the Bankruptcy
Code (or any similar provision of any foreign Debtor Relief Laws) would be Term Priority Collateral), then the ABL Agent, on behalf
of itself and the ABL Secured Parties, agrees that it will raise no objection and will not support any objection to such Term DIP
Financing or to the Liens securing the same on the grounds of a failure to provide “adequate protection” for the Liens
of the ABL Agent securing the ABL Obligations or on any other grounds (and will not request any adequate protection solely as a
result of such Term DIP Financing), so long as (i) the ABL Agent retains its Lien on the Collateral to secure the ABL Obligations
(in each case, including Proceeds thereof arising after the commencement of the case under any Debtor Relief Law) and, as to the
ABL Priority Collateral only, such Lien has the same priority as existed prior to the commencement of the case under the subject
Debtor Relief Laws and any Lien on ABL Priority Collateral securing such Term DIP Financing furnished by the Term Agents or Term
Secured Parties is junior and subordinate to the Lien of the ABL Agent on the ABL Priority Collateral, (ii) all Liens on Term Priority
Collateral securing any such Term DIP Financing furnished by the Term Agents or Term Secured Parties shall be senior to or on a
parity with the Liens of the Term Agents and the Term Secured Parties securing the Term Obligations on Term Priority Collateral,
(iii) any proceeds of the ABL Priority Collateral are applied to the ABL Obligations or as otherwise agreed by the ABL Agent and
(iv) the foregoing provisions of this Section 6.1(b) hereof shall not prevent the ABL Agent and the ABL Secured Parties
from objecting to any provision in any Term DIP Financing relating to any provision or content of a plan of reorganization or other
plan of similar effect under any Debtor Relief Laws. The ABL Agent agrees that it shall not, and nor shall any of the ABL Secured
Parties, directly or indirectly, provide, offer to provide, or support any debtor in possession financing or use of cash collateral
secured by a Lien on the Term Priority Collateral senior to or pari passu with the Liens securing the Term Obligations. If, in
connection with any Term DIP Financing, any Liens on the Term Priority Collateral held by the Term Secured Parties to secure the
Term Obligations are subject to a surcharge or are subordinated to an administrative priority claim, a professional fee “carve
out,” or fees owed to the United States Trustee, then the Liens on the Term Priority Collateral of the ABL Secured Parties
securing the ABL Obligations shall also be subordinated to such interest or claim and shall remain subordinated to the Liens on
the Term Priority Collateral of the Term Secured Parties consistent with this Agreement.
(c) All
Liens granted to the ABL Agent or any Term Agent in any Insolvency Proceeding, whether as adequate protection or otherwise, are
intended by the Parties to be and shall be deemed to be subject to the Lien Priority and the other terms and conditions of this
Agreement.
Section
6.2 Relief From Stay. Until the Discharge of ABL Obligations has occurred, each Term Agent, on behalf of itself
and the Term Secured Parties represented by it, agrees not to seek relief from the automatic stay or any other stay in any Insolvency
Proceeding in respect of any portion of the ABL Priority Collateral without the ABL Agent’s express written consent. Until
the Discharge of Term Obligations has occurred, the ABL Agent, on behalf of itself and the ABL Secured Parties, agrees not to
seek relief from the automatic stay or any other stay in any Insolvency Proceeding in respect of any portion of the Term Priority
Collateral without the Controlling Term Agent’s express written consent. In addition, none of the Term Agents or the ABL
Agent shall seek any relief from the automatic stay with respect to any Collateral without providing three (3) days’ prior
written notice to the others, unless such period is agreed by the ABL Agent and the Term Agents to be modified or unless the ABL
Agent or Term Agents, as applicable, make a good faith determination that either (A) the ABL Priority Collateral or the Term Priority
Collateral, as applicable, will decline speedily in value or (B) the failure to take any action will have a reasonable likelihood
of endangering the ABL Agent’s or the Term Agents’ ability to realize upon its Collateral.
Section
6.3 No Contest; Adequate Protection.
(a) The
Term Agents, on behalf of themselves and the relevant Term Secured Parties, agree that, prior to the Discharge of ABL Obligations,
none of them shall seek or accept any form of adequate protection under any or all of §361, §362, §363 or §364
of the Bankruptcy Code with respect to the ABL Priority Collateral, except as set forth in Section 6.1 hereof and this Section
6.3 or as may otherwise be consented to in writing by the ABL Agent in its sole and absolute discretion. The Term Agents, on
behalf of themselves and the relevant Term Secured Parties, agree that, prior to the Discharge of ABL Obligations, none of them
shall contest (or support any other Person contesting) (i) any request by the ABL Agent or any ABL Secured Party for adequate protection
of its interest in the Collateral (unless in contravention of Section 6.1(b) above or the other provisions of this Section
6.3), (ii) any proposed provision of ABL DIP Financing by the ABL Agent and the ABL Secured Parties (or any other Person proposing
to provide an ABL DIP Financing with the consent of the ABL Agent) (unless in contravention of Section 6.1(a) above) or
(iii) any objection by the ABL Agent or any ABL Secured Party to any motion, relief, action, or proceeding based on a claim by
the ABL Agent or any ABL Secured Party that its interests in the Collateral (unless in contravention of Section 6.1(b) above
or the other provisions of this Section 6.3)) are not adequately protected (or any other similar request under any law applicable
to an Insolvency Proceeding), so long as any Liens granted to the ABL Agent as adequate protection of its interests are subject
to this Agreement.
(b) The
ABL Agent, on behalf of itself and the ABL Secured Parties, agrees that, prior to the Discharge of Term Obligations, none of them
shall seek or accept any form of adequate protection under any or all of §361, §362, §363 or §364 of the Bankruptcy
Code with respect to the Term Priority Collateral, except as set forth in Section 6.1 hereof and this Section 6.3
or as may otherwise be consented to in writing by any Term Agent in its sole and absolute discretion. The ABL Agent, on behalf
of itself and the ABL Secured Parties, agrees that, prior to the Discharge of Term Obligations, none of them shall contest (or
support any other Person contesting) (i) any request by any Term Agent or any Term Secured Party for adequate protection of its
interest in the Collateral (unless in contravention of Section 6.1(a) above or the other provisions of this Section 6.3),
(ii) any proposed provision of Term DIP Financing by any Term Agent or any Term Secured Parties (or any other Person proposing
to provide a Term DIP Financing with the consent of any Term Agent) (unless in contravention of Section 6.1(b) above) or
(iii) any objection by any Term Agent or any Term Secured Party to any motion, relief, action or proceeding based on a claim by
any Term Agent or any Term Secured Party that its interests in the Collateral (unless in contravention of Section 6.1(a)
above or the other provisions of this Section 6.3) are not adequately protected (or any other similar request under any
law applicable to an Insolvency Proceeding), so long as any Liens granted to such Term Agent as adequate protection of its interests
are subject to this Agreement.
(c) Notwithstanding
the foregoing provisions in this Section 6.3, in any Insolvency Proceeding:
(i) if
the ABL Secured Parties (or any subset thereof) are granted adequate protection with respect to the ABL Priority Collateral in
the form of a Lien on additional or replacement collateral (even if such collateral is not of a type which would otherwise have
constituted ABL Priority Collateral), then the ABL Agent, on behalf of itself and the ABL Secured Parties, agrees that any Term
Agent, on behalf of itself or any of the Term Secured Parties represented by it, may seek or request (and the ABL Secured Parties
will not oppose such request) adequate protection with respect to their interests in such Collateral in the form of a Lien on the
same additional or replacement collateral, which Lien will be subordinated to the Liens securing and providing adequate protection
with respect to the ABL Obligations on the same basis as the other Liens of the Term Agents’ on ABL Priority Collateral;
and
(ii) in
the event any Term Agent, on behalf of itself or any of the Term Secured Parties represented by it, are granted adequate protection
in respect of Term Priority Collateral in the form of a Lien on additional or replacement collateral (even if such collateral is
not of a type which would otherwise have constituted Term Priority Collateral), then the Term Agents, on behalf of themselves and
any of the Term Secured Parties, agree that the ABL Agent on behalf of itself or any of the ABL Secured Parties, may seek or request
(and the Term Secured Parties will not oppose such request) adequate protection with respect to its interests in such Collateral
in the form of a Lien on the same additional or replacement collateral, which Lien will be subordinated to the Liens securing and
providing adequate protection with respect to the Term Obligations on the same basis as the other Liens of the ABL Agent on Term
Priority Collateral.
(iii) Except
as otherwise expressly set forth in Section 6.1 hereof or in connection with the exercise of remedies with respect to the
ABL Priority Collateral, nothing herein shall limit the rights of any Term Agent or the Term Secured Parties from seeking adequate
protection with respect to their rights in the Term Priority Collateral in any Insolvency Proceeding (including adequate protection
in the form of a cash payment, periodic cash payments or otherwise, provided that such cash payments do not come from the Proceeds
of ABL Priority Collateral). Except as otherwise expressly set forth in Section 6.1 hereof or in connection with the exercise
of remedies with respect to the Term Priority Collateral, nothing herein shall limit the rights of the ABL Agent or the ABL Secured
Parties from seeking adequate protection with respect to their rights in the ABL Priority Collateral in any Insolvency Proceeding
(including adequate protection in the form of a cash payment, periodic cash payments or otherwise, provided that such cash payments
do not come from the Proceeds of Term Priority Collateral).
Section
6.4 Asset Sales. The Term Agents agree, on behalf of themselves and the Term Secured Parties, that they will
not oppose (and will not support any other Person in opposing), and hereby consent to, any sale consented to by the ABL Agent
of any ABL Priority Collateral pursuant to Sections 363(f) or 1129 of the Bankruptcy Code (or any similar provision under the
law applicable to any Insolvency Proceeding or under a court order in respect of measures granted with similar effect under any
foreign Debtor Relief Laws) (each an “ABL Bankruptcy Sale”) or any motion seeking approval for proposed
bidding procedures in respect of any such ABL Bankruptcy Sale, so long as (i) the Term Agents, for the benefit of the Term Secured
Parties, shall retain a Lien on the proceeds of such sale (to the extent such proceeds are not applied to the ABL Obligations
in accordance with Section 4.1(b) hereof) subject to the priorities set forth in this Agreement, and (ii) the applicable
motion to approve such sale does not impair, subject to the priorities set forth in this Agreement, the rights of the Term Secured
Parties to credit bid their Liens on the ABL Priority Collateral under Section 363(k) of the Bankruptcy Code (so long as the Discharge
of ABL Obligations would occur in connection therewith). The ABL Agent agrees, on behalf of itself and the ABL Secured Parties,
that it will not oppose (and will not support any other Person in opposing), and hereby consents to, any sale consented to by
any Term Agent of any Term Priority Collateral pursuant to Sections 363(f) or 1129 of the Bankruptcy Code (or any similar provision
under the law applicable to any Insolvency Proceeding or under a court order in respect of measures granted with similar effect
under any foreign Debtor Relief Laws) (each a “Term Bankruptcy Sale”) or any motion seeking approval
for proposed bidding procedures in respect of any such Term Bankruptcy Sale, so long as (i) any such sale is made in accordance
with Section 3.6 hereof, (ii) the ABL Agent, for the benefit of the ABL Secured Parties, shall retain a Lien on the proceeds
of such sale (to the extent such proceeds are not applied to the Term Obligations in accordance with Section 4.1(c) hereof)
subject to the priorities set forth in this Agreement, and (iii) the applicable motion to approve such sale does not impair, subject
to the priorities set forth in this Agreement, the rights of the ABL Secured Parties to credit bid their Liens on the Term Priority
Collateral under Section 363(k) of the Bankruptcy Code (so long as the Discharge of Term Obligations would occur in connection
therewith). If such sale of Collateral includes both ABL Priority Collateral and Term Priority Collateral and the Parties are
unable after negotiating in good faith to agree on the allocation of the purchase price between the ABL Priority Collateral and
Term Priority Collateral, either Party may apply to the court in such Insolvency Proceeding to make a determination of such allocation,
and the court’s determination shall be binding upon the Parties.
Section
6.5 Separate Grants of Security and Separate Classification. Each Term Secured Party and each ABL Secured
Party acknowledges and agrees that (i) the grants of Liens pursuant to the ABL Collateral Documents and the Term Collateral Documents
constitute two separate and distinct grants of Liens and (ii) because of, among other things, their differing rights in the Collateral,
the Term Obligations are fundamentally different from the ABL Obligations and must be separately classified in any plan of reorganization
(or other plan of similar effect under any Debtor Relief Laws) proposed, confirmed, or adopted in an Insolvency Proceeding. To
further effectuate the intent of the parties as provided in the immediately preceding sentence, if it is held that the claims of
the ABL Secured Parties and the Term Secured Parties in respect of the Collateral constitute only one secured claim (rather than
separate classes of secured claims subject to the priorities set forth herein), then the ABL Secured Parties and the Term Secured
Parties hereby acknowledge and agree that all distributions from the Collateral shall be made as if there were separate classes
of ABL Obligation claims and Term Obligation claims against the Credit Parties, with the effect being that (a) to the extent that
the aggregate value of the ABL Priority Collateral is sufficient (for this purpose ignoring all claims held by the Term Secured
Parties), the ABL Secured Parties shall be entitled to receive, in addition to amounts distributed to them in respect of principal,
pre petition interest and other claims, all amounts owing in respect of post petition interest, fees and expenses (regardless of
whether any claim therefor is allowed or allowable in any such Insolvency Proceeding) that is available from the ABL Priority Collateral
for the ABL Secured Parties, before any distribution is made in respect of the claims held by the Term Secured Parties from the
ABL Priority Collateral, with the Term Secured Parties hereby acknowledging and agreeing to turn over to the ABL Secured Parties
amounts otherwise received or receivable by them from the ABL Priority Collateral to the extent necessary to effectuate the intent
of this sentence, even if such turnover has the effect of reducing their aggregate recovery, and (b) to the extent that the aggregate
value of the Term Priority Collateral is sufficient (for this purpose ignoring all claims held by the ABL Secured Parties), the
Term Secured Parties shall be entitled to receive, in addition to amounts distributed to them in respect of principal, pre petition
interest and other claims, all amounts owing in respect of postpetition interest, fees and expenses (regardless of whether any
claim therefor is allowed or allowable in any such Insolvency Proceeding) that is available from the Term Priority Collateral for
the Term Secured Parties, before any distribution is made in respect of the claims held by the ABL Secured Parties from the Term
Priority Collateral, with the ABL Secured Parties hereby acknowledging and agreeing to turn over to the Term Secured Parties amounts
otherwise received or receivable by them from the Term Priority Collateral to the extent necessary to effectuate the intent of
this sentence, even if such turnover has the effect of reducing their aggregate recovery.
Section
6.6 Enforceability. This Agreement shall be applicable both before and after the commencement of any Insolvency
Proceeding and all converted or succeeding cases in respect thereof. Notwithstanding the provisions of Section 1129(b)(1) (or any
other applicable provision) of the Bankruptcy Code, the relative rights of Secured Parties in or to any distributions from or in
respect of any Collateral or Proceeds of Collateral shall continue after the commencement of any Insolvency Proceeding. Accordingly,
the provisions of this Agreement (including, without limitation, Section 2.1 hereof) are intended to be and shall be enforceable
as a “subordination agreement” within the meaning of Section 510(a) of the Bankruptcy Code or any applicable personal
property security law.
Section
6.7 ABL Obligations Unconditional. All rights of the ABL Agent hereunder, and all agreements and obligations
of the Term Agents and the Credit Parties (to the extent applicable) hereunder, shall remain in full force and effect irrespective
of:
(a) any
lack of validity or enforceability of any ABL Document;
(b) any
change in the time, place or manner of payment of, or in any other term of, all or any portion of the ABL Obligations, or any amendment,
waiver or other modification, whether by course of conduct or otherwise, or any refinancing, replacement, refunding or restatement
of any ABL Document;
(c) any
exchange, release, voiding, avoidance or non perfection of any security interest in any Collateral or any other collateral, or
any release, amendment, waiver or other modification, whether by course of conduct or otherwise, or any refinancing, replacement,
refunding, restatement or increase of all or any portion of the ABL Obligations or any guarantee or guaranty thereof; or
(d) any
other circumstances that otherwise might constitute a defense available to, or a discharge of, any Credit Party in respect of the
ABL Obligations, or of any of the Term Agents or any Credit Party, to the extent applicable, in respect of this Agreement.
Section
6.8 Term Obligations Unconditional. All rights of the Term Agents hereunder, and all agreements and obligations
of the ABL Agent and the Credit Parties (to the extent applicable) hereunder, shall remain in full force and effect irrespective
of:
(a) any
lack of validity or enforceability of any Term Document;
(b) any
change in the time, place or manner of payment of, or in any other term of, all or any portion of the Term Obligations, or any
amendment, waiver or other modification, whether by course of conduct or otherwise, or any refinancing, replacement, refunding
or restatement of any Term Document;
(c) any
exchange, release, voiding, avoidance or non perfection of any security interest in any Collateral, or any other collateral,
or any release, amendment, waiver or other modification, whether by course of conduct or otherwise, or any refinancing,
replacement, refunding, restatement or increase of all or any portion of the Term Obligations or any guarantee or guaranty
thereof; or
(d) any
other circumstances that otherwise might constitute a defense available to, or a discharge of, any Credit Party in respect of the
Term Obligations, or of any of the ABL Agent or any Credit Party, to the extent applicable, in respect of this Agreement.
Section
6.9 Plan of Reorganization.
(a) If,
in any Insolvency Proceeding, debt obligations of the reorganized debtor secured by Liens upon any property of the reorganized
debtor are distributed (in whole or in part) pursuant to a plan of reorganization, proposal or plan of compromise or arrangement
or similar dispositive restructuring plan, both on account of ABL Obligations and on account of Term Obligations, then, to the
extent the debt obligations distributed on account of the ABL Obligations and on account of the Term Obligations are secured by
Liens upon the same property, the provisions of this Agreement will survive the distribution of such debt obligations pursuant
to such plan and will apply with like effect to the Liens securing such debt obligations.
(b) Each
Term Agent, for itself and on behalf of the applicable Term Secured Parties, and the ABL Agent, for itself and on behalf of the
ABL Secured Parties, acknowledges and agrees that no ABL Secured Party nor any Term Secured Party shall propose, vote for, or otherwise
support directly or indirectly any plan of reorganization, proposal or plan of compromise or arrangement or other dispositive restructuring
plan that is inconsistent with the priorities or other provisions of this Agreement.
Section
6.10 Certain Waivers as to Sections 506(c) and 1111(b)(2) of the Bankruptcy Code.
(a) No
Term Agent nor Term Secured Party will object to, or oppose the right of, the ABL Secured Parties to make an election under Section
1111(b)(2) of the Bankruptcy Code (or any similar provision in or order made under any Debtor Relief Law) with respect to the ABL
Priority Collateral. The ABL Agent and the ABL Secured Parties will not object to, or oppose the right of, the Term Secured Parties
to make an election under Section 1111(b)(2) of the Bankruptcy Code (or any similar provision in or order made under any Debtor
Relief Law) with respect to the Term Priority Collateral.
(b) Until
the Discharge of ABL Obligations has occurred, no Term Agent, on behalf of itself and the other Term Secured Parties represented
by it, will assert or enforce any claim under Section 506(c) of the Bankruptcy Code (or any similar provision in or order made
under any Debtor Relief Law) senior to or on a parity with the Liens on ABL Priority Collateral securing the ABL Obligations for
costs or expenses of preserving or disposing of any ABL Priority Collateral. Until the Discharge of Term Obligations has occurred,
the ABL Agent, on behalf of itself and the other ABL Secured Parties, will not assert or enforce any claim under Section 506(c)
of the Bankruptcy Code (or any similar provision in or order made under any Debtor Relief Law) senior to or on a parity with the
Liens on Term Priority Collateral securing the Term Obligations for costs or expenses of preserving or disposing of any Term Priority
Collateral.
Section
6.11 Post Petition Interest.
(a) No
Term Agent nor any Term Secured Party shall oppose or seek to challenge any claim by the ABL Agent or any ABL Secured Party for
allowance in any Insolvency Proceeding of ABL Obligations consisting of post petition interest, fees or expenses to the extent
of the value of the Lien on the Collateral securing any ABL Secured Party’s claim, without regard to the existence of the
Lien of the Term Agents on behalf of the Term Secured Parties on the ABL Priority Collateral (but after taking into account the
Lien of the Term Agents on the Term Priority Collateral).
(b) Neither
the ABL Agent nor any other ABL Secured Party shall oppose or seek to challenge any claim by any Term Agent or any Term Secured
Party for allowance in any Insolvency Proceeding of Term Obligations consisting of post petition interest, fees or expenses to
the extent of the value of the Lien on the Collateral securing any Term Secured Party’s claim, without regard to the existence
of the Lien of any ABL Agent on behalf of the ABL Secured Parties on the Term Priority Collateral (but after taking into account
the Lien of the ABL Agent on the ABL Priority Collateral).
ARTICLE
7
MISCELLANEOUS
Section
7.1 Rights of Subrogation. Each Term Agent, for and on behalf of itself and the Term Secured Parties
represented by it, agrees that no payment to the ABL Agent or any ABL Secured Party pursuant to the provisions of this
Agreement shall entitle any Term Agent or any Term Secured Party to exercise any rights of subrogation in respect thereof
until the Discharge of ABL Obligations shall have occurred. Following the Discharge of ABL Obligations, the ABL Agent agrees
to execute such documents, agreements, and instruments as the Controlling Term Agent may reasonably request to evidence the
transfer by subrogation to any such Person of an interest in the ABL Obligations resulting from payments to the ABL Agent by
such Person, so long as all costs and expenses (including all reasonable legal fees and disbursements) incurred in connection
therewith by the ABL Agent are paid by such Person upon request for payment thereof. The ABL Agent, for and on behalf of
itself and the ABL Secured Parties, agrees that no payment to the Term Agents or any Term Secured Party pursuant to the
provisions of this Agreement shall entitle the ABL Agent or any ABL Secured Party to exercise any rights of subrogation in
respect thereof until the Discharge of Term Obligations shall have occurred. Following the Discharge of Term Obligations, the
Term Agents agree to execute such documents, agreements, and instruments as the ABL Agent or any ABL Secured Party may
reasonably request to evidence the transfer by subrogation to any such Person of an interest in the Term Obligations
resulting from payments to the relevant Term Agent by such Person, so long as all costs and expenses (including all
reasonable legal fees and disbursements) incurred in connection therewith by the relevant Term Agent are paid by such Person
upon request for payment thereof.
Section
7.2 Further Assurances. The Parties will, at their own expense and at
any time and from time to time, promptly execute and deliver all further instruments and documents, and take all further
action, that may be necessary or desirable, or that either Party may reasonably request, in order to protect any right or
interest granted or purported to be granted hereby or to enable the ABL Agent or the Term Agents to exercise and enforce its
rights and remedies hereunder; provided, however, that no Party shall be required to pay over any payment or distribution,
execute any instruments or documents, or take any other action referred to in this Section 7.2, to the extent that
such action would contravene any law, order or other legal requirement or any of the terms or provisions of this Agreement,
and in the event of a controversy or dispute, such Party may interplead any payment or distribution in any court of competent
jurisdiction, without further responsibility in respect of such payment or distribution under this Section 7.2.
Section
7.3 Representations. Each Term Agent represents and warrants to the ABL Agent that it has the requisite power
and authority under the Term Documents to enter into, execute, deliver, and carry out the terms of this Agreement on behalf of
itself and the relevant Term Secured Parties and that this Agreement shall be binding obligations of such Term Agent and such
Term Secured Parties enforceable against such Term Agent and the respective Term Secured Parties in accordance with its terms.
The ABL Agent represents and warrants to the Term Agents that it has the requisite power and authority under the ABL Documents
to enter into, execute, deliver, and carry out the terms of this Agreement on behalf of itself and the ABL Secured Parties and
that this Agreement shall be binding obligations of the ABL Agent and the ABL Secured Parties, enforceable against the ABL Agent
and the ABL Secured Parties in accordance with its terms.
Section
7.4 Amendments. No amendment or waiver of any provision of this Agreement nor consent to any departure by
any Party hereto shall be effective unless it is in a written agreement executed by each Term Agent, the ABL Agent and the Borrower,
and then such amendment, waiver or consent shall be effective only in the specific instance and for the specific purpose for which
given; provided that the consent of the Borrower to any such amendment or waiver of, or consent to departure from, any provision
of this Agreement shall only be required if the provisions of such amendment, waiver or consent materially and adversely impact
the rights or obligations of any Credit Party under the ABL Documents or the Term Documents; provided, further, that the Borrower
shall be given notice of any amendment or waiver of, or consent to departure from, any provision of this Agreement promptly after
effectiveness thereof. Notwithstanding the foregoing, without the consent of any ABL Secured Party, any Person may become a party
hereto by execution and delivery of a joinder agreement in accordance with Section 7.20 of this Agreement and upon such
execution and delivery, such Person and the “Secured Parties” and Term Obligations for which such Person is acting
shall be subject to the terms hereof.
Section
7.5 Addresses for Notices. Unless otherwise specifically provided herein, any notice or other communication herein
required or permitted to be given shall be in writing and may be personally served, telecopied, emailed, or sent by overnight
express courier service or United States mail and shall be deemed to have been given when delivered in person or by courier service,
upon receipt of a telecopy, upon delivery of an email or five (5) days after deposit in the United States mail (certified, with
postage prepaid and properly addressed). For the purposes hereof, the addresses of the parties hereto (until notice of a change
thereof is delivered as provided in this Section 7.5) shall be as set forth below or, as to each party, at such other address
as may be designated by such party in a written notice to all of the other parties.
ABL Agent: Bank of America, N.A.
Four Penn Center
1600 JFK Blvd.
Philadelphia, PA 19103
Attention: Christy Bowen
Email:Christy.kuklinski@baml.com
Facsimile: 267 675 0175
with a copy (which shall not constitute notice) to:
Davis Polk & Wardwell LLP
Attention: John (JW) Perry
Telephone: (212) 450 4949
Facsimile: (212) 701 5949
Email:john.perry@davispolk.com
First Lien Term Agent: Bank of America, N.A.
135 S. LaSalle Street
Mail Code: IL4 135 09 61
Attention: Denise Jones
Email:denise.j.jones@baml.com
Telephone: 312.828.1846
Facsimile: 877.206.8413
with a copy (which shall not constitute notice) to:
Davis Polk & Wardwell LLP
Attention: John (JW) Perry
Telephone: (212) 450 4949
Facsimile: (212) 701 5949
Email:john.perry@davispolk.com
Second Lien Term Agent: Bank of America, N.A.
135 S. LaSalle Street
Mail Code: IL4 135 09 61
Attention: Denise Jones
Email:denise.j.jones@baml.com
Telephone: 312.828.1846
Facsimile: 877.206.8413
with a copy (which shall not constitute notice) to:
Davis Polk & Wardwell LLP
Attention: John (JW) Perry
Telephone: (212) 450 4949
Facsimile: (212) 701 5949
Email:john.perry@davispolk.com
The Borrower or any other Credit Party: to such Credit
Party in the care of the Borrower at:
620 Division Street
Elizabeth, New Jersey 07207
Attention: Co Chairman of the Board
Facsimile: (908) 351 4492
Email:rdavis@hayward.com
with a copy (which will not constitute notice) to:
c/o CCMP Capital Advisors, LLC
277 Park Avenue, 37th Floor
New York, New York 10172
Attention: Richard Jansen, Esq.
Fax No.: (212) 599 3481
Email:richard.jansen@ccmpcapital.com
and
c/o MSD Partners, L.P.
645 Fifth Avenue, 21st Floor
New York, New York 10022
Attention: Marcello Liguori
Fax No.: (212) 303 1772
Email:mliguori@msdcapital.com
and
c/o Alberta Investment Management Corporation
First Canadian Place
100 King Street West
Suite 5120, P.O. Box 51
Toronto, Ontario M5X 1B1, Canada
Attention: Jason Peters
and
c/o Alberta Investment Management Corporation
1100 – 10830 Jasper Avenue
Edmonton, Alberta T5J 2B3, Canada
Attention: Christina Luison
with a copy to:
Ropes & Gray LLP
1211 Avenue of the Americas
New York, New York 10036
Attention: Jay Kim
Fax No.: (212) 497 3626
Email:jay.kim@ropesgray.com
and
Dechert LLP
2929 Arch Street
Philadelphia, Pennsylvania 19104
Attention: Geraldine Sinatra and Eric Siegel
Fax No.: (215) 994 2222
Email:geraldine.sinatra@dechert.com
eric.siegel@dechert.com
and
Torys LLP
The Grace Building
1114 Avenue of the Americas
New York, New York 10036
Attention: Jared Fontaine
Fax No.: (212) 682 0200
Email:jfontaine@torys.com
Section
7.6 No Waiver; Remedies. No failure on the part of any Party to exercise, and no delay in exercising, any
right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right hereunder preclude any
other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive
of any remedies provided by law.
Section
7.7 Continuing Agreement; Transfer of Secured Obligations.
This Agreement is a continuing agreement and shall (a) remain in full force and effect until the earlier of the Discharge of ABL
Obligations or the Discharge of Term Obligations shall have occurred, (b) be binding upon the Parties and their successors and
assigns, and (c) inure to the benefit of and be enforceable by the Parties and their respective successors, transferees and assigns.
Except as set forth in Section 7.4 hereof, nothing herein is intended, or shall be construed to give, any other Person
any right, remedy or claim under, to or in respect of this Agreement or any Collateral. All references to any Credit Party shall
include any Credit Party as debtor in possession and any receiver or trustee for such Credit Party in any Insolvency Proceeding.
Without limiting the generality of the foregoing clause (c), the ABL Agent, any ABL Secured Party, any Term Agent, or any Term
Secured Party may assign or otherwise transfer all or any portion of the ABL Obligations or the Term Obligations in accordance
with the ABL Credit Agreement or the Term Credit Agreement, in each case, as applicable, to any other Person (in each case, except
as otherwise provided in such ABL Credit Agreement or such Term Credit Agreement, as applicable), and such other Person shall
thereupon become vested with all the rights and obligations in respect thereof granted to the ABL Agent, any Term Agent, any ABL
Secured Party, or any Term Secured Party, as the case may be, herein or otherwise. The ABL Secured Parties and the Term Secured
Parties may continue, at any time and without notice to the other parties hereto, to extend credit and other financial accommodations,
lend monies and provide Indebtedness to, or for the benefit of, any Credit Party on the faith hereof.
Section
7.8 GOVERNING LAW; ENTIRE AGREEMENT. THIS AGREEMENT
AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS AGREEMENT, WHETHER IN TORT, CONTRACT (AT LAW OR IN EQUITY)
OR OTHERWISE, SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. This
Agreement constitutes the entire agreement and understanding among the Parties with respect to the subject matter hereof and supersedes
any prior agreements, written or oral, with respect thereto.
Section
7.9 Counterparts. This Agreement may be executed in any number of counterparts, and it is not necessary that
the signatures of all Parties be contained on any one counterpart hereof, each counterpart will be deemed to be an original, and
all together shall constitute one and the same document. Delivery of an executed signature page to this Agreement by facsimile
or other electronic transmission (in .pdf or similar format) shall be as effective as delivery of a manually signed counterpart
of this Agreement.
Section
7.10 No Third Party Beneficiaries. This Agreement is solely for the benefit of the ABL Agent, ABL Secured Parties,
Term Agents and Term Secured Parties, the Borrower and the other Credit Parties. Except as set forth in Section 7.4 hereof,
no other Person shall be deemed to be a third party beneficiary of this Agreement.
Section
7.11 Headings. The headings of the articles and sections of this Agreement are inserted for purposes of convenience
only and shall not be construed to affect the meaning or construction of any of the provisions hereof.
Section
7.12 Severability. To the extent permitted by law, any provision of this Agreement held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity,
illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions thereof;
and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.
Section
7.13 Attorneys’ Fees. The Parties agree that if any dispute,
arbitration, litigation, or other proceeding is brought with respect to the enforcement of this Agreement or any provision hereof,
the prevailing party in such dispute, arbitration, litigation, or other proceeding shall be entitled to recover its reasonable
attorneys’ fees and all other costs and expenses incurred in the enforcement of this Agreement, irrespective of whether
suit is brought.
Section
7.14 VENUE; JURY TRIAL WAIVER.
(a) EACH
PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION (SUBJECT
TO THE LAST SENTENCE OF THIS PARAGRAPH (a)) OF ANY U.S. FEDERAL OR NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN,
IN THE CITY OF NEW YORK (OR ANY APPELLATE COURT THEREFROM) OVER ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT AND AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING SHALL (EXCEPT AS PERMITTED BELOW) BE HEARD AND
DETERMINED IN SUCH NEW YORK STATE OR, TO THE EXTENT PERMITTED BY LAW, FEDERAL COURT. EACH PARTY HERETO AGREES THAT SERVICE OF ANY
PROCESS, SUMMONS, NOTICE OR DOCUMENT BY REGISTERED MAIL ADDRESSED TO SUCH PERSON SHALL BE EFFECTIVE SERVICE OF PROCESS AGAINST
SUCH PERSON FOR ANY SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT. EACH PARTY HERETO AGREES THAT A FINAL JUDGMENT IN ANY
SUCH ACTION OR PROCEEDING MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
EACH PARTY HERETO AGREES THAT THE ADMINISTRATIVE AGENT AND THE SECURED PARTIES RETAIN THE RIGHT TO BRING PROCEEDINGS AGAINST ANY
LOAN PARTY IN THE COURTS OF ANY OTHER JURISDICTION SOLELY IN CONNECTION WITH THE EXERCISE OF ANY RIGHTS UNDER ANY COLLATERAL DOCUMENT.
(b) EACH
PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT IN ANY COURT REFERRED TO IN PARAGRAPH (a) OF THIS SECTION 7.14. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY LAW, ANY CLAIM OR DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION, SUIT OR PROCEEDING
IN ANY SUCH COURT.
(c) TO
THE EXTENT PERMITTED BY LAW, EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND AGREES
THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY REGISTERED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL) DIRECTED TO IT AT ITS
ADDRESS FOR NOTICES AS PROVIDED FOR IN SECTION 7.5.
(d) EACH
PARTY HERETO HEREBY WAIVES ANY OBJECTION TO SUCH SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM
IN ANY ACTION OR PROCEEDING COMMENCED HEREUNDER THAT SERVICE OF PROCESS WAS INVALID AND INEFFECTIVE. NOTHING IN THIS AGREEMENT
WILL AFFECT THE RIGHT OF ANY PARTY TO THIS AGREEMENT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
(e) EACH
PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY SUIT, ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY) DIRECTLY OR INDIRECTLY
ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH
PARTY HERETO (i) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION,
SEEK TO ENFORCE THE FOREGOING WAIVER AND (ii) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO
THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 7.14.
Section
7.15 Intercreditor Agreement. This Agreement is the “ABL Intercreditor Agreement” referred to in
the ABL Credit Agreement and this Agreement is the “ABL Intercreditor Agreement” referred to in the Term Credit Agreements.
Nothing in this Agreement shall be deemed to subordinate the obligations due to (i) any ABL Secured Party to the obligations due
to any Term Secured Party or (ii) any Term Secured Party to the obligations due to any ABL Secured Party (in each case, whether
before or after the occurrence of an Insolvency Proceeding), it being the intent of the Parties that this Agreement shall effectuate
a subordination of Liens but not a subordination of Indebtedness. Nothing in this Agreement shall be deemed to modify the rights,
remedies and obligations as between the First Lien Term Agent and the First Lien Secured Parties, on the one hand, and the Second
Lien Term Agent and the Second Lien Term Secured Parties, on the other hand, as set forth in the Term Loan Intercreditor Agreement.
Nothing in this Agreement shall be deemed to modify the rights, remedies and obligations as among the First Lien Secured Parties
set forth in any Pari Passu Intercreditor Agreement (as defined in the First Lien Term Credit Agreement). Nothing in this Agreement
shall be deemed to modify the rights, remedies and obligations as among the Second Lien Secured Parties set forth in any Pari
Passu Intercreditor Agreement (as defined in the Second Lien Term Credit Agreement).
Section
7.16 No Warranties or Liability. Each Term Agent and the ABL
Agent acknowledge and agree that none have made any representation or warranty with respect to the execution, validity, legality,
completeness, collectability or enforceability of any other ABL Document or any Term Document. Except as otherwise provided in
this Agreement, the Term Agents and the ABL Agent will be entitled to manage and supervise their respective extensions of credit
to any Credit Party in accordance with law and their usual practices, modified from time to time as they deem appropriate.
Section
7.17 Conflicts. In the event of any conflict between the provisions
of this Agreement and the provisions of any ABL Document or any Term Document, the provisions of this Agreement shall govern.
Section
7.18 Costs and Expenses. All costs and expenses incurred by the
Term Agent and the ABL Agent, including, without limitation pursuant to Section 4.1(e), hereunder shall be reimbursed by
the Borrower and the other Credit Parties as provided in Section 9.03 of the Term Credit Agreements (or any similar provision)
and Section 9.03 (or any similar provision) of the ABL Credit Agreement.
Section
7.19 Information Concerning Financial Condition of the Credit Parties. Each of the Term Agents and the ABL
Agent hereby assumes responsibility for keeping itself informed of the financial condition of the Credit Parties and all other
circumstances bearing upon the risk of nonpayment of the ABL Obligations or the Term Obligations. Each Term Agent and the ABL Agent
hereby agree that no party shall have any duty to advise any other party of information known to it regarding such condition or
any such circumstances. In the event any Term Agent or the ABL Agent, in its sole discretion, undertakes at any time or from time
to time to provide any information to any other party to this Agreement, (a) it shall be under no obligation (i) to provide any
such information to such other party or any other party on any subsequent occasion, (ii) to undertake any investigation not a part
of its regular business routine, or (iii) to disclose any other information, (b) it makes no representation as to the accuracy
or completeness of any such information and shall not be liable for any information contained therein, and (c) the Party receiving
such information hereby agrees to hold the other Party harmless from any action the receiving Party may take or conclusion the
receiving Party may reach or draw from any such information, as well as from and against any and all losses, claims, damages, liabilities,
and expenses to which such receiving Party may become subject arising out of or in connection with the use of such information.
Section
7.20 Additional Debt Facilities. To the extent, but only to the extent,
permitted by the provisions of each of the then extant ABL Documents and Term Documents, the Credit Parties may incur or issue
and sell one or more series or classes of Term Obligations. Any such additional class or series of Term Obligations (the “Term
Class Debt”) may be secured by (i) a junior priority, subordinated Lien on ABL Priority Collateral, (ii) a Lien
on Term Priority Collateral that is pari passu with, or junior in priority to, the Lien securing the then outstanding First Lien
Term Obligations and (iii) a Lien on Term Priority Collateral that is senior to, pari passu with, or junior in priority to, the
Lien securing the then outstanding Second Lien Term Obligations, in each case under and pursuant to the relevant Term Collateral
Documents for such Term Class Debt, if and subject to the condition that the representative or agent of any such Term Class Debt
(each, a “Term Class Debt Representative”), acting on behalf of the holders of such Term Class Debt
(such representative or agent and holders in respect of any Term Class Debt being referred to as the “Term Class Debt
Parties”), becomes a party to this Agreement by satisfying conditions (a) through (c), as applicable of this Section
7.20. In order for a Term Class Debt Representative to become a party to this Agreement:
(a) such
Term Class Debt Representative shall have executed and delivered a joinder agreement pursuant to which it becomes a “Term
Agent” hereunder, and the Term Class Debt in respect of which such Term Class Debt Representative is the Term Agent and the
related Term Class Debt Parties become subject hereto and bound hereby, and specifying whether the Term Class Debt in respect of
which such Term Class Debt Representative is the Term Agent constitutes First Lien Term Obligations or Second Lien Term Obligations;
(b) the
Borrower shall have delivered to the ABL Agent and the Controlling Term Agent an officer’s certificate stating that the conditions
set forth in this Section 7.20 are satisfied (or waived in accordance with the terms of the ABL Documents and Term Documents)
with respect to such Term Class Debt and, if requested, true and complete copies of each of the material Term Documents, relating
to such Term Class Debt, certified as being true and correct in all material respects by an Responsible Officer (as defined in
the ABL Credit Agreement) of the Borrower; and
(c) the
Term Debt Documents relating to such Term Class Debt shall provide that each Term Class Debt Party with respect to such Term Class
Debt will be subject to and bound by the provisions of this Agreement in its capacity as a holder of such Term Class Debt.
Section
7.21 Additional Credit Parties. The Borrower and each other Credit Party agrees that if, after the date hereof,
any Subsidiary of the Borrower becomes a party to (a) any ABL Credit Agreement or any ABL Guaranty (in each case, other than any
ABL Exclusive Credit Party) or (b) any Term Credit Agreement or any Term Guaranty (in each case, other than any Term Exclusive
Credit Party), it will promptly cause such Subsidiary to become party hereto by such Subsidiary executing and delivering an instrument
in a form reasonably acceptable to each of the ABL Agent and the Term Agents and the Borrower. Upon such execution and delivery,
such Subsidiary will become a Credit Party hereunder with the same force and effect as if originally named as a Credit Party herein.
The execution and delivery of such instrument shall not require the consent of any other party hereunder. The rights and obligations
of each Credit Party hereunder shall remain in full force and effect notwithstanding the addition of any new Credit Party as a
party to this Agreement.
[SIGNATURE PAGES FOLLOW]
IN WITNESS WHEREOF,
the ABL Agent, for and on behalf of itself and the ABL Secured Parties, and the Term Agents, in each case, for and on behalf of
itself and the Term Secured Parties represented by such Term Agent, have caused this Agreement to be duly executed and delivered
as of the date first above written.
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BANK OF AMERICA, N.A.,
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in its capacity as the ABL Agent
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By:
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Name:
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Title:
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BANK OF AMERICA, N.A.,
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in its capacity as the First Lien Term Agent
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By:
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Name:
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Title:
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BANK OF AMERICA, N.A.,
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in its capacity as the Second Lien Term Agent
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By:
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Name:
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Title:
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[Signature Page to ABL Intercreditor Agreement]
ACKNOWLEDGEMENT
The Borrower and each
Credit Party hereby acknowledges that it has received a copy of this Agreement as in effect on the date hereof and consents thereto,
agrees to recognize all rights granted thereby to the ABL Agent, the ABL Secured Parties, the Term Agents, and the Term Secured
Parties (including pursuant to Section 7.18 hereof) and will not do any act or perform any obligation which is not in accordance
with the agreements set forth in this Agreement as in effect on the date hereof. The Borrower and each Credit Party further acknowledge
and agree that (i) as between the ABL Secured Parties, the Borrower and the other Credit Parties, the ABL Documents remain in full
force and effect as written and are in no way modified hereby, and (ii) as between the Term Secured Parties, the Borrower and the
other Credit Parties, the Term Documents remain in full force and effect as written and are in no way modified hereby.
Without limiting the
foregoing or any rights or remedies the Borrower and the other Credit Parties may have, Holdings, the Borrower and the other Credit
Parties consent to the performance by each Term Agent of the obligations set forth in Section 3.6 of this Agreement, waive
the provisions of Section 9 615(a) of the UCC (or similar provisions under any other applicable law) in connection with the application
of proceeds of Collateral in accordance with the provisions of this Agreement, and acknowledge and agree that neither any Term
Agent nor any other Term Secured Party shall ever be accountable or liable for any action taken or omitted by the ABL Agent or
any other ABL Secured Party or its or any of their officers, employees, agents successors or assigns in connection therewith or
incidental thereto or in consequence thereof, including any improper use or disclosure of any proprietary information or other
Intellectual Property by the ABL Agent or any other ABL Secured Party or its or any of their officers, employees, agents, successors
or assigns or any other damage to or misuse or loss of any property of the Credit Parties as a result of any action taken or omitted
by the ABL Agent or its officers, employees, agents, successors or assigns pursuant to, and in accordance with, Section 3.6
of this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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CREDIT PARTIES:
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HAYWARD INTERMEDIATE, INC.,
as Holdings
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HAYWARD ACQUISITION CORP.,
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as the Initial Borrower
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By:
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Name:
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Title:
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HAYWARD INDUSTRIES, INC.,
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as the Borrower
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By:
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Name:
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Title:
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[Signature Page to ABL Intercreditor Agreement]
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HAYWARD INDUSTRIAL PRODUCTS, INC.
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By:
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Name:
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Title:
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GOLDLINE PROPERTIES LLC,
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By:
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Name:
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Title:
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HAYWARD/WRIGHT AUSTIN, INC.,
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By:
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Name:
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Title:
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WEBSTER PUMPS, INC.,
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By:
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Name:
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Title:
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[Signature Page to ABL Intercreditor Agreement]
Exhibit 10.6
Execution Version
AMENDMENT
NO. 1
AMENDMENT NO. 1 (this “First Amendment”)
dated as of March 30, 2018 to the ABL Credit Agreement dated as of August 4, 2017 (as amended, supplemented or otherwise modified
prior to the date hereof, the “Credit Agreement”), by and among Hayward Industries, Inc., a New Jersey corporation
(the “Lead Borrower”), Hayward Intermediate, Inc. a Delaware corporation (“Holdings”), Hayward
Pool Products Canada, Inc. / Produits De Piscines Hayward Canada, Inc., a Canadian federal corporation (the “Canadian
Borrower” and, together with the Lead Borrower, each a “Borrower” and, collectively, the “Borrowers”),
the Lenders from time to time party thereto, including Bank of America, N.A. (“Bank of America”), and Bank of
America, in its capacities as administrative agent and collateral agent (in such capacities, the “Agent”), the
Swingline Lender and the Issuing Bank.
WHEREAS, the Borrowers have requested that
the Credit Agreement be amended on the terms set forth herein, and each Lender party hereto consents to this First Amendment; and
WHEREAS, this First Amendment includes amendments
to the Credit Agreement that are subject to the approval of the Required Lenders, and that, in each case, will become effective
on the First Amendment Effective Date (as defined below) on the terms and subject to the conditions set forth herein.
Accordingly, in consideration of the foregoing
and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
Article
I
DEFINITIONS
Section 1.01 Definitions.
Capitalized terms used and not otherwise defined herein have the meanings assigned to them in the Credit Agreement as amended by
this First Amendment.
Article
II
AMENDMENTS TO THE CREDIT AGREEMENT
Section 2.01 Amendments
to Credit Agreement. Each of the parties hereto agrees that, effective on the First Amendment Effective Date, Section
5.01(h) of the Credit Agreement shall be amended by replacing the term “45 days” with the term “90 days”
in the first sentence thereof.
Article
III
REPRESENTATIONS AND WARRANTIES
Section 3.01 Representations
and Warranties. To induce the other parties hereto to enter into this First Amendment, each of (i) in the case
of Holdings, solely with respect to clauses (a), (b) and (c) below, and (ii) the Lead Borrower and the Canadian Borrower
represents and warrants, on and as of the First Amendment Effective Date, that the following statements are true and correct
in all material respects on and as of the First Amendment Effective Date:
(a)
The execution, delivery and performance of this First Amendment is within each applicable Loan Party’s corporate or
other organizational power and has been duly authorized by all necessary corporate or other organizational action of such Loan
Party, and do not and will not violate the terms of such Loan Party’s Organization Documents;
(b)
This First Amendment has been duly executed and delivered by each Loan Party and is a legal, valid and binding obligation
of such Loan Party, enforceable in accordance with its terms, subject to the Legal Reservations;
(c)
Immediately after giving effect to this First Amendment, the representations and warranties of Holdings and each Borrower
contained in Article 3 of the Credit Agreement or in any other Loan Document are true and correct in all material respects on and
as of the First Amendment Effective Date; provided that to the extent that such representations and warranties specifically
refer to an earlier date, they are true and correct in all material respects as of such earlier date; provided further that
any representation and warranty that is qualified as to “materiality,” “Material Adverse Effect” or similar
language is true and correct (after giving effect to any qualification therein) in all respects on such respective dates; and
(d)
As of the First Amendment Effective Date, (i) other than the Specified Default (as defined below), no Default or Event of
Default exists immediately before giving effect to this First Amendment and (ii) no Default or Event of Default exists immediately
after giving effect to this First Amendment.
Article
IV
CONDITIONS TO EFFECTIVENESS
Section 4.01 Section
4.01 First Amendment Effective Date. This First Amendment shall become effective as of the first date (the “First
Amendment Effective Date”) on which each of the following conditions shall have been satisfied:
(a)
Execution and Delivery of this First Amendment. The Agent shall have received counterparts hereof signed by
the Required Lenders and each Loan Party (or, in the case of any party as to which an executed counterpart shall not have been
received, receipt by the Agent in form satisfactory to it of telegraphic, e-mail or other written confirmation from such party
of execution of a counterpart hereof by such party).
(b)
Payment of Fees. The Agent shall have received payment of all fees and expenses required to be paid by the
Lead Borrower pursuant to the Credit Agreement and this Amendment for which an invoice has been provided to the Lead Borrower.
Section 4.02 Effects
of this First Amendment.
(a) Except
as expressly set forth herein, this First Amendment (i) shall not by implication or otherwise limit, impair, constitute a
waiver of or otherwise affect the rights and remedies of the Lenders or the Agent under the existing Credit Agreement or any
other Loan Document, and (ii) shall not alter, modify, amend or in any way affect any of the terms, conditions, obligations,
covenants or agreements contained in the existing Credit Agreement or any other provision of the existing Credit Agreement or
of any other Loan Document, all of which are ratified and affirmed in all respects and shall continue in full force and
effect. Except as expressly set forth herein, nothing herein shall be deemed to be a waiver, amendment, modification or other
change of, any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement or any other
Loan Document in similar or different circumstances.
(b)
From and after the First Amendment Effective Date, each reference in the Credit Agreement to “this Agreement”,
“hereunder”, “hereof”, “herein”, or words of like import, and each reference to the Credit
Agreement in any other Loan Document shall be deemed a reference to the Credit Agreement as amended hereby. This First Amendment
shall constitute a “Loan Document” for all purposes of the Credit Agreement and the other Loan Documents.
(c)
The execution and delivery of this First Amendment by the Required Lenders shall act as a waiver by the Required Lenders
of the Lead Borrower’s non-compliance with Section 5.01(h) of the Credit Agreement with respect to the delivery of the financial
documentation required to be delivered thereunder no later than 45 days after the beginning of each Fiscal Year of the Lead Borrower
(the “Specified Default”) so long as, no later than April 1, 2018, the Agent is in receipt of the financial
documentation for the Fiscal Year of the Lead Borrower ending December 31, 2017 required to be delivered under Section 5.01(h)
of the Credit Agreement (as amended by this First Amendment).
Article
V
REAFFIRMATION
Section 5.01 Reaffirmation.
Notwithstanding the effectiveness of this First Amendment and the transactions contemplated hereby, (i) each Loan Party acknowledges
and agrees that each Loan Document to which it is a party is hereby confirmed and ratified and shall remain in full force and effect
according to its respective terms (in the case of the Credit Agreement, as amended hereby) and (ii) each Loan Party hereby confirms
and ratifies its continuing unconditional obligations as a guarantor under the Loan Guaranties and the Security Agreements.
Article
VI
MISCELLANEOUS
Section 6.01 Governing
Law. THIS FIRST AMENDMENT AND ANY CLAIMS, CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER IN CONTRACT OR TORT OR
OTHERWISE) BASED UPON, ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT (EXCEPT, AS TO ANY OTHER LOAN DOCUMENT,
AS EXPRESSLY SET FORTH THEREIN) AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.
Section 6.02 Costs and Expenses.
The Borrower agrees to reimburse the Agent for its actual and reasonable costs and expenses in connection with this First Amendment
to the extent required pursuant to Section 9.03(a) of the Credit Agreement.
Section 6.03 Counterparts;
Effectiveness. This First Amendment may be executed in any number of counterparts, each of which when so executed
and delivered shall be deemed an original, but all of which together shall constitute one and the same instrument. Delivery by
facsimile or other electronic imaging means of an executed counterpart of a signature page to this First Amendment shall be effective
as delivery of an original executed counterpart of this First Amendment.
Section 6.04 Headings.
Section headings herein are included herein for convenience of reference only and shall not constitute a part hereof for any other
purpose or be given any substantive effect.
IN
WITNESS WHEREOF, the parties hereto have caused this First Amendment to be duly executed by their respective authorized officers
as of the date first above written.
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HOLDINGS
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HAYWARD INTERMEDIATE, INC.
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By:
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/s/ Andrew Diamond
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Name:
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Andrew Diamond
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Title:
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Senior Vice President, Finance and Chief Financial Officer
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LEAD BORROWER
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HAYWARD INDUSTRIES, INC.
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By:
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/s/ Andrew Diamond
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Name:
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Andrew Diamond
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Title:
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Senior Vice President and Chief Financial Officer
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CANADIAN BORROWER
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HAYWARD POOL PRODUCTS CANADA, INC. / PRODUITS DE PISCINES HAYWARD CANADA, INC.
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By:
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/s/ Andrew Diamond
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Name:
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Andrew Diamond
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Title:
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Vice President
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SUBSIDIARY GUARANTORS
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GOLDLINE PROPERTIES LLC
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By:
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/s/ Andrew Diamond
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Name:
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Andrew Diamond
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Title:
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Vice President
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HAYWARD INUSTRIAL PRODUCTS, INC.
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By:
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/s/ Andrew Diamond
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Name:
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Andrew Diamond
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Title:
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Senior Vice President and Chief Financial Officer
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[Signature Page to Hayward ABL First amendment]
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HAYWARD WRIGHT-AUSTIN INC.
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By:
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/s/ Andrew Diamond
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Name:
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Andrew Diamond
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Title:
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Vice President and Chief Financial Officer
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WEBSTER PUMPS, INC.
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By:
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/s/ Andrew Diamond
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Name:
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Andrew Diamond
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Title:
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Vice President and Chief Financial Officer
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BANK OF AMERICA, N.A., as Agent
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By:
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/s/ Christy Bowen
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Name:
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Christy Bowen
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Title:
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Vice President
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BANK OF AMERICA, N.A.,
as Lender, Swingline Lender and Issuing Bank
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By:
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/s/ Christy Bowen
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Name:
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Christy Bowen
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Title:
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Vice President
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BANK OF AMERICA, N.A. (ACTING THROUGH ITS CANADA BRANCH), AS LENDER
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By:
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/s/ Sylwia Durkiewicz
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Name:
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Sylwia Durkiewicz
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Title:
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Vice President
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[If second signature is required]
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By:
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Name:
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Title:
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[Signature Page to Hayward ABL First amendment]
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WELLS FARGO BANK, N.A.
as a Lender
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By:
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/s/ Lynn Fiore
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Name:
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Lynn Fiore
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Title:
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Vice President
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WELLS FARGO CAPITAL FINANCE CORPORATION CANADA
as a Lender
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By:
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/s/ David G. Philips
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Name:
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David G. Phillips
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Title:
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Senior Vice President
Credit Officer, Canada
Wells Fargo Capital Finance
Corporation Canada
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MORGAN STANLEY SENIOR FUNDING, INC.,
as a Lender
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By:
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/s/ Manish Desai
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Name:
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Manish Desai
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Title:
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Vice President
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Nomura Corporate Funding Americas, LLC.,
as a Lender
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By:
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/s/ G. Andrew Keith
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Name:
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G. Andrew Keith
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Title:
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Executive Director
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[If second signature is required]
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By:
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Name:
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Title:
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JPMORGAN CHASE BANK, N.A.,
as a Lender
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By:
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/s/ Donna DiForio
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Name:
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Donna DiForio
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Title:
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Authorized Officer
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[Signature Page to Hayward ABL First amendment]
Exhibit 10.7
Anthony P. Colucci
Release
For good and valuable consideration,
and in satisfaction of the Executive’s rights under the Employment Agreement dated as of May 17, 2018 (the “Employment
Agreement”), which rights are set forth in full on Schedule A hereto, which is incorporated by reference herein,
this agreement and release (the “Release”) is entered into by and among Antony P. Colucci (the “Executive”),
Hayward Industries, Inc. (the “Company”) and Hayward Holdings, Inc. (the “Parent”, and together
with the Company, the “Companies”).
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1.
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The Executive, on behalf of himself and his dependents, heirs, administrators,
agents, personal representatives, executors, successors and assigns, does hereby irrevocably, completely and unconditionally release,
waive and forever discharge the Companies and their past, present and future parents, subsidiaries, affiliated corporations, partnerships,
joint ventures, employee benefit plans, insurers and their predecessors, successors and assigns (each a “Company Affiliate”
and collectively, “Company Affiliates”) and all of the Company Affiliates’ past, present and future shareholders,
directors, officers, employees, agents, trustees, and representatives, both individually and in their official capacities, and
their successors and assigns, from any and all actions, rights, claims, demands, obligations, liabilities, attorneys’ fees
and causes of action of any kind or description whatsoever, in law, equity or otherwise, whether known or unknown, whether past
or present, including those arising out of or in any way related to the Executive’s employment, or termination of employment,
with either or both of the Companies (including any events, acts, conduct or omissions related thereto) occurring at any time prior
to or at the date on which the Executive signs and returns this Release (the “Release Date”), including, but
not limited to, any action, claim, demand, obligation, liability or cause of action arising under: any Federal, state, or local
law (including, but not limited to, Title VII of the Civil Rights Act of 1964, the Civil Rights Acts of 1866, 1871, 1964 and 1991,
the Equal Pay Act, the Americans with Disabilities Act of 1990, the National Labor Relations Act, the Employee Retirement Income
Security Act of 1974 (other than any claim as excepted below), the Age Discrimination in Employment Act of 1967, all as amended,
and the wage and hour, wage payment and fair employment practices laws of the state or states in which the Executive has been employed),
tort, contract or any other legal obligation (collectively, the “Claims”); provided, however, the Executive
does not release any of the following Claims:
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a.
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any Claim to vested but unpaid payments, benefits or other entitlements,
including, without limitation, under any compensation or benefit plan, program or other arrangement of the Company, the Parent
or any Company Affiliate including, without limitation, any incentive or deferred compensation plan including any cash or equity
award, any pension plan or benefits under any medical, dental, vision, life insurance or disability insurance plan, in each case
as set forth on Schedule A;
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b.
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any Claim to workers’ compensation or unemployment insurance benefits;
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c.
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any claim arising from a failure to pay or provide any of the payments or benefits described on Schedule A hereto;
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d.
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any Claim for indemnification in accordance with applicable laws, the applicable
constituent documents (including bylaws and certificates of incorporation) of the Company, the Parent or any Company Affiliate,
and any applicable insurance policy with respect to any liability the Executive incurs or has incurred as a director, officer or
employee of the Company, the Parent or any Company Affiliate;
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e.
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any Claim the Executive may have to obtain contribution as permitted by
law in the event of entry of judgment against the Executive as a result of any act or failure to act for which the Executive and
the Company, the Parent and/or any Company Affiliate are jointly liable in whole or in part;
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f.
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any Claim that by law may not be released by private agreement without judicial
or governmental review and approval; or
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g.
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any Claim that arises after the Release Date.
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Nothing contained in this Release
shall be construed to prohibit the Executive from filing a charge with or participating in any investigation or proceeding conducted
by the federal Equal Employment Opportunity Commission or a comparable state or local agency, provided, however, that the Executive
hereby agrees to waive his right to recover monetary damages or other individual relief in any such charge, investigation or proceeding
or any related complaint or lawsuit filed by the Executive or by anyone else on his behalf.
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2.
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The following shall apply in connection with the signing of this Release:
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a.
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The Executive acknowledges and agrees that he has had at least twenty-one
(21) days in which to consider this Release and is hereby advised that this Release creates a legally binding obligation and that
he should therefore consult an attorney about this Release (though he may choose voluntarily not to do so).
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b.
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The Executive represents that he has read this Release carefully; has had
the opportunity to consult with an attorney of the Executive’s own choosing about the Release; understands fully what this
Release means; and is entering into it knowingly, voluntarily and without coercion.
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c.
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The Executive may not sign and return this Release to the Companies earlier
than April 16, 2020 (the “Date of Termination”) and must sign and return it no later than twenty-one (21) calendar
days following the date this Release was first provided to the Executive. The Executive will have an additional seven (7) calendar
days after the Release Date in which to revoke his acceptance by providing written notice of revocation to the Companies. The Release
will not be effective until the date upon which the revocation period has expired, which will be the eighth (8th)
calendar day after the Release Date, if not previously revoked.
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d.
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By signing this Release, the Executive represents that (i) he is signing
it voluntarily and with a full understanding of its terms, (ii) he has had sufficient opportunity, before signing this Release,
to consider its terms and consult with an attorney (if he so wished to do so) and (iii) he has not relied on any promises or representations,
express or implied, that are not set forth expressly in this Release.
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3.
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The Executive represents that as of the date he has executed this Release
he has not assigned to any other party, and agrees not to assign, any Claim released by the Executive herein.
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4.
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The Executive acknowledges that he does not hold any equity or equity-related
interests in the Companies or any of their affiliates, except as set forth on Schedule A.
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5.
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The Executive represents that he has returned to the Companies any and all
documents, materials and information (whether in hardcopy, on electronic media or otherwise) related to the business of the Companies
or their affiliates (whether present or otherwise), and all keys, access cards, credit cards, computer hardware and software, telephones
and telephone-related equipment and all other property of the Companies or their affiliates in the Executive’s possession
or control. Further, the Executive agrees that he has not retained any copy or derivation of any documents, materials or information
(whether in hardcopy, on electronic media or otherwise) of the Companies or any Company Affiliates.
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6.
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Each of the Executive, the Company and the Parent hereby waive any notice
(or pay in lieu thereof) that might otherwise be required from any other party.
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7.
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Whenever possible, each provision of this Release shall be interpreted in
such manner as to be effective and valid under applicable law, but if any provision of this Release is held to be invalid, illegal
or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability
shall not affect any other provision or any other jurisdiction, but this Release shall be reformed, construed and enforced in such
jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.
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8.
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This Release may be executed in one or more counterparts, each of which shall
be deemed to be an original but all of which together shall constitute one and the same instrument.
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9.
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This Release shall be governed by and construed and interpreted in accordance
with the laws of the State of New Jersey without reference regard to principles of conflicts of law that would result in the application
of the laws of any other jurisdiction.
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[remainder of page intentionally blank]
IN WITNESS WHEREOF, the Executive, the Company and the Parent
have executed this
Release each as of the date indicated below.
AGREED AND EXECUTED:
ANTHONY P. COLUCCI
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Dated:
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4/29/20
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/s/ Anthony P. Colucci
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HAYWARD INDUSTRIES, INC.
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Name: Margaret B. Costello
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Title: Vice President, Human Resources
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Dated:
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April 16, 2020
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/s/ Margaret B. Costello
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HAYWARD HOLDINGS, INC.
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Name: Kevin Holleran
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Dated:
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April 16, 2020
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Title: President & CEO
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/s/ Kevin Holleran
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Schedule
A to Release (A. Colucci)
Summary
of Severance Benefits
All capitalized terms
not defined herein or in the Release to which this Schedule A is attached (the “Release”) shall have
the meanings given in the Employment Agreement.
Upon the termination
of Executive’s employment, the Company will pay Executive the following Accrued Benefits in a lump sum within thirty (30)
days following the Date of Termination:
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(i)
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Pay, at Executive’s final base rate of pay, for all work performed for the Company through the Date of Termination, to
the extent not previously paid;
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(ii)
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Pay, at Executive’s final base rate of pay, for any accrued, unused vacation days as of the Date of Termination; and
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(iii)
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Reimbursement of outstanding business expenses reimbursable under Company policies as then in effect and properly incurred
by Executive, if all necessary supporting documentation is provided within 30 days of the Date of Termination.
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In addition, upon Executive’s
termination without Cause, as defined in the Employment Agreement, and in consideration of Executive’s execution and non-revocation
of the Release and Executive’s continued compliance with Executive’s restrictive covenant obligations under the Employment
Agreement, including without limitation Section 6, 7, and 8 thereof, and the Agreement between Executive and Hayward Industries,
Inc. dated May 2018, the Company will provide Executive with the following severance benefits:
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(i)
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An amount equal to the sum of Executive’s final Base Salary ($442,000) and Executive’s Target Bonus of 70%
($309,400), paid together in the form of salary continuation over a period of twelve (12) months, beginning on the next
regular pay date that is at least five (5) days following the later of the effective date of the Release or the date it is received
by the Company (the “Payment Date”). The first such payment will be retroactive to the day following the Date
of Termination.
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(ii)
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A pro-rata portion of Executive’s Annual Bonus (if any) for the 2020 plan year determined at such time as annual bonuses
for the 2020 plan year are determined by the Board, paid at such time as annual bonuses for the 2020 plan year are paid generally;
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(iii)
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Post Termination Benefits in the following amounts, payable on the Payment Date:
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a.
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$67,626, representing the value of the Company’s contribution to the Company’s Non-Qualified Deferred Compensation
Plan at the rate of nine (9) percent of Executive’s final Base Salary and Target Bonus;
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b.
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$22,542, representing the value of the Company’s contribution to the Company’s 401k plan at the rate of
three (3) percent of Executive’s final Base Salary and Target Bonus;
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c.
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$8,550, representing the value of a 401k safe-harbor profit-sharing payment at the rate of three (3) percent of Executive’s
final Base Salary, subject to 2020 plan limits;
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d.
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$9,000, representing the value of twelve (12) months of Company payments of Executive’s Company car lease (at
$750/month);
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e.
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$13,128, representing the value of twelve (12) months of Company contributions to Executive’s UltimateHealth executive
medical supplementary health plan (at $1,094/month); and
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f.
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$11,430, representing the value of twelve (12) months of the Company’s premium costs for Executive’s life
insurance and AD&D insurance coverage.
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(iv)
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A one-time lump sum benefit allowance payment of $24.014.22, which is equal to the employer-side premium that the Company would
have provided towards the cost of Executive’s medical, dental, prescription and/or vision
coverage (based on Executive’s benefit elections for such coverages, and premium cost sharing, each as in effect immediately
prior to the Date of Termination), had Executive remained employed with the Company for an additional twelve (12) months following
Executive’s termination of employment and continued such coverage for such period (the “Benefit Allowance”).
The Benefit Allowance will be paid on the Payment Date, and will be made regardless of whether the Executive elects health continuation
coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”). Executive’s current medical,
dental, prescription and/or vision coverage (if any) will end on the Date of Termination. At or about that time, if Executive is
eligible for COBRA, Executive will receive under separate cover, directly from Benefit Express, notice of his opportunity to elect
COBRA continuation coverage of his current plans on a self-pay basis. Should Executive wish to elect this continuation of coverage,
it is his obligation to enroll within the designated timeframe and satisfy all billing requirements directly with Benefit Express.
Executive’s COBRA eligibility and coverage will be governed by the applicable benefit plan and Executive will be responsible
for paying the full cost of any COBRA coverage he elects; and
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(v)
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Outplacement counseling services for a period of 12 months by Terry Mulligan at Transition Partners Group at a cost not to
exceed $13,000.
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Subject to the conditions described herein, the payments and
benefits set forth in this Schedule A will be subject to and reduced by all applicable federal, state and local income and
payroll withholding taxes, and will be paid in full and complete satisfaction of any and all payments or benefits due to Executive
from the Company, whether for services provided to the Company, due under the Employment Agreement, or otherwise.
Treatment of Equity
Executive is the owner of 250 Class A Shares (the “Class
A Shares”) of Hayward Holdings, Inc. (“Hayward Holdings”). The Class A Shares are not subject to vesting
and will remain outstanding following the date hereof, but will continue to be subject to the terms of the Stockholders’
Agreement, including Section 2.5 thereof.
Executive is also the owner of 2,000 Class A Restricted Shares
of Hayward Holdings (the “Class A Restricted Shares”). As of the Date of Termination, none of the Class A Restricted
Shares will have vested and, accordingly, all such Class A Restricted Shares will be automatically forfeited by the Executive for
no consideration.
Executive has been granted stock options with respect to 8,000
Class B Shares of Hayward Holdings (the “Class B Options”). 50% of the Class B Options are time-vesting options
(the “Time-Vesting Options”) and 50% of the Class B Options are performance-vesting shares (the “Performance-Vesting
Options”). As of the Date of Termination, 1,600 of the Time-Vesting Options and none of the Performance-Vesting Options
will have vested (the “Vested Class B Options”). All unvested Class B Options shall terminate without consideration
on the Date of Termination. The Vested Class B Options may be exercised by Executive for a period of 90 days from the Date of Termination
and, immediately following such date, any unexercised Vested Class B Options will expire.
The Class A Shares and the vested Class B Options will remain
subject to, as applicable, the terms of the Stockholders’ Agreement, the Amended and Restated Hayward Holdings Equity Incentive
Plan, the Subscription Agreement, dated as of May 29, 2018 by and between Hayward Holdings and the Executive, and the Executive’s
Non-Qualified Stock Option Agreement, granted May 29, 2018.
Exhibit
10.8
Privileged
& Confidential
Hayward
Holdings, INC.
second
Amended and Restated 2017 Equity Incentive Plan
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SECTION
1.
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GENERAL
PURPOSE OF THE PLAN; DEFINITIONS
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The
name of the plan is the Second Amended and Restated Hayward Holdings, Inc. 2017 Equity Incentive Plan (the “Plan”).
The purpose of the Plan is to encourage and enable the officers, employees, directors, Consultants, and other key Persons (including
prospective employees, but conditioned on their employment) of Hayward Holdings, Inc., a Delaware corporation (including any successor
entity, the “Company”) and any Subsidiary, upon whose judgment, initiative and efforts the Company largely
depends for the successful conduct of its business, to acquire a proprietary interest in the Company. It is anticipated that providing
such Persons with a direct stake in the Company’s welfare will assure a closer identification of their interests with those
of the Company and its stockholders, thereby stimulating their efforts on the Company’s behalf and strengthening their desire
to remain with the Company.
The
following terms shall be defined as set forth below:
“Act”
means the Securities Act of 1933, as amended, and the rules and regulations thereunder.
“Affiliate”
has the meaning set forth in the Stockholders’ Agreement.
“Award”
or “Awards,” except where referring to a particular category of grant under the Plan, shall include Non-Qualified
Stock Options, Restricted Stock Awards, Unrestricted Stock Awards, Restricted Stock Units or any combination of the foregoing.
“Award
Agreement” means a written or electronic agreement setting forth the terms and provisions applicable to an Award granted
under the Plan. Each Award Agreement may contain terms and conditions in addition to those set forth in the Plan; provided,
however, that except to the extent explicitly provided to the contrary, in the event of any conflict in the
terms of the Plan and the Award Agreement, the terms of the Plan shall govern.
“Board”
means the Board of Directors of the Company.
“Cause”
means, with respect to a Participant, “Cause” as defined in such Participant’s Employment Agreement; provided,
that if such Participant does not have an Employment Agreement, “Cause” shall mean (i) conduct by such Participant
constituting a material act of misconduct in connection with the performance of his or her duties, including, without limitation,
misappropriation of funds or property of the Company or any of its Subsidiaries or Affiliates other than the occasional, customary
and de minimis use of Company property for personal purposes; (ii) the Participant’s conviction of a felony or a misdemeanor
involving fraud or any misconduct by the Participant that results in material injury or reputational harm to the Company or any
of its Subsidiaries and Affiliates; (iii) continued non-performance by the Participant of his or her duties (other than by reason
of the Participant’s physical or mental illness, incapacity or disability) which has continued for more than thirty (30)
days following written notice from the Board clearly delineating such non-performance; (iv) a material breach by the Participant
of any restrictive covenant by the Participant contained in any agreement between the Participant and the Company (including Exhibit
B or Appendix B, as applicable, to any Award Agreement); (v) a material violation by the Participant of the Company’s written
employment policies in effect from time to time; or (vi) failure to cooperate with a bona fide internal investigation or an investigation
by regulatory or law enforcement authorities, after being instructed by the Company to cooperate, or the willful destruction or
failure to preserve documents or other materials known to be relevant to such investigation or the inducement of others to fail
to cooperate or to produce documents or other materials in connection with such investigation.
“Change
of Control” means a Liquidity Event as defined herein.
“Chief
Executive Officer” means the Chief Executive Officer of the Company or, if there is no Chief Executive Officer, then
the President of the Company.
“Class
A Common Stock” means the Class A Stock, par value $0.001 per share of the Company subject to adjustments pursuant to
SECTION 3.
“Class
B Common Stock” means the Class B Stock, par value $0.001 per share of the Company, subject to adjustments pursuant
to SECTION 3.
“Code”
means the Internal Revenue Code of 1986, as amended, and any successor statute as from time to time in effect, and related
rules, regulations and interpretations.
“Committee”
means the Committee referred to in SECTION 2.
“Consultant”
means any natural Person that provides bona fide services to the Company (including a Subsidiary), and such services are not
in connection with the offer or sale of securities in a capital-raising transaction and do not directly or indirectly promote
or maintain a market for the Company’s securities.
“Covered
Transaction” means any transaction in which (i) one or more classes of securities issued by the Company are converted
into, or exchanged for, securities in another form issued by the Company, any of its direct or indirect subsidiaries, a newly
formed parent or affiliated Persons or (ii) the Company merges or otherwise combines with one or more Affiliates of the Company
with the Company surviving any such merger or combination.
“Deferral
Period” means, with respect to a Restricted Stock Unit, the period of time between the date of grant of such Restricted
Stock Unit and the date on which such Restricted Stock Unit is due to be settled in accordance with its terms.
“Effective
Date” means the date on which the Plan is approved by the Board as set forth on the final page of the Plan.
“Employment
Agreement” means any existing or future employment, services, severance or similar agreement entered into between the
Company and/or any of its parent companies or Subsidiaries, or any Affiliates thereof, and a Participant.
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.
“Fair
Market Value” has the meaning set forth in the Stockholders’ Agreement.
“Hayward”
means Hayward Industries, Inc.
“IPO”
has the meaning set forth in the Stockholders’ Agreement.
“Liquidity
Event” has the meaning set forth in the Stockholders’ Agreement. Notwithstanding anything to the contrary herein,
an IPO shall not be deemed a Liquidity Event.
“Non-Qualified
Stock Option” means any Stock Option that is not an “incentive stock option” as defined in Section 422 of
the Code.
“Participant”
means an eligible employee or service provider (as provided in SECTION 4) who is granted an Award under the Plan.
“Permitted
Transferee” has the meaning set forth in the Stockholders’ Agreement.
“Person”
has the meaning set forth in the Stockholders’ Agreement.
“Option”
or “Stock Option” means any option to purchase shares of Class B Common Stock granted pursuant to SECTION
5.
“Restricted
Stock Award” means an Award granted pursuant to SECTION 6 entitling the recipient to acquire, at such purchase
price (which may be zero) as determined by the Committee, shares of Stock subject to such restrictions and conditions as the Committee
may determine at the time of grant, which purchase price (if applicable) shall be payable in cash or other form of consideration
acceptable to the Committee.
“Restricted
Stock Unit” means an Award of phantom stock units to a Participant, which may be settled in cash or stock as determined
by the Committee, pursuant to SECTION 8.
“Section
409A” means Section 409A of the Code and the regulations and other guidance promulgated thereunder.
“Stock”
means the Class A Stock and/or the Class B Stock of the Company (as applicable).
“Stockholders’
Agreement” means the Hayward Holdings, Inc. Stockholders’ Agreement, dated as of the date hereof, as it may be
amended, modified or amended and restated from time to time.
“Subsidiary”
means any corporation or other entity (other than the Company) in which the Company has more than a 50 percent interest, either
directly or indirectly.
“Unrestricted
Stock” means shares of Stock, free of any vesting restrictions, granted pursuant to an Unrestricted Stock Award.
“Unrestricted
Stock Award” means an Award of Unrestricted Stock, granted pursuant to SECTION 7.
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SECTION
2.
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ADMINISTRATION
OF PLAN; COMMITTEE AUTHORITY TO SELECT PARTICIPANTS AND DETERMINE AWARDS
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(a)
Administration of Plan. The Plan shall be administered by the Board, or at the discretion of the Board, by a committee
of the Board which shall be comprised of not less than two Directors. All references herein to the “Committee” shall
be deemed to refer to the group then responsible for administration of the Plan at the relevant time (i.e., either the Board or
a committee or committees of the Board, as applicable).
(b)
Powers of Committee. The Committee shall have the power and authority to grant Awards consistent with the terms of the
Plan, including the power and authority:
(i)
to select the individuals to whom Awards may from time to time be granted;
(ii)
to determine the time or times of grant, and the amount, if any, of Non-Qualified Stock Options, Restricted Stock Awards, Unrestricted
Stock Awards, Restricted Stock Units, or any combination of the foregoing, granted to any one or more Participants;
(iii)
to determine the class and the number of shares of Stock to be covered by any Award and, subject to the provisions of SECTION
5(a)(i) below, the price, exercise price, conversion ratio or other price relating thereto;
(iv)
to determine and, subject to SECTION 11, to modify from time to time the terms and conditions, including restrictions,
not inconsistent with the terms of the Plan, of any Award (the terms and conditions of which may differ among individual Awards
and Participants), and to approve the form of written instruments evidencing the Awards;
(v)
to accelerate at any time the exercisability or vesting of all or any portion of any Award;
(vi)
to impose any limitations on Awards granted under the Plan, including limitations on transfers, repurchase provisions and the
like, and to exercise repurchase rights or obligations;
(vii)
to extend at any time the period in which Stock Options may be exercised;
(viii)
to negotiate, enter into, execute and deliver any Award Agreement (and any amendments or modifications thereto); and
(ix)
at any time to determine, amend, modify, waive, adopt, alter and repeal such rules, guidelines and practices for administration
of the Plan and for its own acts and proceedings as it shall deem necessary or advisable; to interpret the terms and provisions
of the Plan and any Award (including related written instruments); to make all determinations it deems advisable for the administration
of the Plan; to decide all disputes arising in connection with the Plan; and to otherwise supervise the administration of the
Plan.
All
decisions and interpretations of the Committee are conclusive and shall bind all Persons (including, without limitation, Participants
and their respective beneficiaries, successors or Permitted Transferees). For the avoidance of doubt, any Awards granted after
the date hereof shall be made by the Committee in consultation with the Chief Executive Officer.
(c)
Award Agreement. Each Award under the Plan shall be evidenced by an Award Agreement that sets forth the terms, conditions
and limitations for such Award and may include, without limitation, the term of such Award and the provisions applicable in the
event employment or service terminates. Each Award under the Plan shall also be subject to the terms and conditions of the Stockholders’
Agreement. By accepting an Award, the Participant agrees to the terms of the applicable Award Agreement, the Plan and the Stockholders’
Agreement.
(d)
Indemnification. To the fullest extent permitted by law, the members and agents of the Committee (solely in their capacities
as such and not, for the avoidance of doubt, in their capacity as a Participant) shall not be liable for any act, omission, interpretation,
construction or determination made in good faith in connection with the Plan, and the members of the Board and the Committee (and
any delegate thereof) shall be entitled in all cases to indemnification and reimbursement by the Company in respect of any claim,
loss, damage, expense, loss, action, suit, or proceeding (including, without limitation, reasonable attorneys’ fees) arising
or resulting therefrom to the fullest extent permitted by law and/or under the Company’s governing documents, including
its articles or bylaws, or any directors’ and officers’ liability insurance coverage which may be in effect from time
to time and/or any indemnification agreement between such individual and the Company. The foregoing right of indemnification shall
not be exclusive of any other rights of indemnification to which such persons may be entitled as a matter of law, or otherwise,
or any power that the Company may have to indemnify such persons or hold them harmless.
(e)
Section 409A. Subject to SECTION 10, Awards under the Plan are intended to be exempt from, or comply with, the requirements
of Section 409A and shall be construed and administered accordingly. The Committee may establish rules and procedures, consistent
with Section 409A, setting forth the circumstances under which the distribution or the receipt of Stock and other amounts payable
with respect to an Award may be deferred either automatically or at the election of the Participant and whether and to what extent
the Company may pay or credit amounts constituting interest (at rates determined by the Committee) or dividends or deemed dividends
on such deferrals.
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SECTION
3.
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STOCK
ISSUABLE UNDER THE PLAN; MERGERS AND OTHER TRANSACTIONS; SUBSTITUTION
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(a)
Stock Issuable. The maximum number of shares of Stock reserved and available for issuance under the Plan shall be 95,994.11
shares of Class B Common Stock and 2,949.49 shares of Class A Common Stock, which may be issued as Restricted Stock, subject to
adjustment as provided in SECTION 3(b). For purposes of this limitation, the shares of Stock underlying any Awards that
are forfeited, canceled, withheld upon exercise of an Option or settlement of an Award to cover the exercise price or tax withholding,
reacquired by the Company prior to vesting, satisfied without the issuance of Stock or otherwise terminated (other than by exercise),
in each case shall be added back to the shares of Stock available for issuance under the Plan.
(b)
Changes in Stock. Subject to SECTION 3(c) hereof, if, as a result of any reorganization, recapitalization, reclassification,
stock dividend, stock split, reverse stock split or other similar change in the Company’s capital stock, the outstanding
shares of Stock are increased or decreased or are exchanged for a different number or kind of shares or other securities of the
Company, or additional shares or new or different shares or other securities of the Company or other non-cash assets are distributed
with respect to such shares of Stock or other securities, or, if, as a result of any merger or consolidation, or sale of all or
substantially all of the assets of the Company, the outstanding shares of Stock are converted into or exchanged for securities
of the Company or any successor entity (or a parent or subsidiary thereof), the Committee shall make an appropriate and equitable
or proportionate adjustment in (i) the maximum number of shares reserved for issuance under the Plan, (ii) the number and kind
of shares or other securities subject to any then outstanding Awards under the Plan, (iii) the repurchase price, if any, per share
subject to each outstanding Restricted Stock Award, and (iv) the exercise price for each share subject to any then outstanding
Stock Options under the Plan, without changing the aggregate exercise price (i.e., the exercise price multiplied by the number
of Stock Options) as to which such Stock Options remain exercisable. The adjustment by the Committee shall be final, binding and
conclusive. No fractional shares of Stock shall be issued under the Plan resulting from any such adjustment, but the Committee
in its discretion may make a cash payment in lieu of fractional shares.
(c)
Liquidity Events.
(i)
Subject to and effective immediately prior to the consummation of a Liquidity Event, except as the Committee may otherwise specify
with respect to particular Awards in the relevant Award Agreement, provision may be made in connection with the Liquidity Event
in the sole discretion of the parties to the Liquidity Event for the assumption or continuation by the successor entity of Awards
theretofore granted, or the substitution of such Awards with new awards on substantially equivalent terms of the successor entity
or parent thereof, with an equitable or proportionate adjustment as to the number and kind of shares and, if appropriate, the
per share exercise prices, as such parties shall agree (after taking into account any acceleration hereunder).
(ii)
In the event of a Liquidity Event each Participant shall be permitted, within a specified period of time prior to the consummation
of such Liquidity Event as determined by the Committee, to exercise all outstanding Options held by such Participant, to the extent
such Options are vested, including those that will become vested and exercisable upon the consummation of such Liquidity Event;
provided, however, that the exercise of Options not exercisable prior to such Liquidity Event shall be subject to
the consummation of such Liquidity Event and shall be of no effect if the Liquidity Event is not consummated.
(iii)
Notwithstanding anything to the contrary herein, the Company shall have the right, but not the obligation, in connection with
a Liquidity Event, to make or provide for a cash payment to Participants holding vested Options, in exchange for the cancellation
thereof, in an amount equal to the difference between (A) the value as determined by the Committee of the consideration payable,
or otherwise to be received by stockholders, per share of Stock pursuant to such Liquidity Event multiplied by the number of shares
of Stock subject to outstanding Options (to the extent then exercisable, including by reason of vesting acceleration, at prices
not in excess of the applicable sale price for the Stock in such Liquidity Event) and (B) the aggregate exercise price of all
such outstanding Options (to the extent then exercisable, including by reason of vesting acceleration, at prices not in excess
of the per share sales price of such Liquidity Event), subject to the other terms and conditions of such Liquidity Event (such
as indemnification obligations and purchase price adjustments) to the extent provided by the parties; provided, that if
the value of (B) is greater than the value of (A) upon such Liquidity Event, such Options will be forfeited without consideration
by the Participant.
(d)
Substitute Awards. The Committee may grant Awards under the Plan in substitution for stock and similar stock-based awards
held by employees, directors or other key persons of another corporation in connection with the merger or consolidation of the
employing corporation with the Company or a Subsidiary or the acquisition by the Company or a Subsidiary of property or stock
of the employing corporation. The Committee may direct that the substitute awards be granted on such terms and conditions as the
Committee considers appropriate in the circumstances. To the extent consistent with the requirements of applicable legal requirements
(including applicable stock exchange requirements), any substitute Awards granted under the Plan shall not count against the share
limitation set forth in SECTION 3(a), but notwithstanding anything in SECTION 3(a) to the contrary, if any substitute
award is settled in cash or expires, becomes unexercisable, terminates or is forfeited to or repurchased by the Company without
the issuance of Stock, the shares of Stock previously subject to such Award will not be available for future grants under the
Plan. The Committee will determine the extent to which the terms and conditions of the Plan apply to substitute awards, if at
all.
Participants
under the Plan will be such full or part-time officers and other employees, directors, Consultants, and key persons (including
prospective employees, but conditioned on their employment) of the Company and any Subsidiary who are selected from time to time
by the Committee in its sole discretion; provided, however, that eligibility for Stock Options is limited to individuals
described in the first sentence of this SECTION 4 who are providing direct services on the date of grant of the Stock Option
to the Company or to a Subsidiary that would be described in the first sentence of Treas. Regs. § 1.409A-1(b)(5)(iii)(E).
Any
Stock Option granted under the Plan must be made pursuant to an Award Agreement in such form as the Committee may from time to
time approve. Award Agreements need not be identical.
Stock
Options granted under the Plan will be Non-Qualified Stock Options.
All
Stock Options must be granted on Class B Common Stock, which Class B Common Stock qualifies as “service recipient stock”
under the Section 409A Treasury Regulations.
(a)
Terms of Stock Options. The Committee in its discretion may grant Stock Options to eligible employees and key persons of
the Company or any Subsidiary. Stock Options granted pursuant to this SECTION 5(a) shall be subject to the following terms
and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of the Plan, as the Committee
shall deem desirable. If the Committee so determines, Stock Options may be granted in lieu of cash compensation, subject to such
terms and conditions as the Committee may establish.
(i)
Exercise Price. The exercise price per share for the Stock covered by a Stock Option granted pursuant to SECTION 5(a)
shall be determined by the Committee at the time of grant but shall not be less than 100 percent of the Fair Market Value
on the date of grant.
(ii)
Option Term. The term of each Stock Option shall be fixed by the Committee, but no Stock Option shall be exercisable more
than ten years after the date the Stock Option is granted.
(iii)
Exercisability; Rights of a Stockholder. Stock Options shall become exercisable at such time or times, whether or not in
installments, as shall be determined by the Committee at or after the grant date. An optionee shall have the rights of a stockholder
only as to shares acquired upon the exercise of a Stock Option and not as to unexercised Stock Options. An optionee shall not
be deemed to have acquired any such shares unless and until a Stock Option shall have been exercised pursuant to the terms hereof,
the Company shall have issued and delivered a certificate representing the shares to the optionee, and the optionee’s name
shall have been entered on the books of the Company as a stockholder.
(iv)
Method of Exercise; Payment. Stock Options may be exercised by an optionee in whole or in part, by the optionee giving
written notice of exercise to the Company, specifying the number of shares to be purchased. Payment of the purchase price may
be made by one or more of the following methods (or any combination thereof) to the extent provided in the Award Agreement:
(A)
in cash, by certified or bank check, by wire transfer of immediately available funds, or other instrument acceptable to the Committee;
(B)
by the optionee delivering to the Company a promissory note, if the Board has expressly authorized the loan of funds to the optionee
for the purpose of enabling or assisting the optionee to effect the exercise of such optionee’s Stock Options; provided,
that at least so much of the exercise price as represents the par value of the Stock shall be paid other than with a promissory
note if required by state law;
(C)
if the IPO has occurred, through the delivery (or attestation to the ownership) of shares of Stock that have been purchased by
the optionee on the open market or that are beneficially owned by the optionee and are not then subject to restrictions under
any Company plan; provided, that, to the extent required to avoid variable accounting treatment under ASC 718 or any successor
accounting standard or other applicable accounting rules, such surrendered shares if originally purchased from the Company shall
have been owned by the optionee for at least six months and one day; provided, further, that such surrendered shares
shall be valued at Fair Market Value on the exercise date;
(D)
if permitted by the Committee with respect to Stock Options, by a “net exercise” arrangement pursuant to which the
Company will reduce the number of shares of Stock issuable upon exercise by the largest whole number of shares with a Fair Market
Value that does not exceed the aggregate exercise price; and
(E)
if permitted by the Committee, by the optionee delivering to the Company a properly executed exercise notice together with irrevocable
instructions to a broker to promptly deliver to the Company cash or a check payable and acceptable to the Company for the purchase
price; provided, that in the event the optionee chooses to pay the purchase price as so provided, the optionee and the
broker shall comply with such procedures and enter into such agreements of indemnity and other agreements as the Committee shall
prescribe as a condition of such payment procedure.
Payment
instruments will be received subject to collection. No certificates for shares of Stock so purchased will be issued to the optionee
until the Company has completed all steps required by law to be taken in connection with the issuance and sale of the shares,
including without limitation (i) receipt of a representation from the optionee at the time of exercise of the Option that such
optionee is purchasing the shares for the optionee’s own account and not with a view to any sale or distribution thereof,
(ii) the legending of any certificate representing the shares to evidence the foregoing restrictions, and (iii) obtaining from
the optionee payment or provision for all withholding taxes due as a result of the exercise of the Option. The delivery of certificates
representing the shares of Stock to be purchased pursuant to the exercise of a Stock Option will be contingent upon receipt from
the optionee (or a purchaser acting in his or her stead in accordance with the provisions of the Stock Option) by the Company
of the full purchase price for such shares and the fulfillment of any other requirements contained in the Award Agreement or applicable
provisions of laws. In the event an optionee chooses to pay the purchase price by previously-owned shares of Stock through the
attestation method, the number of shares of Stock transferred to such optionee upon the exercise of the Stock Option shall be
net of the number of shares attested to.
(b)
Non-Transferability of Stock Options. No Stock Option shall be transferable by the optionee otherwise than by will or by
the laws of descent and distribution and all Stock Options shall be exercisable, during the optionee’s lifetime, only by
the optionee, or by the optionee’s legal representative or guardian in the event of the optionee’s incapacity. Notwithstanding
the foregoing, the Committee, in its sole discretion, may provide in the Award Agreement regarding a given Option that the optionee
may transfer, without consideration for the transfer, his or her Stock Options to members of his or her immediate family, to trusts
for the benefit of such family members, or to partnerships in which such family members are the only partners, provided that the
transferee agrees in writing with the Company to be bound by all of the terms and conditions of the Plan and the applicable Option.
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|
SECTION
6.
|
RESTRICTED
STOCK AWARDS
|
(a)
Nature of Restricted Stock Awards. The Committee shall determine the restrictions and conditions applicable to each Restricted
Stock Award at the time of grant. Conditions may be based on continuing employment (or other service relationship), achievement
of pre-established performance goals and objectives and/or such other criteria as the Committee may determine. The grant of a
Restricted Stock Award is contingent on the Participant executing an Award Agreement. The terms and conditions of each such Award
Agreement shall be determined by the Committee, and such terms and conditions may differ among individual Awards and Participants,
all of whom must be eligible Persons under SECTION 4 hereof.
(b)
Rights as a Stockholder. Upon execution of an Award Agreement and payment of any applicable purchase price, a Participant
of Restricted Stock shall be considered the record owner of the shares of Restricted Stock, and shall be entitled to vote such
shares of Restricted Stock unless otherwise specified in the Company’s certificate of incorporation or the applicable Award
Agreement. Except as otherwise provided for in any Award Agreement or waiver letter, the Participant shall be entitled to receive
all dividends and any other distributions declared on the shares of Restricted Stock; provided, however, that the
Company shall not be obligated to declare any such dividends or to make any such distribution. The Award Agreement may require
or permit the immediate payment, waiver, deferral or investment of dividends paid on the Restricted Stock. Unless the Committee
shall otherwise determine, certificates evidencing the Restricted Stock shall remain in the possession of the Company until such
Restricted Stock is vested as provided in SECTION 6(d), and the Participant shall be required, as a condition of the grant,
to deliver to the Company a stock power endorsed in blank and such other instruments of transfer as the Committee may prescribe.
(c)
Restrictions. Restricted Stock may not be sold, assigned, transferred, pledged or otherwise encumbered or disposed of except
as specifically provided herein or in the Award Agreement. Except as may otherwise be provided by the Committee either in the
Award Agreement or, subject to SECTION 13 below, in writing after the Award Agreement is issued, if any, if a Participant’s
employment (or other service relationship) with the Company and any Subsidiary terminates, the Company or its assigns shall have
the right, as may be specified in the relevant instrument, to repurchase some or all of the Shares subject to the Restricted Stock
Award at such purchase price as is set forth in the Award Agreement.
(d)
Vesting of Restricted Stock. The Committee at the time of grant shall specify the date or dates and/or the attainment of
pre-established performance goals, objectives and other conditions on which Restricted Stock shall become vested, subject to such
further rights of the Company or its assigns as may be specified in the Award Agreement.
(e)
Section 83(b) Election. Except if provided otherwise in the Award Agreement, as a condition subsequent to the issuance
or transfer to the Participant of Restricted Stock, the Participant will be required within thirty (30) days following the grant
of a Restricted Stock Award to execute and deliver to the Internal Revenue Service, with a copy thereof to the Company, an
election under Section 83(b) of the Code (to the extent such Restricted Stock is subject to a substantial risk of forfeiture as
of the date of the Restricted Stock Award).
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|
SECTION
7.
|
UNRESTRICTED
STOCK AWARDS
|
(a)
Grant or Sale of Unrestricted Stock. The Committee may, in its sole discretion, grant (or sell at par value or such higher
purchase price determined by the Committee) to a Participant under SECTION 4 hereof an Unrestricted Stock Award under the
Plan. Unrestricted Stock Awards may be granted in respect of past services or other valid consideration, or in lieu of cash compensation
due to such Participant.
(b)
Requests to Receive Unrestricted Stock In Lieu of Compensation. Upon the request of an eligible Person under SECTION
4 hereof and with the consent of the Committee, to be approved in its sole discretion, each such Participant may, pursuant
to an advance written election delivered to the Company no later than the date specified by the Committee, receive a portion of
any cash compensation otherwise due to such Participant in the form of shares of Unrestricted Stock either currently or on a deferred
basis; provided, that any such request and election, if approved by the Committee, be structured to comply with or be exempt
from Section 409A of the Code.
(c)
Restrictions on Transfers. The right to receive shares of Unrestricted Stock on a deferred basis may not be sold, assigned,
transferred, pledged or otherwise encumbered, other than by will or the laws of descent and distribution.
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|
SECTION
8.
|
RESTRICTED
STOCK UNITS
|
(a)
Nature of Restricted Stock Units. The Committee shall determine the restrictions and conditions applicable to each Restricted
Stock Unit at the time of grant. Conditions may be based on continuing employment (or other service relationship), achievement
of pre-established performance goals and objectives and/or other such criteria as the Committee may determine. The grant of Restricted
Stock Unit(s) is contingent on the Participant executing an Award Agreement. The terms and conditions of each such Award Agreement
shall be determined by the Committee, shall be consistent with Section 409A, and such terms and conditions may differ among individual
Awards and Participants. At the end of the Deferral Period applicable to any Restricted Stock Unit, such Restricted Stock Unit,
to the extent vested, shall be settled in the form of cash or shares of Stock, as specified in the Award Agreement.
(b)
Election to Receive Restricted Stock Units in Lieu of Compensation. The Committee may, in its sole discretion, permit a
Participant to elect to receive a portion of any future cash compensation otherwise due to such Participant in the form of a Restricted
Stock Unit. Any such election shall be made in writing and shall be delivered to the Company no later than the date specified
by the Committee and in accordance with Section 409A and such other rules and procedures established by the Committee. Upon any
such election, any such future cash compensation shall be converted to a fixed number of Restricted Stock Unit(s) based on the
Fair Market Value of Stock on the date the compensation would otherwise have been paid to the Participant if such payment had
not been deferred through conversion into the Restricted Stock Unit(s). The Committee shall have the sole right to determine whether
and under what circumstances to permit such elections and to impose such limitations and other terms and conditions thereon as
the Committee deems appropriate.
(c)
Rights as a Stockholder. A Participant shall have the rights of a stockholder only as to shares of Stock, if any, acquired
upon settlement of a Restricted Stock Unit. A Participant shall not be deemed to have acquired any such shares unless and until
a Restricted Stock Unit shall have been settled in Stock pursuant to the terms hereof, the Company shall have issued and delivered
a certificate representing the shares of Stock to the Participant, and the Participant’s name shall have been entered in
the books of the Company as a stockholder.
(d)
Termination. Except as may otherwise be provided by the Committee either in the Award Agreement or in writing after the
Award Agreement is issued, a Participant’s right in all Restricted Stock Units that have not vested shall automatically
terminate upon the Participant’s termination of employment (or cessation of service relationship) with the Company and any
Subsidiary for any reason.
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|
SECTION
9.
|
TAX
WITHHOLDING
|
(a)
Payment by Participant. Each Participant shall, no later than the date as of which the value of an Award or of any Stock
or other amounts received thereunder first becomes includable in the gross income of the Participant for Federal income tax purposes,
pay to the Company, or make arrangements satisfactory to the Committee regarding payment of, any Federal, state, or local taxes
of any kind required by law to be withheld by the Company with respect to such income. The Company and any Subsidiary shall, to
the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to the Participant.
The Company’s obligation to deliver stock certificates to any Participant is subject to and conditioned on any such tax
withholding obligations being satisfied by the Participant.
(b)
Payment in Stock. Subject to approval by the Committee, a Participant may elect to have the Company’s minimum required
tax withholding obligation satisfied, in whole or in part, by authorizing the Company to withhold from shares of Stock to be issued
pursuant to any Award a number of shares of Stock with an aggregate Fair Market Value (as of the date the withholding is effected)
that would satisfy the minimum withholding amount due.
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|
SECTION
10.
|
CODE
SECTION 409A.
|
To
the extent that any Award is determined to constitute “nonqualified deferred compensation” within the meaning of Section
409A (a “409A Award”), the Award shall be subject to such additional rules and requirements as specified by
the Committee from time to time in order to comply with Section 409A. In this regard, if any amount under a 409A Award is payable
upon a “separation from service” (within the meaning of Section 409A) to a Participant who is considered a “specified
employee” (within the meaning of Section 409A), then no such payment shall be made prior to the date that is the earlier
of (i) six months and one day after the Participant’s date of separation from service, or (ii) the Participant’s death,
but only to the extent such delay is necessary to prevent such payment from being subject to interest, penalties and/or additional
tax imposed pursuant to Section 409A.
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|
SECTION
11.
|
Covered
Transaction
|
(a)
In the event of a Covered Transaction (including a Covered Transaction undertaken in connection with an IPO), outstanding Awards
shall be subject to the agreement or arrangement governing the terms of the Covered Transaction, which may provide, without limitation,
for (A) the assumption or substitution of Awards with awards on substantially equivalent terms by an acquiring or surviving entity
(which may include requiring Participants holding unvested Options, Restricted Stock Awards and/or Restricted Stock Units to exchange
or convert such unvested Award(s) for equity securities or other assets or rights that may include, but are not limited to, awards
to acquire the same consideration paid to or received by the stockholders or the Company, as the case may be, pursuant to the
Covered Transaction) or (B) a cash-out of Awards, based on the value ascribed to the Company’s equity securities in the
Covered Transaction (including for no payment if the Fair Market Value of an Award is zero at the time of the Covered Transaction).
(b)
The Committee may provide that Awards held by different Participants, or different portions of an Award or Awards held by a Participant,
shall be treated differently in connection with a Covered Transaction.
(c)
Nothing in this SECTION 11 shall limit the rights of the Company or any of its Permitted Transferees under the Stockholders’
Agreement.
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|
SECTION
12.
|
TRANSFER,
LEAVE OF ABSENCE, ETC.
|
For
purposes of the Plan, the following events shall not be deemed a termination of employment:
(a)
a transfer to the employment of the Company from a Subsidiary or from the Company to a Subsidiary, or from one Subsidiary to another;
or
(b)
an approved leave of absence for military service, sickness or disability, or for any other purpose approved by the Company, if
the employee’s right to re-employment is guaranteed either by a statute or by contract or under the policy pursuant to which
the leave of absence was granted or if the Committee otherwise so provides in writing.
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|
SECTION
13.
|
AMENDMENTS
AND TERMINATION
|
The
Board may, at any time, amend or discontinue the Plan and the Committee may, at any time, amend or cancel any outstanding Award
(or provide substitute Awards at the same or a reduced exercise or purchase price or with no exercise or purchase price in a manner
not inconsistent with the terms of the Plan; provided, that such price, if any, must satisfy the requirements which would
apply to the substitute or amended Award if it were then initially granted under the Plan for the purpose of satisfying changes
in law or for any other lawful purpose), but no such action shall adversely affect rights under any outstanding Award without
the consent of the holder of the Award. The Committee may exercise its discretion to reduce the exercise price of outstanding
Stock Options or effect repricing through cancellation of outstanding Awards and by granting such holders new Awards in replacement
of the cancelled Awards. To the extent determined by the Committee to be required by applicable law, Plan amendments shall be
subject to approval by the Company stockholders entitled to vote at a meeting of stockholders.
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|
SECTION
14.
|
STATUS
OF PLAN
|
With
respect to the portion of any Award that has not been exercised and any payments in cash, Stock or other consideration not received
by a Participant, a Participant shall have no rights greater than those of a general creditor of the Company unless the Committee
shall otherwise expressly so determine in connection with any Award or Awards. In its sole discretion, the Committee may authorize
the creation of trusts or other arrangements to meet the Company’s obligations to deliver Stock or make payments with respect
to Awards hereunder; provided, that the existence of such trusts or other arrangements is consistent with the foregoing
sentence.
|
|
SECTION
15.
|
GENERAL
PROVISIONS
|
(a)
No Distribution; Compliance with Legal Requirements. The Committee may require each Person acquiring Stock pursuant to
an Award to represent to and agree with the Company in writing that such Person is acquiring the shares of Stock without a view
to distribution thereof. No shares of Stock shall be issued pursuant to an Award until all applicable securities law and other
legal and stock exchange or similar requirements have been satisfied. The Committee may require the placing of such stop-orders
and restrictive legends on certificates for Stock and Awards as it deems appropriate.
(b)
Delivery of Stock Certificates. Stock certificates to Participants under the Plan shall be deemed delivered for all purposes
when the Company or a stock transfer agent of the Company shall have mailed such certificates in the United States mail, addressed
to the Participant, at the Participant’s last known address on file with the Company.
(c)
Other Compensation Arrangements; No Employment Rights. Nothing contained in the Plan shall prevent the Board from adopting
other or additional compensation arrangements, including trusts, and such arrangements may be either generally applicable or applicable
only in specific cases. The adoption of the Plan and the grant of Awards do not confer upon any Person any right to continued
employment or service relationship with the Company or any Subsidiary. No holder of an Award shall have any rights as a stockholder
except as to shares of Stock actually issued under the Plan.
(d)
Trading Policy Restrictions. Option exercises and other Awards under the Plan shall be subject to the Company’s insider
trading policy-related restrictions, terms and conditions as may be established by the Committee, or in accordance with policies
set by the Committee, from time to time.
(e)
Loans to Award Recipients. The Company shall have the authority, to the extent permitted by law, to make loans to recipients
of Awards hereunder (including to facilitate the purchase of shares) and shall further have the authority to issue shares for
promissory notes hereunder.
(f)
Designation of Beneficiary. Each Participant to whom an Award has been made under the Plan may designate a beneficiary
or beneficiaries to exercise any Award on or after the Participant’s death or receive any payment under any Award payable
on or after the Participant’s death. Any such designation shall be on a form provided for that purpose by the Committee
and shall not be effective until received by the Committee. If no beneficiary has been designated by a deceased Participant, or
if the designated beneficiaries have predeceased the Participant, the beneficiary shall be the Participant’s estate.
(g)
Waiver of Jury Trial. By accepting an Award under the Plan, each Participant waives any right to a trial by jury in any
action, proceeding or counterclaim concerning any rights under the Plan and any Award, or under any amendment, waiver, consent,
instrument, document or other agreement delivered or which in the future may be delivered in connection therewith, and agrees
that any such action, proceedings or counterclaim shall be tried before a court and not before a jury. By accepting an Award under
the Plan, each Participant certifies that no officer, representative, or attorney of the Company or any of its Affiliates has
represented, expressly or otherwise, that the Company would not, in the event of any action, proceeding or counterclaim, seek
to enforce the foregoing waivers.
(h)
Limitation of Liability. Notwithstanding anything to the contrary in the Plan or any Award Agreement, none of the Company
or any of its Affiliates, or any Person acting on behalf of the Company or any of its Affiliates, shall be liable to any Participant,
to the estate, or any beneficiary or Permitted Transferee of any Participant or to any other Person by reason of any acceleration
of income, any additional tax, or any other tax or liability asserted by reason of the failure of an Award to satisfy the requirements
of Section 409A, by reason of Section 4999 of the Code, except if such failure is attributable to the gross negligence of the
Company, any of its Affiliates or any Person acting on behalf of the Company or any of its Affiliates.
(i)
Coordination with Other Plans. Awards under the Plan may be granted in tandem with, or in satisfaction of or substitution
for, other Awards under the Plan or awards made under other compensatory plans or programs of the Company or its Subsidiaries.
For example, but without limiting the generality of the foregoing, awards under other compensatory plans or programs of the Company
or its Subsidiaries may be settled in Stock if the Committee so determines, in which case the shares of Stock delivered will be
treated as awarded under the Plan (and will reduce the number of shares of Stock thereafter available under the Plan in accordance
with the rules set forth in SECTION 3).
(j)
Legend. Any certificate(s) representing shares of Stock shall carry substantially the following legend:
The
transferability of this certificate and the shares of stock represented hereby are subject to the restrictions, terms and conditions
(including repurchase and restrictions against transfers) contained in the Hayward Holdings, Inc. 2017 Equity Incentive Plan and
any agreement entered into thereunder by and between the company and the holder of this certificate (a copy of which is available
at the offices of the company for examination).
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|
SECTION
16.
|
EFFECTIVE
DATE OF PLAN
|
The
Plan shall become effective upon approval of the Board in accordance with applicable state law and the Company’s bylaws
and certificate of incorporation. Stock Options and other Awards may only be granted hereunder on and after adoption of the Plan
by the Board. No grants of Stock Options and other Awards may be made hereunder after the tenth anniversary of the Effective Date.
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|
SECTION
17.
|
Establishment
of Sub-Plans
|
The
Committee may from time to time establish one or more sub-plans under the Plan for purposes of satisfying applicable blue sky,
securities, tax or other laws of any jurisdiction. The Committee will establish such sub-plans by adopting supplements to the
Plan setting forth (a) such limitations on the Committee’s discretion under the Plan as it deems necessary or desirable
and (b) such additional terms and conditions as it deems in good faith to be necessary or appropriate, which may supersede contrary
terms in the Stockholders’ Agreement, the Plan or an applicable Award Agreement. All supplements so established will be
deemed to be part of the Plan, but each supplement will apply only to Participants within the applicable jurisdiction (as determined
by the Committee).
|
|
SECTION
18.
|
Entire
Agreement
|
The
Plan, any applicable Award Agreements and the Stockholders’ Agreement constitute the entire agreement with respect to the
subject matter hereof and thereof. In the event of any inconsistency between the Plan and an Award Agreement, the terms and conditions
of the Plan shall control.
|
|
SECTION
19.
|
GOVERNING
LAW
|
This
Plan, all Awards and any controversy arising out of or relating to this Plan and all Awards shall be governed by and construed
in accordance with the General Corporation Law of the State of Delaware, without regard to conflict of law principles that would
result in the application of any law other than the law of the State of Delaware.
DATE
APPROVED BY THE BOARD OF DIRECTORS: August 4, 2017
DATE
AMENDED AND RESTATED BY THE BOARD OF DIRECTORS: November 22, 2019
Exhibit 10.9
RESTRICTED
STOCK SUBSCRIPTION AGREEMENT
UNDER THE
HAYWARD HOLDINGS, INC.
2017 EQUITY
INCENTIVE PLAN
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Name of Subscriber:
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(the “Subscriber”)
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No. of Shares of Stock:
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Shares of Class B Common Stock
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Subscription Date:
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(the “Subscription Date”)
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Vesting Commencement Date:
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(the “Vesting Commencement Date”)
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Per Share Purchase Price:
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$
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(the “Per Share Purchase Price”)
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Aggregate Purchase Price:
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$
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(the “Aggregate Purchase Price”)
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Pursuant to the Hayward
Holdings, Inc. 2017 Equity Incentive Plan (the “Plan”), Hayward Holdings, Inc., a Delaware corporation (together
with its successors, the “Company”), hereby grants, sells and issues to the individual named above, who is an
officer, employee, director, consultant or other key person of the Company or any of the Subsidiaries, the shares of Restricted
Stock (as defined below) at the Per Share Purchase Price, which Per Share Purchase Price represents the Fair Market Value per share
on the Subscription Date, subject to the terms and conditions set forth herein and in the Plan. The parties agree that the Per
Share Purchase Price constitutes the “fair market value” of the shares of Restricted Stock for purposes of Section
83 of the Internal Revenue Code of 1986, as amended, and shall take a consistent position for federal income tax purposes. The
Subscriber agrees to the provisions set forth herein, as well as the provisions set forth in the Charter and the Stockholders Agreement
in respect of the Restricted Stock, and acknowledges that each such provision is a material condition of the Company’s agreement
to issue and sell the shares of Restricted Stock to him or her. The Company hereby acknowledges receipt of the Aggregate Purchase
Price as full payment for the shares of Restricted Stock. All references to share prices and amounts herein shall be equitably
adjusted to reflect stock splits, stock dividends, recapitalizations, mergers, reorganizations and similar changes affecting the
capital stock of the Company, and any shares of capital stock of the Company received on or in respect of shares of Restricted
Stock in connection with any such event (including any shares of capital stock or any right, option or warrant to receive the same
or any security convertible into or exchangeable for any such shares or received upon conversion of any such shares) shall be subject
to this Agreement on the same basis and extent at the relevant time as the shares of Restricted Stock in respect of which they
were issued, and shall be deemed shares of Restricted Stock as if and to the same extent they were issued at the date hereof.
1.
Definitions. For the purposes of this Agreement, the following terms shall have the following respective meanings.
All capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Plan.
“Advisory Services
Agreement” means that certain Advisory Services and Monitoring Agreement, dated as August 4, 2017, by and among the Company,
Hayward Intermediate, Inc., Hayward Industries, Inc., CCMP Capital Advisors, L.P. and MSD Partners, L.P.
“Business Day”
means any day except a Saturday, a Sunday or any other day on which commercial banks in New York, New York are authorized or required
by law to close.
“Charter”
means the amended and restated certificate of incorporation of the Company, as amended, modified, supplemented or restated and
in effect from time to time, including any certificate of designation, correction or amendment filed with the Secretary of State
of the State of Delaware pursuant to the terms thereof.
“CCMP Investor”
means, collectively, CCMP Capital Investors III, L.P., CCMP Capital Investors III (Employee), L.P. and any of their respective
Affiliates that is a transferee of any CCMP Investor Shares or otherwise acquires equity securities of the Company.
“CCMP Investor
Shares” means the equity securities of the Company acquired by the CCMP Investor in connection with its investment in
the Company, whether acquired before, on or after the date hereof, and any additional securities received in respect thereof, as
a dividend on, or otherwise on account of, such equity securities.
“Disability”
means, with respect to any Subscriber, the meaning set forth in such Subscriber’s Employment Agreement. If such Subscriber
does not have an Employment Agreement or “Disability” is not defined in such agreement, “Disability” shall
mean the failure or inability of the Subscriber to perform duties with the Company or any of its Affiliates for a period of at
least 180 consecutive days (or 180 days during any twelve (12) month period) by reason of any physical or mental condition, as
determined in good faith by the Company in its sole discretion; provided, that, if the Company’s long term disability
plan contains a definition of “Disability,” the definition in such plan will control.
“Investor Shares”
means with respect to the CCMP Investor, the CCMP Investor Shares, and with respect to the MSD Investor, the MSD Investor Shares.
“Investors”
means the CCMP Investor and the MSD Investor.
“Liquidity Threshold
Price” means, at any time, the lowest average closing trading price for shares of common stock of the Company over any
ten (10) day trading period that .
“Measurement
Date” means any date upon which Proceeds are received by the CCMP Investor and/or the MSD Investor.
“MSD Investor”
means MSD Aqua Holdings, L.P. and any of its Affiliates that is a transferee of any MSD Investor Shares or otherwise acquires equity
securities of the Company.
“MSD Investor
Shares” means the equity securities of the Company acquired by the MSD Investor in connection with its investment in
the Company, whether acquired before, on or after the date hereof and any additional securities received in respect thereof, as
a dividend on, or otherwise on account of, such equity securities.
“Principal Investment”
means, with respect to an Investor, the sum, without duplication, of: (i) the aggregate consideration paid by such Investor to
acquire such Investor’s Investor Shares, plus (ii) the amount of cash and the value (as determined by the Board in good faith)
of any property contributed by such Investor to the Company, whether contributed before, on or after the date hereof.
“Proceeds”
means, with respect to an Investor, without duplication, all (i) cash proceeds actually received by such Investor from the
disposition of such Investor’s Investor Shares, net of Unreimbursed Transaction Expenses; (ii) cash dividends and other cash
distributions actually received by such Investor in respect of its Investor Shares; and (iii) the fair market value of any non-cash
consideration (including but not limited to marketable securities) received in exchange for or in respect of such Investor’s
Investor Shares (net of Unreimbursed Transaction Expenses) solely to the extent received in connection with a Change of Control;
for the avoidance of doubt, any Proceeds shall exclude any amounts payable pursuant to the Advisory Services Agreement.
“Restricted
Stock” means the number of shares of Class B Common Stock, par value $0.001 per share, of the Company being purchased
by the Subscriber on the date hereof and any additional shares of Class B Common Stock or other securities received in respect
of such shares of Class B Common Stock, as a dividend on, or otherwise on account of, such shares of Class B Common Stock.
“Service Relationship”
means any relationship as an employee, part-time employee, director or other key person (including consultants) of the Company
or any Subsidiary or any successor entity such that, for example, a Service Relationship shall be deemed to continue without interruption
in the event the Subscriber’s status changes from full-time employee to part-time employee or consultant.
“Stockholders
Agreement” means the Stockholders Agreement, dated as of August 4, 2017, as it may be amended, modified or amended and
restated from time to time.
“Unreimbursed
Transaction Expenses” means, with respect to an Investor, such Investor’s share of all reasonable legal, accounting
and investment banking fees that are not reimbursed by unrelated third parties (other than amounts paid to such Investor and its
Affiliates), in connection with the disposition of such Investor’s Investor Shares.
2.
Purchase and Sale of Restricted Stock; Investment Representations.
(a)
Purchase and Sale. On the date hereof, the Company hereby sells to the Subscriber, and the Subscriber hereby purchases
from the Company, the number of shares of Restricted Stock set forth above for the Aggregate Purchase Price. Fifty percent (50%)
of such Restricted Stock shall be subject to time-based vesting criteria (the “Time-Vesting Shares”), and fifty
percent (50%) of such Restricted Stock shall be subject to performance-based vesting criteria (the “Performance-Vesting
Shares”).
(b)
Investment Representations. In connection with the purchase and sale of the shares of Restricted Stock contemplated
by Section 2(a) above, the Subscriber hereby represents and warrants to the Company as follows:
(i)
The Subscriber acknowledges that the shares of Restricted Stock are subject to the terms and conditions of the Stockholders’
Agreement and agrees to be bound to all of the provisions thereof.
(ii)
The Subscriber is purchasing the shares of Restricted Stock for the Subscriber’s own account for investment only,
and not for resale or with a view to the distribution thereof.
(iii)
The Subscriber has had such an opportunity as he or she has deemed adequate to obtain from the Company such information
as is necessary to permit him or her to evaluate the merits and risks of the Subscriber’s investment in the Company and has
consulted with the Subscriber’s own advisers with respect to the Subscriber’s investment in the Company.
(iv)
The Subscriber has sufficient experience in business, financial and investment matters to be able to evaluate the risks
involved in the purchase of the shares of Restricted Stock and to make an informed investment decision with respect to such purchase.
(v)
The Subscriber can afford a complete loss of the value of the shares of Restricted Stock and is able to bear the economic
risk of holding such shares of Restricted Stock for an indefinite period.
(vi)
The Subscriber understands that the shares of Restricted Stock are not registered under the Act (it being understood that
the shares of Restricted Stock are being issued and sold in reliance on the exemption provided in Rule 701 thereunder) or any applicable
state securities or “blue sky” laws and may not be sold or otherwise transferred or disposed of in the absence of an
effective registration statement under the Act and under any applicable state securities or “blue sky” laws (or exemptions
from the registration requirements thereof). The Subscriber further acknowledges that certificates representing the shares of Restricted
Stock will bear restrictive legends reflecting the foregoing.
3.
Vesting; Company Repurchase Right. Subject to the terms and conditions set forth in the Plan, the Restricted Stock
shall vest as follows:
(a)
Time-Vesting Shares.
(i)
General. Subject to accelerated vesting as provided in Section 3(a)(iii) below, the Time-Vesting Shares shall
vest ,
if the Subscriber remains in a continuous Service Relationship from the vesting commencement date to the applicable vesting date.
(ii)
Initial Public Offering. In the event of an IPO which does not constitute a Change of Control, any unvested Time-Vesting
Shares shall remain outstanding and remain subject to the same vesting schedule set forth herein.
(iii)
Change of Control. Subject to and effective immediately prior to the consummation of a Change of Control, all Time-Vesting
Shares shall be deemed vested, provided that the Subscriber remains in a continuous Service Relationship from the vesting commencement
date to the date of the consummation of the Change of Control.
(b)
Performance-Vesting Shares.
(i)
Prior to an Initial Public Offering. If prior to the occurrence of an IPO ,
the Performance-Vesting Shares shall vest in full on such Measurement Date, subject to the Subscriber remaining in a continuous
Service Relationship from the vesting commencement date through the applicable Measurement Date.
(ii)
Following an Initial Public Offering. In the event of an IPO which does not constitute a Change of Control, any unvested
Performance-Vesting Shares shall remain outstanding and remain subject to the same vesting schedule set forth herein, and from
and after the date of an IPO, if the average closing trading price for shares of common stock of the Company on the exchange on
which such shares are then listed ,
then the Performance-Vesting Shares shall vest in full ,
subject to the Subscriber remaining in a continuous Service Relationship from the vesting commencement date through the end of
such period.
(iii)
Change of Control. If any Performance-Vesting Shares do not vest upon the first Change of Control to occur, any such
unvested Performance-Vesting Shares will be repurchased by the Company in accordance with the Charter and the Stockholders Agreement.
(c)
Additional Vesting Upon Death or Disability. In the event that the Subscriber’s Service Relationship terminates
by reason of such Subscriber's death or Disability, (I) the portion of the Subscribers Time-Vesting Shares that would have vested
had the Subscriber continued his or her Service Relationship until the period ending one year after such termination shall immediately
vest and (II) the Subscriber's Performance-Vesting Shares shall remain outstanding and eligible to vest during the period ending
one year after such termination (and the Subscriber’s unvested Performance-Vesting Shares will not be subject to repurchase
by the Company during such one-year period); provided, that any Performance-Vesting Share that has not vested by the end of such
one-year period shall cease vesting and remain outstanding (unless repurchased by the Company pursuant to its rights under the
terms of the Stockholders Agreement) until the closing of a Change of Control (as defined in the Plan), at which time the unvested
Performance-Vesting Share will be repurchased by the Company in accordance with the terms of the Charter and the Stockholders Agreement.
4. Withholding
Taxes. The Subscriber agrees to elect, within thirty (30) days of the Subscription Date, in accordance with Section 83(b)
of the Internal Revenue Code of 1986, as amended, to recognize ordinary income in the year of acquisition of the shares of
Restricted Stock, and to pay to the Company all withholding taxes determined to be due with respect to such election, based
on the excess, if any, of the Fair Market Value of such shares of Restricted Stock as of the date of the purchase of such
shares of Restricted Stock by the Subscriber over the purchase price for such shares of Restricted Stock. The Subscriber
represents that he has received tax advice from his own personal tax advisor on the consequences of the purchase of the
shares of Restricted Stock and the making of such Section 83(b) election. The Subscriber understands the tax consequences of
filing a Section 83(b) election and agrees that any filing of a Section 83(b) election is solely the Subscriber’s
responsibility. The Subscriber agrees to provide the Company of the Subscriber’s Section 83(b) election promptly after
filing such election. The form of election is attached as Exhibit A.
5.
Restricted Activities. As a further condition to the issuance of shares hereunder, the Subscriber agrees to be bound
by the Non-Competition, Non-Solicitation, Confidentiality and Assignment Agreement attached as Exhibit B.
6.
Miscellaneous Provisions.
(a)
Change and Modifications. This Agreement may not be orally changed, modified, amended or terminated, nor shall any
oral waiver of any of its terms be effective. This Agreement may be changed, modified, amended or terminated only by an agreement
in writing signed by the Company and the Subscriber.
(b)
Governing Law. This Agreement shall be governed by and construed in accordance with the General Corporation Law of
the State of Delaware, without regard to conflict of law principles that would result in the application of any law other than
the law of the State of Delaware.
(c)
Headings. The headings are intended only for convenience in finding the subject matter and do not constitute part
of the text of this Agreement and shall not be considered in the interpretation of this Agreement.
(d)
Saving Clause. If any provision(s) of this Agreement shall be determined to be illegal or unenforceable, such determination
shall in no manner affect the legality or enforceability of any other provision hereof.
(e)
Notices. All notices, amendments, waivers or other communications pursuant to this Agreement shall be in writing
and shall be deemed to have been duly given if personally delivered, sent by e-mail or sent by nationally recognized overnight
courier to the parties hereto at the following addresses (or at such other address for any party hereto as shall be specified by
like notice):
if to the Company:
Hayward Holdings, Inc.
620 Division Street
Elizabeth, New Jersey 07201
Attention:
Email:
with a copy (which
shall not constitute effective notice) to:
CCMP Capital Advisors,
LP
277 Park Avenue, 27th Floor
New York, New York 10172
Attention:
Email:
and to
MSD Partners, L.P.
645 Fifth Avenue, 21st Floor
New York, New York 10022
Attention:
Email:
and to:
Ropes & Gray
LLP
1211 Avenue of
the Americas
New York, NY
10036-8704
Attention:
Email:
if to the Subscriber,
as set forth underneath the Subscriber’s signatures below
or to such other address
as the party to whom notice is to be given may have furnished to each other party in writing in accordance herewith. Any such notice
or communication shall be deemed to have been given and received (w) when delivered, if personally delivered; (x) upon machine
generated acknowledgement of receipt after transmittal by electronic mail if so acknowledged to have been received before 5:00
p.m. on a Business Day at the location of receipt and otherwise on the next following Business Day; (y) on the next Business Day
after dispatch, if sent by nationally recognized overnight courier guaranteeing next Business Day delivery; and (z) on the fifth
Business Day following the date on which the piece of mail containing such communication is posted, if sent by mail.
(f)
Benefit and Binding Effect. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto,
their respective successors, assigns, and legal representatives. The Company has the right to assign this Agreement, and such assignee
shall become entitled to all the rights of the Company hereunder to the extent of such assignment.
(g)
Dispute Resolution.
(i)
Except as provided below, any dispute arising out of or relating to this Agreement or the breach, termination or validity
hereof shall be finally settled by binding arbitration conducted expeditiously in accordance with the J.A.M.S./Endispute Comprehensive
Arbitration Rules and Procedures. The arbitration shall be governed by the United States Arbitration Act, 9 U.S.C. §§1-16,
and judgment upon the award rendered by the arbitrators may be entered by any court having jurisdiction thereof. The place of arbitration
shall be New York, New York.
(ii) The
parties covenant and agree that the arbitration shall commence within sixty (60) days of the date on which a written demand
for arbitration is filed by any party hereto. In connection with the arbitration proceeding, the arbitrator shall have the
power to order the production of documents by each party and any third-party witnesses. In addition, each party may take up
to three depositions as of right, and the arbitrator may in his or her discretion allow additional depositions upon good
cause shown by the moving party. However, the arbitrator shall not have the power to order the answering of interrogatories
or the response to requests for admission. In connection with any arbitration, each party shall provide to the other, no
later than seven Business Days before the date of the arbitration, the identity of all persons that may testify at the
arbitration and a copy of all documents that may be introduced at the arbitration or considered or used by a party’s
witness or expert. The arbitrator’s decision and award shall be made and delivered within six months of the selection
of the arbitrator. The arbitrator’s decision shall set forth a reasoned basis for any award of damages or finding of
liability. The arbitrator shall not have power to award damages in excess of actual compensatory damages and shall not
multiply actual damages or award punitive damages or any other damages that are specifically excluded under this Agreement,
and each party hereby irrevocably waives any claim to such damages.
(iii)
The parties covenant and agree that they will participate in the arbitration in good faith. This Section 6(g) applies
equally to requests for temporary, preliminary or permanent injunctive relief, except that in the case of temporary or preliminary
injunctive relief any party may proceed in court without prior arbitration for the limited purpose of avoiding immediate and irreparable
harm.
(iv) Each
of the parties hereto (x) hereby irrevocably submits to the jurisdiction of any United States District Court of competent jurisdiction
for the purpose of enforcing the award or decision in any such proceeding, (y) hereby waives, and agrees not to assert, by way
of motion, as a defense, or otherwise, in any such suit, action or proceeding, any claim that it is not subject personally to
the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution (except as protected
by applicable law), that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action
or proceeding is improper or that this Agreement or the subject matter hereof may not be enforced in or by such court, and hereby
waives and agrees not to seek any review by any court of any other jurisdiction which may be called upon to grant an enforcement
of the judgment of any such court. Each of the parties hereto hereby consents to service of process by registered mail at the
address to which notices are to be given. Each of the parties hereto agrees that its, his or her submission to jurisdiction and
its, his or her consent to service of process by mail is made for the express benefit of the other parties hereto. Final judgment
against any party hereto in any such action, suit or proceeding may be enforced in other jurisdictions by suit, action or proceeding
on the judgment, or in any other manner provided by or pursuant to the laws of such other jurisdiction.
(h)
Equitable Relief. The parties hereto agree and declare that legal remedies are inadequate to enforce the provisions
of this Agreement and that equitable relief, including specific performance and injunctive relief, may be used to enforce the provisions
of this Agreement.
(i)
Counterparts. For the convenience of the parties and to facilitate execution, this Agreement may be executed in
two or more counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same document.
(j)
Entire Agreement. The Plan, this Agreement and the Stockholders Agreement constitute the entire agreement with respect
to the subject matter hereof and thereof. In the event of any inconsistency between the Plan and this Agreement, the terms and
conditions of the Plan shall control.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF,
the Company and the Subscriber have executed this Restricted Stock Agreement as of the date first above written.
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HAYWARD HOLDINGS, INC.
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By:
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Name:
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Title:
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IN WITNESS WHEREOF,
the Company and the Subscriber have executed this Restricted Stock Agreement as of the date first above written.
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SUBSCRIBER:
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Name:
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Address:
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Exhibit 10.10
NON-QUALIFIED
STOCK OPTION AGREEMENT
UNDER THE SECOND Amended and restated Hayward HOLDINGS, Inc.
2017 Equity Incentive Plan
Name of Optionee:
(the “Optionee”)
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No. of Option Shares of Stock:
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Shares of Class B Common Stock
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Grant Date:
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(the “Grant Date”)
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Vesting Commencement Date:
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(the “Vesting Commencement Date”)
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Expiration Date:
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(the “Expiration Date”)
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Option Exercise Price/Share: $
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(the “Option Exercise Price”)
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Pursuant to the Second
Amended and Restated Hayward Holdings, Inc. 2017 Equity Incentive Plan (the “Plan”), Hayward Holdings, Inc.,
a Delaware corporation (together with all successors thereto, the “Company”), hereby grants to the Optionee,
who is an officer, employee, director, consultant or other key person of the Company or any of its Subsidiaries, an option (the
“Stock Option”) to purchase on or prior to the Expiration Date, or such earlier date as is specified herein,
all or any part of the number of shares of Class B Common Stock, par value $0.001 per share of stock (“Stock”),
of the Company indicated above (the “Option Shares of Stock,” and such shares of stock once issued shall be
referred to as the “Issued Shares of Stock”), at the Option Exercise Price per share, subject to the terms and
conditions set forth in this Non-Qualified Stock Option Agreement (this “Agreement”) and in the Plan. This Stock
Option is not intended to qualify as an “incentive stock option” as defined in Section 422(b) of the Internal Revenue
Code of 1986, as amended from time to time (the “Code”).
1. Definitions.
For the purposes of this Agreement, the following terms shall have the following respective meanings. All capitalized terms used
herein and not otherwise defined shall have the respective meanings set forth in the Plan.
“Advisory
Agreement” means that certain Advisory Services and Monitoring Agreement, by and among the Company, Hayward Industries,
Inc., CCMP Capital Advisors, L.P. and MSD Partners, L.P., dated as of August 4, 2017, as the same may be amended from time to time.
“Business
Day” means any day except a Saturday, a Sunday or any other day on which commercial banks in New York, New York are authorized
or required by law to close.
“CCMP Investor”
means, collectively, CCMP Capital Investors III, L.P., CCMP Capital Investors III (Employee), L.P. and any of their respective
Affiliates that is a transferee of any CCMP Investor Shares or otherwise acquires equity securities of the Company.
“CCMP Investor
Shares” means the equity securities of the Company acquired by the CCMP Investor in connection with its investment in
the Company, whether acquired before, on or after the date hereof, and any additional securities received in respect thereof, as
a dividend on, or otherwise on account of, such equity securities.
“Disability”
means, with respect to any Optionee, the meaning set forth in such Optionee’s Employment Agreement. If such Optionee does
not have an Employment Agreement or “Disability” is not defined in such agreement, “Disability” shall mean
the failure or inability of the Optionee to perform duties with the Company or any of its Affiliates for a period of at least 180
consecutive days (or 180 days during any twelve (12) month period) by reason of any physical or mental condition, as determined
in good faith by the Company in its sole discretion; provided, that, if the Company’s long term disability plan contains
a definition of “Disability,” the definition in such plan will control.
“Investor
Shares” means with respect to the CCMP Investor, the CCMP Investor Shares, and with respect to the MSD Investor, the
MSD Investor Shares.
“Investors”
means the CCMP Investor and the MSD Investor.
“Liquidity
Threshold Price” means, at any time, the lowest average closing trading price for shares of common stock of the Company
over any ten (10) day trading period that .
“Measurement
Date” means any date upon which Proceeds are received by the CCMP Investor and/or the MSD Investor.
“MSD Investor”
means MSD Aqua Partners, LLC and any of its Affiliates that is a transferee of any MSD Investor Shares or otherwise acquires equity
securities of the Company.
“MSD Investor
Shares” means the equity securities of the Company acquired by the MSD Investor in connection with its investment in
the Company, whether acquired before, on or after the date hereof and any additional securities received in respect thereof, as
a dividend on, or otherwise on account of, such equity securities.
“Permitted
Transferee” means (i) any executor, administrator or testamentary trustee of the Optionee’s estate if such Subscriber
dies, (ii) any person or entity receiving Issued Shares of Stock by will, intestacy laws or the laws of descent or survivorship,
(iii) any trustee of a trust (including an inter vivos trust) of which there are no principal beneficiaries other than such Optionee,
the Optionee’s spouse or one or more of the Optionee’s lineal decedents or (iv) any corporation, partnership, limited
liability company or similar entity controlled by the Optionee (within the meaning of “Control” as defined in the Stockholders’
Agreement) and of which there are no principal beneficiaries or owners other the Optionee, the Optionee’s spouse or one or
more of the Optionee’s lineal decedents.
“Principal
Investment” means, with respect to an Investor, the sum, without duplication, of: (i) the aggregate consideration paid
by such Investor to acquire such Investor’s Investor Shares, plus (ii) the amount of cash and the value (as determined by
the Board in good faith) of any property contributed by such Investor to the Company, whether contributed before, on or after the
date hereof.
“Proceeds”
means, with respect to an Investor, without duplication, all (i) cash proceeds actually received by such Investor from
the disposition of such Investor’s Investor Shares, net of Unreimbursed Transaction Expenses; (ii) cash dividends and
other cash distributions actually received by such Investor in respect of its Investor Shares; and (iii) the fair market
value of any non-cash consideration (including but not limited to marketable securities) received in exchange for or in
respect of such Investor’s Investor Shares (net of Unreimbursed Transaction Expenses) solely to the extent received in
connection with a Change of Control; for the avoidance of doubt, any Proceeds shall exclude any amounts payable pursuant to
the Advisory Services Agreement.
“Securities
Act” means the Securities Act of 1933, as amended, or any successor federal statute, and the rules and regulations of
the Commission promulgated thereunder, all as the same shall be in effect from time to time.
“Service Relationship”
means any relationship as an employee, part-time employee, director or other key person (including consultants) of the Company
or any Subsidiary or any successor entity such that, for example, a Service Relationship shall be deemed to continue without interruption
in the event the Optionee’s status changes from full-time employee to part-time employee or consultant.
“Stockholders’
Agreement” means the Stockholders’ Agreement, dated August 4, 2017, as it may be amended, modified or amended and
restated from time to time.
“Unreimbursed
Transaction Expenses” means, with respect to an Investor, such Investor’s share of all reasonable legal, accounting
and investment banking fees that are not reimbursed by unrelated third parties (other than amounts paid to such Investor and its
Affiliates) in connection with the disposition of such Investor’s Investor Shares.
2. Vesting,
Exercisability and Termination. Fifty percent (50%) of this Stock Option shall be subject to time-based vesting criteria (the
“Time-Vesting Options”), and fifty percent (50%) of such Stock Option shall be subject to performance-based
vesting criteria (the “Performance-Vesting Options”). No portion of this Stock Option may be exercised until
such portion shall have vested. Except as set forth below, and subject to the terms and conditions set forth in the Plan, determination
of the Committee in its sole discretion to accelerate the vesting schedule hereunder, this Stock Option shall become vested and
exercisable as follows:
(a) Time-Vesting
Options.
(i)
General. Subject to accelerated vesting as provided in Section 2(a)(iii) below, the Time-Vesting Options shall vest
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if the Optionee remains in a continuous Service Relationship from the vesting commencement date to the applicable vesting date.
(ii)
Initial Public Offering. In the event of an IPO which does not constitute a Change of Control, any unvested Time-Vesting
Options shall remain outstanding and remain subject to the same vesting schedule set forth herein.
(iii)
Change of Control. Subject to and effective immediately prior to the consummation of a Change of Control, all Time-Vesting
Options shall be deemed vested, provided that the Optionee remains in a continuous Service Relationship from the vesting commencement
date to the date of the consummation of the Change of Control.
(b) Performance-Vesting Options.
(i) Prior to an Initial Public Offering. If prior to the occurrence of an IPO ,
the Performance-Vesting Options shall vest in full on such Measurement Date, subject to the Optionee remaining in a continuous
Service Relationship from the vesting commencement date through the applicable Measurement Date.
(ii) Following an Initial Public Offering. In the event of an IPO which does not constitute a Change of Control, any unvested
Performance-Vesting Options shall remain outstanding and remain subject to the same vesting schedule set forth herein, and from
and after the date of an IPO, if the average closing trading price for shares of common stock of the Company on the exchange on
which such shares are then listed ,
then the Performance-Vesting Options shall vest in full ,
subject to the Optionee remaining in a continuous Service Relationship from the vesting commencement date through the end of such
period.
(iii) Change
of Control. If any Performance-Vesting Options do not vest upon the first Change of Control to occur, any such unvested Performance-Vesting
Options will be cancelled for no additional consideration.
(c) Additional Vesting Upon Death or Disability. In the event that the Optionee’s Service Relationship terminates
by reason of such Optionee’s death or Disability, (I) the portion of the Optionee’s Time-Vesting Options that would
have vested had the Optionee continued his or her Service Relationship until the period ending one year after such termination
shall immediately vest and (II) the Optionee’s Performance-Vesting Options shall remain outstanding and eligible to vest
during the period ending one year after such termination; provided, that any Performance-Vesting Option that has not vested by
the end of such one-year period shall cease vesting and be cancelled for no additional consideration.
For purposes hereof,
the Committee’s good faith determination of the reason for termination of the Optionee’s Service Relationship shall
be conclusive and binding on the Optionee and his or her representatives or legatees or Permitted Transferees. Subject to Section
2(c) above, any portion of this Stock Option that is not exercisable on the date of termination of the Service Relationship shall
terminate immediately and be null and void.
3. Exercise
of Stock Option.
(a) The
Optionee may exercise this Stock Option, to the extent then vested, only in the following manner: Prior to the Expiration Date,
the Optionee may deliver a Stock Option exercise notice (an “Exercise Notice”) in the form of Appendix A
hereto indicating his or her election to purchase some or all of the Option Shares of Stock with respect to which this Stock
Option is exercisable at the time of such notice. Such notice shall specify the number of Option Shares of Stock to be purchased.
Payment of the purchase price may be made by one or more of the methods described below (payment instruments will be received
subject to collection):
(i)
in cash, by certified or bank check, by wire transfer of immediately available funds, or other instrument acceptable to
the Committee in U.S. funds payable to the order of the Company in an amount equal to the purchase price of such Option Shares
of Stock;
(ii) by
the Optionee delivering to the Company a promissory note if the Board has expressly authorized the loan of funds to the Optionee
for the purpose of enabling or assisting the Optionee to effect the exercise of his or her Stock Options; provided, that
at least so much of the exercise price as represents the par value of the Stock shall be paid other than with a promissory note
if otherwise required by state law; or
(iii) if the IPO has occurred, then (A) through the delivery (or attestation to ownership) of shares of Stock that have been purchased
by the Optionee on the open market or that are beneficially owned by the Optionee and are not subject to restrictions under any
plan of the Company; provided, that, to the extent required to avoid variable accounting treatment under ASC 718 or other
applicable accounting rules, such surrendered shares shall have been owned by the Optionee for at least six months, and in any
event with an aggregate Fair Market Value (as of the date of such exercise) equal to the option purchase price, (B) by the Optionee
delivering to the Company a properly executed Exercise Notice together with irrevocable instructions to a broker to promptly deliver
to the Company cash or a check payable and acceptable to the Company to pay the option purchase price, provided that in the event
the Optionee chooses to pay the option purchase price as so provided, the Optionee and the broker shall comply with such procedures
and enter into such agreements of indemnity and other agreements as the Committee shall prescribe as a condition of such payment
procedure, or (C) a combination of (i), (ii), (iii)(A) and (iii)(B) above.
(b)
Certificates for the Option Shares of Stock so purchased will be issued and delivered to the Optionee upon (i) compliance
to the satisfaction of the Committee with all requirements under applicable laws or regulations in connection with such issuance
and (ii) delivery of an executed Joinder Agreement (as defined in the Stockholders’ Agreement) pursuant to which the Optionee
agrees to become a party to the Stockholders’ Agreement as a “Management Stockholder” and an “Other Stockholder”
(in each case, as defined in the Stockholders’ Agreement). Until the Optionee shall have complied with the requirements hereof
and of the Plan, the Company shall be under no obligation to issue the Option Shares of Stock subject to this Stock Option, and
the determination of the Committee as to such compliance shall be final and binding on the Optionee. The Optionee shall not be
deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares of Stock subject to this Stock
Option unless and until this Stock Option shall have been exercised pursuant to the terms hereof, the Company shall have issued
and delivered the Issued Shares of Stock to the Optionee, and the Optionee’s name shall have been entered as a stockholder
of record on the books of the Company. Thereupon, the Optionee shall have full dividend and other ownership rights with respect
to such Issued Shares of Stock, subject to the terms of this Agreement and the Stockholders’ Agreement.
(c) Upon the exercise of the Stock Option, Issued Shares of Stock shall be subject to the terms and conditions of the Stockholders’
Agreement.
(d) Notwithstanding
any other provision hereof or of the Plan, no portion of this Stock Option shall be exercisable after the Expiration Date.
(e) Timing of Exercise.
(i) Termination
Due to Death or Disability. If the Optionee’s Service Relationship terminates by reason of such Optionee’s death
or Disability, this Stock Option may be exercised, to the extent exercisable on the date of such termination, by the Optionee,
the Optionee’s legal representative or legatee for a period of 12 months from the later of (A) the date of death or Disability
of such Optionee or (B) the date such Stock Option vests, or until the Expiration Date, if earlier.
(ii) Other
Termination. If the Optionee’s Service Relationship terminates for any reason other than death or Disability, and unless
otherwise determined by the Committee, this Stock Option may be exercised, to the extent exercisable on the date of termination,
for a period of 90 days following termination and, to the extent not exercised within such period, shall automatically terminate
in all respects; provided however, if the Optionee’s Service Relationship is terminated for Cause, this Stock Option,
whether vested or unvested, shall terminate immediately upon the date of such termination.
4. Incorporation
of Plan. Notwithstanding anything herein to the contrary, this Stock Option shall be subject to and governed by all the terms
and conditions of the Plan.
5. Transferability
of Stock Option. This Agreement is personal to the Optionee and is not transferable by the Optionee in any manner other than
by will or by the laws of descent and distribution. The Stock Option may be exercised during the Optionee’s lifetime only
by the Optionee (or by the Optionee’s guardian or personal representative in the event of the Optionee’s incapacity).
The Optionee may elect to designate a beneficiary by providing written notice of the name of such beneficiary to the Company,
and may revoke or change such designation at any time by filing written notice of revocation or change with the Company; such
beneficiary may exercise the Optionee’s Stock Option in the event of the Optionee’s death to the extent provided herein.
If the Optionee does not designate a beneficiary, or if the designated beneficiary predeceases the Optionee, the legal representative
of the Optionee may exercise this Stock Option to the extent provided herein in the event of the Optionee’s death.
6. Effect
of Certain Transactions. In the case of a Liquidity Event (as defined in the Plan), provision may be made in connection with
such transaction, in the sole discretion of the parties thereto, for the continuation or assumption by the successor entity of
this Stock Option heretofore granted, or the substitution of this Stock Option with a new Stock Option of the successor entity
or a parent thereof; provided that any such substitution must be on substantially equivalent terms of the successor entity or
parent thereof, with an equitable or proportionate adjustment as to the number and kind of shares, and, if appropriate, the per
share exercise prices, as such parties shall agree.
7. Withholding
Taxes. The Optionee shall, not later than the date as of which the exercise of this Stock Option becomes a taxable event for
federal income tax purposes, pay to the Company or make arrangements satisfactory to the Committee for payment of any federal,
state and local taxes required by law to be withheld on account of such taxable event. Subject to approval by the Committee, the
Optionee may elect to have the minimum tax withholding obligation satisfied, in whole or in part, by authorizing the Company to
withhold from shares of Stock to be issued or transferring to the Company, a number of shares of Stock with an aggregate Fair
Market Value that would satisfy the minimum withholding amount due. The Optionee acknowledges and agrees that the Company or any
Subsidiary of the Company has the right to deduct from payments of any kind otherwise due to the Optionee, or from the Option
Shares of Stock to be issued in respect of an exercise of this Stock Option, any federal, state or local taxes of any kind required
by law to be withheld with respect to the issuance of Option Shares of Stock to the Optionee.
8. Restrictions
on Transfer of Issued Shares of Stock. None of the Issued Shares of Stock acquired upon exercise of the Stock Option shall
be sold, assigned, transferred, pledged, hypothecated, given away or in any other manner disposed of or encumbered, whether voluntarily
or by operation of law, unless such transfer is in compliance with all applicable securities laws (including, without limitation,
the Act), the terms and conditions of Sections 8 and 9 hereof and the terms and conditions of the Stockholders’
Agreement and such disposition does not cause the Company to become subject to the reporting requirements of the Exchange Act.
In connection with any transfer of Issued Shares of Stock, the Company may require the transferor to provide at the Optionee’s
own expense an opinion of counsel to the transferor, satisfactory to the Company that such transfer is in compliance with all
foreign, federal and state securities laws (including, without limitation, the Act). Any attempted disposition of Issued Shares
of Stock not in accordance with the terms and conditions of Sections 8 and 9 hereof and the Stockholders’
Agreement shall be null and void, and the Company shall not reflect on its records any change in record ownership of any Issued
Shares of Stock as a result of any such disposition, shall otherwise refuse to recognize any such disposition and shall not in
any way give effect to any such disposition of any Issued Shares of Stock. Subject to the foregoing general provisions, Issued
Shares of Stock may be transferred pursuant to the following specific terms and conditions:
(a) Transfers to Permitted Transferees. The Optionee may sell, assign, transfer or
give away any or all of the Issued Shares of Stock to Permitted Transferees; provided, however, that such
Permitted Transferee(s) shall, as a condition to any such transfer, agree to be subject to the provisions of this Agreement
to the same extent as the Optionee (including, without limitation, the provisions of Sections 8, 9, 11
and 12) and shall have delivered a written acknowledgment to that effect to the Company.
(b) Transfers
Upon Death. Upon the death of the Optionee, any Issued Shares of Stock then held by the Optionee at the time of such death
and any Issued Shares of Stock acquired thereafter by the Optionee’s legal representative pursuant to this Agreement shall
be subject to the provisions of Sections 8, 9, 10, 11 and 12, if applicable, and the Optionee’s
estate, executors, administrators, personal representatives, heirs, legatees and distributees shall be obligated to convey such
Issued Shares of Stock to the Company or its assigns under the terms contemplated hereby.
9. Company’s
Right of Repurchase.
(a) Right
of Repurchase. Upon a Termination Event (as defined below), the Issued Shares of Stock held or subsequently acquired upon
exercise of this Stock Option in accordance with the terms hereof by the Optionee (or any Permitted Transferee) shall be subject
to the repurchase rights set forth in Section 2.5 of the Stockholders’ Agreement (the “Repurchase Right”).
(b) Company’s
Right to Exercise Repurchase Right. The Company shall have the Repurchase Right in the event that the following event shall
occur (the “Termination Event”): the termination of the Optionee’s Service Relationship for any reason
whatsoever, regardless of the circumstances thereof, and including without limitation upon death, Disability, retirement, discharge
or resignation for any reason, whether voluntarily or involuntarily.
10. Escrow
Arrangement.
(a) Escrow.
In order to carry out the provisions of Sections 8, 9 and 11 of this Agreement more effectively, the Company
shall hold any Issued Shares of Stock in escrow together with separate stock powers executed by the Optionee in blank for transfer,
and any Permitted Transferee shall, as an additional condition to any transfer of Issued Shares of Stock, execute a like stock
power as to such Issued Shares of Stock. The Company shall not dispose of the Issued Shares of Stock except as otherwise provided
in this Agreement. In the event of any repurchase by the Company (or any of its assigns), the Company is hereby authorized by
the Optionee and any Permitted Transferee, as the Optionee’s and each such Permitted Transferee’s attorney-in-fact,
to date and complete the stock powers necessary for the transfer of the Issued Shares of Stock being purchased and to transfer
such Issued Shares of Stock in accordance with the terms hereof. At such time as any Issued Shares of Stock are no longer subject
to the Company’s repurchase and drag along rights, the Company shall, at the written request of the Optionee, deliver to
the Optionee (or the relevant Permitted Transferee) a certificate representing such Issued Shares of Stock with the balance of
the Issued Shares of Stock to be held in escrow pursuant to this Section 10.
(b) Remedy.
Without limitation of any other provision of this Agreement or other rights, in the event that the Optionee, any Permitted Transferees
or any other Person is required to sell the Optionee’s Issued Shares of Stock pursuant to the provisions of Sections
9 and 11 of this Agreement and in the further event that he or she refuses or for any reason fails to deliver to the
Company or its designated purchaser of such Issued Shares of Stock the certificate or certificates evidencing such Issued Shares
of Stock together with a related stock power, the Company or such designated purchaser may deposit the applicable purchase price
for such Issued Shares of Stock with a bank designated by the Company, or with the Company’s independent public accounting
firm, as agent or trustee, or in escrow, for the Optionee, any Permitted Transferees or other Person, to be held by such bank
or accounting firm for the benefit of and for delivery to him, her, them or it, and/or, in its discretion, pay such purchase price
by offsetting any indebtedness then owed by the Optionee as provided above. Upon any such deposit and/or offset by the Company
or its designated purchaser of such amount and upon notice to the Person who was required to sell the Issued Shares of Stock to
be sold pursuant to the provisions of Sections 9 and 11, such Issued Shares of Stock shall at such time be deemed
to have been sold, assigned, transferred and conveyed to such purchaser, the holder thereof shall have no further rights thereto
(other than the right to withdraw the payment thereof held in escrow, if applicable), and the Company shall record such transfer
in its stock transfer book or in any appropriate manner.
11. Drag
Along Right. If the Investors at any time propose that the Company consummate (or commit to consummate), in one transaction
or a series of related transactions, a Change of Control (as defined in the Plan), the Optionee’s Issued Shares of Stock
(including for this purpose all of such Optionee’s or his or her Permitted Transferee’s Issued Shares of Stock that
presently or as a result of any such transaction may be acquired upon the exercise of options (following the payment of the exercise
price therefor)) shall be subject to the drag-along rights set forth in Section 2.4 of the Stockholders’ Agreement.
12. Lockup Provision. If the Company at any time shall register an offering and sale of shares common stock of the Company
under the Securities Act in an Underwritten Offering (as defined in the Stockholders’ Agreement), the Optionee agrees to
be subject to the holdback obligations set forth in Section 5.5 of the Stockholders’ Agreement. The Optionee agrees, if
requested by the underwriter engaged by the Company, to execute a separate letter reflecting the agreement set forth in this Section
12.
13. Restrictive Covenants. As a further condition to the issuance of this Stock Option pursuant to this Agreement, and
as partial consideration for the grant of the Stock Option, the Optionee agrees to be bound by the Non-Competition, Non-Solicitation,
Confidentiality and Assignment Agreement attached hereto as Appendix B.
14. Miscellaneous
Provisions.
(a) Termination.
The Company’s repurchase rights pursuant to Section 9 and the drag along obligations pursuant to Section 11
shall terminate upon the closing of the Company’s IPO or upon consummation of any Liquidity Event (as defined in the Plan),
in either case as a result of which shares of the Company (or successor entity) of the same class as the Issued Shares of Stock
are registered under Section 12 of the Exchange Act and publicly traded on any national securities exchange.
(b) Equitable
Relief. The parties hereto agree and declare that legal remedies may be inadequate to enforce the provisions of this Agreement
and that equitable relief, including specific performance and injunctive relief, may be used to enforce the provisions of this
Agreement.
(c) Adjustments
for Changes in Capital Structure. If, as a result of any reorganization, recapitalization, reincorporation, reclassification,
stock dividend, stock split, reverse stock split or other similar change in the Stock, the outstanding shares of Stock are increased
or decreased or are exchanged for a different number or kind of shares of the Company’s stock, the restrictions contained
in this Agreement shall apply with equal force to additional and/or substitute securities, if any, received by the Optionee in
exchange for, or by virtue of his or her ownership of, Issued Shares of Stock.
(d) Change
and Modifications. This Agreement may not be orally changed, modified, amended or terminated, nor shall any oral waiver of
any of its terms be effective. This Agreement may be changed, modified, amended or terminated only by an agreement in writing
signed by the Company and the Optionee.
(e) Accredited Investor Questionnaire. As a further condition to the issuance of this Stock Option pursuant to this Agreement,
the Optionee agrees to accurately complete the Accredited Investor Questionnaire attached hereto as Appendix C.
(f) Governing
Law. This Agreement shall be governed by and construed in accordance with the General Corporation Law of the State of Delaware
without regard to conflict of law principles that would result in the application of any law other than the law of the State of
Delaware.
(g) Headings. The headings are intended only for convenience in finding the subject matter and do not constitute part
of the text of this Agreement and shall not be considered in the interpretation of this Agreement.
(h) Saving
Clause. If any provision(s) of this Agreement shall be determined to be illegal or unenforceable, such determination shall
in no manner affect the legality or enforceability of any other provision hereof.
(i) Notices.
All notices, amendments, waivers or other communications pursuant to this Agreement shall be in writing and shall be deemed to
have been duly given if personally delivered, sent by e-mail or sent by nationally recognized overnight courier to the parties
hereto at the following addresses (or at such other address for any party hereto as shall be specified by like notice):
if to the Company:
Hayward Holdings, Inc.
400 Connell Drive, Suite 6100
Berkeley Heights, NJ 07922
Attention:
Email:
if to the Optionee, as set forth
underneath the Optionee’s signatures below
or to such other address
as the party to whom notice is to be given may have furnished to each other party in writing in accordance herewith. Any such notice
or communication shall be deemed to have been given and received (w) when delivered, if personally delivered; (x) upon machine
generated acknowledgement of receipt after transmittal by electronic mail if so acknowledged to have been received before 5:00
p.m. on a Business Day at the location of receipt and otherwise on the next following Business Day; (y) on the next Business Day
after dispatch, if sent by nationally recognized overnight courier guaranteeing next Business Day delivery; and (z) on the fifth
Business Day following the date on which the piece of mail containing such communication is posted, if sent by mail.
(j) Benefit
and Binding Effect. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto, their respective
successors, permitted assigns, and legal representatives. The Company has the right to assign this Agreement, and such assignee
shall become entitled to all the rights of the Company hereunder to the extent of such assignment.
(k) Dispute
Resolution.
(i) Except as provided below, any dispute arising out of or relating to this Agreement or the breach, termination or validity
hereof shall be finally settled by binding arbitration conducted expeditiously in accordance with the J.A.M.S./Endispute Comprehensive
Arbitration Rules and Procedures. The arbitration shall be governed by the United States Arbitration Act, 9 U.S.C. §§1-16,
and judgment upon the award rendered by the arbitrators may be entered by any court having jurisdiction thereof. The place of arbitration
shall be New York, New York.
(ii)
The parties covenant and agree that the arbitration shall commence within 60 days of the date on which a written demand
for arbitration is filed by any party hereto. In connection with the arbitration proceeding, the arbitrator shall have the power
to order the production of documents by each party and any third-party witnesses. In addition, each party may take up to three
depositions as of right, and the arbitrator may in his or her discretion allow additional depositions upon good cause shown by
the moving party. However, the arbitrator shall not have the power to order the answering of interrogatories or the response to
requests for admission. In connection with any arbitration, each party shall provide to the other, no later than seven Business
Days before the date of the arbitration, the identity of all persons that may testify at the arbitration and a copy of all documents
that may be introduced at the arbitration or considered or used by a party’s witness or expert. The arbitrator’s decision
and award shall be made and delivered within six months of the selection of the arbitrator. The arbitrator’s decision shall
set forth a reasoned basis for any award of damages or finding of liability. The arbitrator shall not have power to award damages
in excess of actual compensatory damages and shall not multiply actual damages or award punitive damages or any other damages that
are specifically excluded under this Agreement, and each party hereby irrevocably waives any claim to such damages.
(iii)
The parties covenant and agree that they will participate in the arbitration in good faith. This Section 14(k) applies
equally to requests for temporary, preliminary or permanent injunctive relief, except that in the case of temporary or preliminary
injunctive relief any party may proceed in court without prior arbitration for the limited purpose of avoiding immediate and irreparable
harm.
(iv)
Each of the parties hereto (x) hereby irrevocably submits to the jurisdiction of any United States District Court of competent
jurisdiction for the purpose of enforcing the award or decision in any such proceeding and (y) hereby waives, and agrees not to
assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, any claim that it is not subject
personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution (except
as protected by applicable law), that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the
suit, action or proceeding is improper or that this Agreement or the subject matter hereof may not be enforced in or by such court,
and hereby waives and agrees not to seek any review by any court of any other jurisdiction which may be called upon to grant an
enforcement of the judgment of any such court. Each of the parties hereto hereby consents to service of process by registered mail
at the address to which notices are to be given. Each of the parties hereto agrees that its, his or her submission to jurisdiction
and its, his or her consent to service of process by mail is made for the express benefit of the other parties hereto. Final judgment
against any party hereto in any such action, suit or proceeding may be enforced in other jurisdictions by suit, action or proceeding
on the judgment, or in any other manner provided by or pursuant to the laws of such other jurisdiction.
(l) Counterparts.
For the convenience of the parties and to facilitate execution, this Agreement may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which shall constitute one and the same document.
(m) Entire Agreement. The Plan, this Agreement and the Stockholders’ Agreement constitute the entire agreement
with respect to the subject matter hereof and thereof. In the event of any inconsistency between the Plan and this Agreement,
the terms and conditions of the Plan shall control.
[SIGNATURE PAGE FOLLOWS]
The foregoing Agreement
is hereby accepted and the terms and conditions thereof hereby agreed to by the undersigned as of the date first above written.
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HAYWARD HOLDINGS, INC.
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By:
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Name:
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Title:
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[Signature Page to Non-Qualified Stock Option
Agreement]
The foregoing Agreement
is hereby accepted and the terms and conditions thereof hereby agreed to by the undersigned as of the date first above written.
[Signature Page to Non-Qualified Stock Option
Agreement]
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DESIGNATED BENEFICIARY:
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Beneficiary’s Address:
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[Signature Page to Non-Qualified Stock Option
Agreement]
Exhibit 10.11
NON-QUALIFIED
STOCK OPTION AGREEMENT
UNDER THE SECOND Amended and restated Hayward HOLDINGS, Inc.
2017 Equity Incentive Plan
Name of Optionee: Kevin P. Holleran (the “Optionee”)
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No. of Option Shares of Stock:
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20,000 Shares of Class B Common Stock
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Grant Date:
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December 24, 2019 (the “Grant Date”)
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Vesting Commencement Date:
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August 12, 2019 (the “Vesting Commencement Date”)
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Expiration Date:
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December 24, 2029 (the “Expiration Date”)
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Option Exercise Price/Share:
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$272.92 (the “Option Exercise Price”)
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Pursuant to the Second
Amended and Restated Hayward Holdings, Inc. 2017 Equity Incentive Plan (the “Plan”), Hayward Holdings, Inc.,
a Delaware corporation (together with all successors thereto, the “Company”), hereby grants to the Optionee,
who is an officer, employee, director, consultant or other key person of the Company or any of its Subsidiaries, an option (the
“Stock Option”) to purchase on or prior to the Expiration Date, or such earlier date as is specified herein,
all or any part of the number of shares of Class B Common Stock, par value $0.001 per share of stock (“Stock”),
of the Company indicated above (the “Option Shares of Stock,” and such shares of stock once issued shall be
referred to as the “Issued Shares of Stock”), at the Option Exercise Price per share, subject to the terms and
conditions set forth in this Non-Qualified Stock Option Agreement (this “Agreement”) and in the Plan. This Stock
Option is not intended to qualify as an “incentive stock option” as defined in Section 422(b) of the Internal Revenue
Code of 1986, as amended from time to time (the “Code”).
1. Definitions.
For the purposes of this Agreement, the following terms shall have the following respective meanings. All capitalized terms used
herein and not otherwise defined shall have the respective meanings set forth in the Plan.
“Advisory
Agreement” means that certain Advisory Services and Monitoring Agreement, by and among the Company, Hayward Industries,
Inc., CCMP Capital Advisors, L.P. and MSD Partners, L.P., dated as of August 4, 2017, as the same may be amended from time to time.
“Business
Day” means any day except a Saturday, a Sunday or any other day on which commercial banks in New York, New York are authorized
or required by law to close.
“CCMP Investor”
means, collectively, CCMP Capital Investors III, L.P., CCMP Capital Investors III (Employee), L.P. and any of their respective
Affiliates that is a transferee of any CCMP Investor Shares or otherwise acquires equity securities of the Company.
“CCMP Investor
Shares” means the equity securities of the Company acquired by the CCMP Investor in connection with its investment in
the Company, whether acquired before, on or after the date hereof, and any additional securities received in respect thereof, as
a dividend on, or otherwise on account of, such equity securities.
“Change of
Control” shall have the meaning set forth in the Plan, provided that references to “Hayward” as used therein
or any definition incorporated therein by reference shall mean either Hayward Industries, Inc. or Hayward Intermediate, Inc.
“Disability”
shall have the meaning set forth in the Optionee’s Employment Agreement.
“Good Reason”
shall have the meaning set forth in the Optionee’s Employment Agreement.
“Investor
Shares” means with respect to the CCMP Investor, the CCMP Investor Shares, and with respect to the MSD Investor, the
MSD Investor Shares.
“Investors”
means the CCMP Investor and the MSD Investor.
“Liquidity
Threshold Price” means, at any time, the lowest average closing trading price for shares of common stock of the Company
over any ten (10) day trading period that .
“Measurement
Date” means any date upon which Proceeds are received by the CCMP Investor and/or the MSD Investor.
“MSD Investor”
means MSD Aqua Partners, LLC and any of its Affiliates that is a transferee of any MSD Investor Shares or otherwise acquires equity
securities of the Company.
“MSD Investor
Shares” means the equity securities of the Company acquired by the MSD Investor in connection with its investment in
the Company, whether acquired before, on or after the date hereof and any additional securities received in respect thereof, as
a dividend on, or otherwise on account of, such equity securities.
“Permitted
Transferee” means (i) any executor, administrator or testamentary trustee of the Optionee’s estate if such Subscriber
dies, (ii) any person or entity receiving Issued Shares of Stock by will, intestacy laws or the laws of descent or survivorship,
(iii) any trustee of a trust (including an inter vivos trust) of which there are no principal beneficiaries other than such Optionee,
the Optionee’s spouse or one or more of the Optionee’s lineal decedents or (iv) any corporation, partnership, limited
liability company or similar entity controlled by the Optionee (within the meaning of “Control” as defined in the Stockholders’
Agreement) and of which there are no principal beneficiaries or owners other the Optionee, the Optionee’s spouse or one or
more of the Optionee’s lineal decedents.
“Principal
Investment” means, with respect to an Investor, the sum, without duplication, of: (i) the aggregate consideration paid
by such Investor to acquire such Investor’s Investor Shares, plus (ii) the amount of cash and the value (as determined by
the Board in good faith) of any property contributed by such Investor to the Company, whether contributed before, on or after the
date hereof.
“Proceeds”
means, with respect to an Investor, without duplication, all (i) cash proceeds actually received by such Investor from
the disposition of such Investor’s Investor Shares, net of Unreimbursed Transaction Expenses; (ii) cash dividends and
other cash distributions actually received by such Investor in respect of its Investor Shares; and (iii) the fair market
value of any non-cash consideration (including but not limited to marketable securities) received in exchange for or in
respect of such Investor’s Investor Shares (net of Unreimbursed Transaction Expenses), and of any retained
Investor’s Investor Shares, solely to the extent received or retained in connection with a Change of Control; for the
avoidance of doubt, any Proceeds shall exclude any amounts payable pursuant to the Advisory Services Agreement.
“Securities
Act” means the Securities Act of 1933, as amended, or any successor federal statute, and the rules and regulations of
the Commission promulgated thereunder, all as the same shall be in effect from time to time.
“Service Relationship”
means any relationship as an employee, part-time employee, director or other key person (including consultants) of the Company
or any Subsidiary or any successor entity such that, for example, a Service Relationship shall be deemed to continue without interruption
in the event the Optionee’s status changes from full-time employee to part-time employee or consultant.
“Stockholders’
Agreement” means the Stockholders’ Agreement, dated August 4, 2017, as it may be amended, modified or amended and
restated from time to time.
“Unreimbursed
Transaction Expenses” means, with respect to an Investor, such Investor’s share of all reasonable legal, accounting
and investment banking fees that are not reimbursed by unrelated third parties (other than amounts paid to such Investor and its
Affiliates) in connection with the disposition of such Investor’s Investor Shares.
2. Vesting,
Exercisability and Termination. Fifty percent (50%) of this Stock Option shall be subject to time-based vesting criteria (the
“Time-Vesting Options”), and fifty percent (50%) of such Stock Option shall be subject to performance-based
vesting criteria (the “Performance-Vesting Options”). No portion of this Stock Option may be exercised until
such portion shall have vested. Except as set forth below, and subject to the terms and conditions set forth in the Plan, determination
of the Committee in its sole discretion to accelerate the vesting schedule hereunder, this Stock Option shall become vested and
exercisable as follows:
(a) Time-Vesting
Options.
(i) General.
Subject to accelerated vesting as provided in Section 2(a)(iii) below, the Time-Vesting Options shall vest in five (5) equal installments
on each of August 12, 2020, August 12, 2021, August 12, 2022, August 12, 2023, and August 12, 2024, if the Optionee remains in
a continuous Service Relationship from the Vesting Commencement Date to the applicable vesting date.
(ii) Initial
Public Offering. In the event of an IPO which does not constitute a Change of Control, any unvested Time-Vesting Options shall
remain outstanding and remain subject to the same vesting schedule set forth herein.
(iii) Change
of Control. Subject to and effective immediately prior to the consummation of a Change of Control, all Time-Vesting Options
shall be deemed vested, provided that the Optionee remains in a continuous Service Relationship from the Vesting Commencement
Date to the date of the consummation of the Change of Control.
(b) Performance-Vesting
Options.
(i) Prior to an Initial Public Offering. If prior to the occurrence of an IPO ,
the Performance-Vesting Options shall vest in full on such Measurement Date, subject to the Optionee remaining in a continuous
Service Relationship from the Vesting Commencement Date through the applicable Measurement Date.
(ii) Following
an Initial Public Offering. In the event of an IPO which does not constitute a Change of Control, any unvested Performance-Vesting
Options shall remain outstanding and remain subject to the same vesting schedule set forth herein, and from and after the date
of an IPO, if ,
then the Performance-Vesting Options shall vest in full ,
subject to the Optionee remaining in a continuous Service Relationship from the Vesting Commencement Date through the end of such
period.
(iii) Change
of Control. If any Performance-Vesting Options do not vest upon the first Change of Control to occur, any such unvested Performance-Vesting
Options will be cancelled for no additional consideration.
(c) Additional
Vesting Upon Death or Disability, Without Cause, For Good Reason.
(i) In
the event that the Optionee’s Service Relationship terminates by reason of such Optionee’s death or Disability, (I)
the portion of the Optionee’s Time-Vesting Options that would have vested had the Optionee continued his Service Relationship
until the period ending one year after such termination shall immediately vest and (II) the Optionee’s Performance-Vesting
Options shall remain outstanding and eligible to vest during the period ending one year after such termination; provided, that
any Performance-Vesting Option that has not vested by the end of such one-year period shall cease vesting and be cancelled for
no additional consideration.
(ii) In
the event that the Optionee’s Service Relationship is terminated by the Company or its Affiliates without Cause or by the
Optionee for Good Reason,
(1) the
Optionee’s Performance-Vesting Options shall remain outstanding and eligible to vest during the period ending six months
after such termination (the “Extended Exercise Date”); provided, that any Performance-Vesting Option that has
not vested by the end of such six-month period shall cease vesting and be cancelled for no additional consideration.
(2) if
a transaction, which is not an IPO nor a Change of Control, is consummated immediately following which either the MSD Investor
ceases to own any MSD Investor Shares or the CCMP Investor ceases to own any CCMP Investor Shares and the Optionee’s Service
Relationship is terminated by the Company or its Affiliates without Cause, or by the Optionee for Good Reason within a year of
such transaction, all of the Optionee’s unvested Time-Vesting Options shall be deemed vested.
For purposes
hereof, the Committee’s good faith determination of the reason for termination of the Optionee’s Service
Relationship shall be conclusive and binding on the Optionee and his representatives or legatees or Permitted Transferees.
Subject to Section 2(c) above, any portion of this Stock Option that is not exercisable on the date of termination of the
Service Relationship shall terminate immediately and be null and void.
3. Exercise of Stock Option.
(a) The
Optionee may exercise this Stock Option, to the extent then vested, only in the following manner: Prior to the Expiration Date,
the Optionee may deliver a Stock Option exercise notice (an “Exercise Notice”) in the form of Appendix A
hereto indicating his election to purchase some or all of the Option Shares of Stock with respect to which this Stock Option
is exercisable at the time of such notice. Such notice shall specify the number of Option Shares of Stock to be purchased. Payment
of the purchase price may be made by one or more of the methods described below (payment instruments will be received subject
to collection):
(i) in
cash, by certified or bank check, by wire transfer of immediately available funds, or other instrument acceptable to the Committee
in U.S. funds payable to the order of the Company in an amount equal to the purchase price of such Option Shares of Stock;
(ii) by
the Optionee delivering to the Company a promissory note if the Board has expressly authorized the loan of funds to the Optionee
for the purpose of enabling or assisting the Optionee to effect the exercise of his Stock Options; provided, that at least
so much of the exercise price as represents the par value of the Stock shall be paid other than with a promissory note if otherwise
required by state law;
(iii)
if the IPO has occurred, then (A) through the delivery (or attestation to ownership) of shares of Stock that have been purchased
by the Optionee on the open market or that are beneficially owned by the Optionee and are not subject to restrictions under any
plan of the Company; provided, that, to the extent required to avoid variable accounting treatment under ASC 718 or other
applicable accounting rules, such surrendered shares shall have been owned by the Optionee for at least six months, and in any
event with an aggregate Fair Market Value (as of the date of such exercise) equal to the option purchase price, (B) by the Optionee
delivering to the Company a properly executed Exercise Notice together with irrevocable instructions to a broker to promptly deliver
to the Company cash or a check payable and acceptable to the Company to pay the option purchase price, provided that in the event
the Optionee chooses to pay the option purchase price as so provided, the Optionee and the broker shall comply with such procedures
and enter into such agreements of indemnity and other agreements as the Committee shall prescribe as a condition of such payment
procedure, or (C) a combination of (i), (ii), (iii)(A) and (iii)(B) above.
(b) Certificates
for the Option Shares of Stock so purchased will be issued and delivered to the Optionee upon (i) compliance to the
satisfaction of the Committee with all requirements under applicable laws or regulations in connection with such issuance and
(ii) delivery of an executed Joinder Agreement (as defined in the Stockholders’ Agreement) pursuant to which the
Optionee agrees to become a party to the Stockholders’ Agreement as a “Management Stockholder” and an
“Other Stockholder” (in each case, as defined in the Stockholders’ Agreement). Until the Optionee shall
have complied with the requirements hereof and of the Plan, the Company shall be under no obligation to issue the Option
Shares of Stock subject to this Stock Option, and the determination of the Committee as to such compliance shall be final and
binding on the Optionee. The Optionee shall not be deemed to be the holder of, or to have any of the rights of a holder with
respect to, any shares of Stock subject to this Stock Option unless and until this Stock Option shall have been exercised
pursuant to the terms hereof, the Company shall have issued and delivered the Issued Shares of Stock to the Optionee, and the
Optionee’s name shall have been entered as a stockholder of record on the books of the Company. Thereupon, the Optionee
shall have full dividend and other ownership rights with respect to such Issued Shares of Stock, subject to the terms of this
Agreement and the Stockholders’ Agreement.
(c) Upon
the exercise of the Stock Option, Issued Shares of Stock shall be subject to the terms and conditions of the Stockholders’
Agreement.
(d) Notwithstanding
any other provision hereof or of the Plan, no portion of this Stock Option shall be exercisable after the Expiration Date.
(e) Timing
of Exercise.
(i) Termination
Due to Death or Disability. If the Optionee’s Service Relationship terminates by reason of such Optionee’s death
or Disability, this Stock Option may be exercised, to the extent exercisable on the date of such termination, by the Optionee,
the Optionee’s legal representative or legatee for a period of 12 months from the later of (A) the date of death or Disability
of such Optionee or (B) the date such Stock Option vests, or until the Expiration Date, if earlier.
(ii) Other
Termination. If the Optionee’s Service Relationship terminates for any reason other than death or Disability, and unless
otherwise determined by the Committee, this Stock Option may be exercised, to the extent exercisable on the date of termination,
for a period of 90 days following termination and, to the extent not exercised within such period, shall automatically terminate
in all respects; provided however, if the Optionee’s Service Relationship is terminated for Cause, this Stock Option,
whether vested or unvested, shall terminate immediately upon the date of such termination and provided, further,
that the Optionee’s Performance-Vesting Options shall remain outstanding and eligible to vest through the Extended Exercise
Date in the event of the Optionee’s Service Relationship is terminated in the circumstances provided for in Section 2(c)(ii)(1)
above.
4. Incorporation
of Plan. Notwithstanding anything herein to the contrary, this Stock Option shall be subject to and governed by all the terms
and conditions of the Plan.
5. Transferability
of Stock Option. This Agreement is personal to the Optionee and is not transferable by the Optionee in any manner other than
by will or by the laws of descent and distribution. The Stock Option may be exercised during the Optionee’s lifetime only
by the Optionee (or by the Optionee’s guardian or personal representative in the event of the Optionee’s incapacity).
The Optionee may elect to designate a beneficiary by providing written notice of the name of such beneficiary to the Company,
and may revoke or change such designation at any time by filing written notice of revocation or change with the Company; such
beneficiary may exercise the Optionee’s Stock Option in the event of the Optionee’s death to the extent provided herein.
If the Optionee does not designate a beneficiary, or if the designated beneficiary predeceases the Optionee, the legal representative
of the Optionee may exercise this Stock Option to the extent provided herein in the event of the Optionee’s death.
6. Effect of Certain Transactions. In the case of a Liquidity Event (as defined in the Plan), provision may be made
in connection with such transaction, in the sole discretion of the parties thereto, for the continuation or assumption by the
successor entity of this Stock Option heretofore granted, or the substitution of this Stock Option with a new Stock Option of
the successor entity or a parent thereof; provided that any such substitution must be on substantially equivalent terms of the
successor entity or parent thereof, with an equitable or proportionate adjustment as to the number and kind of shares, and, if
appropriate, the per share exercise prices, as such parties shall agree.
7. Withholding
Taxes. The Optionee shall, not later than the date as of which the exercise of this Stock Option becomes a taxable event for
federal income tax purposes, pay to the Company or make arrangements satisfactory to the Committee for payment of any federal,
state and local taxes required by law to be withheld on account of such taxable event. Subject to the approval by the Committee,
the Optionee may elect to have the minimum tax withholding obligation satisfied, in whole or in part, by authorizing the Company
to withhold from shares of Stock to be issued or transferring to the Company, a number of shares of Stock with an aggregate Fair
Market Value that would satisfy the minimum withholding amount due. The Optionee acknowledges and agrees that the Company or any
Subsidiary of the Company has the right to deduct from payments of any kind otherwise due to the Optionee, or from the Option
Shares of Stock to be issued in respect of an exercise of this Stock Option, any federal, state or local taxes of any kind required
by law to be withheld with respect to the issuance of Option Shares of Stock to the Optionee.
8. Restrictions
on Transfer of Issued Shares of Stock. None of the Issued Shares of Stock acquired upon exercise of the Stock Option shall
be sold, assigned, transferred, pledged, hypothecated, given away or in any other manner disposed of or encumbered, whether voluntarily
or by operation of law, unless such transfer is in compliance with all applicable securities laws (including, without limitation,
the Act), the terms and conditions of Sections 8 and 9 hereof and the terms and conditions of the Stockholders’
Agreement and such disposition does not cause the Company to become subject to the reporting requirements of the Exchange Act.
In connection with any transfer of Issued Shares of Stock, the Company may require the transferor to provide at the Optionee’s
own expense an opinion of counsel to the transferor, satisfactory to the Company, that such transfer is in compliance with all
foreign, federal and state securities laws (including, without limitation, the Act). Any attempted disposition of Issued Shares
of Stock not in accordance with the terms and conditions of Sections 8 and 9 hereof and the Stockholders’
Agreement shall be null and void, and the Company shall not reflect on its records any change in record ownership of any Issued
Shares of Stock as a result of any such disposition, shall otherwise refuse to recognize any such disposition and shall not in
any way give effect to any such disposition of any Issued Shares of Stock. Subject to the foregoing general provisions, Issued
Shares of Stock may be transferred pursuant to the following specific terms and conditions:
(a) Transfers
to Permitted Transferees. The Optionee may sell, assign, transfer or give away any or all of the Issued Shares of Stock to
Permitted Transferees; provided, however, that such Permitted Transferee(s) shall, as a condition to any such transfer,
agree to be subject to the provisions of this Agreement to the same extent as the Optionee (including, without limitation, the
provisions of Sections 8, 9, 11 and 12) and shall have delivered a written acknowledgment to that
effect to the Company.
(b) Transfers Upon Death. Upon the death of the Optionee, any Issued Shares of Stock then held by the Optionee at the
time of such death and any Issued Shares of Stock acquired thereafter by the Optionee’s legal representative pursuant to
this Agreement shall be subject to the provisions of Sections 8, 9, 10, 11 and 12, if applicable,
and the Optionee’s estate, executors, administrators, personal representatives, heirs, legatees and distributees shall be
obligated to convey such Issued Shares of Stock to the Company or its assigns under the terms contemplated hereby.
9. Company’s
Right of Repurchase.
(a) Right
of Repurchase. Upon a Termination Event (as defined below), the Issued Shares of Stock held or subsequently acquired upon
exercise of this Stock Option in accordance with the terms hereof by the Optionee (or any Permitted Transferee) shall be subject
to the repurchase rights set forth in Section 2.5 of the Stockholders’ Agreement (the “Repurchase Right”).
(b) Company’s
Right to Exercise Repurchase Right. The Company shall have the Repurchase Right in the event that the following event shall
occur (the “Termination Event”): the termination of the Optionee’s Service Relationship for any reason
whatsoever, regardless of the circumstances thereof, and including without limitation upon death, Disability, retirement, discharge
or resignation for any reason, whether voluntarily or involuntarily.
10. Escrow
Arrangement.
(a) Escrow.
In order to carry out the provisions of Sections 8, 9 and 11 of this Agreement more effectively, the Company
shall hold any Issued Shares of Stock in escrow together with separate stock powers executed by the Optionee in blank for transfer,
and any Permitted Transferee shall, as an additional condition to any transfer of Issued Shares of Stock, execute a like stock
power as to such Issued Shares of Stock. The Company shall not dispose of the Issued Shares of Stock except as otherwise provided
in this Agreement. In the event of any repurchase by the Company (or any of its assigns), the Company is hereby authorized by
the Optionee and any Permitted Transferee, as the Optionee’s and each such Permitted Transferee’s attorney-in-fact,
to date and complete the stock powers necessary for the transfer of the Issued Shares of Stock being purchased and to transfer
such Issued Shares of Stock in accordance with the terms hereof. At such time as any Issued Shares of Stock are no longer subject
to the Company’s repurchase and drag along rights, the Company shall, at the written request of the Optionee, deliver to
the Optionee (or the relevant Permitted Transferee) a certificate representing such Issued Shares of Stock with the balance of
the Issued Shares of Stock to be held in escrow pursuant to this Section 10.
(b) Remedy.
Without limitation of any other provision of this Agreement or other rights, in the event that the Optionee, any Permitted Transferees
or any other Person is required to sell the Optionee’s Issued Shares of Stock pursuant to the provisions of Sections
9 and 11 of this Agreement and in the further event that he refuses or for any reason fails to deliver to the Company
or its designated purchaser of such Issued Shares of Stock the certificate or certificates evidencing such Issued Shares of Stock
together with a related stock power, the Company or such designated purchaser may deposit the applicable purchase price for such
Issued Shares of Stock with a bank designated by the Company, or with the Company’s independent public accounting firm,
as agent or trustee, or in escrow, for the Optionee, any Permitted Transferees or other Person, to be held by such bank or accounting
firm for the benefit of and for delivery to him, her, them or it, and/or, in its discretion, pay such purchase price by offsetting
any indebtedness then owed by the Optionee as provided above. Upon any such deposit and/or offset by the Company or its designated
purchaser of such amount and upon notice to the Person who was required to sell the Issued Shares of Stock to be sold pursuant
to the provisions of Sections 9 and 11, such Issued Shares of Stock shall at such time be deemed to have been sold,
assigned, transferred and conveyed to such purchaser, the holder thereof shall have no further rights thereto (other than the
right to withdraw the payment thereof held in escrow, if applicable), and the Company shall record such transfer in its stock
transfer book or in any appropriate manner.
11. Drag
Along Right. If the Investors at any time propose that the Company consummate (or commit to consummate), in one transaction
or a series of related transactions, a Change of Control (as defined in the Plan), the Optionee’s Issued Shares of Stock
(including for this purpose all of such Optionee’s or his Permitted Transferee’s Issued Shares of Stock that presently
or as a result of any such transaction may be acquired upon the exercise of options (following the payment of the exercise price
therefor)) shall be subject to the drag-along rights set forth in Section 2.4 of the Stockholders’ Agreement.
12. Lockup
Provision. If the Company at any time shall register an offering and sale of shares common stock of the Company under the
Securities Act in an Underwritten Offering (as defined in the Stockholders’ Agreement), the Optionee agrees to be subject
to the holdback obligations set forth in Section 5.5 of the Stockholders’ Agreement. The Optionee agrees, if requested by
the underwriter engaged by the Company, to execute a separate letter reflecting the agreement set forth in this Section 12.
13. Restrictive
Covenants. The provisions of Sections 6,7 and 8 of the employment agreement between the Optionee, Hayward Industries, Inc.
and the Company dated as of August 12, 2019 (as may be amended from time to time, the “Employment Agreement”), including
without limitation the restrictive covenants related to confidential information, assignment of intellectual property, non-competition,
customer non-solicitation, employee non-solicitation and no-hire, and non-disparagement set forth therein, as well as the definitions
of any capitalized terms contained in such Sections and defined elsewhere in the Employment Agreement (collectively, the “Incorporated
Restrictions”), are hereby incorporated by reference in their entirety. In consideration of the Stock Option granted to
the Optionee under this Agreement, the Optionee hereby affirms and agrees to be bound by the Incorporated Restrictions.
The Optionee’s obligations under this Section 13 shall remain separate and distinct from, and shall not supersede, replace
or otherwise be affected by, any other similar obligations contained in any agreement between the Optionee and the Company
or its Affiliates (including, without limitation, the Employment Agreement).
14. Miscellaneous Provisions.
(a) Termination.
The Company’s repurchase rights pursuant to Section 9 and the drag along obligations pursuant to Section 11
shall terminate upon the closing of the Company’s IPO or upon consummation of any Liquidity Event (as defined in the Plan),
in either case as a result of which shares of the Company (or successor entity) of the same class as the Issued Shares of Stock
are registered under Section 12 of the Exchange Act and publicly traded on any national securities exchange.
(b) Equitable Relief. The parties hereto agree and declare that legal remedies may be inadequate to enforce the provisions
of this Agreement and that equitable relief, including specific performance and injunctive relief, may be used to enforce the provisions
of this Agreement.
(c) Adjustments for Changes in Capital Structure. If, as a result of any reorganization, recapitalization, reincorporation,
reclassification, stock dividend, stock split, reverse stock split or other similar change in the Stock, the outstanding shares
of Stock are increased or decreased or are exchanged for a different number or kind of shares of the Company’s stock, the
restrictions contained in this Agreement shall apply with equal force to additional and/or substitute securities, if any, received
by the Optionee in exchange for, or by virtue of his ownership of, Issued Shares of Stock.
(d) Change and Modifications. This Agreement may not be orally changed, modified, amended or terminated, nor shall any
oral waiver of any of its terms be effective. This Agreement may be changed, modified, amended or terminated only by an agreement
in writing signed by the Company and the Optionee.
(e) Governing Law. This Agreement shall be governed by and construed in accordance with the General Corporation Law of
the State of Delaware without regard to conflict of law principles that would result in the application of any law other than the
law of the State of Delaware.
(f) Headings. The headings are intended only for convenience in finding the subject matter and do not constitute part
of the text of this Agreement and shall not be considered in the interpretation of this Agreement.
(g) Saving Clause. If any provision(s) of this Agreement shall be determined to be illegal or unenforceable, such determination
shall in no manner affect the legality or enforceability of any other provision hereof.
(h) Notices. All notices, amendments, waivers or other communications pursuant to this Agreement shall be in writing
and shall be deemed to have been duly given if personally delivered, sent by e-mail or sent by nationally recognized overnight
courier to the parties hereto at the following addresses (or at such other address for any party hereto as shall be specified by
like notice):
if to the Company:
Hayward Holdings, Inc.
c/o CCMP Capital Advisors, LP
277 Park Avenue, 27th Floor
New York, NY 10172
Telephone: (212) 600-9600
Attention:
Email:
if to the Optionee, as set forth
underneath the Optionee’s signatures below
or to such other address
as the party to whom notice is to be given may have furnished to each other party in writing in accordance herewith. Any such notice
or communication shall be deemed to have been given and received (w) when delivered, if personally delivered; (x) upon machine
generated acknowledgement of receipt after transmittal by electronic mail if so acknowledged to have been received before 5:00
p.m. on a Business Day at the location of receipt and otherwise on the next following Business Day; (y) on the next Business Day
after dispatch, if sent by nationally recognized overnight courier guaranteeing next Business Day delivery; and (z) on the fifth
Business Day following the date on which the piece of mail containing such communication is posted, if sent by mail.
(i) Benefit and Binding Effect. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto,
their respective successors, permitted assigns, and legal representatives. The Company has the right to assign this Agreement,
and such assignee shall become entitled to all the rights of the Company hereunder to the extent of such assignment.
(j) Dispute Resolution.
(i) Except as provided below, any dispute arising out of or relating to this Agreement or the breach, termination or validity
hereof shall be finally settled by binding arbitration conducted expeditiously in accordance with the J.A.M.S./Endispute Comprehensive
Arbitration Rules and Procedures. The arbitration shall be governed by the United States Arbitration Act, 9 U.S.C. §§1-16,
and judgment upon the award rendered by the arbitrators may be entered by any court having jurisdiction thereof. The place of arbitration
shall be New York, New York.
(ii) The parties covenant and agree that the arbitration shall commence within 60 days of the date on which a written demand
for arbitration is filed by any party hereto. In connection with the arbitration proceeding, the arbitrator shall have the power
to order the production of documents by each party and any third-party witnesses. In addition, each party may take up to three
depositions as of right, and the arbitrator may in his or her discretion allow additional depositions upon good cause shown by
the moving party. However, the arbitrator shall not have the power to order the answering of interrogatories or the response to
requests for admission. In connection with any arbitration, each party shall provide to the other, no later than seven Business
Days before the date of the arbitration, the identity of all persons that may testify at the arbitration and a copy of all documents
that may be introduced at the arbitration or considered or used by a party’s witness or expert. The arbitrator’s decision
and award shall be made and delivered within six months of the selection of the arbitrator. The arbitrator’s decision shall
set forth a reasoned basis for any award of damages or finding of liability. The arbitrator shall not have power to award damages
in excess of actual compensatory damages and shall not multiply actual damages or award punitive damages or any other damages that
are specifically excluded under this Agreement, and each party hereby irrevocably waives any claim to such damages.
(iii) The
parties covenant and agree that they will participate in the arbitration in good faith. This Section 14(j) applies equally
to requests for temporary, preliminary or permanent injunctive relief, except that in the case of temporary or preliminary injunctive
relief any party may proceed in court without prior arbitration for the limited purpose of avoiding immediate and irreparable
harm.
(iv) Each of the parties hereto (x) hereby irrevocably submits to the jurisdiction of any United States District Court of competent
jurisdiction for the purpose of enforcing the award or decision in any such proceeding and (y) hereby waives, and agrees not to
assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, any claim that it is not subject
personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution (except
as protected by applicable law), that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the
suit, action or proceeding is improper or that this Agreement or the subject matter hereof may not be enforced in or by such court,
and hereby waives and agrees not to seek any review by any court of any other jurisdiction which may be called upon to grant an
enforcement of the judgment of any such court. Each of the parties hereto hereby consents to service of process by registered mail
at the address to which notices are to be given. Each of the parties hereto agrees that its, his or her submission to jurisdiction
and its, his or her consent to service of process by mail is made for the express benefit of the other parties hereto. Final judgment
against any party hereto in any such action, suit or proceeding may be enforced in other jurisdictions by suit, action or proceeding
on the judgment, or in any other manner provided by or pursuant to the laws of such other jurisdiction.
(k) Counterparts.
For the convenience of the parties and to facilitate execution, this Agreement may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which shall constitute one and the same document.
(l) Entire Agreement. The Plan, this Agreement and the Stockholders’ Agreement constitute the entire agreement
with respect to the subject matter hereof and thereof. In the event of any inconsistency between the Plan and this Agreement, the
terms and conditions of the Plan shall control.
[SIGNATURE PAGE FOLLOWS]
The foregoing Agreement is hereby accepted
and the terms and conditions thereof hereby agreed to by the undersigned as of the date first above written.
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HAYWARD HOLDINGS, INC.
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By:
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/s/ Anthony Colucci
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Name:
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Anthony Colucci
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Title:
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Senior Vice President and Chief Financial Officer
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[Signature Page to Non-Qualified Stock Option Agreement]
The foregoing Agreement is hereby accepted
and the terms and conditions thereof hereby agreed to by the undersigned as of the date first above written.
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OPTIONEE:
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/s/ Kevin P. Holleran
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Name:
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Kevin P. Holleran
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Address:
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[Signature Page to Non-Qualified Stock Option Agreement]
Exhibit 10.12
RESTRICTED
STOCK AGREEMENT
UNDER THE Hayward HOLDINGS, Inc.
SECOND AMENDED AND RESTATED 2017 Equity Incentive Plan
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Name of Holder:
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Kevin P. Holleran
(the “Holder”)
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No. of Shares of Stock:
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949.49
Shares of Class A Common Stock
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Grant Date:
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December 24, 2019
(the “Grant Date”)
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Per Share Value:
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$1,053.20 (the
“Per Share Value”)
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Pursuant to the Hayward
Holdings, Inc. Second Amended and Restated 2017 Equity Incentive Plan (as amended, modified, supplemented or restated and in effect
from time to time, the “Plan”), Hayward Holdings, Inc., a Delaware corporation (together with its successors,
the “Company”), hereby grants to the individual named above, who is an employee of the Company or any of the
Subsidiaries, the shares of Restricted Stock (as defined below), pursuant to which the shares of Restricted Stock are valued at
the Per Share Value, which Per Share Value represents the Fair Market Value per share on the Grant Date, subject to the terms and
conditions set forth herein and in the Plan. The Holder agrees to the provisions set forth herein, as well as the provisions set
forth in the Charter and the Stockholders' Agreement in respect of the Restricted Stock, and acknowledges that each such provision
is a material condition of the Company’s agreement to issue and sell the shares of Restricted Stock to him. The Issue Price,
for purposes of the Stockholders Agreement, shall be zero. All references to share prices and amounts herein shall be equitably
adjusted to reflect stock splits, stock dividends, recapitalizations, mergers, reorganizations and similar changes affecting the
capital stock of the Company, and any shares of capital stock of the Company received on or in respect of shares of Restricted
Stock in connection with any such event (including any shares of capital stock or any right, option or warrant to receive the same
or any security convertible into or exchangeable for any such shares or received upon conversion of any such shares) shall be subject
to this Agreement on the same basis and extent at the relevant time as the shares of Restricted Stock in respect of which they
were issued, and shall be deemed shares of Restricted Stock as if and to the same extent they were issued at the date hereof.
1.
Definitions. For the purposes of this Agreement, the following terms shall have the following respective meanings.
All capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Plan.
“Business Day”
means any day except a Saturday, a Sunday or any other day on which commercial banks in New York, New York are authorized or required
by law to close.
“CCMP
Investor” means, collectively, CCMP Capital Investors III, L.P., CCMP Capital Investors III (Employee), L.P. and any
of their respective Affiliates that is a transferee of any CCMP Investor Shares or otherwise acquires equity securities of the
Company.
“CCMP Investor
Shares” means the equity securities of the Company acquired by the CCMP Investor in connection with its investment in
the Company, whether acquired before, on or after the date hereof, and any additional securities received in respect thereof, as
a dividend on, or otherwise on account of, such equity securities.
Change of Control”
shall have the meaning set forth in the Plan, provided that references to “Hayward” as used therein or any definition
incorporated therein by reference shall mean either Hayward Industries, Inc. or Hayward Intermediate, Inc.
“Charter”
means the amended and restated certificate of incorporation of the Company, as amended, modified, supplemented or restated and
in effect from time to time, including any certificate of designation, correction or amendment filed with the Secretary of State
of the State of Delaware pursuant to the terms thereof.
“Disability”
shall have the meaning set forth in the Holder’s Employment Agreement.
“Good Reason”
shall have the meaning set forth in the Holder’s Employment Agreement.
“MSD Investor” means MSD
Aqua Partners, LLC and any of its Affiliates that is a transferee of any MSD Investor Shares or otherwise acquires equity securities
of the Company.
“MSD Investor Shares” means
the equity securities of the Company acquired by the MSD Investor in connection with its investment in the Company, whether acquired
before, on or after the date hereof and any additional securities received in respect thereof, as a dividend on, or otherwise on
account of, such equity securities.
“Restricted
Stock” means the number of shares of Class A Common Stock, par value $0.001 per share, of the Company being granted to
the Holder on the date hereof and any additional shares of Class A Common Stock or other securities received in respect of such
shares of Class A Common Stock, as a dividend on, or otherwise on account of, such shares of Class A Common Stock.
“Service Relationship”
means any relationship as an employee, part-time employee, director or other key person (including consultants) of the Company
or any Subsidiary or any successor entity such that, for example, a Service Relationship shall be deemed to continue without interruption
in the event the Holder’s status changes from full-time employee to part-time employee or consultant.
“Stockholders
Agreement” means the Stockholders Agreement, dated as of August 4, 2017, as it may be amended, modified or amended and
restated from time to time.
2. Grant
of Restricted Stock; Investment Representations.
(a)
Grant. On the date hereof, the Company hereby grants to the Holder the number of shares of Restricted Stock set forth
above. One hundred percent (100%) of such Restricted Stock shall be subject to the vesting criteria set forth in Section 3
below (the “Vesting Shares”).
(b)
Investment Representations. In connection with the grant of the shares of Restricted Stock contemplated by Section
2(a) above, the Holder hereby represents and warrants to the Company as follows:
(i)
The Holder acknowledges that the shares of Restricted Stock are subject to the terms and conditions of the Stockholders
Agreement and agrees to be bound to all of the provisions thereof.
(ii)
The Holder is being granted the shares of Restricted Stock for the Holder’s own account for investment only, and not
for resale or with a view to the distribution thereof.
(iii) The Holder has had such an opportunity as he has deemed adequate to obtain from the Company such information as is necessary
to permit him to evaluate the merits and risks of the Holder’s investment in the Company and has consulted with the Holder’s
own advisers with respect thereto.
(iv) The
Holder has sufficient experience in business, financial and investment matters to be able to evaluate the risks involved in the
holding of the shares of Restricted Stock and to make an informed decision with respect to such grant.
(v) The
Holder can afford a complete loss of the value of the shares of Restricted Stock and is able to bear the economic risk of holding
such shares of Restricted Stock for an indefinite period.
(vi) The Holder understands that the shares of Restricted Stock are not registered under the Securities Act of 1933 (the “Act”)
(it being understood that the shares of Restricted Stock are being issued and sold in reliance on the exemption provided in Rule
701 thereunder or Regulation D) or any applicable state securities or “blue sky” laws and may not be sold or otherwise
transferred or disposed of in the absence of an effective registration statement under the Act and under any applicable state securities
or “blue sky” laws (or exemptions from the registration requirements thereof). The Holder further acknowledges that
certificates representing the shares of Restricted Stock will bear restrictive legends reflecting the foregoing.
3. Vesting; Forfeiture of Unvested Shares. Subject to the terms and conditions set forth in the Plan, the Restricted
Stock shall vest as follows:
(a)
Vesting Shares.
(i)
Initial Public Offering. Subject to and effective immediately prior to the consummation of an IPO, all Vesting Shares
shall be deemed vested, provided that the Holder remains in a continuous Service Relationship from the Grant Date to the date of
the consummation of the IPO.
(ii)
Change of Control. Subject to and effective immediately prior to the consummation of a Change of Control, all Vesting
Shares shall be deemed vested, provided that the Holder remains in a continuous Service Relationship from the Grant Date to the
date of the consummation of the Change of Control.
(b)
Additional Vesting.
(i) Upon Death or Disability. In the event that the Holder’s Service Relationship terminates by reason of such
Holder's death or Disability, all Vesting Shares shall be deemed vested.
(ii)
Without Cause, For Good Reason. In the event that the Holder’s Service Relationship is terminated by the Company
or its Affiliates without Cause, or by the Holder for Good Reason, the Holder’s Vesting Shares that are not vested as of
the date of termination shall remain outstanding for up to six months following such termination and remain eligible to vest in
accordance with Section 3(a) if an IPO or Change of Control occurs during such six month period, provided, further, that if a transaction,
which is not an IPO nor a Change of Control, is consummated immediately following which either the MSD Investor ceases to own any
MSD Investor Shares or the CCMP Investor ceases to own any CCMP Investor Shares and the Holder’s Service Relationship is
terminated by the Company or its Affiliates without Cause, or by the Holder for Good Reason within a year of such transaction,
all Vesting Shares shall be deemed vested.
(c)
Forfeiture of Shares Upon Termination of Service Relationship. In the event that the Holder’s Service Relationship
terminates for any reason, other than described in Section 3(b) above, those of the Holder’s Vesting Shares that are
not vested as of the date of termination shall automatically be fully forfeited for no consideration.
4.
Withholding Taxes. The Holder will not make an election in accordance with Section 83(b) of the Internal Revenue
Code of 1986 (“83(b) Election”) with regard to the Vesting Shares, and agrees to pay the Company all withholding
and employee payroll taxes determined to be due to the Company on the vesting date of such Vesting Shares based on the excess,
if any, of the fair market value of such shares of Restricted Stock as of the date of vesting over the purchase price (i.e., zero)
as of the vesting date. The Fair Market Value of such shares on such vesting date will be determined in accordance with the Stockholders’
Agreement and will be communicated to the Holder as promptly as practicable prior to such vesting date. The Holder may elect to
have the minimum tax withholding obligation satisfied, in whole or in part, by authorizing the Company to withhold from shares
of Stock to be issued or transferring to the Company, a number of shares of Stock with an aggregate Fair Market Value that would
satisfy the minimum withholding amount due. The Company and any Subsidiary shall, to the extent permitted by the law, have the
right to deduct such tax payment from any payment at any time otherwise due to the Company. The Holder represents that he has received
tax advice from his own personal tax advisor on the consequences of the grant of the shares of Restricted Stock and the determination
to not make a Section 83(b) election.
5. Restricted
Activities. The provisions of Sections 6,7 and 8 of the employment agreement between the Holder, Hayward Industries, Inc.
and the Company dated as of August 12, 2019 (as may be amended from time to time, the “Employment Agreement”),
including without limitation the restrictive covenants related to confidential information, assignment of intellectual
property, non-competition, customer non-solicitation, employee non-solicitation and no-hire, and non-disparagement set forth
therein, as well as the definitions of any capitalized terms contained in such Sections and defined elsewhere in the
Employment Agreement (collectively, the “Incorporated Restrictions”), are hereby incorporated by reference in
their entirety. In consideration of the Vesting Shares issued to the Holder under this Agreement, the Holder hereby affirms
and agrees to be bound by the Incorporated Restrictions. The Holder’s obligations under this Section 5 shall
remain separate and distinct from, and shall not supersede, replace or otherwise be affected by, any other similar
obligations contained in any agreement between the Holder and the Company or its Affiliates (including, without limitation,
the Employment Agreement).
6.
Miscellaneous Provisions.
(a)
Change and Modifications. This Agreement may not be orally changed, modified, amended or terminated, nor shall any
oral waiver of any of its terms be effective. This Agreement may be changed, modified, amended or terminated only by an agreement
in writing signed by the Company and the Holder.
(b)
Governing Law. This Agreement shall be governed by and construed in accordance with the General Corporation Law of
the State of Delaware, without regard to conflict of law principles that would result in the application of any law other than
the law of the State of Delaware.
(c)
Headings. The headings are intended only for convenience in finding the subject matter and do not constitute part
of the text of this Agreement and shall not be considered in the interpretation of this Agreement.
(d)
Saving Clause. If any provision(s) of this Agreement shall be determined to be illegal or unenforceable, such determination
shall in no manner affect the legality or enforceability of any other provision hereof.
(e)
Notices. All notices, amendments, waivers or other communications pursuant to this Agreement shall be in writing
and shall be deemed to have been duly given if personally delivered, sent by e-mail or sent by nationally recognized overnight
courier to the parties hereto at the following addresses (or at such other address for any party hereto as shall be specified by
like notice):
if to the Company:
Hayward Holdings, Inc.
c/o CCMP Capital
Advisors, LP
277 Park Avenue, 27th Floor
New York, New York 10172
Attention:
Email:
with a copy (which
shall not constitute effective notice) to:
CCMP Capital Advisors,
LP
277 Park Avenue, 27th Floor
New York, New York 10172
Attention:
Email:
and to
MSD Partners, L.P.
645 Fifth Avenue, 21st Floor
New York, New York 10022
Attention:
Email:
and to:
Ropes & Gray
LLP
1211 Avenue of
the Americas
New York, NY
10036-8704
Attention:
Email:
if to the Holder,
as set forth underneath the Holder’s signatures below
or to such other address
as the party to whom notice is to be given may have furnished to each other party in writing in accordance herewith. Any such notice
or communication shall be deemed to have been given and received (w) when delivered, if personally delivered; (x) upon machine
generated acknowledgement of receipt after transmittal by electronic mail if so acknowledged to have been received before 5:00
p.m. on a Business Day at the location of receipt and otherwise on the next following Business Day; (y) on the next Business Day
after dispatch, if sent by nationally recognized overnight courier guaranteeing next Business Day delivery; and (z) on the fifth
Business Day following the date on which the piece of mail containing such communication is posted, if sent by mail.
(f)
Benefit and Binding Effect. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto,
their respective successors, assigns, and legal representatives. The Company has the right to assign this Agreement, and such assignee
shall become entitled to all the rights of the Company hereunder to the extent of such assignment.
(g)
Dispute Resolution.
(i) Except as provided below, any dispute arising out of or relating to this Agreement or the breach, termination or validity
hereof shall be finally settled by binding arbitration conducted expeditiously in accordance with the J.A.M.S./Endispute Comprehensive
Arbitration Rules and Procedures. The arbitration shall be governed by the United States Arbitration Act, 9 U.S.C. §§1-16,
and judgment upon the award rendered by the arbitrators may be entered by any court having jurisdiction thereof. The place of arbitration
shall be New York, New York.
(ii) The
parties covenant and agree that the arbitration shall commence within sixty (60) days of the date on which a written demand for
arbitration is filed by any party hereto. In connection with the arbitration proceeding, the arbitrator shall have the power to
order the production of documents by each party and any third-party witnesses.
In addition, each party may take
up to three depositions as of right, and the arbitrator may in his or her discretion allow additional depositions upon good cause
shown by the moving party. However, the arbitrator shall not have the power to order the answering of interrogatories or the response
to requests for admission. In connection with any arbitration, each party shall provide to the other, no later than seven Business
Days before the date of the arbitration, the identity of all persons that may testify at the arbitration and a copy of all documents
that may be introduced at the arbitration or considered or used by a party’s witness or expert. The arbitrator’s decision
and award shall be made and delivered within six months of the selection of the arbitrator. The arbitrator’s decision shall
set forth a reasoned basis for any award of damages or finding of liability. The arbitrator shall not have power to award damages
in excess of actual compensatory damages and shall not multiply actual damages or award punitive damages or any other damages that
are specifically excluded under this Agreement, and each party hereby irrevocably waives any claim to such damages.
(iii) The
parties covenant and agree that they will participate in the arbitration in good faith. This Section 7(g) applies equally
to requests for temporary, preliminary or permanent injunctive relief, except that in the case of temporary or preliminary injunctive
relief any party may proceed in court without prior arbitration for the limited purpose of avoiding immediate and irreparable
harm.
(iv) Each
of the parties hereto (x) hereby irrevocably submits to the jurisdiction of any United States District Court of competent jurisdiction
for the purpose of enforcing the award or decision in any such proceeding, (y) hereby waives, and agrees not to assert, by way
of motion, as a defense, or otherwise, in any such suit, action or proceeding, any claim that it is not subject personally to
the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution (except as protected
by applicable law), that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action
or proceeding is improper or that this Agreement or the subject matter hereof may not be enforced in or by such court, and hereby
waives and agrees not to seek any review by any court of any other jurisdiction which may be called upon to grant an enforcement
of the judgment of any such court. Each of the parties hereto hereby consents to service of process by registered mail at the
address to which notices are to be given. Each of the parties hereto agrees that its, his or her submission to jurisdiction and
its, his or her consent to service of process by mail is made for the express benefit of the other parties hereto. Final judgment
against any party hereto in any such action, suit or proceeding may be enforced in other jurisdictions by suit, action or proceeding
on the judgment, or in any other manner provided by or pursuant to the laws of such other jurisdiction.
(h)
Equitable Relief. The parties hereto agree and declare that legal remedies are inadequate to enforce the provisions
of this Agreement and that equitable relief, including specific performance and injunctive relief, may be used to enforce the provisions
of this Agreement.
(i)
Counterparts. For the convenience of the parties and to facilitate execution, this Agreement may be executed in
two or more counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same document.
(j)
Entire Agreement. The Plan, this Agreement and the Stockholders Agreement constitute the entire agreement with respect
to the subject matter hereof and thereof. In the event of any inconsistency between the Plan and this Agreement, the terms and
conditions of the Plan shall control.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF,
the Company and the Holder have executed this Amended and Restated Restricted Stock Agreement as of the date first written above.
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HAYWARD HOLDINGS, INC.
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By:
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/s/ Anthony Colucci
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Name: Anthony Colucci
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Title: Senior Vice President and Chief Financial Officer
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IN WITNESS WHEREOF,
the Company and the Holder have executed this Amended and Restated Restricted Stock Agreement as of the date first written above.
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HOLDER:
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/s/ Kevin P. Holleran
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Name: Kevin P. Holleran
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Address:
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Exhibit 10.13
NON-QUALIFIED
STOCK OPTION AGREEMENT
UNDER THE SECOND Amended and restated Hayward HOLDINGS, Inc.
2017 Equity Incentive Plan
Name of Optionee: Eifion jones (the “Optionee”)
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No. of Option Shares of Stock:
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1,500 Shares of Class B Common Stock
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Grant Date:
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April 14, 2020 (the “Grant Date”)
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Expiration Date:
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October 14, 2021 (the “Expiration Date”)
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Option Exercise Price/Share:
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$272.92 (the “Option Exercise Price”)
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Pursuant to the Second
Amended and Restated Hayward Holdings, Inc. 2017 Equity Incentive Plan (the “Plan”), Hayward Holdings, Inc.,
a Delaware corporation (together with all successors thereto, the “Company”), hereby grants to the Optionee,
who is an officer, employee, director, consultant or other key person of the Company or any of its Subsidiaries, an option (the
“Stock Option”) to purchase on or prior to the Expiration Date, or such earlier date as is specified herein,
all or any part of the number of shares of Class B Common Stock, par value $0.001 per share of stock (“Stock”),
of the Company indicated above (the “Option Shares of Stock,” and such shares of stock once issued shall be
referred to as the “Issued Shares of Stock”), at the Option Exercise Price per share, subject to the terms and
conditions set forth in this Non-Qualified Stock Option Agreement (this “Agreement”) and in the Plan. This Stock
Option is not intended to qualify as an “incentive stock option” as defined in Section 422(b) of the Internal Revenue
Code of 1986, as amended from time to time (the “Code”).
1.
Definitions. For the purposes of this Agreement, the following terms shall have the following respective meanings.
All capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Plan.
“Business
Day” means any day except a Saturday, a Sunday or any other day on which commercial banks in New York, New York are authorized
or required by law to close.
“CCMP Investor”
means, collectively, CCMP Capital Investors III, L.P., CCMP Capital Investors III (Employee), L.P. and any of their respective
Affiliates that is a transferee of any CCMP Investor Shares or otherwise acquires equity securities of the Company.
“Disability”
means, with respect to any Optionee, the meaning set forth in such Optionee’s Employment Agreement. If such Optionee does
not have an Employment Agreement or “Disability” is not defined in such agreement, “Disability” shall mean
the failure or inability of the Optionee to perform duties with the Company or any of its Affiliates for a period of at least 180
consecutive days (or 180 days during any twelve (12) month period) by reason of any physical or mental condition, as determined
in good faith by the Company in its sole discretion; provided, that, if the Company’s long term disability plan contains
a definition of “Disability,” the definition in such plan will control.
“Investors”
means the CCMP Investor and the MSD Investor.
“MSD Investor”
means MSD Aqua Partners, LLC and any of its Affiliates that is a transferee of any MSD Investor Shares or otherwise acquires equity
securities of the Company.
“Permitted
Transferee” means (i) any executor, administrator or testamentary trustee of the Optionee’s estate if such Optionee
dies, (ii) any person or entity receiving Issued Shares of Stock by will, intestacy laws or the laws of descent or survivorship,
(iii) any trustee of a trust (including an inter vivos trust) of which there are no principal beneficiaries other than such Optionee,
the Optionee’s spouse or one or more of the Optionee’s lineal decedents or (iv) any corporation, partnership, limited
liability company or similar entity controlled by the Optionee (within the meaning of “Control” as defined in the Stockholders’
Agreement) and of which there are no principal beneficiaries or owners other the Optionee, the Optionee’s spouse or one or
more of the Optionee’s lineal decedents.
“Securities
Act” means the Securities Act of 1933, as amended, or any successor federal statute, and the rules and regulations of
the Commission promulgated thereunder, all as the same shall be in effect from time to time.
“Service Relationship”
means any relationship as an employee, part-time employee, director or other key person (including consultants) of the Company
or any Subsidiary or any successor entity such that, for example, a Service Relationship shall be deemed to continue without interruption
in the event the Optionee’s status changes from full-time employee to part-time employee or consultant.
“Stockholders’
Agreement” means the Stockholders’ Agreement, dated August 4, 2017, as it may be amended, modified or amended and
restated from time to time.
2.
Vesting. The Option Shares of Stock are fully-vested as of the date hereof.
3.
Exercise of Stock Option.
(a)
The Optionee may exercise this Stock Option only in the following manner: Prior to the Expiration Date, the Optionee may
deliver a Stock Option exercise notice (an “Exercise Notice”) in the form of Appendix A hereto indicating
his or her election to purchase some or all of the Option Shares of Stock with respect to which this Stock Option is exercisable
at the time of such notice. Such notice shall specify the number of Option Shares of Stock to be purchased. Payment of the purchase
price may be made by one or more of the methods described below (payment instruments will be received subject to collection):
(i)
in cash, by certified or bank check, by wire transfer of immediately available funds, or other instrument acceptable to
the Committee in U.S. funds payable to the order of the Company in an amount equal to the purchase price of such Option Shares
of Stock;
(ii)
by the Optionee delivering to the Company a promissory note if the Board has expressly authorized the loan of funds to the
Optionee for the purpose of enabling or assisting the Optionee to effect the exercise of his or her Stock Options; provided,
that at least so much of the exercise price as represents the par value of the Stock shall be paid other than with a promissory
note if otherwise required by state law; or
(iii)
if the IPO has occurred, then (A) through the delivery (or attestation to ownership) of shares of Stock that have been
purchased by the Optionee on the open market or that are beneficially owned by the Optionee and are not subject to restrictions
under any plan of the Company; provided, that, to the extent required to avoid variable accounting treatment under ASC 718
or other applicable accounting rules, such surrendered shares shall have been owned by the Optionee for at least six months, and
in any event with an aggregate Fair Market Value (as of the date of such exercise) equal to the option purchase price, (B) by the
Optionee delivering to the Company a properly executed Exercise Notice together with irrevocable instructions to a broker to promptly
deliver to the Company cash or a check payable and acceptable to the Company to pay the option purchase price, provided that in
the event the Optionee chooses to pay the option purchase price as so provided, the Optionee and the broker shall comply with such
procedures and enter into such agreements of indemnity and other agreements as the Committee shall prescribe as a condition of
such payment procedure, or (C) a combination of (i), (ii), (iii)(A) and (iii)(B) above.
(b)
Certificates for the Option Shares of Stock so purchased will be issued and delivered to the Optionee upon (i) compliance
to the satisfaction of the Committee with all requirements under applicable laws or regulations in connection with such issuance
and (ii) delivery of an executed Joinder Agreement (as defined in the Stockholders’ Agreement) pursuant to which the Optionee
agrees to become a party to the Stockholders’ Agreement as a “Management Stockholder” and an “Other Stockholder”
(in each case, as defined in the Stockholders’ Agreement). Until the Optionee shall have complied with the requirements hereof
and of the Plan, the Company shall be under no obligation to issue the Option Shares of Stock subject to this Stock Option, and
the determination of the Committee as to such compliance shall be final and binding on the Optionee. The Optionee shall not be
deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares of Stock subject to this Stock
Option unless and until this Stock Option shall have been exercised pursuant to the terms hereof, the Company shall have issued
and delivered the Issued Shares of Stock to the Optionee, and the Optionee’s name shall have been entered as a stockholder
of record on the books of the Company. Thereupon, the Optionee shall have full dividend and other ownership rights with respect
to such Issued Shares of Stock, subject to the terms of this Agreement and the Stockholders’ Agreement.
(c)
Upon the exercise of the Stock Option, Issued Shares of Stock shall be subject to the terms and conditions of the Stockholders’
Agreement.
(d)
Notwithstanding any other provision hereof or of the Plan, no portion of this Stock Option shall be exercisable after the
Expiration Date.
(e)
Timing of Exercise.
(i)
Termination Due to Death or Disability. If the Optionee’s Service Relationship terminates by reason of such
Optionee’s death or Disability, this Stock Option may be exercised, to the extent exercisable on the date of such termination,
by the Optionee, the Optionee’s legal representative or legatee until the earlier of (A) the 12 month anniversary of the
date of death or Disability of such Optionee or (B) the Expiration Date.
(ii)
Other Termination. If the Optionee’s Service Relationship terminates for any reason other than death or Disability,
and unless otherwise determined by the Committee, this Stock Option shall terminate immediately upon the date of such termination.
4.
Incorporation of Plan. Notwithstanding anything herein to the contrary, this Stock Option shall be subject to and
governed by all the terms and conditions of the Plan.
5.
Transferability of Stock Option. This Agreement is personal to the Optionee and is not transferable by the Optionee
in any manner other than by will or by the laws of descent and distribution. The Stock Option may be exercised during the Optionee’s
lifetime only by the Optionee (or by the Optionee’s guardian or personal representative in the event of the Optionee’s
incapacity). The Optionee may elect to designate a beneficiary by providing written notice of the name of such beneficiary to the
Company, and may revoke or change such designation at any time by filing written notice of revocation or change with the Company;
such beneficiary may exercise the Optionee’s Stock Option in the event of the Optionee’s death to the extent provided
herein. If the Optionee does not designate a beneficiary, or if the designated beneficiary predeceases the Optionee, the legal
representative of the Optionee may exercise this Stock Option to the extent provided herein in the event of the Optionee’s
death.
6.
Effect of Certain Transactions. In the case of a Liquidity Event (as defined in the Plan), provision may be made
in connection with such transaction, in the sole discretion of the parties thereto, for the continuation or assumption by the successor
entity of this Stock Option heretofore granted, or the substitution of this Stock Option with a new Stock Option of the successor
entity or a parent thereof; provided that any such substitution must be on substantially equivalent terms of the successor entity
or parent thereof, with an equitable or proportionate adjustment as to the number and kind of shares, and, if appropriate, the
per share exercise prices, as such parties shall agree.
7.
Withholding Taxes. The Optionee shall, not later than the date as of which the exercise of this Stock Option becomes
a taxable event for federal income tax purposes, pay to the Company or make arrangements satisfactory to the Committee for payment
of any federal, state and local taxes required by law to be withheld on account of such taxable event. Subject to approval by the
Committee, the Optionee may elect to have the minimum tax withholding obligation satisfied, in whole or in part, by authorizing
the Company to withhold from shares of Stock to be issued or transferring to the Company, a number of shares of Stock with an aggregate
Fair Market Value that would satisfy the minimum withholding amount due. The Optionee acknowledges and agrees that the Company
or any Subsidiary of the Company has the right to deduct from payments of any kind otherwise due to the Optionee, or from the Option
Shares of Stock to be issued in respect of an exercise of this Stock Option, any federal, state or local taxes of any kind required
by law to be withheld with respect to the issuance of Option Shares of Stock to the Optionee.
8. Restrictions
on Transfer of Issued Shares of Stock. None of the Issued Shares of Stock acquired upon exercise of the Stock Option
shall be sold, assigned, transferred, pledged, hypothecated, given away or in any other manner disposed of or encumbered,
whether voluntarily or by operation of law, unless such transfer is in compliance with all applicable securities laws
(including, without limitation, the Act), the terms and conditions of Sections 8 and 9 hereof and the terms and
conditions of the Stockholders’ Agreement and such disposition does not cause the Company to become subject to the
reporting requirements of the Exchange Act. In connection with any transfer of Issued Shares of Stock, the Company may
require the transferor to provide at the Optionee’s own expense an opinion of counsel to the transferor, satisfactory
to the Company that such transfer is in compliance with all foreign, federal and state securities laws (including, without
limitation, the Act). Any attempted disposition of Issued Shares of Stock not in accordance with the terms and conditions of Sections
8 and 9 hereof and the Stockholders’ Agreement shall be null and void, and the Company shall not reflect on
its records any change in record ownership of any Issued Shares of Stock as a result of any such disposition, shall otherwise
refuse to recognize any such disposition and shall not in any way give effect to any such disposition of any Issued Shares of
Stock. Subject to the foregoing general provisions, Issued Shares of Stock may be transferred pursuant to the following
specific terms and conditions:
(a)
Transfers to Permitted Transferees. The Optionee may sell, assign, transfer or give away any or all of the Issued
Shares of Stock to Permitted Transferees; provided, however, that such Permitted Transferee(s) shall, as a condition
to any such transfer, agree to be subject to the provisions of this Agreement to the same extent as the Optionee (including, without
limitation, the provisions of Sections 8, 9, 11 and 12) and shall have delivered a written acknowledgment
to that effect to the Company.
(b)
Transfers Upon Death. Upon the death of the Optionee, any Issued Shares of Stock then held by the Optionee at the
time of such death and any Issued Shares of Stock acquired thereafter by the Optionee’s legal representative pursuant to
this Agreement shall be subject to the provisions of Sections 8, 9, 10, 11 and 12, if applicable,
and the Optionee’s estate, executors, administrators, personal representatives, heirs, legatees and distributees shall be
obligated to convey such Issued Shares of Stock to the Company or its assigns under the terms contemplated hereby.
9.
Company’s Right of Repurchase.
(a)
Right of Repurchase. Upon a Termination Event (as defined below), the Issued Shares of Stock held or subsequently
acquired upon exercise of this Stock Option in accordance with the terms hereof by the Optionee (or any Permitted Transferee) shall
be subject to the repurchase rights set forth in Section 2.5 of the Stockholders’ Agreement (the “Repurchase Right”).
(b)
Company’s Right to Exercise Repurchase Right. The Company shall have the Repurchase Right in the event that
the following event shall occur (the “Termination Event”): the termination of the Optionee’s Service Relationship
for any reason whatsoever, regardless of the circumstances thereof, and including without limitation upon death, Disability, retirement,
discharge or resignation for any reason, whether voluntarily or involuntarily.
10.
Escrow Arrangement.
(a) Escrow.
In order to carry out the provisions of Sections 8, 9 and 11 of this Agreement more effectively, the
Company shall hold any Issued Shares of Stock in escrow together with separate stock powers executed by the Optionee in blank
for transfer, and any Permitted Transferee shall, as an additional condition to any transfer of Issued Shares of Stock,
execute a like stock power as to such Issued Shares of Stock. The Company shall not dispose of the Issued Shares of Stock
except as otherwise provided in this Agreement. In the event of any repurchase by the Company (or any of its assigns), the
Company is hereby authorized by the Optionee and any Permitted Transferee, as the Optionee’s and each such Permitted
Transferee’s attorney-in-fact, to date and complete the stock powers necessary for the transfer of the Issued Shares of
Stock being purchased and to transfer such Issued Shares of Stock in accordance with the terms hereof. At such time as any
Issued Shares of Stock are no longer subject to the Company’s repurchase and drag along rights, the Company shall, at
the written request of the Optionee, deliver to the Optionee (or the relevant Permitted Transferee) a certificate
representing such Issued Shares of Stock with the balance of the Issued Shares of Stock to be held in escrow pursuant to this Section
10.
(b)
Remedy. Without limitation of any other provision of this Agreement or other rights, in the event that the Optionee,
any Permitted Transferees or any other Person is required to sell the Optionee’s Issued Shares of Stock pursuant to the provisions
of Sections 9 and 11 of this Agreement and in the further event that he or she refuses or for any reason fails to
deliver to the Company or its designated purchaser of such Issued Shares of Stock the certificate or certificates evidencing such
Issued Shares of Stock together with a related stock power, the Company or such designated purchaser may deposit the applicable
purchase price for such Issued Shares of Stock with a bank designated by the Company, or with the Company’s independent public
accounting firm, as agent or trustee, or in escrow, for the Optionee, any Permitted Transferees or other Person, to be held by
such bank or accounting firm for the benefit of and for delivery to him, her, them or it, and/or, in its discretion, pay such purchase
price by offsetting any indebtedness then owed by the Optionee as provided above. Upon any such deposit and/or offset by the Company
or its designated purchaser of such amount and upon notice to the Person who was required to sell the Issued Shares of Stock to
be sold pursuant to the provisions of Sections 9 and 11, such Issued Shares of Stock shall at such time be deemed
to have been sold, assigned, transferred and conveyed to such purchaser, the holder thereof shall have no further rights thereto
(other than the right to withdraw the payment thereof held in escrow, if applicable), and the Company shall record such transfer
in its stock transfer book or in any appropriate manner.
11.
Drag Along Right. If the Investors at any time propose that the Company consummate (or commit to consummate), in
one transaction or a series of related transactions, a Change of Control (as defined in the Plan), the Optionee’s Issued
Shares of Stock (including for this purpose all of such Optionee’s or his or her Permitted Transferee’s Issued Shares
of Stock that presently or as a result of any such transaction may be acquired upon the exercise of options (following the payment
of the exercise price therefor)) shall be subject to the drag-along rights set forth in Section 2.4 of the Stockholders’
Agreement.
12.
Lockup Provision. If the Company at any time shall register an offering and sale of shares of common stock of the
Company under the Securities Act in an Underwritten Offering (as defined in the Stockholders’ Agreement), the Optionee agrees
to be subject to the holdback obligations set forth in Section 5.5 of the Stockholders’ Agreement. The Optionee agrees, if
requested by the underwriter engaged by the Company, to execute a separate letter reflecting the agreement set forth in this Section
12.
13.
Restrictive Covenants. As a further condition to the issuance of this Stock Option pursuant to this Agreement, and
as partial consideration for the grant of the Stock Option, the Optionee agrees to be bound by the Non-Competition, Non-Solicitation,
Confidentiality and Assignment Agreement attached hereto as Appendix B.
14.
Miscellaneous Provisions.
(a)
Termination. The Company’s Repurchase Rights pursuant to Section 9 and the drag along obligations pursuant
to Section 11 shall terminate upon the closing of the Company’s IPO or upon consummation of any Liquidity Event (as
defined in the Plan), in either case as a result of which shares of the Company (or successor entity) of the same class as the
Issued Shares of Stock are registered under Section 12 of the Exchange Act and publicly traded on any national securities exchange.
(b)
Equitable Relief. The parties hereto agree and declare that legal remedies may be inadequate to enforce the provisions
of this Agreement and that equitable relief, including specific performance and injunctive relief, may be used to enforce the provisions
of this Agreement.
(c)
Adjustments for Changes in Capital Structure. If, as a result of any reorganization, recapitalization, reincorporation,
reclassification, stock dividend, stock split, reverse stock split or other similar change in the Stock, the outstanding shares
of Stock are increased or decreased or are exchanged for a different number or kind of shares of the Company’s stock, the
restrictions contained in this Agreement shall apply with equal force to additional and/or substitute securities, if any, received
by the Optionee in exchange for, or by virtue of his or her ownership of, Issued Shares of Stock.
(d)
Change and Modifications. This Agreement may not be orally changed, modified, amended or terminated, nor shall any
oral waiver of any of its terms be effective. This Agreement may be changed, modified, amended or terminated only by an agreement
in writing signed by the Company and the Optionee.
(e)
Governing Law. This Agreement shall be governed by and construed in accordance with the General Corporation Law of
the State of Delaware without regard to conflict of law principles that would result in the application of any law other than the
law of the State of Delaware.
(f)
Headings. The headings are intended only for convenience in finding the subject matter and do not constitute part
of the text of this Agreement and shall not be considered in the interpretation of this Agreement.
(g)
Saving Clause. If any provision(s) of this Agreement shall be determined to be illegal or unenforceable, such determination
shall in no manner affect the legality or enforceability of any other provision hereof.
(h) Notices.
All notices, amendments, waivers or other communications pursuant to this Agreement shall be in writing and shall be deemed
to have been duly given if personally delivered, sent by e-mail or sent by nationally recognized overnight courier to the
parties hereto at the following addresses (or at such other address for any party hereto as shall be specified by like
notice):
if to the Company:
Hayward Holdings, Inc.
400 Connell Drive, Suite 6100
Berkeley Heights, NJ 07922
Attention:
Email:
if to the Optionee, as set forth
underneath the Optionee’s signatures below
or to such other address
as the party to whom notice is to be given may have furnished to each other party in writing in accordance herewith. Any such notice
or communication shall be deemed to have been given and received (w) when delivered, if personally delivered; (x) upon machine
generated acknowledgement of receipt after transmittal by electronic mail if so acknowledged to have been received before 5:00
p.m. on a Business Day at the location of receipt and otherwise on the next following Business Day; (y) on the next Business Day
after dispatch, if sent by nationally recognized overnight courier guaranteeing next Business Day delivery; and (z) on the fifth
Business Day following the date on which the piece of mail containing such communication is posted, if sent by mail.
(i)
Benefit and Binding Effect. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto,
their respective successors, permitted assigns, and legal representatives. The Company has the right to assign this Agreement,
and such assignee shall become entitled to all the rights of the Company hereunder to the extent of such assignment.
(j)
Dispute Resolution.
(i)
Except as provided below, any dispute arising out of or relating to this Agreement or the breach, termination or validity
hereof shall be finally settled by binding arbitration conducted expeditiously in accordance with the J.A.M.S./Endispute Comprehensive
Arbitration Rules and Procedures. The arbitration shall be governed by the United States Arbitration Act, 9 U.S.C. §§1-16,
and judgment upon the award rendered by the arbitrators may be entered by any court having jurisdiction thereof. The place of arbitration
shall be New York, New York.
(ii) The
parties covenant and agree that the arbitration shall commence within 60 days of the date on which a written demand for
arbitration is filed by any party hereto. In connection with the arbitration proceeding, the arbitrator shall have the power
to order the production of documents by each party and any third-party witnesses. In addition, each party may take up to
three depositions as of right, and the arbitrator may in his or her discretion allow additional depositions upon good cause
shown by the moving party. However, the arbitrator shall not have the power to order the answering of interrogatories or the
response to requests for admission. In connection with any arbitration, each party shall provide to the other, no later than
seven Business Days before the date of the arbitration, the identity of all persons that may testify at the arbitration and a
copy of all documents that may be introduced at the arbitration or considered or used by a party’s witness or expert.
The arbitrator’s decision and award shall be made and delivered within six months of the selection of the arbitrator.
The arbitrator’s decision shall set forth a reasoned basis for any award of damages or finding of liability. The
arbitrator shall not have power to award damages in excess of actual compensatory damages and shall not multiply actual
damages or award punitive damages or any other damages that are specifically excluded under this Agreement, and each party
hereby irrevocably waives any claim to such damages.
(iii)
The parties covenant and agree that they will participate in the arbitration in good faith. This Section 14(j) applies
equally to requests for temporary, preliminary or permanent injunctive relief, except that in the case of temporary or preliminary
injunctive relief any party may proceed in court without prior arbitration for the limited purpose of avoiding immediate and irreparable
harm.
(iv)
Each of the parties hereto (x) hereby irrevocably submits to the jurisdiction of any United States District Court of competent
jurisdiction for the purpose of enforcing the award or decision in any such proceeding and (y) hereby waives, and agrees not to
assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, any claim that it is not subject
personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution (except
as protected by applicable law), that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the
suit, action or proceeding is improper or that this Agreement or the subject matter hereof may not be enforced in or by such court,
and hereby waives and agrees not to seek any review by any court of any other jurisdiction which may be called upon to grant an
enforcement of the judgment of any such court. Each of the parties hereto hereby consents to service of process by registered mail
at the address to which notices are to be given. Each of the parties hereto agrees that its, his or her submission to jurisdiction
and its, his or her consent to service of process by mail is made for the express benefit of the other parties hereto. Final judgment
against any party hereto in any such action, suit or proceeding may be enforced in other jurisdictions by suit, action or proceeding
on the judgment, or in any other manner provided by or pursuant to the laws of such other jurisdiction.
(k)
Counterparts. For the convenience of the parties and to facilitate execution, this Agreement may be executed in two
or more counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same document.
(l)
Entire Agreement. The Plan, this Agreement and the Stockholders’ Agreement constitute the entire agreement
with respect to the subject matter hereof and thereof. In the event of any inconsistency between the Plan and this Agreement, the
terms and conditions of the Plan shall control.
[SIGNATURE PAGE FOLLOWS]
The foregoing Agreement
is hereby accepted and the terms and conditions thereof hereby agreed to by the undersigned as of the date first above written.
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HAYWARD HOLDINGS,
INC.
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By:
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/s/ Kevin P. Holleran
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Name: Kevin P. Holleran
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Title: President &
CEO
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[Signature Page to Non-Qualified Stock Option Agreement]
The foregoing Agreement
is hereby accepted and the terms and conditions thereof hereby agreed to by the undersigned as of the date first above written.
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OPTIONEE:
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/s/
Eifion Jones
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Name: Eifion Jones
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Address:
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[Signature Page to Non-Qualified Stock Option Agreement]
Exhibit 10.14
FORM OF
NON-QUALIFIED STOCK OPTION AGREEMENT
UNDER THE SECOND Amended and restated Hayward HOLDINGS, Inc.
2017 Equity Incentive Plan
Name of Optionee: Lawrence
Silber (the “Optionee”)
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No. of Option Shares of Stock:
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800 Shares of Class B Common Stock
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Grant Date:
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December 21, 2019 (the “Grant Date”)
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Vesting Commencement Date:
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November 22, 2019 (the “Vesting Commencement Date”)
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Expiration Date:
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December 21, 2029 (the “Expiration Date”)
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Option Exercise Price/Share:
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$272.92 (the “Option Exercise Price”)
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Pursuant
to the Second Amended and Restated Hayward Holdings, Inc. 2017 Equity Incentive Plan (the “Plan”),
Hayward Holdings, Inc., a Delaware corporation (together with all successors thereto, the “Company”), hereby
grants to the Optionee, who is an officer, employee, director, consultant or other key person of the Company or any of its Subsidiaries,
an option (the “Stock Option”) to purchase on or prior to the Expiration Date, or such earlier date as is specified
herein, all or any part of the number of shares of Class B Common Stock, par value $0.001 per share of stock (“Stock”),
of the Company indicated above (the “Option Shares of Stock,” and such shares of stock once issued shall be
referred to as the “Issued Shares of Stock”), at the Option Exercise Price per share, subject to the terms and
conditions set forth in this Non-Qualified Stock Option Agreement (this “Agreement”) and in the Plan. This Stock
Option is not intended to qualify as an “incentive stock option” as defined in Section 422(b) of the Internal
Revenue Code of 1986, as amended from time to time (the “Code”).
1. Definitions.
For the purposes of this Agreement, the following terms shall have the following respective meanings. All capitalized terms used
herein and not otherwise defined shall have the respective meanings set forth in the Plan.
“Business
Day” means any day except a Saturday, a Sunday or any other day on which commercial banks in New York, New York are authorized
or required by law to close.
“CCMP Investor”
means, collectively, CCMP Capital Investors III, L.P., CCMP Capital Investors III (Employee), L.P. and any of their respective
Affiliates that is a transferee of any CCMP Investor Shares or otherwise acquires equity securities of the Company.
“CCMP
Investor Shares” means the equity securities of the Company acquired by the CCMP Investor in connection with its
investment in the Company, whether acquired before, on or after the date hereof, and any additional securities received in respect
thereof, as a dividend on, or otherwise on account of, such equity securities.
“Disability”
means, with respect to any Optionee, the meaning set forth in such Optionee’s Employment Agreement. If such Optionee does
not have an Employment Agreement or “Disability” is not defined in such agreement, “Disability” shall mean
the failure or inability of the Optionee to perform duties with the Company or any of its Affiliates for a period of at least 180
consecutive days (or 180 days during any twelve (12) month period) by reason of any physical or mental condition, as determined
in good faith by the Company in its sole discretion; provided, that, if the Company’s long term disability plan contains
a definition of “Disability,” the definition in such plan will control.
“Investor
Shares” means with respect to the CCMP Investor, the CCMP Investor Shares, and with respect to the MSD Investor,
the MSD Investor Shares.
“Investors”
means the CCMP Investor and the MSD Investor.
“MSD
Investor” means MSD Aqua Partners, LLC and any of its Affiliates that is a transferee of any MSD Investor Shares
or otherwise acquires equity securities of the Company.
“MSD
Investor Shares” means the equity securities of the Company acquired by the MSD Investor in connection with its
investment in the Company, whether acquired before, on or after the date hereof and any additional securities received in respect
thereof, as a dividend on, or otherwise on account of, such equity securities.
“Permitted
Transferee” means (i) any executor, administrator or testamentary trustee of the Optionee’s estate if such
Subscriber dies, (ii) any person or entity receiving Issued Shares of Stock by will, intestacy laws or the laws of descent
or survivorship, (iii) any trustee of a trust (including an inter vivos trust) of which there are no principal beneficiaries
other than such Optionee, the Optionee’s spouse or one or more of the Optionee’s lineal decedents or (iv) any
corporation, partnership, limited liability company or similar entity controlled by the Optionee (within the meaning of “Control”
as defined in the Stockholders’ Agreement) and of which there are no principal beneficiaries or owners other the Optionee,
the Optionee’s spouse or one or more of the Optionee’s lineal decedents.
“Securities
Act” means the Securities Act of 1933, as amended, or any successor federal statute, and the rules and regulations
of the Commission promulgated thereunder, all as the same shall be in effect from time to time.
“Service
Relationship” means any relationship as an employee, part-time employee, director or other key person (including
consultants) of the Company or any Subsidiary or any successor entity such that, for example, a Service Relationship shall be deemed
to continue without interruption in the event the Optionee’s status changes from full-time employee to part-time employee
or consultant.
“Stockholders’
Agreement” means the Stockholders’ Agreement, dated August 4, 2017, as it may be amended, modified or amended
and restated from time to time.
2. Vesting,
Exercisability and Termination. One hundred percent (100%) of this Stock Option shall be subject to time-based vesting criteria.
No portion of this Stock Option may be exercised until such portion shall have vested. Except as set forth below, and subject to
the terms and conditions set forth in the Plan, determination of the Committee in its sole discretion to accelerate the vesting
schedule hereunder, this Stock Option shall become vested and exercisable as follows:
(a) Time-Vesting.
(i) General.
Subject to accelerated vesting as provided in Section 2(a)(iii) below, the Options shall vest in five (5) equal
installments on each of November 22, 2020, November 22, 2021, November 22, 2022, November 22, 2023, and November 22,
2024, if the Optionee remains in a continuous Service Relationship from the vesting commencement date to the applicable vesting
date.
(ii) Initial
Public Offering. In the event of an IPO which does not constitute a Change of Control, any unvested Options shall remain outstanding
and remain subject to the same vesting schedule set forth herein.
(iii) Change
of Control. Subject to and effective immediately prior to the consummation of a Change of Control, all Options shall be deemed
vested, provided that the Optionee remains in a continuous Service Relationship from the vesting commencement date to the date
of the consummation of the Change of Control.
(b) Additional
Vesting Upon Death or Disability. In the event that the Optionee’s Service Relationship terminates by reason of such
Optionee’s death or Disability, the portion of the Optionee’s Options that would have vested had the Optionee continued
his Service Relationship until the period ending one year after such termination shall immediately vest.
For purposes hereof,
the Committee’s good faith determination of the reason for termination of the Optionee’s Service Relationship shall
be conclusive and binding on the Optionee and his representatives or legatees or Permitted Transferees. Subject to Section 2(b) above,
any portion of this Stock Option that is not exercisable on the date of termination of the Service Relationship shall terminate
immediately and be null and void.
3. Exercise
of Stock Option.
(a) The
Optionee may exercise this Stock Option, to the extent then vested, only in the following manner: Prior to the Expiration Date,
the Optionee may deliver a Stock Option exercise notice (an “Exercise Notice”) in the form of Appendix A
hereto indicating his election to purchase some or all of the Option Shares of Stock with respect to which this Stock Option is
exercisable at the time of such notice. Such notice shall specify the number of Option Shares of Stock to be purchased. Payment
of the purchase price may be made by one or more of the methods described below (payment instruments will be received subject to
collection):
(i) in
cash, by certified or bank check, by wire transfer of immediately available funds, or other instrument acceptable to the Committee
in U.S. funds payable to the order of the Company in an amount equal to the purchase price of such Option Shares of Stock;
(ii) by
the Optionee delivering to the Company a promissory note if the Board has expressly authorized the loan of funds to the Optionee
for the purpose of enabling or assisting the Optionee to effect the exercise of his Stock Options; provided, that at least
so much of the exercise price as represents the par value of the Stock shall be paid other than with a promissory note if otherwise
required by state law; or
(iii) if
the IPO has occurred, then (A) through the delivery (or attestation to ownership) of shares of Stock that have been purchased
by the Optionee on the open market or that are beneficially owned by the Optionee and are not subject to restrictions under any
plan of the Company; provided, that, to the extent required to avoid variable accounting treatment under ASC 718 or other
applicable accounting rules, such surrendered shares shall have been owned by the Optionee for at least six months, and in any
event with an aggregate Fair Market Value (as of the date of such exercise) equal to the option purchase price, (B) by the
Optionee delivering to the Company a properly executed Exercise Notice together with irrevocable instructions to a broker to promptly
deliver to the Company cash or a check payable and acceptable to the Company to pay the option purchase price, provided that in
the event the Optionee chooses to pay the option purchase price as so provided, the Optionee and the broker shall comply with such
procedures and enter into such agreements of indemnity and other agreements as the Committee shall prescribe as a condition of
such payment procedure, or (C) a combination of (i), (ii), (iii)(A) and (iii)(B) above.
(b) Certificates
for the Option Shares of Stock so purchased will be issued and delivered to the Optionee upon (i) compliance to the satisfaction
of the Committee with all requirements under applicable laws or regulations in connection with such issuance and (ii) delivery
of an executed Joinder Agreement (as defined in the Stockholders’ Agreement) pursuant to which the Optionee agrees to become
a party to the Stockholders’ Agreement as a “Management Stockholder” and an “Other Stockholder” (in
each case, as defined in the Stockholders’ Agreement). Until the Optionee shall have complied with the requirements hereof
and of the Plan, the Company shall be under no obligation to issue the Option Shares of Stock subject to this Stock Option, and
the determination of the Committee as to such compliance shall be final and binding on the Optionee. The Optionee shall not be
deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares of Stock subject to this Stock
Option unless and until this Stock Option shall have been exercised pursuant to the terms hereof, the Company shall have issued
and delivered the Issued Shares of Stock to the Optionee, and the Optionee’s name shall have been entered as a stockholder
of record on the books of the Company. Thereupon, the Optionee shall have full dividend and other ownership rights with respect
to such Issued Shares of Stock, subject to the terms of this Agreement and the Stockholders’ Agreement.
(c) Upon
the exercise of the Stock Option, Issued Shares of Stock shall be subject to the terms and conditions of the Stockholders’
Agreement.
(d) Notwithstanding
any other provision hereof or of the Plan, no portion of this Stock Option shall be exercisable after the Expiration Date.
(e) Timing
of Exercise.
(i) Termination
Due to Death or Disability. If the Optionee’s Service Relationship terminates by reason of such Optionee’s death
or Disability, this Stock Option may be exercised, to the extent exercisable on the date of such termination, by the Optionee,
the Optionee’s legal representative or legatee for a period of 12 months from the later of (A) the date of death or
Disability of such Optionee or (B) the date such Stock Option vests, or until the Expiration Date, if earlier.
(ii) Other
Termination. If the Optionee’s Service Relationship terminates for any reason other than death or Disability, and unless
otherwise determined by the Committee, this Stock Option may be exercised, to the extent exercisable on the date of termination,
for a period of 90 days following termination and, to the extent not exercised within such period, shall automatically terminate
in all respects; provided however, if the Optionee’s Service Relationship is terminated for Cause, this Stock
Option, whether vested or unvested, shall terminate immediately upon the date of such termination.
4. Incorporation
of Plan. Notwithstanding anything herein to the contrary, this Stock Option shall be subject to and governed by all the terms
and conditions of the Plan.
5. Transferability
of Stock Option. This Agreement is personal to the Optionee and is not transferable by the Optionee in any manner other than
(a) by will or by the laws of descent and distribution or (b) to a Permitted Transferee; provided, however,
that such Permitted Transferee shall, as a condition to any such transfer, execute such documentation as the Company may reasonably
request. The Stock Option may be exercised during the Optionee’s lifetime only by the Optionee (or by the Optionee’s
guardian or personal representative in the event of the Optionee’s incapacity) or the Optionee’s Permitted Transferee,
as applicable. The Optionee may elect to designate a beneficiary by providing written notice of the name of such beneficiary to
the Company, and may revoke or change such designation at any time by filing written notice of revocation or change with the Company;
such beneficiary may exercise the Optionee’s Stock Option in the event of the Optionee’s death to the extent provided
herein. If the Optionee does not designate a beneficiary, or if the designated beneficiary predeceases the Optionee, the legal
representative of the Optionee may exercise this Stock Option to the extent provided herein in the event of the Optionee’s
death.
6. Effect
of Certain Transactions. In the case of a Liquidity Event (as defined in the Plan), provision may be made in connection with
such transaction, in the sole discretion of the parties thereto, for the continuation or assumption by the successor entity of
this Stock Option heretofore granted, or the substitution of this Stock Option with a new Stock Option of the successor entity
or a parent thereof; provided that any such substitution must be on substantially equivalent terms of the successor entity or parent
thereof, with an equitable or proportionate adjustment as to the number and kind of shares, and, if appropriate, the per share
exercise prices, as such parties shall agree.
7. Withholding.
The Optionee shall be responsible for satisfying and paying all taxes arising from or due in connection with the Stock Option,
its exercise or a disposition of Issued Shares of Stock acquired upon exercise of the Stock Option. The Company shall have no liability
or obligation related to the foregoing.
8. Restrictions
on Transfer of Issued Shares of Stock. None of the Issued Shares of Stock acquired upon exercise of the Stock Option shall
be sold, assigned, transferred, pledged, hypothecated, given away or in any other manner disposed of or encumbered, whether voluntarily
or by operation of law, unless such transfer is in compliance with all applicable securities laws (including, without limitation,
the Act), the terms and conditions of Sections 8 and 9 hereof and the terms and conditions of the Stockholders’
Agreement and such disposition does not cause the Company to become subject to the reporting requirements of the Exchange Act.
In connection with any transfer of Issued Shares of Stock, the Company may require the transferor to provide at the Optionee’s
own expense an opinion of counsel to the transferor, satisfactory to the Company, that such transfer is in compliance with all
foreign, federal and state securities laws (including, without limitation, the Act). Any attempted disposition of Issued Shares
of Stock not in accordance with the terms and conditions of Sections 8 and 9 hereof and the Stockholders’ Agreement
shall be null and void, and the Company shall not reflect on its records any change in record ownership of any Issued Shares of
Stock as a result of any such disposition, shall otherwise refuse to recognize any such disposition and shall not in any way give
effect to any such disposition of any Issued Shares of Stock. Subject to the foregoing general provisions, Issued Shares of
Stock may be transferred pursuant to the following specific terms and conditions:
(a) Transfers
to Permitted Transferees. The Optionee may sell, assign, transfer or give away any or all of the Issued Shares of Stock to
Permitted Transferees; provided, however, that such Permitted Transferee(s) shall, as a condition to any such
transfer, agree to be subject to the provisions of this Agreement to the same extent as the Optionee (including, without limitation,
the provisions of Sections 8, 9, 11 and 12) and shall have delivered a written acknowledgment to that
effect to the Company.
(b) Transfers
Upon Death. Upon the death of the Optionee, any Issued Shares of Stock then held by the Optionee at the time of such death
and any Issued Shares of Stock acquired thereafter by the Optionee’s legal representative pursuant to this Agreement shall
be subject to the provisions of Sections 8, 9, 10, 11 and 12, if applicable, and the Optionee’s
estate, executors, administrators, personal representatives, heirs, legatees and distributees shall be obligated to convey such
Issued Shares of Stock to the Company or its assigns under the terms contemplated hereby.
9. Company’s
Right of Repurchase.
(a) Right
of Repurchase. Upon a Termination Event (as defined below), the Issued Shares of Stock held or subsequently acquired upon exercise
of this Stock Option in accordance with the terms hereof by the Optionee (or any Permitted Transferee) shall be subject to the
repurchase rights set forth in Section 2.5 of the Stockholders’ Agreement (the “Repurchase Right”).
(b) Company’s
Right to Exercise Repurchase Right. The Company shall have the Repurchase Right in the event that the following event shall
occur (the “Termination Event”): the termination of the Optionee’s Service Relationship for any reason
whatsoever, regardless of the circumstances thereof, and including without limitation upon death, Disability, retirement, discharge
or resignation for any reason, whether voluntarily or involuntarily.
10.
Escrow Arrangement.
(a) Escrow.
In order to carry out the provisions of Sections 8, 9 and 11 of this Agreement more effectively, the Company
shall hold any Issued Shares of Stock in escrow together with separate stock powers executed by the Optionee in blank for transfer,
and any Permitted Transferee shall, as an additional condition to any transfer of Issued Shares of Stock, execute a like stock
power as to such Issued Shares of Stock. The Company shall not dispose of the Issued Shares of Stock except as otherwise provided
in this Agreement. In the event of any repurchase by the Company (or any of its assigns), the Company is hereby authorized by
the Optionee and any Permitted Transferee, as the Optionee’s and each such Permitted Transferee’s attorney-in-fact,
to date and complete the stock powers necessary for the transfer of the Issued Shares of Stock being purchased and to transfer
such Issued Shares of Stock in accordance with the terms hereof. At such time as any Issued Shares of Stock are no longer subject
to the Company’s repurchase and drag along rights, the Company shall, at the written request of the Optionee, deliver to
the Optionee (or the relevant Permitted Transferee) a certificate representing such Issued Shares of Stock with the balance of
the Issued Shares of Stock to be held in escrow pursuant to this Section 10.
(b) Remedy.
Without limitation of any other provision of this Agreement or other rights, in the event that the Optionee, any Permitted Transferees
or any other Person is required to sell the Optionee’s Issued Shares of Stock pursuant to the provisions of Sections 9
and 11 of this Agreement and in the further event that he or she refuses or for any reason fails to deliver to the Company
or its designated purchaser of such Issued Shares of Stock the certificate or certificates evidencing such Issued Shares of Stock
together with a related stock power, the Company or such designated purchaser may deposit the applicable purchase price for such
Issued Shares of Stock with a bank designated by the Company, or with the Company’s independent public accounting firm, as
agent or trustee, or in escrow, for the Optionee, any Permitted Transferees or other Person, to be held by such bank or accounting
firm for the benefit of and for delivery to him, her, them or it, and/or, in its discretion, pay such purchase price by offsetting
any indebtedness then owed by the Optionee as provided above. Upon any such deposit and/or offset by the Company or its designated
purchaser of such amount and upon notice to the Person who was required to sell the Issued Shares of Stock to be sold pursuant
to the provisions of Sections 9 and 11, such Issued Shares of Stock shall at such time be deemed to have been sold,
assigned, transferred and conveyed to such purchaser, the holder thereof shall have no further rights thereto (other than the right
to withdraw the payment thereof held in escrow, if applicable), and the Company shall record such transfer in its stock transfer
book or in any appropriate manner.
11. Drag
Along Right. If the Investors at any time propose that the Company consummate (or commit to consummate), in one transaction
or a series of related transactions, a Change of Control (as defined in the Plan), the Optionee’s Issued Shares of Stock
(including for this purpose all of such Optionee’s or his Permitted Transferee’s Issued Shares of Stock that presently
or as a result of any such transaction may be acquired upon the exercise of options (following the payment of the exercise price
therefor)) shall be subject to the drag-along rights set forth in Section 2.4 of the Stockholders’ Agreement.
12. Lockup
Provision. If the Company at any time shall register an offering and sale of shares common stock of the Company under the Securities
Act in an Underwritten Offering (as defined in the Stockholders’ Agreement), the Optionee agrees to be subject to the holdback
obligations set forth in Section 5.5 of the Stockholders’ Agreement. The Optionee agrees, if requested by the underwriter
engaged by the Company, to execute a separate letter reflecting the agreement set forth in this Section 12.
13. Restrictive
Covenants. As a further condition to the issuance of this Stock Option pursuant to this Agreement, and as partial consideration
for the grant of the Stock Option, the Optionee agrees to be bound by the Non-Competition, Non-Solicitation, Confidentiality and
Assignment Agreement attached hereto as Appendix B.
14. Miscellaneous
Provisions.
(a) Termination.
The Company’s repurchase rights pursuant to Section 9 and the drag along obligations pursuant to Section 11
shall terminate upon the closing of the Company’s IPO or upon consummation of any Liquidity Event (as defined in the Plan),
in either case as a result of which shares of the Company (or successor entity) of the same class as the Issued Shares of Stock
are registered under Section 12 of the Exchange Act and publicly traded on any national securities exchange.
(b) Equitable
Relief. The parties hereto agree and declare that legal remedies may be inadequate to enforce the provisions of this Agreement
and that equitable relief, including specific performance and injunctive relief, may be used to enforce the provisions of this
Agreement.
(c) Adjustments
for Changes in Capital Structure. If, as a result of any reorganization, recapitalization, reincorporation, reclassification,
stock dividend, stock split, reverse stock split or other similar change in the Stock, the outstanding shares of Stock are increased
or decreased or are exchanged for a different number or kind of shares of the Company’s stock, the restrictions contained
in this Agreement shall apply with equal force to additional and/or substitute securities, if any, received by the Optionee in
exchange for, or by virtue of his ownership of, Issued Shares of Stock.
(d) Change
and Modifications. This Agreement may not be orally changed, modified, amended or terminated, nor shall any oral waiver of
any of its terms be effective. This Agreement may be changed, modified, amended or terminated only by an agreement in writing signed
by the Company and the Optionee.
(e) Governing
Law. This Agreement shall be governed by and construed in accordance with the General Corporation Law of the State of Delaware
without regard to conflict of law principles that would result in the application of any law other than the law of the State of
Delaware.
(f) Headings.
The headings are intended only for convenience in finding the subject matter and do not constitute part of the text of this Agreement
and shall not be considered in the interpretation of this Agreement.
(g) Saving
Clause. If any provision(s) of this Agreement shall be determined to be illegal or unenforceable, such determination shall
in no manner affect the legality or enforceability of any other provision hereof.
(h) Notices.
All notices, amendments, waivers or other communications pursuant to this Agreement shall be in writing and shall be deemed to
have been duly given if personally delivered, sent by e-mail or sent by nationally recognized overnight courier to the parties
hereto at the following addresses (or at such other address for any party hereto as shall be specified by like notice):
if to the Company:
Hayward Holdings, Inc.
400 Connell Drive, Suite 6100
Berkeley Heights, NJ 07922
Attention:
Email:
if to the Optionee, as set forth
underneath the Optionee’s signatures below
or to such other address
as the party to whom notice is to be given may have furnished to each other party in writing in accordance herewith. Any such notice
or communication shall be deemed to have been given and received (w) when delivered, if personally delivered; (x) upon
machine generated acknowledgement of receipt after transmittal by electronic mail if so acknowledged to have been received before
5:00 p.m. on a Business Day at the location of receipt and otherwise on the next following Business Day; (y) on the next
Business Day after dispatch, if sent by nationally recognized overnight courier guaranteeing next Business Day delivery; and (z) on
the fifth Business Day following the date on which the piece of mail containing such communication is posted, if sent by mail.
(i) Benefit
and Binding Effect. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto, their respective
successors, permitted assigns, and legal representatives. The Company has the right to assign this Agreement, and such assignee
shall become entitled to all the rights of the Company hereunder to the extent of such assignment.
(j) Dispute
Resolution.
(i) Except
as provided below, any dispute arising out of or relating to this Agreement or the breach, termination or validity hereof shall
be finally settled by binding arbitration conducted expeditiously in accordance with the J.A.M.S./Endispute Comprehensive Arbitration
Rules and Procedures. The arbitration shall be governed by the United States Arbitration Act, 9 U.S.C. §§1-16, and
judgment upon the award rendered by the arbitrators may be entered by any court having jurisdiction thereof. The place of arbitration
shall be New York, New York.
(ii) The
parties covenant and agree that the arbitration shall commence within 60 days of the date on which a written demand for arbitration
is filed by any party hereto. In connection with the arbitration proceeding, the arbitrator shall have the power to order the production
of documents by each party and any third-party witnesses. In addition, each party may take up to three depositions as of right,
and the arbitrator may in his or her discretion allow additional depositions upon good cause shown by the moving party. However,
the arbitrator shall not have the power to order the answering of interrogatories or the response to requests for admission. In
connection with any arbitration, each party shall provide to the other, no later than seven Business Days before the date of the
arbitration, the identity of all persons that may testify at the arbitration and a copy of all documents that may be introduced
at the arbitration or considered or used by a party’s witness or expert. The arbitrator’s decision and award shall
be made and delivered within six months of the selection of the arbitrator. The arbitrator’s decision shall set forth a reasoned
basis for any award of damages or finding of liability. The arbitrator shall not have power to award damages in excess of actual
compensatory damages and shall not multiply actual damages or award punitive damages or any other damages that are specifically
excluded under this Agreement, and each party hereby irrevocably waives any claim to such damages.
(iii) The
parties covenant and agree that they will participate in the arbitration in good faith. This Section 14(j) applies
equally to requests for temporary, preliminary or permanent injunctive relief, except that in the case of temporary or preliminary
injunctive relief any party may proceed in court without prior arbitration for the limited purpose of avoiding immediate and irreparable
harm.
(iv) Each
of the parties hereto (x) hereby irrevocably submits to the jurisdiction of any United States District Court of competent
jurisdiction for the purpose of enforcing the award or decision in any such proceeding and (y) hereby waives, and agrees not
to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, any claim that it is not subject
personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution (except
as protected by applicable law), that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the
suit, action or proceeding is improper or that this Agreement or the subject matter hereof may not be enforced in or by such court,
and hereby waives and agrees not to seek any review by any court of any other jurisdiction which may be called upon to grant an
enforcement of the judgment of any such court. Each of the parties hereto hereby consents to service of process by registered mail
at the address to which notices are to be given. Each of the parties hereto agrees that its, his or her submission to jurisdiction
and its, his or her consent to service of process by mail is made for the express benefit of the other parties hereto. Final judgment
against any party hereto in any such action, suit or proceeding may be enforced in other jurisdictions by suit, action or proceeding
on the judgment, or in any other manner provided by or pursuant to the laws of such other jurisdiction.
(k) Counterparts.
For the convenience of the parties and to facilitate execution, this Agreement may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which shall constitute one and the same document.
(l) Entire
Agreement. The Plan, this Agreement and the Stockholders’ Agreement constitute the entire agreement with respect to the
subject matter hereof and thereof. In the event of any inconsistency between the Plan and this Agreement, the terms and conditions
of the Plan shall control.
[SIGNATURE PAGE FOLLOWS]
The foregoing Agreement
is hereby accepted and the terms and conditions thereof hereby agreed to by the undersigned as of the date first above written.
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HAYWARD HOLDINGS, INC.
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By:
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/s/ Kevin P. Holleran
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Name:
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Kevin P. Holleran
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Title:
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President & CEO
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[Signature Page to Non-Qualified Stock Option Agreement]
The foregoing Agreement
is hereby accepted and the terms and conditions thereof hereby agreed to by the undersigned as of the date first above written.
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OPTIONEE:
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/s/ Lawrence Silber
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Name:
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Lawrence Silber
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[Signature Page to Non-Qualified Stock Option Agreement]
Exhibit 10.19
Hayward
Holdings, Inc.
2021
Cash Incentive Plan
1. Defined
Terms
Exhibit A,
which is incorporated by reference, defines certain terms used in the Plan and sets forth operational rules related to those
terms.
2. Purpose
The Plan has been established
to advance the interests of the Company by providing for the grant of cash-based incentive Awards to Participants that will attract,
retain, and reward such persons and incentivize them to attain key Company performance criteria and metrics.
3. Administration
The Plan will be administered
by the Administrator. The Administrator has discretionary authority, subject only to the express provisions of the Plan, to administer
and interpret the Plan and any Award; to determine eligibility for and grant Awards; to adjust the performance criterion or criteria
applicable to Awards; to determine, modify or waive the terms and conditions of any Award; to prescribe forms, rules and procedures
relating to the Plan and Awards; and to otherwise do all things necessary or desirable to carry out the purposes of the Plan or
any Award. Determinations of the Administrator made with respect to the Plan or any Award are conclusive and bind all persons.
4. Eligibility;
Participation
The Administrator may
select Participants from among executive officers and employees of the Company and its subsidiaries.
5. Grant
of Awards
A Participant who is
granted an Award will be entitled to a payment, if any, in respect of the Award only if all conditions to payment have been satisfied
in accordance with the Plan and the terms of the Award. By accepting (or being deemed to have accepted) an Award, the Participant
agrees or will be deemed to have agreed to the terms and condition of the Award and the Plan. The Administrator will select the
Participants, if any, who receive Awards for each Performance Period and, for each Award, will establish the following:
(a) the
Performance Criterion or Criteria applicable to the Award;
(b) the
amount or amounts that will be payable (subject to adjustment in accordance with Section 6) if the performance criterion or
criteria are achieved in whole or in part; and
(c) such
other terms and conditions as the Administrator determines with respect to the Award.
6. Determination
of Performance; Amounts Payable under Awards
As soon as practicable
after the end of the applicable Performance Period, the Administrator will determine whether and to what extent, if at all, the
performance criterion or criteria applicable to each Award granted for such Performance Period have been satisfied. The Administrator
will then determine the amount payable, if any, under each Award. The Administrator may, in its sole discretion and with or without
specifying its reasons for doing so, after determining the amount that would otherwise be payable in respect of any Award, adjust
the actual payment, if any, to be made with respect to such Award. The Administrator may exercise the discretion described in the
immediately preceding sentence either in individual cases or in ways that affect more than one Participant. In each case, the Administrator’s
discretionary determination, which may affect different Awards differently, is conclusive and binds all persons.
7. Payments
under Awards
The Administrator will
determine the payment dates for Awards under the Plan. Except as otherwise determined by the Administrator or set forth in an effective
individual employment or other agreement with a Participant:
(a) all
payments under the Plan will be made, if at all, not later than March 15th of the calendar year immediately following
the calendar year in which the Performance Period ends; provided, however, that the Administrator may authorize
elective deferrals of any Award payments in accordance with the deferral rules of Section 409A;
(b) payment
will not be made with respect to an Award unless the Participant has remained employed with the Company and its subsidiaries through
the date of payment; and
(c) awards
under the Plan are intended to qualify for exemption from Section 409A of the Code and shall be construed and administered
accordingly.
8. Tax
Withholding; Limitation on Liability
All
payments under the Plan will be reduced by all tax and other amounts required to be withheld with respect to the payment. Any
amounts withheld pursuant to this Section 8 will be treated as though such payment had been made directly to the Participant.
9. Amendment
and Termination
The Administrator may
at any time or times amend the Plan or any outstanding Award for any purpose which may at the time be permitted by applicable law,
and may at any time terminate the Plan as to any future grants of Awards.
10. Recovery
of Compensation
The Administrator
may provide in any case that any outstanding Award and any amounts received in respect of any Award will be subject to forfeiture
and disgorgement to the Company, with interest and other related earnings, if the Participant to whom the Award was granted is
not in compliance with any provision of the Plan or any applicable Award, any non-competition, non-solicitation, no-hire, non-disparagement,
confidentiality, invention assignment or any other restrictive covenant by which he or she is bound. In addition, each Award will
be subject to any policy of the Company or any of its affiliates that provides for forfeiture, disgorgement or clawback with respect
to incentive compensation that includes Awards under the Plan and will be further subject to forfeiture and disgorgement to the
extent required by law or applicable stock exchange listing standards, including, without limitation, Section 10D of the
Securities Exchange Act of 1934, as amended. Each Participant, by accepting (or being deemed to have accepted) an Award under
the Plan, agrees or will be deemed to have agreed to the provisions of this Section 10 and any clawback, recoupment or similar
policy of the Company or any of its subsidiaries and further agrees (or will be deemed to have further agreed) to cooperate fully
with the Administrator to effectuate any forfeiture or disgorgement described in this Section 10. Neither the Administrator
nor the Company nor any other person, other than the Participant, will be responsible for any adverse tax or other consequences
to a Participant that may arise in connection with this Section 10.
11. Miscellaneous
(a) Waiver
of Jury Trial. By accepting or being deemed to have accepted an Award under the Plan,
each Participant waives (or will be deemed to have waived), to the maximum extent permitted under applicable law, any right to
a trial by jury in any action, proceeding or counterclaim concerning any rights under the Plan or any Award, or under any amendment,
waiver, consent, instrument, document or other agreement delivered or which in the future may be delivered in connection therewith,
and agrees (or will be deemed to have agreed) that any such action, proceedings or counterclaim will be tried before a court and
not before a jury. By accepting or being deemed to have accepted an Award under the Plan, each Participant certifies that no officer,
representative, or attorney of the Company has represented, expressly or otherwise, that the Company would not, in the event of
any action, proceeding, or counterclaim, seek to enforce the foregoing waivers. Notwithstanding anything to the contrary in the
Plan, nothing herein is to be construed as limiting the ability of the Company and a Participant to agree to submit any dispute
arising under the terms of the Plan or any Award to binding arbitration or as limiting the ability of the Company to require any
individual to agree to submit such disputes to binding arbitration as a condition of receiving an Award hereunder.
(b) Limitation
of Liability. Notwithstanding anything to the contrary in the Plan or any Award,
neither the Company, nor any of its subsidiaries, nor the Administrator, nor any person acting on behalf of the Company, any
of its subsidiaries, or the Administrator, will be liable to any Participant or to any other person by reason of any
acceleration of income, any additional tax, or any penalty, interest or other liability asserted by reason of the failure of
an Award to satisfy the requirements of Section 409A or by reason of Section 4999 of the Code, or otherwise asserted with
respect to any Award.
(c) Unfunded
Plan. The Company’s obligations under the Plan are unfunded, and no Participant
will have any right to specific assets of the Company in respect of any Award. Participants will be general unsecured creditors
of the Company with respect to any amounts due or payable under the Plan.
(d) Governing
Law. Except as otherwise provided by the express terms of an Award, the domestic substantive
laws of the State of New Jersey govern the provisions of the Plan and of Awards under the Plan and all claims or disputes arising
out of or based upon the Plan or any Award under the Plan or relating to the subject matter hereof or thereof, without giving effect
to any choice or conflict of laws provision or rule that would cause the application of the domestic substantive laws of any
other jurisdiction.
(e) Jurisdiction.
By accepting (or being deemed to have accepted) an Award, each Participant agrees or will
be deemed to have agreed to (i) submit irrevocably and unconditionally to the jurisdiction of the federal and state courts
located within the geographic boundaries of the United States District Court for the District of New Jersey for the purpose of
any suit, action or other proceeding arising out of or based upon the Plan or any Award; (ii) not commence any suit, action
or other proceeding arising out of or based upon the Plan or any Award, except in the federal and state courts located within the
geographic boundaries of the United States District Court for the District of New Jersey; and (iii) waive, and not assert,
by way of motion as a defense or otherwise, in any such suit, action or proceeding, any claim that he or she is not subject personally
to the jurisdiction of the above-named courts, that his or her property is exempt or immune from attachment or execution, that
the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper
or that the Plan or any Award or the subject matter thereof may not be enforced in or by such court.
(f) Other
Compensation Arrangements. The existence of the Plan or the grant of any Award will
not affect the right of the Company or any of its subsidiaries to grant any person bonuses or other compensation in addition to
Awards under the Plan.
(g) Rights
Limited. Nothing in the Plan or any Award will be construed as giving any person the
right to be granted an Award or to continued employment or service with the Company or any of its subsidiaries. The loss of any
Award will not constitute an element of damages in the event of a termination of a Participant’s employment for any reason,
even if the termination is in violation of an obligation of the Company or any of its subsidiaries to the Participant.
(h) Effective
Date. The Plan will be effective upon adoption of the Plan by the Administrator and
will supersede and replace the Company’s annual cash bonus program with respect to awards granted to eligible executive officers
and employees for fiscal years beginning after the date of adoption.
[The remainder of this page is
intentionally left blank.]
Exhibit A
Definition of Terms
The following terms,
when used in the Plan, will have the meanings and be subject to the provisions set forth below:
“Administrator”:
The Compensation Committee, except with respect to such matters that are not delegated to the Compensation Committee
by the Board (whether pursuant to committee charter or otherwise). The Compensation Committee (or the Board, with respect to such
matters over which it retains authority under the Plan or otherwise) may delegate (i) to one or more of its members (or one
or more other members of the Board) such of its duties, powers and responsibilities as it may determine; (ii) to one or more
officers of the Company the power to grant Awards to the extent permitted by applicable law; and (iii) to such employees or
other persons as it determines such ministerial tasks as it deems appropriate. For purposes of the Plan, the term “Administrator”
will include the Board, the Compensation Committee, and the person or persons delegated authority under the Plan to the extent
of such delegation, as applicable.
“Award”:
A cash bonus award that is granted to a Participant with respect to a Performance Period. An Award opportunity may
be expressed as a percentage of the Participant’s base salary, as a fixed dollar amount, or in such other form determined
by the Administrator.
“Board”:
The Board of Directors of the Company.
“Code”:
The U.S. Internal Revenue Code of 1986, as from time to time amended and in effect, or any successor statute as from
time to time in effect.
“Company”:
Hayward Holdings, Inc., a Delaware corporation.
“Compensation
Committee”: The Compensation Committee of the Board.
“Participant”:
A person who is granted an Award under the Plan.
“Performance
Criteria”: Specified criteria, other than the mere continuation of employment or the mere passage of time, the
satisfaction of which is a condition for the grant, exercisability, vesting, or full enjoyment of an Award. A Performance Criterion
and any targets with respect thereto need not be based upon an increase, a positive or improved result, or avoidance of loss and
may be applied to a Participant individually, or to a business unit or division of the Company or to the Company as a whole. A
Performance Criterion may also be based on individual performance and/or subjective performance criteria. The Administrator may
provide that one or more of the Performance Criteria applicable to such Award will be adjusted in a manner to reflect events (for
example, but without limitation, acquisitions or dispositions) occurring during the Performance Period that affect the applicable
Performance Criterion or Criteria.
“Performance
Period”: A specified performance period, consisting of the Company’s fiscal year or such other period as
the Administrator determines.
“Plan”:
The Hayward Holdings, Inc. 2021 Cash Incentive Plan, as from time to time amended and in effect.
“Section 409A”:
Section 409A of the Code and the regulations thereunder.
Exhibit 21.1
Subsidiaries
of Hayward Holdings, Inc.
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Entity
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Jurisdiction
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ConnectedYard, Inc.
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Delaware
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Goldline Properties LLC
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Rhode Island
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Hayward Consolidated Pty, Ltd.
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Australia
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Hayward Enterprises Europe S.A.
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Belgium
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Hayward Iberica, S.L.U.
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Spain
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Hayward Industrial Products, Inc.
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New Jersey
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Hayward Industries, Inc.
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New Jersey
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Hayward Industries, (Wuxi) Co., Ltd.
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China
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Hayward Intermediate, Inc.
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Delaware
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Hayward Pool Europe S.A.
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France
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Hayward Pool Products (Australia) Pty, Ltd.
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Australia
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Hayward Pool Products Canada, Inc.
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Canada
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Hayward Pool Products Trading (Shanghai) Co., Ltd.
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China
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Hayward/Wright-Austin, Inc.
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New Jersey
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Webster Pumps, Inc.
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New Jersey
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Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
We hereby consent to the use in this Registration Statement
on Form S-1 of Hayward Holdings, Inc. of our report dated February 16, 2021 relating to the financial statements of Hayward Holdings,
Inc., which appears in this Registration Statement. We also consent to the reference to us under the heading “Experts”
in such Registration Statement.
/s/ PricewaterhouseCoopers LLP
New York, New York
February 16, 2021
![[MISSING IMAGE: LG_HAYWARD-4CLR.JPG]](https://content.edgar-online.com/edgar_conv_img/2021/02/17/0001104659-21-024595_LG_HAYWARD-4CLR.JPG){kind=small}
![[MISSING IMAGE: TM2037032D1-PH_SMART4CLR.JPG]](https://content.edgar-online.com/edgar_conv_img/2021/02/17/0001104659-21-024595_TM2037032D1-PH_SMART4CLR.JPG)
![[MISSING IMAGE: TM2037032D1-PH_INNOVAT4CLR.JPG]](https://content.edgar-online.com/edgar_conv_img/2021/02/17/0001104659-21-024595_TM2037032D1-PH_INNOVAT4CLR.JPG)
![[MISSING IMAGE: TM2037032D1-PH_EFFICI4CLR.JPG]](https://content.edgar-online.com/edgar_conv_img/2021/02/17/0001104659-21-024595_TM2037032D1-PH_EFFICI4CLR.JPG)
![[MISSING IMAGE: TM2037032D1-PH_SILKY4CLR.JPG]](https://content.edgar-online.com/edgar_conv_img/2021/02/17/0001104659-21-024595_TM2037032D1-PH_SILKY4CLR.JPG)
![[MISSING IMAGE: SG_KEVINHOLLERAN-BW.JPG]](https://content.edgar-online.com/edgar_conv_img/2021/02/17/0001104659-21-024595_SG_KEVINHOLLERAN-BW.JPG){kind=small}
![[MISSING IMAGE: TM2037032D3-PH_TOPRATE4CLR.JPG]](https://content.edgar-online.com/edgar_conv_img/2021/02/17/0001104659-21-024595_TM2037032D3-PH_TOPRATE4CLR.JPG)
![[MISSING IMAGE: TM2037032D3-TBL_PREMIUM4C.JPG]](https://content.edgar-online.com/edgar_conv_img/2021/02/17/0001104659-21-024595_TM2037032D3-TBL_PREMIUM4C.JPG)
![[MISSING IMAGE: TM2037032D1-BC_SPACE4C.JPG]](https://content.edgar-online.com/edgar_conv_img/2021/02/17/0001104659-21-024595_TM2037032D1-BC_SPACE4C.JPG)
![[MISSING IMAGE: TM2037032D3-PH_OUTDOOR4CLR.JPG]](https://content.edgar-online.com/edgar_conv_img/2021/02/17/0001104659-21-024595_TM2037032D3-PH_OUTDOOR4CLR.JPG)
![[MISSING IMAGE: TM2037032D6-FC_POOLEQUIP4C.JPG]](https://content.edgar-online.com/edgar_conv_img/2021/02/17/0001104659-21-024595_TM2037032D6-FC_POOLEQUIP4C.JPG)
![[MISSING IMAGE: TM2037032D1-BC_USNEW4C.JPG]](https://content.edgar-online.com/edgar_conv_img/2021/02/17/0001104659-21-024595_TM2037032D1-BC_USNEW4C.JPG)
![[MISSING IMAGE: TM2037032D9-FC_CORSTRUCBW.JPG]](https://content.edgar-online.com/edgar_conv_img/2021/02/17/0001104659-21-024595_TM2037032D9-FC_CORSTRUCBW.JPG)
![[MISSING IMAGE: TM2037032D1-PH_SUGAR4CLR.JPG]](https://content.edgar-online.com/edgar_conv_img/2021/02/17/0001104659-21-024595_TM2037032D1-PH_SUGAR4CLR.JPG)
![[MISSING IMAGE: TM2037032D1-PH_COMMER4CLR.JPG]](https://content.edgar-online.com/edgar_conv_img/2021/02/17/0001104659-21-024595_TM2037032D1-PH_COMMER4CLR.JPG)
![[MISSING IMAGE: TM2037032D1-PH_REPRES4CLR.JPG]](https://content.edgar-online.com/edgar_conv_img/2021/02/17/0001104659-21-024595_TM2037032D1-PH_REPRES4CLR.JPG)
![[MISSING IMAGE: TM2037032D1-PC_ESTIMAT4C.JPG]](https://content.edgar-online.com/edgar_conv_img/2021/02/17/0001104659-21-024595_TM2037032D1-PC_ESTIMAT4C.JPG)
![[MISSING IMAGE: TM2037032D3-FC_SPECTR4CLR.JPG]](https://content.edgar-online.com/edgar_conv_img/2021/02/17/0001104659-21-024595_TM2037032D3-FC_SPECTR4CLR.JPG)
![[MISSING IMAGE: TM2037032D3-FC_ROBUST4CLR.JPG]](https://content.edgar-online.com/edgar_conv_img/2021/02/17/0001104659-21-024595_TM2037032D3-FC_ROBUST4CLR.JPG)
![[MISSING IMAGE: TM2037032D1-FC_GROUND4CLR.JPG]](https://content.edgar-online.com/edgar_conv_img/2021/02/17/0001104659-21-024595_TM2037032D1-FC_GROUND4CLR.JPG)